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Plumas Bancorp(PLBC) - 2025 Q3 - Quarterly Results

Executive Summary Plumas Bancorp's Q3 and YTD 2025 results show decreased net income and EPS, primarily due to the Cornerstone Community Bank acquisition's one-time impacts, increased credit loss provisions, and higher non-interest expenses Third Quarter 2025 Financial Highlights Plumas Bancorp reported a significant decrease in net income and diluted EPS for Q3 2025 compared to Q3 2024, primarily due to the acquisition of Cornerstone Community Bank (CCB) which introduced one-time items, increased provision for credit losses, and higher non-interest expenses | Metric | Q3 2025 | Q3 2024 | Change (YoY) | Percentage Change (YoY) | | :-------------------------------- | :------ | :------ | :----------- | :---------------------- | | Net Income | $5.1 million | $7.8 million | -$2.7 million | -34.6% | | Diluted EPS | $0.73 | $1.31 | -$0.58 | -44.3% | | Net Interest Income | Increased $6.3 million | N/A | +$6.3 million | N/A | | Provision for Credit Losses | Increased $5.8 million | N/A | +$5.8 million | N/A | | Non-Interest Expense | Increased $4.3 million | N/A | +$4.3 million | N/A | | Annualized Return on Average Assets | 0.90% | 1.84% | -0.94% | -51.1% | | Annualized Return on Average Equity | 8.5% | 18.1% | -9.6% | -53.0% | - Results were influenced by several one-time items due to the acquisition completed in the quarter1 Nine Months Ended September 30, 2025 Financial Highlights For the first nine months of 2025, Plumas Bancorp experienced a decrease in net income and diluted EPS compared to the same period in 2024, driven by increased provision for credit losses and non-interest expenses, despite growth in net interest and non-interest income | Metric | YTD 2025 | YTD 2024 | Change (YoY) | Percentage Change (YoY) | | :-------------------------------- | :------- | :------- | :----------- | :---------------------- | | Net Income | $18.6 million | $20.9 million | -$2.3 million | -11.0% | | Diluted EPS | $2.94 | $3.50 | -$0.56 | -16.0% | | Net Interest Income | Increased $7.2 million | N/A | +$7.2 million | N/A | | Non-Interest Income | Increased $1.2 million | N/A | +$1.2 million | N/A | | Provision for Credit Losses | Increased $5.1 million | N/A | +$5.1 million | N/A | | Non-Interest Expense | Increased $6.0 million | N/A | +$6.0 million | N/A | | Annualized Return on Average Assets | 1.35% | 1.69% | -0.34% | -20.1% | | Annualized Return on Average Equity | 12.2% | 17.2% | -5.0% | -29.1% | Strategic Overview & Acquisition Impact This section details the successful acquisition of Cornerstone Community Bank, its financial implications, and strategic initiatives to optimize net interest margin Cornerstone Community Bank Acquisition Plumas Bancorp successfully completed the acquisition of Cornerstone Community Bank (CCB) on July 1, 2025, significantly expanding its asset base, loan portfolio, and deposits, also resulting in substantial goodwill and core deposit intangibles - Acquisition of Cornerstone Community Bank (CCB) was effective July 1, 20253 Acquired Asset/Liability | Acquired Asset/Liability | Amount (excluding purchase adjustments, in millions) | | :----------------------- | :-------------------------------------- | | Total Assets | $658 million | | Gross Loans | $478 million | | Deposits | $580 million | | Goodwill | $18.7 million | | Core Deposit Intangible | $11.6 million | | Discount on Acquired Loans | $15.8 million | President's Comments and Strategic Initiatives The President highlighted the successful integration of Cornerstone Community Bank, including a streamlined conversion and employee retention, with strategic actions taken to improve net interest margin - Successful completion and integration of Cornerstone Community Bancorp and Cornerstone Community Bank, including streamlined conversion and retention of most employees9 - Sold acquired investment portfolio to provide liquidity, paying off $38.5 million in brokered CDs and a $15 million FHLB borrowing10 - Reinvested residual liquidity into the investment portfolio at higher rates and transferred over $60 million of third-party reciprocal deposits to on-balance sheet repurchase agreement product10 - Expect cost of funds to decrease slightly due to these changes and the Fed rate reduction in September 202510 Fair Value Marks Amortization/Accretion The Company incurred expenses/income related to the amortization/accretion of Fair Value (FV) marks in Q3 2025, primarily from the acquisition, with projections indicating a negative impact for Q4 2025 and the full year 2026 Effect on Pretax Earnings of Amortization/Accretion of Fair Value Marks (in thousands) | Amortization/Accretion of Fair Value marks | Actual (3 Months Ending 9/30/2025) | Projected (3 Months Ending 12/31/2025) | Projected (12 Months Ending 12/31/2026) | | :--------------------------------------- | :--------------------------------- | :------------------------------------- | :-------------------------------------- | | Core Deposit Intangible | $(571) | $(557) | $(2,082) | | Discount on acquired loans | $455 | $336 | $1,290 | | Premium/discount on acquired time deposits | $651 | $(61) | $(92) | | Discount on acquired debentures | $(84) | $(58) | $(23) | | Total amortization/accretion of Fair Value marks | $451 | $(340) | $(907) | - The projected accretion of the discount on acquired loans is based on contractual payment schedules and may differ from actual accretion7 Consolidated Financial Results (GAAP) GAAP financial statements reveal a decline in net income and diluted EPS for Q3 and YTD 2025, driven by increased credit loss provisions and non-interest expenses, despite higher net interest income Condensed Consolidated Statements of Income - Three Months Ended September 30, 2025 For the third quarter of 2025, Plumas Bancorp reported a decrease in net income and diluted EPS compared to the prior year, primarily driven by a substantial increase in the provision for credit losses and non-interest expenses, despite a significant rise in net interest income Condensed Consolidated Statements of Income (Three Months Ended September 30, in thousands, except per share data) | Metric | 2025 | 2024 | Dollar Change | Percentage Change | | :------------------------------------------ | :----- | :----- | :------------ | :---------------- | | Interest income | $29,797 | $21,862 | $7,935 | 36.3% | | Interest expense | $4,623 | $2,992 | $1,631 | 54.5% | | Net interest income before provision for credit losses | $25,174 | $18,870 | $6,304 | 33.4% | | Provision for credit losses | $5,373 | $(400) | $5,773 | 1443.3% | | Net interest income after provision for credit losses | $19,801 | $19,270 | $531 | 2.8% | | Non-interest income | $2,248 | $2,237 | $11 | 0.5% | | Non-interest expense | $15,134 | $10,824 | $4,310 | 39.8% | | Income before income taxes | $6,915 | $10,683 | $(3,768) | -35.3% | | Provision for income taxes | $1,769 | $2,853 | $(1,084) | -38.0% | | Net income | $5,146 | $7,830 | $(2,684) | -34.3% | | Basic earnings per share | $0.74 | $1.33 | $(0.59) | -44.4% | | Diluted earnings per share | $0.73 | $1.31 | $(0.58) | -44.3% | Condensed Consolidated Statements of Income - Nine Months Ended September 30, 2025 For the nine months ended September 30, 2025, the Company reported a decline in net income and diluted EPS compared to the prior year, primarily due to a significant increase in the provision for credit losses and non-interest expenses, partially offset by growth in net interest income and non-interest income Condensed Consolidated Statements of Income (Nine Months Ended September 30, in thousands, except per share data) | Metric | 2025 | 2024 | Dollar Change | Percentage Change | | :------------------------------------------ | :----- | :----- | :------------ | :---------------- | | Interest income | $71,020 | $63,049 | $7,971 | 12.6% | | Interest expense | $9,124 | $8,317 | $807 | 9.7% | | Net interest income before provision for credit losses | $61,896 | $54,732 | $7,164 | 13.1% | | Provision for credit losses | $6,483 | $1,346 | $5,137 | 381.6% | | Net interest income after provision for credit losses | $55,413 | $53,386 | $2,027 | 3.8% | | Non-interest income | $7,822 | $6,579 | $1,243 | 18.9% | | Non-interest expense | $37,612 | $31,617 | $5,995 | 19.0% | | Income before income taxes | $25,623 | $28,348 | $(2,725) | -9.6% | | Provision for income taxes | $6,977 | $7,478 | $(501) | -6.7% | | Net income | $18,646 | $20,870 | $(2,224) | -10.7% | | Basic earnings per share | $2.98 | $3.54 | $(0.56) | -15.8% | | Diluted earnings per share | $2.94 | $3.50 | $(0.56) | -16.0% | Non-GAAP Financial Measures Plumas Bancorp provides non-GAAP financial measures to offer a clearer view of core operations by excluding non-recurring merger-related expenses, significantly improving reported net income, diluted EPS, and return on average assets for Q3 and YTD 2025 - Non-GAAP financial measures are presented to provide useful and comparative information to assess trends in core operations, excluding merger-related activities55 Reconciliation of Non-GAAP Disclosure (in thousands, except per share data) | Metric | GAAP (Q3 2025) | Non-GAAP (Q3 2025) | GAAP (YTD 2025) | Non-GAAP (YTD 2025) | | :--------------------------------------- | :------------- | :----------------- | :-------------- | :------------------ | | Income before tax | $6,915 | $13,117 | $25,623 | $32,875 | | Total merger related items (excluded) | N/A | $6,202 | N/A | $7,252 | | Net Income | $5,146 | $9,515 | $18,646 | $23,754 | | Diluted earnings per share | $0.73 | $1.35 | $2.94 | $3.74 | | Return on average assets | 0.90% | 1.66% | 1.35% | 1.72% | Net Interest Income and Margin Analysis This section analyzes the drivers of net interest income and margin for Q3 and YTD 2025, highlighting the impact of loan growth, yields, and interest expenses Three Months Ended September 30, 2025 Net interest income increased significantly in Q3 2025, driven by higher interest income from loan growth and increased yields on loans and investment securities, leading to an improved net interest margin Net Interest Income and Margin (Three Months Ended September 30, in thousands) | Metric | Q3 2025 | Q3 2024 | Change | | :-------------------------------- | :------ | :------ | :----- | | Net Interest Income | $25,174 | $18,870 | +$6,304 | | Interest Income | $29,797 | $21,862 | +$7,935 | | Interest Expense | $4,623 | $2,992 | +$1,631 | | Net Interest Margin | 4.83% | 4.76% | +0.07% | | Average Loan Balances | $1,476,275 | $1,001,505 | +$474,770 | | Average Yield on Loans | 6.35% | 6.21% | +0.14% | | Average Investment Securities Balance | $481,862 | $446,868 | +$34,994 | | Average Yield on Investment Securities | 4.06% | 3.99% | +0.07% | | Average Rate Paid on Interest-Bearing Liabilities | 1.67% | 1.52% | +0.15% | | Average Rate Paid on Interest-Bearing Deposits | 1.56% | 0.97% | +0.59% | - Interest on cash balances decreased by $518 thousand due to a decline in average balance and a 94 basis point decrease in average rate paid to 4.50%34 - Interest paid on deposits increased by $2.3 million, with money market accounts seeing the largest increase ($1.8 million) due to higher rates and balances from the CCB acquisition36 Nine Months Ended September 30, 2025 For the first nine months of 2025, net interest income increased, primarily driven by higher interest income from increased average loan balances and yields, leading to an improved overall net interest margin despite rising interest expense Net Interest Income and Margin (Nine Months Ended September 30, in thousands) | Metric | YTD 2025 | YTD 2024 | Change | | :-------------------------------- | :------- | :------- | :----- | | Net Interest Income | $61,896 | $54,732 | +$7,164 | | Interest Income | $71,020 | $63,049 | +$7,971 | | Interest Expense | $9,124 | $8,317 | +$807 | | Net Interest Margin | 4.87% | 4.76% | +0.11% | | Average Loan Balances | $1,171,116 | $982,191 | +$188,925 | | Average Yield on Loans | 6.24% | 6.21% | +0.03% | | Average Investment Securities Balance | $456,208 | $456,944 | -$736 | | Average Yield on Investment Securities | 4.09% | 3.92% | +0.17% | | Average Rate Paid on Interest-Bearing Liabilities | 1.43% | 1.43% | 0.00% | | Average Rate Paid on Interest-Bearing Deposits | 1.35% | 0.85% | +0.50% | - Interest on cash balances declined by $1.6 million due to a decrease in both balance and yield, with the rate earned on cash balances falling by 99 basis points to 4.5%42 - Interest paid on deposits increased by $4.0 million, with money market accounts contributing the largest share ($3.4 million)44 Non-Interest Income and Expense Analysis This section examines the components of non-interest income and expense for Q3 and YTD 2025, noting the influence of the CCB acquisition and specific one-time events Three Months Ended September 30, 2025 Non-interest income remained relatively stable in Q3 2025, with gains from an interest rate swap and BOLI largely offset by a loss on the sale of CCB's investment portfolio, while non-interest expense significantly increased due to merger-related costs and higher salary and benefit expenses Non-Interest Income (Three Months Ended September 30, in thousands) | Category | 2025 | 2024 | Dollar Change | Percentage Change | | :-------------------------------- | :----- | :----- | :------------ | :---------------- | | Total non-interest income | $2,248 | $2,237 | $11 | 0.5% | | Gain on termination of interest rate swap (acquired from CCB) | N/A | N/A | +$254 | N/A | | Earnings on bank owned life insurance (BOLI) | $261 | $104 | +$157 | 151.0% | | Loss on sale of investment securities | $(628) | $0 | $(628) | -100.0% | Non-Interest Expense (Three Months Ended September 30, in thousands) | Category | 2025 | 2024 | Dollar Change | Percentage Change | | :-------------------------------- | :----- | :----- | :------------ | :---------------- | | Total non-interest expense | $15,134 | $10,824 | $4,310 | 39.8% | | Merger and acquisition expenses | $879 | $0 | +$879 | 100.0% | | Salaries and employee benefits | $7,418 | $5,481 | +$1,937 | 35.3% | | Occupancy and equipment | $2,471 | $1,988 | +$483 | 24.3% | | Outside service fees | $1,584 | $1,114 | +$470 | 42.2% | | Amortization of Core Deposit Intangible | $615 | $51 | +$564 | 1105.9% | - Increase in salary and benefit expense includes $1.3 million related to former CCB employees, $312 thousand in bonus expense, $217 thousand in SBA loan funding commissions, and a $150 thousand increase in accrued vacation liability (viewed as non-recurring)47 Nine Months Ended September 30, 2025 For the nine months ended September 30, 2025, non-interest income increased, largely due to a legal settlement, despite a significant loss on the sale of investment securities, while non-interest expense saw a substantial increase driven by higher salary and benefit expenses and merger-related costs Non-Interest Income (Nine Months Ended September 30, in thousands) | Category | 2025 | 2024 | Dollar Change | Percentage Change | | :-------------------------------- | :----- | :----- | :------------ | :---------------- | | Total non-interest income | $7,822 | $6,579 | $1,243 | 18.9% | | Legal settlement (Dixie Fire) | N/A | N/A | +$1,100 | N/A | | Loss on sale of investment securities | $(625) | $(19,817) | +$19,192 | 96.8% | | Gain on sale of buildings | $0 | $19,854 | $(19,854) | -100.0% | Non-Interest Expense (Nine Months Ended September 30, in thousands) | Category | 2025 | 2024 | Dollar Change | Percentage Change | | :-------------------------------- | :----- | :----- | :------------ | :---------------- | | Total non-interest expense | $37,612 | $31,617 | $5,995 | 19.0% | | Salaries and employee benefits | $18,851 | $16,129 | +$2,722 | 16.9% | | Merger and acquisition expenses | $1,929 | $0 | +$1,929 | 100.0% | | Occupancy and equipment | $6,535 | $5,627 | +$908 | 16.1% | | Amortization of Core Deposit Intangible | $702 | $153 | +$549 | 358.8% | - Increase in salary and benefit expense includes $1.8 million primarily related to the acquisition of CCB, and other increases in bonus expense, health insurance, payroll taxes, and accrued vacation49 Balance Sheet Highlights The balance sheet expanded significantly year-over-year, primarily due to the Cornerstone Community Bank acquisition, impacting assets, loans, deposits, and equity Overall Balance Sheet Changes Plumas Bancorp's balance sheet grew significantly year-over-year, primarily driven by the Cornerstone Community Bank acquisition, with total assets, loans, deposits, and shareholders' equity all seeing substantial increases, while borrowings decreased Balance Sheet Highlights (September 30, in thousands) | Metric | 2025 | 2024 | Dollar Change | Percentage Change | | :-------------------------- | :----------- | :----------- | :------------ | :---------------- | | Total Assets | $2,229,408 | $1,663,974 | $565,434 | 34.0% | | Gross Loans | $1,496,494 | $1,003,488 | $493,006 | 49.1% | | Deposits | $1,819,536 | $1,350,996 | $468,540 | 34.7% | | Shareholders' Equity | $245,950 | $181,942 | $64,008 | 35.2% | | Book Value Per Share | $35.38 | $30.85 | $4.53 | 14.7% | | Borrowings | $26,705 | $75,000 | $(48,295) | -64.4% | | Repurchase Agreements | $93,900 | $17,000 | $76,900 | 452.4% | | Goodwill | $24,215 | $5,502 | $18,713 | 340.1% | | Bank Owned Life Insurance | $33,396 | $16,415 | $16,981 | 103.4% | Loans, Deposits, and Investments The acquisition of CCB significantly impacted the composition and volume of loans and deposits, with gross loans increasing substantially across most categories and deposits growing, while investment securities saw a modest increase and cash balances decreased Loans Gross loans increased by 49% to $1.5 billion, primarily due to the CCB acquisition, with commercial real estate loans representing the largest portion of the portfolio, and approximately 80% of the loan portfolio consisting of variable rate loans - Gross loans increased by $493 million, or 49%, to $1.5 billion, mostly related to the acquisition of CCB12 Loan Portfolio Distribution (September 30, in thousands) | Loan Type | 9/30/2025 Balance | 9/30/2025 % of Total | 9/30/2024 Balance | 9/30/2024 % of Total | | :-------------------------- | :------------------ | :------------------- | :------------------ | :------------------- | | Commercial | $161,667 | 10.8% | $82,192 | 8.2% | | Agricultural | $154,107 | 10.3% | $121,709 | 12.1% | | Real estate – residential | $33,657 | 2.2% | $11,672 | 1.2% | | Real estate – commercial | $980,694 | 65.5% | $618,236 | 61.6% | | Real estate – construction & land | $49,199 | 3.3% | $54,287 | 5.4% | | Equity Lines of Credit | $53,283 | 3.6% | $37,652 | 3.8% | | Auto | $45,142 | 3.0% | $72,388 | 7.2% | | Other | $18,745 | 1.3% | $5,352 | 0.5% | | Total Gross Loans | $1,496,494 | 100% | $1,003,488 | 100% | - Approximately 80% of the Company's loan portfolio was comprised of variable rate loans at September 30, 202513 Deposits Total deposits increased by 35% to $1.8 billion, largely due to the CCB acquisition, with significant increases in demand deposits, money market accounts, and time deposits, and non-interest-bearing demand deposits constituting 47% of total deposits - Total deposits increased by $469 million from $1.3 billion to $1.8 billion, related to the acquisition of CCB14 Deposit Distribution by Type (September 30, in thousands) | Deposit Type | 9/30/2025 Balance | 9/30/2025 % of Total | 9/30/2024 Balance | 9/30/2024 % of Total | | :------------------ | :------------------ | :------------------- | :------------------ | :------------------- | | Non-interest bearing | $862,085 | 47.4% | $703,005 | 52.0% | | Money Market | $433,832 | 23.8% | $229,267 | 17.0% | | Savings | $309,030 | 17.0% | $316,483 | 23.4% | | Time | $214,589 | 11.8% | $102,241 | 7.6% | | Total Deposits | $1,819,536 | 100% | $1,350,996 | 100% | - Transferred over $60 million of third-party reciprocal deposits acquired from CCB to repurchase agreements and paid off $38.5 million in brokered time deposits14 Investment Securities and Cash Total investment securities increased modestly, while cash and due from banks decreased, and the unrealized loss on investment securities also increased Investment Securities and Cash (September 30, in thousands) | Metric | 2025 | 2024 | Dollar Change | Percentage Change | | :-------------------------- | :----- | :----- | :------------ | :---------------- | | Total investment securities | $485,000 | $457,000 | +$28,000 | 6.1% | | Unrealized loss on investment securities | $23,000 | $21,000 | +$2,000 | 9.5% | | Cash and due from banks | $87,000 | $118,000 | $(31,000) | -26.3% | Shareholders' Equity Total shareholders' equity increased by $64 million, primarily driven by earnings and the issuance of common stock and stock options for the Cornerstone acquisition, partially offset by cash dividends and an increase in accumulated other comprehensive loss - Total shareholders' equity increased by $64 million from $182 million to $246 million21 - Increase includes $26.4 million in earnings, $45.2 million from common stock and stock options issued for the Cornerstone acquisition, and $1.4 million from restricted stock and stock option activity21 - Partially offset by $7.2 million in cash dividends and a $1.8 million increase in accumulated other comprehensive loss21 Asset Quality and Credit Losses This section details the increase in nonperforming assets and the substantial provision for credit losses, largely influenced by loan growth and the CCB acquisition Nonperforming Assets Nonperforming assets and loans increased significantly year-over-year, with nonperforming loans rising to 1.0% of total loans, largely attributed to a single agricultural loan relationship totaling $9.8 million Nonperforming Assets (September 30, in thousands) | Metric | 2025 | 2024 | Dollar Change | Percentage Change | | :-------------------------------- | :----- | :----- | :------------ | :---------------- | | Nonperforming assets | $15,169 | $4,753 | +$10,416 | 219.1% | | Nonperforming assets as % of total assets | 0.68% | 0.29% | +0.39% | 134.5% | | Nonperforming loans | $15,029 | $4,455 | +$10,574 | 237.4% | | Nonperforming loans as % of total loans | 1.0% | 0.44% | +0.56% | 127.3% | | OREO | $114 | $141 | $(27) | -19.1% | - The increase in nonperforming loans is related to one agricultural loan relationship of 15 loans totaling $9.8 million, which were placed on nonaccrual status during Q2 202516 Provision for Credit Losses and Allowance The provision for credit losses increased substantially for the nine months ended September 30, 2025, primarily due to loan portfolio growth, the CECL Day 1 provision on acquired non-PCD loans from CCB, and a reserve for unfunded commitments, while the allowance for credit losses also increased and net charge-offs decreased Provision for Credit Losses (Nine Months Ended September 30, in thousands) | Metric | 2025 | 2024 | Dollar Change | Percentage Change | | :-------------------------------- | :----- | :----- | :------------ | :---------------- | | Provision for credit losses | $6,500 | $1,300 | +$5,200 | 400.0% | | Provision for credit losses on loans | $6,300 | $1,500 | +$4,800 | 320.0% | | Increase in reserve for unfunded commitments | $211 | $(129) | +$340 | N/A | - The provision includes growth in the loan portfolio, the CECL Day 1 provision on non-PCD loans acquired from CCB, and a reserve for unfunded commitments on acquired loans17 Allowance for Credit Losses (September 30, in thousands) | Metric | 2025 | 2024 | Dollar Change | Percentage Change | | :-------------------------------- | :----- | :----- | :------------ | :---------------- | | Allowance for credit losses | $19,564 | $13,606 | +$5,958 | 43.8% | | Allowance for credit losses as % of total loans | 1.30% | 1.35% | -0.05% | -3.7% | | Net charge-offs (YTD) | $219 | $736 | $(517) | -70.2% | Funding and Liquidity Management This section outlines the company's funding sources, liquidity management strategies, and borrowing capacities, including the impact of the CCB acquisition on repurchase agreements Borrowings The Company paid off all BTFP borrowings during 2024, while repurchase agreements significantly increased due to the conversion of reciprocal deposits from the CCB acquisition, and other borrowings include a correspondent bank loan and assumed subordinated notes from Cornerstone, with plans to redeem the 2030 notes - All Bank Term Funding Program (BTFP) borrowings totaling $60 million at September 30, 2024, were paid off during 202422 Repurchase Agreements (September 30, in thousands) | Metric | 2025 | 2024 | Dollar Change | Percentage Change | | :-------------------------- | :----- | :----- | :------------ | :---------------- | | Securities sold under agreements to repurchase | $93,900 | $17,000 | +$76,900 | 452.4% | | Interest expense (Q3) | $317 | $8 | +$309 | 3862.5% | | Interest expense (YTD) | $347 | $26 | +$321 | 1234.6% | - Assumed $12 million in subordinated notes from Cornerstone ($2 million due 2035, $10 million due 2030), with an intention to redeem the 2030 notes on December 30, 202525 - An outstanding FHLB borrowing of $15 million from CCB was paid in full in August 202526 Liquidity Sources and Management The Company manages liquidity through asset and liability strategies, utilizing its investment portfolio, cash, competitive deposit rates, and established lines of credit, with significant borrowing capacity from FHLB and FRB Discount Window, and customer deposits remaining the primary source of funds - Liquidity is managed using assets (cash, investment portfolio with unpledged securities) and liabilities (competitive deposit rates, established lines of credit)27 - Can borrow up to $272 million from FHLB (secured by commercial and residential mortgage loans) and up to $63 million at the FRB Discount Window (secured by investment securities)28 - Has unsecured short-term borrowing agreements with two correspondent banks totaling $70 million28 - Estimates approximately $718 million in uninsured deposits, of which $162 million are collateralized29 Performance and Capital Ratios This section presents key performance and regulatory capital ratios, showing a decline in profitability metrics but an improvement in net interest margin, reflecting the acquisition's impact Performance Ratios Performance ratios for Q3 and YTD 2025 show a decline in return on average assets and equity compared to 2024, reflecting the impact of the acquisition and associated expenses, though net interest margin improved and the efficiency ratio slightly increased Performance Ratios (Annualized) | Metric | Q3 2025 | Q3 2024 | YTD 2025 | YTD 2024 | | :-------------------------------- | :------ | :------ | :------- | :------- | | Return on average assets | 0.90% | 1.84% | 1.35% | 1.69% | | Return on average equity | 8.5% | 18.1% | 12.2% | 17.2% | | Yield on earning assets | 5.72% | 5.52% | 5.59% | 5.48% | | Rate paid on interest-bearing liabilities | 1.67% | 1.52% | 1.43% | 1.43% | | Net interest margin | 4.83% | 4.76% | 4.87% | 4.76% | | Noninterest income to average assets | 0.39% | 0.53% | 0.57% | 0.53% | | Noninterest expense to average assets | 2.65% | 2.55% | 2.73% | 2.56% | | Efficiency ratio | 55.2% | 51.3% | 53.9% | 51.6% | Capital Ratios Plumas Bank's regulatory capital ratios, including Tier 1 Leverage, Common Equity Tier 1, Tier 1 Risk-Based, and Total Risk-Based Capital Ratios, decreased from Q3 2024 to Q3 2025, reflecting the impact of the acquisition on the capital structure Plumas Bank Regulatory Capital Ratios (September 30) | Ratio | 2025 | 2024 | | :-------------------------- | :----- | :----- | | Tier 1 Leverage Ratio | 10.6% | 11.3% | | Common Equity Tier 1 Ratio | 14.3% | 16.9% | | Tier 1 Risk-Based Capital Ratio | 14.3% | 16.9% | | Total Risk-Based Capital Ratio | 15.5% | 18.2% | Tangible Common Equity (September 30, in thousands) | Metric | 2025 | 2024 | | :-------------------------- | :----- | :----- | | Tangible common equity | $210,036 | $175,601 | | Tangible book value per common share | $30.21 | $29.78 | | Tangible common equity to total assets | 9.4% | 10.6% | Company Information and Forward-Looking Statements This section provides a profile of Plumas Bancorp and Plumas Bank, along with important disclaimers regarding forward-looking statements and associated risks Company Profile Plumas Bancorp, headquartered in Reno, Nevada, is the parent company of Plumas Bank, a full-service community bank founded in 1980 and headquartered in Quincy, California, operating nineteen branches across California and Nevada, along with two loan production offices, offering a wide range of financial services and holding Preferred Lender status with the SBA - Plumas Bancorp is headquartered in Reno, Nevada, and its principal subsidiary, Plumas Bank, is headquartered in Quincy, California50 - Plumas Bank operates nineteen branches across California (Butte, Lassen, Modoc, Nevada, Placer, Plumas, Shasta, Sutter, Tehama counties) and Nevada (Carson City and Washoe counties), plus two loan production offices in Auburn, California, and Klamath Falls, Oregon50 - Offers a wide range of financial and investment services to consumers and businesses and has nationwide Preferred Lender status with the United States Small Business Administration50 Forward-Looking Statements The report includes forward-looking statements, which are subject to inherent risks and uncertainties that may cause actual results to differ materially from expectations, and these statements are not guarantees of future performance and should not be solely relied upon - Forward-looking statements are covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 199551 - Future events are difficult to predict, and expectations are subject to risk and uncertainty that may cause actual results to differ materially and adversely51 - Factors that might cause differences include changes in economic conditions, interest rates, industry consolidation, litigation, competitive challenges, regulatory changes, loss of key personnel, and changes in accounting policies52