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8-K - FORM 8-K - PLUMAS BANCORP | c11751e8vk.htm |
Exhibit 99.1
PLUMAS BANCORP REPORTS FOURTH QUARTER
AND YEAR END NET INCOME
AND YEAR END NET INCOME
QUINCY, California, February 3, 2011 Plumas Bancorp (NASDAQ:PLBC), a bank holding company
and the parent company of Plumas Bank, today announced fourth quarter earnings of $65 thousand as
compared to a net loss of $3.5 million for the fourth quarter of 2009, or an improvement of $3.6
million. For the year ended December 31, 2010, Plumas Bancorp reported net income of $971 thousand
as compared to a net loss of $9.1 million for the year ended December 31, 2009.
2010 Financial Highlights
Year ended December 31, 2010 compared to December 31, 2009
| Net income of $971 thousand as compared to a net loss of $9.1 million. |
| Loan loss provision decreased by $9.0 million. |
| Non-interest income increased by $2.8 million. |
| Non-interest expense decreased by $7.1 million. |
| Net loan charge-offs decreased by $4.4 million or 36% to $7.7 million. |
Period ended December 31, 2010 compared to December 31, 2009
| Cash and due from banks increased by $5 million. |
| Borrowings declined by $40 million. |
| Total Risk-Based Capital Ratio strengthened to 13.9% from 11.6%. |
Three months ended December 31, 2010 compared to December 31, 2009
| Net income of $65 thousand as compared to a net loss of $3.5 million. |
| Loan loss provision decreased by $1.4 million. |
| Non-interest income increased by $309 thousand. |
| Non-interest expense decreased by $4.9 million. |
Andrew J. Ryback, interim president and chief executive officer, remarked:
The Board of Directors and executive management team are pleased to announce that the Company
achieved profitability for the fourth consecutive quarter despite continuing economic challenges.
While not satisfied with our earnings, we have stabilized our operating performance with reduced
credit losses, a continued focus on cost controls, growth in our government guaranteed lending
operations and additional items of non-interest income.
Plumas Bancorps and Plumas Banks capital ratios have improved significantly compared to year end
2009, continued Ryback. During 2010, the Banks tier 1 leverage, tier 1 risk-based and total
risk-based capital ratios grew by 150 basis points, 300 basis points and 300 basis points,
respectively and ended the year at 8.9%, 12.8% and 14.0%, respectively. Furthermore, our strong
liquidity position provides us with the flexibility to mitigate considerable fluctuations in our
funding needs. He added, Our top priority is ensuring that our credit risk is proactively
managed. Because of that, weve restructured our credit administration function and dedicated our
highest level loan administrator to the task of accelerating the reduction in problem assets and
mitigating losses. This action step, along with a continued strong focus on cost control and
revenue growth will position the Company for a higher level of profitability in future periods.
We continue to meet the challenges presented by a very stressed economy and are confident
that we are well positioned to deal successfully with any future
challenges, concluded Ryback.
Chairman of the Board, Daniel E. West, added, Last December Plumas Bank celebrated a significant
milestone our 30th Anniversary. It has been both a privilege and a pleasure to have
served our customers for three decades and we look forward to many more years of meeting the
financial needs of our local communities. Finally, we would like to take this opportunity to
acknowledge our shareholders for their continued confidence in our Company and to thank them for
their patience as we continue to work toward a higher level of financial strength and stability.
Asset Quality
Nonperforming loans at December 31, 2010 were $25.4 million, an increase of $11.1 million over
the $14.3 million balance at December 31, 2009. Nonperforming loans as a percentage of total loans
increased to 8.07% at December 31, 2010 up from 4.30% at December 31, 2009. The increase in
nonperforming loans mostly relates to two large relationships totaling $8 million. These loans were
measured for impairment and it was determined that a $0.6 million allowance for impairment was
required at December 31, 2010.
Nonperforming assets (which are comprised of nonperforming loans, other real estate owned and
repossessed vehicle holdings) at December 31, 2010 were $34.2 million, an increase of $8.6 million
over the $25.6 million balance at December 31, 2009.
Repossessed vehicles and OREO (other real estate owned) are carried at the lesser of cost or fair
market value, less selling costs. OREO holdings represented thirty-one properties totaling $8.9
million at December 31, 2010 and twenty-nine properties totaling $11.2 million at December 31,
2009. Nonperforming assets as a percentage of total assets increased to 7.07% at December 31, 2010
up from 4.84% at December 31, 2009.
During the year ended December 31, 2010 we recorded a provision for loan losses of $5.5 million
down $9.0 million from the $14.5 million provision recorded during the year ended December 31,
2009. The Company recorded a $1.8 million provision for loan losses for the three months ended
December 31, 2010 compared to the $3.2 million in provision for loan losses for the three months
ended December 31, 2009.
2
Net charge-offs totaled $7.7 million during the year ended December 31, 2010 and $12.2 million
during the same period in 2009. Net charge-offs as a percentage of average loans decreased from
3.43% during the year ended December 31, 2009 to 2.39% during the current period. While we incurred
significant charge-offs during the 2010 period, $3.1 million of the charge-offs had been
incorporated in the allowance for loan losses at December 31, 2009 as specific reserves on impaired
loans. The allowance for loan losses totaled $7.3 million at December 31, 2010 and $9.6 million at
December 31, 2009. The decrease in the allowance for loan losses from December 31, 2009 is
attributable to a $2.4 million decrease in specific reserves related to impaired loans from $4.3
million at December 31, 2009 to $1.9 million at December 31, 2010. General reserves increased by
$133 thousand to $5.4 million at December 31, 2010. As a percentage of total loans general reserves
were 1.73% at December 31, 2010 and 1.59% at December 31, 2009. Overall, the allowance for loan
losses as a percentage of total loans decreased from 2.88% at December 31, 2009 to 2.33% at
December 31, 2010, driven by the decline in specific reserves on impaired loans.
The increase in nonperforming loans resulted from changes in the quality of two large real estate
loan relationships that we have been monitoring actively for some time. We are encouraged that,
despite the increase in nonperforming loans, the losses associated with such loans were nominal and
we are seeing some stabilization of real estate prices in our markets. While far from robust, we
are not seeing the declines in appraised values that we saw in the last two years and we are
optimistic that this trend will continue in 2011, stated Ryback.
Cash, Borrowings, Loans and Deposits
On-balance sheet liquidity has improved since December 31, 2009 with increases in cash and due
from banks and decreases in borrowings. Cash and due from banks increased by $5.1 million from
$59.5 million at December 31, 2009 to $64.6 million at December 31, 2010. Borrowings at the
Federal Home Loan Bank (FHLB) totaled $40 million at December 31, 2009, while no borrowings with
the FHLB were outstanding at December 31, 2010. Somewhat offsetting these items were a decrease in
investments securities of $24.9 million.
Net loans decreased by $16 million, or 5.0% from $323 million at December 31, 2009 to $307 million
at December 31, 2010. This decline in net loans was mostly related to normal pay downs and
prepayments and loan charge-offs. Deposits decreased by $8 million from $433 million at December
31, 2009 to $425 million at December 31, 2010 mostly related to a decline in our public agency NOW
accounts as we significantly lowered the rate paid on these municipal accounts in 2010.
Shareholders Equity
Total shareholders equity decreased by $243 thousand from $38.2 million at December 31, 2009
to $38.0 million at December 31, 2010. This decrease relates to a $674 thousand decline in
unrealized gains on available-for-sale investment securities from $622 thousand at December 31,
2009 to an unrealized loss of $52 thousand at December 31, 2010.
3
Book value per common share decreased slightly to $5.51 at December 31, 2010 from $5.58 at December
31, 2009. Plumas Bancorps total risk-based capital ratio increased from 11.6% at December 31, 2009
to 13.9% at December 31, 2010 and its leverage capital ratio increased from 7.9% at December 31,
2009 to 8.9% at December 31, 2010.
Net Interest Income and Net Interest Margin
Net interest income for the year ended December 31, 2010 was $17.5 million, a decline of $1.7
million from the $19.2 million earned during the same period in 2009. The largest components of the
decrease in net interest income was a decline in the average balance of loans and an increase in
interest foregone on nonaccrual loans. Other significant changes, resulting in a decrease in net
interest income, included a decline in yield on the Companys investment portfolio and an increase
in the average balance of deposits. These items were partially offset by declines in rates paid on
deposit and subordinated debentures and an increase in the average balance of investment securities
and other interest earning assets. Net interest margin for the year ended December 31, 2010
decreased 27 basis points, or 6%, to 4.25%, down from 4.52% for the same period in 2009.
Net interest income was $4.3 million for the three months ended December 31, 2010, a decrease of
$502 thousand, or 10%, from $4.8 million for the same period in 2009. The decline in net interest
income was primarily related to a decrease in the average balance and yield on loans and
investments. The effect of these items on net interest income was partially offset by a decline in
the rates paid on deposit and a decline in average balance and yield on FHLB borrowings. Net
interest margin for the three months ended December 31, 2010 decreased 24 basis points to 4.10%,
down from 4.34% for the same period in 2009.
Non-Interest Income and Expense
During the year ended December 31, 2010 non-interest income increased by $2.8 million to $8.6
million, from $5.8 million during the year ended December 31, 2009. This increase was primarily
related to three items, the largest of which was a $1.4 million gain on the sale of our merchant
processing portfolio. During June 2010 we entered into an alliance with a world-wide merchant
processing leader. In conjunction with this alliance we sold our merchant processing business,
recording a one-time gain of $1.4 million. The Company believes that this alliance provides our
customers with a superior merchant processing solution. Additionally we sold $40.9 million in
securities recording a gain on sale of $1.2 million. Finally, we recorded a gain on sale of SBA
loans of $1.1 million representing the sale of $13.6 million in loans. During the three months
ended December 31, 2010, total non-interest income increased by $309 thousand from the same period
in 2009. This primarily relates to a $380 thousand gain on the sale of $18.9 million in securities
during the 2010 quarter.
4
During the year ended December 31, 2010, total non-interest expense decreased by $7.1 million, or
27%, to $19.2 million, down from $26.3 million for the comparable period in 2009. The largest
component of this decline was a $4.4 million decrease in the provision for OREO losses from $4.8
million during 2009 to $0.4 million during the current year. We also were able to achieve
significant reductions in most other categories of expense including declines in salaries and
employee benefits ($1.3 million), occupancy and equipment costs ($663 thousand), professional fees
($202 thousand) and losses/gains on the sale of OREO ($201 thousand). These items were partially
offset by increases in outside service fees ($222 thousand) and OREO carrying costs ($203
thousand).
Salaries and employee benefits decreased by $1.3 million primarily related to four items. Salary
expense, excluding commissions, declined by $796 thousand related to reduced staffing in all areas
with the exception of government guaranteed lending and problem assets. While the Company has
effectively reduced personnel in most functional areas, we have increased staffing in our problem
asset department to effectively manage our increased level of nonperforming assets. Decreases in
other employee benefits include reductions in stock compensation expense, the elimination of
bonuses for 2010 and, effective April 1, 2010, the discontinuation of the Companys 401k matching
contributions. The reduction in occupancy and equipment expense primarily relates to cost savings
at our Redding branch as a result of the purchase of this facility on March 31, 2010.
Losses on the sale of OREO totaled $158 thousand during 2009; however, during 2010 we recorded net
gains on sale of OREO totaling $43 thousand.
The increase in outside service fees was primarily related to the outsourcing of daily management
of our computer network operations, while the increase in OREO carrying costs is primarily related
to the increase in average OREO balances.
During the three months ended December 31, 2010, total non-interest expense decreased by $4.9
million, or 52%, to $4.4 million, down from $9.3 million for the comparable period in 2009. The
decrease in non-interest expense was primarily the result of decreases of $3.9 million in the
provision for OREO losses. In addition, salaries and
employee benefits decreased by $274 thousand and occupancy and equipment expense declined by $154
thousand.
Founded in 1980, Plumas Bank is a locally owned and managed full-service community bank based in
Northeastern California. The Bank operates eleven branches located in the counties of Plumas,
Lassen, Placer, Nevada, Modoc and Shasta. Plumas Bank offers a wide range of financial and
investment services to consumers and businesses and has received nationwide Preferred Lender status
with the United States Small Business Administration. For more information on Plumas Bancorp and
Plumas Bank, please visit our website at www.plumasbank.com.
5
This news release includes forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the Exchange Act of 1934, as amended and
Plumas Bancorp intends for such forward-looking statements to be covered by the safe harbor
provisions for forward-looking statements contained in the Private Securities Litigation Reform Act
of 1995. Future events are difficult to predict, and the expectations described above are
necessarily subject to risk and uncertainty that may cause actual results to differ materially and
adversely.
Forward-looking statements can be identified by the fact that they do not relate strictly to
historical or current facts. They often include the words believe, expect, anticipate,
intend, plan, estimate, or words of similar meaning, or future or conditional verbs such as
will, would, should, could, or may. These forward-looking statements are not guarantees
of future performance, nor should they be relied upon as representing managements views as of any
subsequent date. Forward-looking statements involve significant risks and uncertainties and actual
results may differ materially from those presented, either expressed or implied, in this news
release. Factors that might cause such differences include, but are not limited to: the Companys
ability to successfully execute its business plans and achieve its objectives; changes in general
economic and financial market conditions, either nationally or locally in areas in which the
Company conducts its operations; changes in interest rates; continuing consolidation in the
financial services industry; new litigation or changes in existing litigation; increased
competitive challenges and expanding product and pricing pressures among financial institutions;
legislation or regulatory changes which adversely affect the Companys operations or business; loss
of key personnel; and changes in accounting policies or procedures as may be required by the
Financial Accounting Standards Board or other regulatory agencies.
In addition, discussions about risks and uncertainties are set forth from time to time in the
Companys publicly available Securities and Exchange Commission filings. The Company undertakes no
obligation to publicly revise these forward-looking statements to reflect subsequent events or
circumstances.
Contact: Elizabeth Kuipers
Vice President, Marketing Manager & Investor Relations Officer
Plumas Bank
35 S. Lindan Ave.
Quincy, CA 95971
530.283.7305 ext. 8912
Fax: 530.283.9665
investorrelations@plumasbank.com
Plumas Bank
35 S. Lindan Ave.
Quincy, CA 95971
530.283.7305 ext. 8912
Fax: 530.283.9665
investorrelations@plumasbank.com
6
PLUMAS BANCORP
CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands)
(Unaudited)
CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands)
(Unaudited)
As of December 31, | Dollar | Percentage | ||||||||||||||
2010 | 2009 | Change | Change | |||||||||||||
ASSETS |
||||||||||||||||
Cash and due from banks |
$ | 64,628 | $ | 59,493 | $ | 5,135 | 8.6 | % | ||||||||
Investment securities |
63,017 | 87,950 | (24,933 | ) | -28.3 | % | ||||||||||
Loans, net of allowance for loan losses |
307,151 | 323,408 | (16,257 | ) | -5.0 | % | ||||||||||
Premises and equipment, net |
14,431 | 14,544 | (113 | ) | -0.8 | % | ||||||||||
Intangible assets, net |
475 | 648 | (173 | ) | -26.7 | % | ||||||||||
Bank owned life insurance |
10,463 | 10,111 | 352 | 3.5 | % | |||||||||||
Real estate and vehicles acquired through foreclosure |
8,884 | 11,269 | (2,385 | ) | -21.2 | % | ||||||||||
Accrued interest receivable and other assets |
15,431 | 20,694 | (5,263 | ) | -25.4 | % | ||||||||||
Total assets |
$ | 484,480 | $ | 528,117 | $ | (43,637 | ) | -8.3 | % | |||||||
LIABILITIES AND
SHAREHOLDERS EQUITY |
||||||||||||||||
Deposits |
$ | 424,887 | $ | 433,255 | $ | (8,368 | ) | -1.9 | % | |||||||
Short-term borrowings |
0 | 20,000 | (20,000 | ) | -100.0 | % | ||||||||||
Long-term borrowings |
0 | 20,000 | (20,000 | ) | -100.0 | % | ||||||||||
Accrued interest payable and other liabilities |
11,295 | 6,321 | 4,974 | 78.7 | % | |||||||||||
Junior subordinated deferrable interest debentures |
10,310 | 10,310 | | 0.0 | % | |||||||||||
Total liabilities |
446,492 | 489,886 | (43,394 | ) | -8.9 | % | ||||||||||
Shareholders equity |
37,988 | 38,231 | (243 | ) | -0.6 | % | ||||||||||
Total liabilities and shareholders equity |
$ | 484,480 | $ | 528,117 | $ | (43,637 | ) | -8.3 | % | |||||||
7
PLUMAS BANCORP
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
Dollar | Percentage | |||||||||||||||
FOR THE YEAR ENDED DECEMBER 31, | 2010 | 2009 | Change | Change | ||||||||||||
Interest income |
$ | 20,680 | $ | 22,836 | $ | (2,156 | ) | -9.4 | % | |||||||
Interest expense |
3,147 | 3,655 | (508 | ) | -13.9 | % | ||||||||||
Net interest income before provision for loan losses |
17,533 | 19,181 | (1,648 | ) | -8.6 | % | ||||||||||
Provision for loan losses |
5,500 | 14,500 | (9,000 | ) | -62.1 | % | ||||||||||
Net interest income after provision for loan losses |
12,033 | 4,681 | 7,352 | 157.1 | % | |||||||||||
Non-interest income |
8,561 | 5,752 | 2,809 | 48.8 | % | |||||||||||
Non-interest expenses |
19,234 | 26,354 | (7,120 | ) | -27.0 | % | ||||||||||
Income (loss) before income taxes |
1,360 | (15,921 | ) | 17,281 | 108.5 | % | ||||||||||
Provision (benefit) for income taxes |
389 | (6,775 | ) | 7,164 | 105.7 | % | ||||||||||
Net income (loss) |
$ | 971 | $ | (9,146 | ) | $ | 10,117 | 110.6 | % | |||||||
Basic earnings (loss) per share |
$ | 0.06 | $ | (2.05 | ) | $ | 2.11 | 102.9 | % | |||||||
Diluted earnings (loss) per share |
$ | 0.06 | $ | (2.05 | ) | $ | 2.11 | 102.9 | % | |||||||
Dollar | Percentage | |||||||||||||||
FOR THE THREE MONTHS ENDED DECEMBER 31, | 2010 | 2009 | Change | Change | ||||||||||||
Interest income |
$ | 4,945 | $ | 5,736 | $ | (791 | ) | -13.8 | % | |||||||
Interest expense |
660 | 949 | (289 | ) | -30.5 | % | ||||||||||
Net interest income before provision for loan losses |
4,285 | 4,787 | (502 | ) | -10.5 | % | ||||||||||
Provision for loan losses |
1,800 | 3,200 | (1,400 | ) | -43.8 | % | ||||||||||
Net interest income after provision for loan losses |
2,485 | 1,587 | 898 | 56.6 | % | |||||||||||
Non-interest income |
2,020 | 1,711 | 309 | 18.1 | % | |||||||||||
Non-interest expenses |
4,424 | 9,313 | (4,889 | ) | -52.5 | % | ||||||||||
Income (loss) before income taxes |
81 | (6,015 | ) | 6,096 | 101.3 | % | ||||||||||
Provision (benefit) for income taxes |
16 | (2,516 | ) | 2,532 | 100.6 | % | ||||||||||
Net income (loss) |
$ | 65 | $ | (3,499 | ) | $ | 3,564 | 101.9 | % | |||||||
Basic loss per share |
$ | (0.02 | ) | $ | (0.77 | ) | $ | 0.75 | 97.4 | % | ||||||
Diluted loss per share |
$ | (0.02 | ) | $ | (0.77 | ) | $ | 0.75 | 97.4 | % | ||||||
8
PLUMAS BANCORP
SELECTED FINANCIAL INFORMATION
(In thousands, except per share data)
(Unaudited)
SELECTED FINANCIAL INFORMATION
(In thousands, except per share data)
(Unaudited)
December 31, | ||||||||
2010 | 2009 | |||||||
AVERAGE BALANCES FOR THE YEAR ENDED |
||||||||
Assets |
$ | 500,082 | $ | 490,000 | ||||
Earning assets |
$ | 413,071 | $ | 424,839 | ||||
Loans |
$ | 323,906 | $ | 354,482 | ||||
Deposits |
$ | 430,777 | $ | 403,896 | ||||
Common equity |
$ | 27,304 | $ | 33,147 | ||||
Total equity |
$ | 38,941 | $ | 43,839 | ||||
CREDIT QUALITY DATA |
||||||||
Allowance for loan losses |
$ | 7,324 | $ | 9,568 | ||||
Allowance for loan losses as a percentage of total loans |
2.33 | % | 2.88 | % | ||||
Nonperforming loans |
$ | 25,358 | $ | 14,291 | ||||
Nonperforming assets |
$ | 34,242 | $ | 25,560 | ||||
Nonperforming loans as a percentage of total loans |
8.07 | % | 4.30 | % | ||||
Nonperforming assets as a percentage of total assets |
7.07 | % | 4.84 | % | ||||
Year-to-date net charge-offs |
$ | 7,745 | $ | 12,156 | ||||
Year-to-date net charge-offs as a percentage of average loans |
2.39 | % | 3.43 | % | ||||
SHARE AND PER SHARE DATA |
||||||||
Basic loss per share for the quarter |
$ | (0.02 | ) | $ | (0.77 | ) | ||
Diluted loss per share for the quarter |
$ | (0.02 | ) | $ | (0.77 | ) | ||
Quarterly weighted average shares outstanding |
4,776 | 4,776 | ||||||
Quarterly weighted average diluted shares outstanding |
4,776 | 4,776 | ||||||
Basic earnings (loss) per share, year-to-date |
$ | 0.06 | $ | (2.05 | ) | |||
Diluted earnings (loss) per share, year-to-date |
$ | 0.06 | $ | (2.05 | ) | |||
Year-to-date weighted average shares outstanding |
4,776 | 4,776 | ||||||
Year-to-date weighted average diluted shares outstanding |
4,776 | 4,776 | ||||||
Book value per common share |
$ | 5.51 | $ | 5.58 | ||||
Common cash dividends paid per share, year-to-date |
$ | | $ | | ||||
Total shares outstanding |
4,776 | 4,776 | ||||||
QUARTERLY KEY FINANCIAL RATIOS |
||||||||
Annualized loss on average common equity |
(1.5 | )% | (48.0 | )% | ||||
Annualized return (loss) on average assets |
0.1 | % | (2.7 | )% | ||||
Net interest margin |
4.10 | % | 4.34 | % | ||||
Efficiency ratio |
70.2 | % | 143.3 | % | ||||
YEAR END KEY FINANCIAL RATIOS |
||||||||
Return (loss) on average common equity |
1.1 | % | (29.5 | )% | ||||
Return (loss) on average assets |
0.2 | % | (1.9 | )% | ||||
Net interest margin |
4.25 | % | 4.52 | % | ||||
Efficiency ratio |
73.7 | % | 105.7 | % | ||||
Loan to Deposit Ratio |
73.9 | % | 76.8 | % | ||||
Total Risk-Based Capital Ratio |
13.9 | % | 11.6 | % |
9