PLUMAS BANCORP

DEF 14A 1 plbc20240322_def14a.htm FORM DEF 14A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

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Exchange Act of 1934 (Amendment No. )

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Plumas Bancorp

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Dear Shareholder,

We are pleased to announce that Plumas Bancorp ended 2023 with record earnings. We also saw improvements over 2022 in return on average assets and return on average equity. Our impressive performance was recognized externally in several ways, including being the recipient of a variety of regional and national awards such as the Raymond James Community Bankers Cup and D.A. Davidson’s Bison Select List. We were also included on the Russell 2000, and, in Raymond James’ equity research with a strong initial report.

Strategic Responses to Industry Challenges

The banking industry faced challenges in 2023, primarily driven by rapidly rising interest rates and deposit outflows. Plumas Bancorp proactively responded to the rate environment and its effect on loan demand by investing in retooling our lending system and processes, enhancing efficiency, and decision-making capabilities. These changes are aimed at positioning us for future loan growth as the rate environment improves. In response to deposit outflows, we terminated our indirect auto loan program, a move that not only reduced our loan loss risk but also improved our overall loan portfolio quality. This decision made sense given that this category of lending is transactional rather than relational in nature and therefore did not bring in deposits. Furthermore, our low-cost funds and higher-yielding loans insulated us from the industry-wide margin compression, resulting in margin expansion.

Capitalizing on Opportunities

Amidst the challenges, we identified and capitalized on opportunities. During 2023, we seized the chance to harvest a significant gain from an interest rate swap while locking in lower-cost borrowing. Additionally, we developed a sale-leaseback strategy that we implemented in the first quarter of 2024. This strategic move enabled us to restructure a portion of our investment portfolio, divesting lower-yielding securities and replacing them with higher-yielding ones, enhancing our interest income streams for the years to come. We also executed on a strategic opportunity that aligns with our long-term growth objectives by opening a full-service branch in Chico, California. This move expanded our services in Butte County from a loan production office to a full-service branch.

Outlook and Future Growth

Looking ahead, the Federal Reserve’s signaling of rate stability and likely rate cuts in the coming year is expected to improve demand for loans. We anticipate stabilization in deposit balances as clients may be less inclined to self-fund with savings in a declining rate environment. As the banking environment for community banks improves, we remain committed to outperforming the industry and exploring strategic opportunities aligned with our long-term growth objectives.

On behalf of Plumas Bancorp, I extend our sincere gratitude to our clients, communities, employees, and investors for their unwavering support. Your trust empowers Plumas Bank to remain steadfast in our commitment to being Here. FOR GOOD. We are excited about the future and confident that our strategic initiatives will continue to yield positive results.

Andrew J. Ryback Director, President & Chief Executive Officer

Daniel E. West Director, Chairman of the Board