PLUMAS BANCORP
For the period ended Mar 31, 2026. Filed May 6, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 6, 2026
PLBC$62.46-0.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-05.
0001437749-25-033185
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-06.
0001437749-26-015036
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 118 previous paragraphs and 87 current paragraphs.
43 unchanged; 36 reworded; 8 added; 33 removed; 6 previous and 0 current paragraphs rearranged.
Tables are not compared: 22 previous and 14 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (8)
Current report
Net interest income increased from $18.5 million during the three months ended March 31, 2025, to $25.1 million during the current quarter. The provision for credit losses decreased from $250 thousand during the first quarter of 2026 to a recovery of $330 thousand during the current quarter. Non-interest income decreased from $3.2 million during the three months ended March 31, 2025, to $3.0 million during the three months ended March 31, 2026. Non-interest expense increased by $3.8 million from $11.5 million during the first quarter of 2025 to $15.3 million during the current quarter.
Current report
The provision for income taxes increased by $560 thousand from $2.9 million, or 28.5% of pre-tax income, during the three months ended March 31, 2025 to $3.4 million, or 25.9% of pre-tax income, during the current quarter.
Current report
Interest paid on deposits increased by $1.7 million and is broken down by product type as follows: money market accounts - $730 thousand, savings deposits - $71 thousand and time deposits - $889 thousand. The increase in interest paid primarily relates to the growth in money market and time deposits related to the acquisition of Cornerstone. The average rate paid on interest-bearing deposits increased from 1.11% during the first quarter of 2025 to 1.52% during the current quarter and primarily relates to an increase in the percentage of average time deposits to average interest-bearing deposits from 13% during the first quarter of 2025 to 22% during the current quarter.
Current report
**Non-interest income.**During the three months ended March 31, 2026, non-interest income totaled $3.0 million, a decrease of $217 thousand from the three months ended March 31, 2025. The largest component of this decrease was a $1.1 million settlement related to the Dixie Fire during the first quarter of 2025. Significant increases in non-interest income during the current quarter were $309 thousand in FHLB dividends, $159 thousand in earnings on Bank Owned Life Insurance (BOLI) and $140 thousand in interchange income. Each of these items benefited from the acquisition of Cornerstone. Additionally, the FHLB paid a regular dividend of $194 thousand and special dividend of $252 thousand during the first quarter of 2026.
Current report
**Non-interest expense.**During the three months ended March 31, 2026, total non-interest expense increased by $3.8 million from $11.5 million during the first quarter of 2025 to $15.3 million during the current quarter. Much of this increase was driven by the acquisition of Cornerstone. Salary and benefit expense increased by $1.9 million which includes an increase in salary expense of $1.1 million related to an increase in Full-Time Equivalent (FTE) employees of 48 to 232 FTE at March 31, 2026 and merit and promotional increases. Related primarily to an increase in pre-tax income, bonus expense increased by $281 thousand. Payroll taxes increased by $207 thousand.
Current report
Occupancy and equipment expenses increased by $660 thousand from $2.0 million during the first quarter of 2025 to $2.7 million during the current quarter, Primarily related to the acquisition of Cornerstone and to a much lesser extent the sales/leaseback completed during the fourth quarter of 2025. Amortization of Core Deposit Intangible increased by $537 thousand related to the acquisition of Cornerstone. Other expenses increased by $719 thousand related to a $726 thousand loss associated with two fraudulent wire transfers. The largest reduction in non-interest expense was $569 thousand in merger expenses incurred during the first quarter of 2025.
Current report
Total assets were $2.2 billion on March 31, 2026, a decrease of $39 million from December 31, 2025. The largest components of this decrease were declines in cash and cash equivalents of $18 million, net loans of $9 million, investment securities of $7 million and accrued interest receivable and other assets of $3 million. Total liabilities declined by $43 million primarily related to a decline of $35 million in deposits. Total shareholders' equity increased by $4 million.
Current report
During the first quarter of 2026 we recorded a recovery of provision for credit losses of $330 thousand consisting of a recovery of provision for credit losses on loans of $401 thousand partially offset by an increase in the reserve for unfunded commitments of $71 thousand. This compares to a provision for credit losses of $250 thousand during the first quarter of 2025.
Removed paragraphs (33)
Previous report
Our financial statements are prepared in conformity with accounting principles generally accepted in the United States (GAAP). In connection with the acquisition, the Company incurred a variety of non-recurring expenses which are summarized on the following page under the heading “Reconciliation of Non-GAAP Disclosure”. The non-recurring expenses for the three and nine months ended September 30, 2025 were $6.2 million and $7.3 million, respectively. Excluding these expenses, non-GAAP net income for the third quarter of 2025 would have been $9.5 million, resulting in diluted earnings per share of $1.35 and return on average assets of 1.66% and non-GAAP net income for the nine months ended September 30, 2025 would have been $23.8 million, resulting in diluted earnings per share of $3.74 and return on average assets of 1.72% .
Previous report
In addition, during the third quarter of 2025, the Company incurred expenses/income related to the amortization/accretion of various Fair Value (FV) marks required under GAAP. The following table presents the effect on pretax earnings of the amortization/accretion of the FV marks recorded during the three months ended September 30, 2025 and the projected effect for the three months ended December 31, 2025, and twelve months ended December 31, 2026. Positive numbers would increase pretax income and negative are a decrease in pretax income.
Previous report
The projected accretion of the discount on acquired loans is based on the acquired loans contractual payment schedules and may differ significantly from the actual accretion during the projected periods. The accretion of the premium on time deposits of $651 thousand was accelerated with the payoff of $38.5 million in brokered deposits during the three months ended September 30, 2025. This resulted in a $160 thousand discount going forward which will be amortized as an increase in interest expense over the remaining life of the time deposits acquired.
Previous report
NON-GAAP FINANCIAL MEASURES
Previous report
In addition to results presented in accordance with generally accepted accounting principles in the GAAP, Management has presented these non-GAAP financial measures because it believes that they provide useful and comparative information to assess trends in the Company's core operations reflected in the current quarter's results and facilitate the comparison of our performance with the performance of our peers. However, these non-GAAP financial measures are supplemental and are not a substitute for any analysis based on GAAP.
Previous report
Net-interest income increased from $54.7 million during the nine months ended September 30, 2024, to $61.9 million during the current period. The provision for credit losses increased from $1.4 million during the nine months ended September 30, 2024, to $6.5 million during the current nine-month period.
Previous report
Non-interest income increased by $1.2 million from $6.6 million during the nine months ended September 30, 2024 to $7.8 million during the nine months ended September 30, of 2025 mostly related to a legal settlement totaling $1.1 million received in the first quarter of 2025. This settlement related to the Dixie Fire in August of 2021 which swept through the town of Greenville, California. The fire caused severe damage to the Greenville area, including the telecommunications infrastructure which adversely affected our ability to service our customers in this area during the last few years.
Previous report
Non-interest expense increased by $6.0 million from $31.6 million during the nine months ended September 30, 2024, to $37.6 million during the current nine-month period. Of this amount $1.9 million relates to costs associated with our acquisition of Cornerstone. Merger transaction costs that facilitate the merger are not deductible for income tax purposes. Of the $1.9 million in merger related costs, $946 thousand is estimated to be not deductible for state and federal income tax.
Previous report
The provision for income taxes decreased from $7.5 million, or 26.4% of pre-tax income, during the nine months ended September 30, 2024 to $7.0 million, or 27.2% of pre-tax income, during the current nine-month period.
Previous report
Interest and fees on loans increased by $9.0 million, mostly related to an increase in average balance. The average balance of loans during the nine months ended September 30, 2025, was $1.2 billion, an increase of $189 million from $982 million during the same period in 2024. The average yield on loans increased by 3 basis points from 6.21% during the first nine months of 2024 to 6.24% during the current period.
Previous report
Interest on cash balances declined by $1.6 million related to both a decline in balance and a decline in yield. The rate earned on cash balances declined by 99 basis points to 4.5% and the average balance declined from $97.2 million during the first nine months of 2024 to $72.2 million during the current period. The decline in rate is consistent with the decline in rate earned on Federal Reserve Bank of San Francisco (FRB) balances.
Previous report
Related to an increase in interest bearing deposits, an increase in the cost of these deposits and the acquisition of CCB partially offset by a $3.7 million decline in interest on the Bank Term Funding Program (BTFP) borrowings, interest expense increased from $8.3 million during the nine months ended September 30, 2024 to $9.1 million during the current period. The average rate paid on interest bearing liabilities was 1.43% during both periods. All BTFP borrowings were paid off during 2024. Interest expense recognized on the BTFP borrowings for the three and nine months ended September 30, 2024, was $1.2 million and $3.7 million, respectively.
Previous report
Interest paid on deposits increased by $4.0 million and is broken down by product type as follows: money market accounts - $3.4 million, savings deposits - $220 thousand and time deposits - $380 thousand. The average rate paid on interest-bearing deposits increased from 0.85% during the nine months ended September 30, 2024, to 1.35% during the current period. Average interest-bearing deposits totaled $796 million during the nine months ended September 30, 2025, an increase of $157 million from $639 million during the nine months ended September 30, 2024.
Previous report
Provision for credit losses**.** During the first nine months of 2025, we recorded a provision for credit losses of $6.5 million, consisting of a provision for credit losses on loans of $6.3 million and an increase in the reserve for unfunded commitments of $211 thousand. The provision includes growth in the loan portfolio, a $5.0 million Current Expected Credit Losses (CECL) day 1 provision on non-Purchased Credit Deteriorated (non-PCD) loans acquired from CCB and the reserve for unfunded commitments on loans acquired from CCB. This compares to a provision for credit losses of $1.3 million consisting of a provision for credit losses on loans of $1.5 million and a decrease in the reserve for unfunded commitments of $129 thousand during the nine months ended September 30, 2024. See “Analysis of Asset Quality and Allowance for Loan Losses” for a discussion of loan quality trends and the provision for credit losses.
Previous report
**Non-interest income.**During the nine months ended September 30, 2025, non-interest income totaled $7.8 million, an increase of $1.2 million from the nine months ended September 30, 2024. The largest component of this increase was a legal settlement totaling $1.1 million related to the Dixie Fire in August of 2021. This settlement is included in Other in the following table.
Previous report
The following table describes the components of non-interest income for the nine-month periods ended September 30, 2025 and 2024, dollars in thousands:
Previous report
**Non-interest expense.**During the nine months ended September 30, 2025, total non-interest expense increased by $6.0 million from $31.6 million during the nine months ended September 30, 2024, to $37.6 million during the current period. The largest components of this increase were salary and benefit expenses of $2.7 million, merger related expenses of $1.9 million, and occupancy and equipment expenses of $908 thousand. The increase in salary and benefit expense included an increase in salary expense of $1.8 million primarily related to the acquisition of CCB and to a lesser extent merit and promotional salary increases. Other significant increases in salary and benefit expense were $569 thousand in bonus expense, $186 thousand in health insurance costs, $174 thousand in payroll taxes and $150 thousand in accrued vacation. The increase in occupancy and equipment expenses mostly relates to the acquisition of CCB and an increase in rent related to the February 2024 sales/leaseback transaction.
Previous report
The following table describes the components of non-interest expense for the nine-month periods ended September 30, 2025 and 2024, dollars in thousands:
Previous report
**Net Income.**The Company recorded net income of $5.1 million for the three months ended September 30, 2025, down from net income of $7.8 million for the three months ended September 30, 2024. An increase of $6.3 million in net interest income and a decline of $1.1 million in the provision for income taxes was offset by an increase of $5.8 million in the provision for credit losses and an increase of $4.3 million in non-interest expense. The annualized return on average assets was 0.90% for the three months ended September 30, 2025, down from 1.84% for the three months ended September 30, 2024. The annualized return on average equity decreased from 18.1% during the third quarter of 2024 to 8.5% during the current quarter.
Previous report
Net interest income increased from $18.9 million during the three months ended September 30, 2024, to $25.2 million during the current quarter. The provision for credit losses increased from a recovery of $400 thousand during the third quarter of 2024 to $5.4 million during the current quarter.
Previous report
Non-interest income totaled $2.2 million during the three months ended September 30, 2024, and 2025.
Previous report
Non-interest expense increased by $4.3 million from $10.8 million during the third quarter of 2024 to $15.1 million during the current quarter. Of this amount, $879 thousand relates to costs associated with our acquisition of Cornerstone Community Bancorp. Merger transaction costs that facilitate the merger are not deductible for income tax purposes. Of the $879 thousand in merger related costs, $145 thousand is estimated to be not deductible for state and federal income tax.
Previous report
The provision for income taxes decreased from $2.9 million, 26.7% of pre-tax income, during the three months ended September 30, 2024 to $1.8 million, or 25.6% of pre-tax income, during the current quarter.
Previous report
Net interest income before provision for credit losses. Net interest income was $25.2 million for the three months ended September 30, 2025, an increase of $6.3 million from the same period in 2024. The increase in net interest income includes an increase of $7.9 million in interest income partially offset by an increase of $1.6 million in interest expense.
Previous report
Interest on investment securities increased by $453 thousand as yield on these securities increased by 7 basis points to 4.06% and the average balance increased by $35 million from $447 million during the three months ended September 30, 2024, to $482 million during the current quarter.
Previous report
Interest paid on deposits increased by $2.3 million and the increase is broken down by product type as follows: money market accounts - $1.8 million, savings deposits - $112 thousand and time deposits - $396 thousand. The average balance of money market accounts during the current quarter was $439 million, an increase of $216 million from $223 million during the three months ended September 30, 2024. The average rate paid on money market accounts increased 105 basis points to 2.22%. The increase is primarily related to higher rate money market accounts acquired in the acquisition of CCB. The increase in interest on savings accounts was driven by an increase in the average rate paid of 15 basis points to 37 basis points. The increase in interest on time deposits includes an increase in average balance of $140 million, partially offset by a decline in average rate paid of 106 basis points to 1.87%. The increase in the average balance of time deposits mostly relates to the acquisition of CCB. The decline in the rate paid on time deposits resulted from a reduction in interest expense of $651 thousand related to the amortization of the fair value mark on time deposits acquired in the acquisition of CCB. This amortization was accelerated with the payoff of $38.5 million in brokered deposits.
Previous report
The average rate paid on interest-bearing deposits increased from 0.97% during the third quarter of 2024 to 1.56% during the current quarter. The average balance of interest-bearing deposits increased from $646 million during the three months ended September 30, 2024, to $990 million during the current quarter.
Previous report
Interest on repurchase agreements and other borrowings, exclusive of the BTFP, increased by $566 thousand from $173 thousand during the three months ended September 30, 2024 to $739 thousand during the current quarter. Interest expense on the BTFP was $1.2 million during the three months ended September 30, 2024. See “Repurchase Agreements” for a discussion of the increase in the balance of this liability.
Previous report
**Non-interest income.**Non-interest income totaled $2.2 million an increase of $11 thousand from the third quarter of 2024. The largest increase was an increase of $157 thousand in earnings on bank owned life insurance (BOLI) acquired from CCB. In addition, several other categories of non-interest income increased mostly related to the acquisition of CCB. The largest decrease was a $628 thousand loss generated on the disposition of CCB’s investment portfolio which was partially offset by a $254 thousand gain on termination of an interest rate swap acquired from CCB.
Previous report
**Non-interest expense.**During the three months ended September 30, 2025, total non-interest expense increased by $4.3 million from $10.8 million during the third quarter of 2024 to $15.1 million during the current quarter. The largest components of this increase were merger related expenses of $879 thousand and salary and benefit expenses of $1.9 million. The increase in salary and benefit expense includes an increase in salary expense of $1.3 million mostly related to former CCB employees. Other significant increases in salary and benefits include $312 thousand in bonus expense, $217 thousand in commissions related to an increase in SBA loan fundings and an increase in the accrued vacation liability of $150 thousand. We view the increase in the accrued vacation as a non-recurring expense. Other large increases in non-interest expense, which largely relate to the acquisition of CCB, include $483 thousand in occupancy and equipment costs, $470 thousand in outside services and $564 thousand in amortization of core deposit intangible.
Previous report
Mostly related to the acquisition of Cornerstone, total assets increased by $606 million from $1.6 billion on December 31, 2024, to $2.2 billion on September 30, 2025. The largest components of this increase were increases in net loans of $475 million, investment securities of $47 million, accrued interest receivable and other assets of $31 million, Goodwill of $19 million, BOLI of $17 million, premises and equipment of $12 million and cash and cash equivalents of $5 million. Increases in liabilities include $448 million in deposits, $72 million in repurchase agreements, $12 million in borrowings and $6 million in accrued interest payable and other liabilities. Total shareholders' equity increased by $68 million. The increase in premises and equipment, BOLI and cash and cash equivalents relates to the acquisition of Cornerstone. A detailed discussion of each of the other changes follows.
Previous report
During the nine months ended September 30, 2025, we recorded a provision for credit losses of $6.5 million, consisting of a provision for credit losses on loans of $6.3 million and an increase in the reserve for unfunded commitments of $211 thousand. The provision includes growth in the loan portfolio, CECL day 1 provision on non-PCD loans acquired from CCB and the reserve for unfunded commitments on loans acquired from CCB. This compares to a provision for credit losses of $1.3 million consisting of a provision for credit losses on loans of $1.5 million and a decrease in the reserve for unfunded commitments of $129 thousand during the nine months ended September 30, 2024.
Previous report
The Federal Reserve Board, on March 12, 2023, announced the creation of the BTFP. At September 30, 2024, the Company had outstanding borrowings under the BTFP totaling $60 million. All BTFP borrowings were paid off during 2024. Interest expense recognized on the BTFP borrowings for the three and nine-months ended September 30, 2024, was $1.2 million and $3.7 million, respectively.
Reworded paragraphs (36)
Previous wording
The following discussion and analysis sets forth certain statistical information relating to the Company as of September 30, 2025 and December 31, 2024 and for the three and nine-month periods ended September 30, 2025 and 2024. This discussion should be read in conjunction with the condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and the consolidated financial statements and notes thereto included in Plumas Bancorp’s Annual Report filed on Form 10-K for the year ended December 31, 2024.
Current wording
The following discussion and analysis sets forth certain statistical information relating to the Company as of March 31, 2026 and December 31, 2025 and for the three-month periods ended March 31, 2026 and 2025. This discussion should be read in conjunction with the condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and the consolidated financial statements and notes thereto included in Plumas Bancorp’s Annual Report filed on Form 10-K for the year ended December 31, 2025.
Previous wording
As a result of and upon the completion of the Merger, the Company assumed Cornerstone’s obligations with respect to an aggregate principal amount of $12 million of subordinated notes, comprised of (a) $2 million in aggregate principal amount of 4.75% Fixed to Floating Rate Subordinated Notes due November 30, 2035 (the “2035 Notes”) and (b) $10 million in aggregate principal amount of 4.75% Fixed-to-Floating Rate Subordinated Notes due November 30, 2030 (the “2030 Notes”). The 2035 Notes, which were issued in 2020, have a fixed interest rate of 4.75% for the first ten years and thereafter a quarterly variable interest rate equal to the then current three-month term Secured Overnight Financing Rate (“SOFR”) plus 4.14%. The 2030 Notes, which were issued in 2020, have a fixed interest rate of 4.75% for the first five years and thereafter a quarterly variable interest rate equal to the then current three-month term SOFR plus 4.52%.
Current wording
In connection with the acquisition of Cornerstone, the Company assumed $12 million of subordinated debentures, including $2 million of 4.75% Fixed‑to‑Floating Rate Subordinated Notes due November 30, 2035 (the “2035 Notes”). The 2035 Notes, which were issued in 2020, have a fixed interest rate of 4.75% for the first ten years and thereafter a quarterly variable interest rate equal to the then current three-month term Secured Overnight Financing Rate (“SOFR”) plus 4.14%. The remaining subordinated notes were called in 2025 and are no longer outstanding. Interest expense recognized on the subordinated notes for the three-months ended March 31, 2026, was $61 thousand.
Previous wording
**Net Income.**The Company recorded net income of $18.6 million for the nine months ended September 30, 2025, down from net income of $20.9 million for the nine months ended September 30, 2024. Increases of $7.2 million in net interest income and $1.2 million in non-interest income, and a decline of $0.5 million in the provision for income taxes were offset by an increase of $5.1 million in the provision for credit losses and an increase of $6.0 million in non-interest expense. The annualized return on average assets was 0.90% for the three months ended September 30, 2025, down from 1.84% for the three months ended September 30, 2024. The annualized return on average equity decreased from 18.1% during the third quarter of 2024 to 8.5% during the current quarter.
Current wording
**Net Income.**The Company recorded net income of $9.8 million for the three months ended March 31, 2026, up from net income of $7.2 million for the three months ended March 31, 2025. An increase of $6.6 million in net interest income and a decline of $580 thousand in the provision for credit losses was partially offset by increases of $3.8 million in non-interest expense and $560 thousand in the provision for income taxes and a decline of $217 thousand in non-interest income. The annualized return on average assets was 1.78% for the three months ended March 31, 2026, down slightly from 1.79% for the three months ended March 31, 2025. The annualized return on average equity decreased from 16.0% during the first quarter of 2025 to 14.9% during the current quarter.
Previous wording
Net interest income before provision for credit losses. Driven by growth in the loan portfolio, the acquisition of Cornerstone and repayment of Bank Term Funding Program (BTFP) borrowings, net interest income increased by $7.2 million from $54.7 million during the nine months ended September 30, 2024, to $61.9 million for the nine months ended September 30, 2025. The increase in net interest income includes an increase of $8.0 million in interest income partially offset by an increase of $0.8 million in interest expense. See "Short-term Borrowing Arrangements" for a discussion of BTFP borrowing activity.
Current wording
Net interest income before provision for credit losses. Driven primarily by growth in the loan portfolio related to the acquisition of Cornerstone, net interest income increased by $6.6 million from $18.5 million during the three months ended March 31, 2025, to $25.1 million for the three months ended March 31, 2026. The increase in net interest income includes an increase of $8.8 million in interest income partially offset by an increase of $2.2 million in interest expense.
Previous wording
Interest and fees on loans increased by $8.0 million related to growth in the loan portfolio, mostly related to the acquisition of CCB and to a much lesser extent an increase in yield. Average loan balances increased by $475 million, while the average yield on loans increased by 14 basis points from 6.21% during the third quarter of 2024 to 6.35% during the current quarter. The increase in loan yield includes an increase in SBA fixed rate loans, which currently have a weighted average rate of 8.2%, the repricing of loans that are priced off the 5-year Treasury and a decline in our lower yielding auto loan portfolio. Loans that are priced off the 5-year Treasury are primarily commercial real estate loans; their rate is adjusted every five years.
Current wording
Interest and fees on loans increased by $8.6 million related both to an increase in average balance and an increase in yield. Average loan balances increased by $495 million, while the average yield on loans increased by 28 basis points from 6.17% during the first quarter of 2025 to 6.45% during the current quarter. We attribute the increase in yield to several factors including the amortization of discount on purchased loans, the repricing of a portion of our commercial real estate loans most of which reprice every five years from the date of origination and growth in fixed rate SBA loans which totaled $119 million at March 31, 2026, and $74 million at March 31, 2025. The weighted average rate earned on this portfolio at March 31, 2026, was 8.1%.
Previous wording
Interest on investment securities increased by $536 thousand related to an increase in yield of 17 basis points to 4.09% partially offset by a $736 thousand decline in average balance. The increase in investment yields is consistent with the increase in market rates and the restructuring of the investment portfolio in February of 2024. Average investment securities declined from $457 million during the nine months ended September 30, 2024, to $456 million during the current period.
Current wording
Interest on investment securities increased by $489 thousand related to an increase in yield on investment securities of 15 basis points to 4.27% and an increase in average balance. The increase in investment yields is consistent with the partial restructuring of the investment portfolio during the fourth quarter of 2025 and market conditions. Average investment securities increased from $444 million during the three months ended March 31, 2025 to $475 million during the current period.
Previous wording
Interest on cash balances decreased by $518 thousand related to a decline in average balance of $19 million and a decrease in average rate paid on cash balances of 94 basis points from 5.44% during the third quarter of 2024 to 4.50% during the current quarter. This decline in yield was related to a decline in rate paid on balances held at the FRB. The average rate earned on FRB balances decreased from 5.33% during the third quarter of 2024 to 4.36% during the current quarter.
Current wording
Interest on cash balances decreased by $273 thousand related to a decline in average balance of $18 million and a decrease in average rate paid on cash balances of 71 basis points from 4.52% during the first quarter of 2025 to 3.81% during the current quarter. This decline in yield was mostly related to a decline in rate paid on balances held at the Federal Reserve Bank (FRB). The average rate earned on FRB balances decreased from 4.40% during the first quarter of 2025 to 3.65% during the current quarter.
Previous wording
Interest expense increased by $1.6 million to $4.6 million, mostly related to the acquisition of Cornerstone. The average rate paid on interest bearing liabilities increased from 1.52% during the 2024 quarter to 1.67% during the three months ended September 30, 2025.
Current wording
The average rate paid on interest bearing liabilities increased from 1.14% during the 2025 quarter to 1.60% in 2026 related mainly to the increase in the cost of interest-bearing deposits and repurchase agreements.
Previous wording
Net interest margin for the nine months ended September 30, 2025, increased 11 basis points to 4.87%, up from 4.76% for the same period in 2024.
Current wording
Net interest margin for the three months ended March 31, 2026, increased 8 basis points to 5.03%, up from 4.95% for the same period in 2025.
Previous wording
**Provision for credit losses.**During the third quarter of 2025 we recorded a provision for credit losses of $5.4 million, consisting of a provision for credit losses on loans of $5.1 million and an increase in the reserve for unfunded commitments of $251 thousand. The provision includes growth in the loan portfolio, a $5.0 million CECL day 1 provision on non-PCD loans acquired from CCB and an increase in the reserve for unfunded commitments on loans acquired from CCB. See “Analysis of Asset Quality and Allowance for Loan Losses” for a discussion of loan quality trends and the provision for credit losses.
Current wording
**Provision for credit losses.**During the first quarter of 2026 we recorded a recovery of provision for credit losses of $330 thousand consisting of a recovery of provision for credit losses on loans of $401 thousand partially offset by an increase in the reserve for unfunded commitments of $71 thousand. This compares to a provision for credit losses of $250 thousand during the first quarter of 2025. See “Analysis of Asset Quality and Allowance for Loan Losses” for a discussion of loan quality trends and the provision for credit losses.
Previous wording
**Provision for income taxes.**The provision for income taxes decreased by $1.1 million from $2.9 million, or 26.7% of pre-tax income, during the three months ended September 30, 2024, to $1.8 million, or 25.6% of pre-tax income, during the current quarter. The percentages for 2025 and 2024 differ from statutory rates as tax exempt items of income such as earnings on Bank owned life insurance and municipal securities interest decrease taxable income while non-deductible merger transaction costs incurred during the current quarter effectively increase taxable income.
Current wording
**Provision for income taxes.**The provision for income taxes increased by $560 thousand from $2.9 million, or 28.5% of pre-tax income, during the three months ended March 31, 2025 to $3.4 million, or 25.9% of pre-tax income, during the current quarter. The percentages for 2026 and 2025 differ from statutory rates as tax exempt items of income such as earnings on Bank owned life insurance and municipal securities interest decrease taxable income while non-deductible merger transaction costs incurred during the 2025 quarter effectively increase taxable income.
Previous wording
**Loan Portfolio.**Gross loans increased by approximately $481 million, or 47%, and totaled $1.5 billion on September 30, 2025, and $1.0 billion on December 31, 2024. The largest increases in loans were $334 million in commercial real estate loans, $84 million in commercial loans, $35 million in agricultural loans, and $22 million in residential loans. Decreases in loan balances totaled $24 million consisting of a decline in automobile loans of $20 million and a decline in construction loans of $4 million. Although the Company offers a broad array of financing options, it continues to concentrate its focus on small to medium sized commercial businesses. These loans offer diversification as to industries and types of businesses, thus limiting material exposure in any industry concentrations. The Company offers both fixed and floating rate loans and obtains collateral in the form of real property, business assets and deposit accounts, but looks to business and personal cash flows as its primary source of repayment. In the fourth quarter of 2023 we terminated our indirect automobile loan program. Ending this program, which was our lowest yielding loan segment, also improved our loan loss risk profile since this program had historically higher charge-off rates. Terminating this program also improved our consumer compliance risk profile.
Current wording
**Loan Portfolio.**Gross loans decreased by approximately $11 million, or 7%, and totaled $1.5 billion on March 31, 2026, and December 31, 2025. Increases of $11 million in commercial real estate loans, $1 million equity lines of credit and $1 million in construction loans were offset by declines of $12 million in agricultural loans in commercial loans, $5 million in commercial loans, $5 million in automobile loans, $1 million in residential real estate loans and $1 million in other loans. Although the Company offers a broad array of financing options, it continues to concentrate its focus on small to medium sized commercial businesses. These loans offer diversification as to industries and types of businesses, thus limiting material exposure in any industry concentrations. The Company offers both fixed and floating rate loans and obtains collateral in the form of real property, business assets and deposit accounts, but looks to business and personal cash flows as its primary source of repayment. In the fourth quarter of 2023 we terminated our indirect automobile loan program. Ending this program, which was our lowest yielding loan segment, also improved our loan loss risk profile since this program had historically higher charge-off rates. Terminating this program also improved our consumer compliance risk profile.
Previous wording
The Company’s real estate related loans, including real estate mortgage loans, real estate construction and land development loans, consumer equity lines of credit, and agricultural loans secured by real estate, comprised 80% of the total loan portfolio at September 30, 2025. Moreover, the business activities of the Company currently are focused in the California counties of Butte, Lassen, Modoc, Nevada, Placer, Plumas, Shasta, Sutter and Tehama and in Washoe and Carson City Counties in Northern Nevada. Consequently, the results of operations and financial condition of the Company are dependent upon the general trends in these economies and, in particular, the commercial real estate markets. In addition, the concentration of the Company's operations in these areas of Northeastern California and Northwestern Nevada exposes it to greater risk than other banking companies with a wider geographic base in the event of catastrophes, such as earthquakes, fires and floods in these regions.
Current wording
The Company’s real estate related loans, including real estate mortgage loans, real estate construction and land development loans, consumer equity lines of credit, and agricultural loans secured by real estate, comprised 83% of the total loan portfolio on March 31, 2026. The Company conducts business primarily in the California counties of Butte, Lassen, Modoc, Nevada, Placer, Plumas, Shasta, Sutter and Tehama and in Washoe and Carson City Counties in Northern Nevada. Consequently, the results of operations and financial condition of the Company are dependent upon the general trends in these economies and, in particular, the commercial real estate markets. In addition, the concentration of the Company's operations in these areas of Northeastern California and Northwestern Nevada exposes it to greater risk than other banking companies with a wider geographic base in the event of catastrophes, such as earthquakes, fires and floods in these regions.
Previous wording
Commercial real estate loans (“CRE”) comprised 66% of the lending portfolio at September 30, 2025. CRE loans were 41% investor-owned, 44% owner-occupied, and 15% multi-family. Concentrations by real estate type within the CRE portfolio, excluding multi-family, were 15% Mixed Commercial Real Estate, 14% Office, 13% Retail, 10% Hospitality, 10% Industrial, 8% Gas Stations, 6% Special Purpose, and 5% Mini Storage Facilities, with all remaining concentrations below 5%. There were no rent-controlled properties within the multi-family category. Office facilities are typically small and located in more rural areas. 21% of CRE loans were located in northern Nevada and 60% were located in northern California. Of the $15.0 million in non-accrual balances at September 30, 2025, approximately 12% were CRE. Of the $26.0 million in substandard balances at September 30, 2025 approximately 30% were CRE.
Current wording
Commercial real estate loans (“CRE”) comprised 68% of the lending portfolio at March 31, 2026. CRE loans were 43% owner-occupied, 42% investor-owned, and 15% multi-family. Concentrations by real estate type within the CRE portfolio, excluding multi-family, were 14% Mixed Commercial Real Estate, 14% Office, 13% Retail, 10% Hospitality, 10% Industrial, 8% Gas Stations, 6% Special Purpose, 5% Residential, 5% Medical Buildings, and 5% Mini Storage Facilities, with all remaining concentrations below 5%. There were no rent-controlled properties within the multi-family category. Office facilities are typically small and located in more rural areas. 21% of CRE loans were located in northern Nevada and 56% were located in northern California. Of the $14.1million in non-accrual balances at March 31, 2026, approximately 11% were CRE. Of the $37.3 million in substandard balances at March 31, 2026 approximately 32% were CRE.
Previous wording
The rates of interest charged on variable rate loans are set at specific increments in relation to the Company's lending rate or other indexes such as the published prime interest rate or U.S. Treasury rates and vary with changes in these indexes. The frequency in which variable rate loans reprice can vary from one day to several years. At September 30, 2025, and December 31, 2024, approximately 80% and 77%, respectively, of the Company's loan portfolio was comprised of variable rate loans. Loans indexed to the prime interest rate were approximately 21% of the Company’s variable rate loan portfolio on September 30, 2025; these loans reprice within one day to three months of a change in the prime rate. The remainder of the Company's variable rate loans mostly consist of commercial real estate loans tied to U.S. Treasury rates and reprice every five years. Approximately 75% of the variable rate loans are indexed to the five-year T-Bill rate and reprice every five years. While real estate mortgage, agricultural, commercial and consumer lending remain the foundation of the Company's historical loan mix, some changes in the mix have occurred due to the changing economic environment and the resulting change in demand for certain loan types
Current wording
The rates of interest charged on variable rate loans are set at specific increments in relation to the Company's lending rate or other indexes such as the published prime interest rate or U.S. Treasury rates and vary with changes in these indexes. The frequency in which variable rate loans reprice can vary from one day to several years. On March 31, 2026, and December 31, 2024, approximately 80% of the Company's loan portfolio was comprised of variable rate loans. Loans indexed to the prime interest rate were approximately 20% of the Company’s variable rate loan portfolio on March 31, 2026; these loans reprice within one day to three months of a change in the prime rate. The remainder of the Company's variable rate loans mostly consist of commercial real estate loans tied to U.S. Treasury rates and reprice every five years. Approximately 77% of the variable rate loans are indexed to the five-year T-Bill rate and reprice every five years. While real estate mortgage, agricultural, commercial and consumer lending remain the foundation of the Company's historical loan mix, some changes in the mix have occurred due to the changing economic environment and the resulting change in demand for certain loan types
Previous wording
**Analysis of Asset Quality and Allowance for Credit Losses.**The Company attempts to minimize credit risk through its underwriting and credit review policies. The Company’s credit review process includes internally prepared credit reviews as well as contracting with an outside firm to conduct periodic credit reviews. The Company’s management and lending officers evaluate the loss exposure of classified and nonaccrual loans on a quarterly basis, or more frequently as loan conditions change. The Management Asset Resolution Committee (MARC) reviews the asset quality of criticized and past due loans monthly and reports the findings to the full Board of Directors. In management's opinion, this loan review system helps facilitate the early identification of potential criticized loans. MARC also provides guidance for the maintenance and timely disposition of OREO properties including developing financing and marketing programs to incent individuals to purchase OREO. MARC consists of the Bank’s Chief Executive Officer, Chief Financial Officer and Chief Credit Officer, and the activities are governed by a formal written charter. The MARC meets monthly and reports to the Board of Directors.
Current wording
**Analysis of Asset Quality and Allowance for Credit Losses.**The Company attempts to minimize credit risk through its underwriting and credit review policies. The Company’s credit review process includes internally prepared credit reviews as well as contracting with an outside firm to conduct periodic credit reviews. The Company’s management and lending officers evaluate the loss exposure of classified and nonaccrual loans on a quarterly basis, or more frequently as loan conditions change. The Management Asset Resolution Committee (MARC) reviews the asset quality of criticized and past due loans monthly and reports the findings to the full Board of Directors. In management's opinion, this loan review system helps facilitate the early identification of potential criticized loans. MARC also provides guidance for the maintenance and timely disposition of OREO properties including developing financing and marketing programs to incent individuals to purchase OREO. MARC consists of the Bank’s Chief Executive Officer, Chief Financial Officer, Chief Banking Officer, Regional President and Chief Credit Officer, and the activities are governed by a formal written charter. The MARC meets monthly and reports to the Board of Directors.
Previous wording
At January 1, 2023, the adoption and implementation date of ASC Topic 326, September 30, 2025, and December 31, 2024, the Company utilized a reasonable and supportable forecast period of approximately four quarters and obtained the forecast data from publicly available sources. The Company also considered the impact of portfolio concentrations, changes in underwriting practices, and other risk factors that might influence its loss estimation process. Management believes that the allowance for credit losses at September 30, 2025, appropriately reflected expected credit losses inherent in the loan portfolio at that date.
Current wording
At March 31, 2026, and December 31, 2025, the Company utilized a reasonable and supportable forecast period of approximately four quarters and obtained the forecast data from publicly available sources. The Company also considered the impact of portfolio concentrations, changes in underwriting practices, and other risk factors that might influence its loss estimation process.
Previous wording
Nonperforming assets (which are comprised of nonperforming loans, other real estate owned (“OREO”) and repossessed vehicle holdings) at September 30, 2025, were $15.2 million, up from $4.3 million at December 31, 2024. Nonperforming assets as a percentage of total assets increased to 0.68% at September 30, 2025, up from 0.27% at December 31, 2024. OREO totaled $114 thousand at September 30, 2025, and $91 thousand December 31, 2024. Nonperforming loans were $15.0 million at September 30, 2025 and $4.1 million at December 31, 2024. Nonperforming loans as a percentage of total loans increased to 1.00% at September 30, 2025, up from 0.40% at December 31, 2024. The increase in nonperforming loans is mostly related to one agricultural loan relationship of 15 loans totaling $9.8 million. The borrower on these loans was unable to meet his commitments under modified loan agreements, and therefore during the second quarter of 2025, we placed the loans on nonaccrual status. Interest reversed on these loans during the nine months ended September 30, 2025, was $344 thousand and specific loan loss reserves totaling $870 thousand were reserved against the loans at September 30, 2025.
Current wording
Nonperforming assets (which are comprised of nonperforming loans, other real estate owned (“OREO”) and repossessed vehicle holdings) at March 31, 2026, were $14.4 million, down from $15.3 million at December 31, 2025. Nonperforming assets as a percentage of total assets decreased slightly to 0.65% at March 31, 2026, down from 0.68% at December 31, 2025. OREO totaled $226 thousand at March 31, 2026, and December 31, 2025. Nonperforming loans were $14.2 million at March 31, 2026 and $15.1 million at December 31, 2025. Nonperforming loans as a percentage of total loans decreased to 0.94% at March 31, 2026, down from 1.00% at December 31, 2025.
Previous wording
Net charge-offs totaled $219 thousand and $736 thousand during the nine months ended September 30, 2025, and 2024, respectively. The allowance for credit losses totaled $19.6 million at September 30, 2025, and $13.6 million at September 30, 2024. The allowance for credit losses as a percentage of total loans was 1.30% on September 30, 2025, and December 31, 2024.
Current wording
Net charge-offs totaled $237 thousand and $127 thousand during the three months ended March 31, 2026 and 2025, respectively. The allowance for credit losses totaled $19.3 million at March 31, 2026, and $20.0 million at December 31, 2025. Specific reserves related to collateral dependent loans totaled $2.0 million and $1.5 million at March 31, 2026, and December 31, 2025, respectively. The allowance for credit losses as a percentage of total loans was 1.29% at March 31, 2026, and 1.32% at December 31, 2025.
Previous wording
The following table provides a summary of the change in the number and balance of OREO properties for the nine months ended September 30, 2025 and 2024 (dollars in thousands):
Current wording
The following table provides a summary of the change in the number and balance of OREO properties for the three months ended March 31, 2026 and 2025 (dollars in thousands):
Previous wording
**Investment Portfolio and Federal Reserve Balances.**Total investment securities were $484.7 million as of September 30, 2025, and $437.7 million at December 31, 2024. Unrealized losses on available-for-sale investment securities totaling $23,411,000 were recorded, net of $6,920,000 in tax benefit, as accumulated other comprehensive loss within shareholders' equity at September 30, 2025. During the nine months ended September 30, 2025, the Company sold 90 available-for-sale investment securities for proceeds of $88,009,000, recording a $625,000 loss on sale. The Company realized a gain on sale from fifteen of these securities totaling $36,000 and a loss on sale of 75 securities totaling $661,000. These sales mostly relate to the sale of the investment portfolio acquired from CCB.
Current wording
**Investment Portfolio and Federal Reserve Balances.**Total investment securities were $469.7 million as of March 31, 2026, and $476.6 million at December 31, 2025. Unrealized losses on available-for-sale investment securities totaling $18.6 million were recorded, net of $5.5 million in tax benefit, as accumulated other comprehensive loss within shareholders' equity at March 31, 2026. No investment securities were sold during the three months ended March 31, 2026, or 2025.
Previous wording
Unrealized losses on available-for-sale investment securities totaling $35.7 million were recorded, net of $10.6 million in tax benefits, as accumulated other comprehensive loss within shareholders' equity at December 31, 2024. During the first quarter of 2024 we sold $116 million in investment securities having a weighted average tax equivalent yield of 2.24% recording a $19.8 million loss on sale. Beginning in December 2023 and ending on March 27, 2024 we purchased $120 million in investment securities having a weighted average tax equivalent yield of 5.25%. These sales and purchases were made as part of an investment restructure the losses of which were offset by the gain recorded on the sales/leaseback.
Current wording
Unrealized losses on available-for-sale investment securities totaling $14.9 million were recorded, net of $4.4 million in tax benefits, as accumulated other comprehensive loss within shareholders' equity at December 31, 2025.
Previous wording
The investment portfolio at September 30, 2025, consisted of $390 million in securities of U.S. Government-sponsored agencies and U.S. Government agencies, and 174 municipal securities totaling $95 million. The investment portfolio at December 31, 2024, consisted of $350 million in securities of U.S. Government-sponsored agencies and U.S. Government agencies, and 170 municipal securities totaling $88 million.
Current wording
The investment portfolio at March 31, 2026, consisted of $382 million in securities of U.S. Government-sponsored agencies and U.S. Government agencies, and 156 municipal securities totaling $88 million. The investment portfolio at December 31, 2025, consisted of $388 million in securities of U.S. Government-sponsored agencies and U.S. Government agencies, and 156 municipal securities totaling $89 million.
Previous wording
There were no Federal funds sold at September 30, 2025, and December 31, 2024; however, the Bank maintained interest earning balances at the Federal Reserve Bank totaling $48 million at September 30, 2025, and $47 million at December 31, 2024. The balance on September 30, 2025, earns interest at the rate of 4.15%.
Current wording
There were no Federal funds sold at March 31, 2026, and December 31, 2025; however, the Bank maintained interest earning balances at the Federal Reserve Bank totaling $26 million at March 31, 2026, and $39 million at December 31, 2025. The balance on March 31, 2026, earns interest at the rate of 3.65%.
Previous wording
**Deposits.**Deposits totaled $1.8 billion on September 30, 2025, an increase of $448 million from December 31, 2024. The increase in deposits includes $163 million in non-interest-bearing demand deposits, $166 million in money market accounts and $120 million in time deposits. Savings deposits declined by $1 million. On September 30, 2025, 47% of the Company’s deposits were in the form of non-interest-bearing demand deposits. At September 30, 2025, brokered deposits consist of a $10 million time deposit acquired from CCB. The rate paid on this deposit is 3.80%.
Current wording
**Deposits.**Deposits totaled $1.8 billion on March 31, 2026 and December 31, 2025. On March 31, 2026, 47% of the Company’s deposits were in the form of non-interest-bearing demand deposits. At March 31, 2026, brokered deposits consist of a $10 million time deposit acquired from CCB. The rate paid on this deposit is 3.80%.
Previous wording
The Company estimates that it has approximately $724 million in uninsured deposits which includes uninsured deposits of Plumas Bancorp. Of this amount, $162 million represents deposits that are collateralized such as deposits of states, municipalities and tribal accounts. Uninsured amounts are estimated based on the portion of the account balances in excess of FDIC insurance limits.
Current wording
The Company estimates that it has approximately $694 million in uninsured deposits on March 31, 2026, which includes uninsured deposits of Plumas Bancorp. Of this amount, $177 million represents deposits that are collateralized such as deposits of states, municipalities and tribal accounts. Uninsured amounts are estimated based on the portion of the account balances in excess of FDIC insurance limits.
Previous wording
**Short-term Borrowing Arrangements.**The Company is a member of the Federal Home Loan Bank of San Francisco (FHLB) and can borrow up to $272 million from the FHLB secured by commercial and residential mortgage loans with carrying values totaling $462 million. The Company is also eligible to borrow at the Federal Reserve Bank (FRB) Discount Window. At September 30, 2025, the Company could borrow up to $63 million at the Discount Window secured by investment securities with a fair value of $72 million. In addition to its FHLB borrowing line and the Discount Window, the Company has unsecured short-term borrowing agreements with two of its correspondent banks in the amounts of $50 million and $20 million. There were no outstanding borrowings to the FHLB, FRB Discount Window or the correspondent banks at September 30, 2025 and December 31, 2024.
Current wording
**Short-term Borrowing Arrangements.**The Company is a member of the Federal Home Loan Bank of San Francisco (FHLB) and can borrow up to $439 million from the FHLB secured by commercial and residential mortgage loans with carrying values totaling $699 million. Based on its current level of FHLB stock holdings the Company can borrow up to $326 million. To borrow the full $439 million in available credit the Company would need to purchase $3 million in additional FHLB stock. The Company is also eligible to borrow at the FRB Discount Window. At March 31, 2026, the Company could borrow up to $40 million at the Discount Window secured by investment securities with a fair value of $47 million. In addition to its FHLB borrowing line and the Discount Window, the Company has unsecured short-term borrowing agreements with two of its correspondent banks in the amounts of $50 million and $20 million. There were no outstanding borrowings to the FHLB, FRB Discount Window or the correspondent banks at March 31, 2026 and December 31, 2025.
Previous wording
Note Payable. Plumas Bancorp has outstanding borrowings of $15 million with a correspondent bank. This loan matures on January 25, 2035, and can be prepaid at any time. During the initial three years the loan functions as an interest only revolving line of credit. Beginning on January 25, 2026 the loan converts into a term loan requiring semi-annual principal and interest payments and no further advances can be made. This borrowing bears interest at a fixed rate of 3.85% for the first 5 years and then beginning January 25, 2027 at a floating interest rate linked to WSJ Prime Rate for the remaining eight-year term. Interest expense recognized on this loan for the three and nine-months ended September 30, 2025, was $148 thousand and $438 thousand, respectively. This compares to interest of $164 thousand and $477 thousand during the three and nine months ended September 30, 2024.
Current wording
Note Payable. Plumas Bancorp had outstanding borrowings of $14.3 million with a correspondent bank at March 31, 2026. This loan matures on January 25, 2035, and can be prepaid at any time. During the initial three years the loan functioned as an interest only revolving line of credit. On February 1, 2025, the loan converted into a term loan requiring semi-annual interest payments and annual principal reductions. This borrowing bears interest at a fixed rate of 3.85% for the first 5 years and then beginning January 25, 2027 at a floating interest rate linked to WSJ Prime Rate for the remaining eight-year term. Interest expense recognized on this loan for the three-months ended March 31, 2026 and 2025, was $139 thousand and $144 thousand, respectively.
Previous wording
**Subordinated Debentures.**As a result of and upon the completion of the Merger, the Company assumed Cornerstone’s obligations with respect to an aggregate principal amount of $12 million of subordinated notes, comprised of (a) $2 million in aggregate principal amount of 4.75% Fixed to Floating Rate Subordinated Notes due November 30, 2035 (the “2035 Notes”) and (b) $10 million in aggregate principal amount of 4.75% Fixed-to-Floating Rate Subordinated Notes due November 30, 2030 (the “2030 Notes”). The 2035 Notes, which were issued in 2020, have a fixed interest rate of 4.75% for the first ten years and thereafter a quarterly variable interest rate equal to the then current three-month term Secured Overnight Financing Rate (“SOFR”) plus 4.14%. The 2030 Notes, which were issued in 2020, have a fixed interest rate of 4.75% for the first five years and thereafter a quarterly variable interest rate equal to the then current three-month term SOFR plus 4.52%. It is the Company’s intention to redeem the 2030 notes on December 30, 2025. Interest expense recognized on the subordinated notes for the three and nine-months ended September 30, 2025, was $225 thousand.
Current wording
**Subordinated Debentures.**In connection with the acquisition of Cornerstone, the Company assumed $12 million of subordinated debentures, including $2 million of 4.75% Fixed‑to‑Floating Rate Subordinated Notes due November 30, 2035 (the “2035 Notes”). The 2035 Notes, which were issued in 2020, have a fixed interest rate of 4.75% for the first ten years and thereafter a quarterly variable interest rate equal to the then current three-month term Secured Overnight Financing Rate (“SOFR”) plus 4.14%. The remaining subordinated notes were called in 2025 and are no longer outstanding. Interest expense recognized on the subordinated notes for the three-months ended March 31, 2026, was $61 thousand.
Previous wording
**Repurchase Agreements.**The Bank offers a repurchase agreement product for its larger customers which use securities sold under agreements to repurchase as an alternative to interest-bearing deposits. Securities sold under agreements to repurchase totaling $93.9 million and $22.1 million at September 30, 2025, and December 31, 2024, respectively, are secured by U.S. Government agency securities with a carrying amount of $104.3 million and $38.5 million at September 30, 2025 and December 31, 2024, respectively. The increase in repurchase agreements is mostly related to the acquisition of CCB. CCB maintained reciprocal deposits with several customers. During July 2025, we converted these deposits to repurchase agreements. Interest expense recognized on repurchase agreements for the three and nine-months ended September 30, 2025, was $317 thousand and $347 thousand, respectively. This compares to interest of $8 thousand and $26 thousand during the three and nine months ended September 30, 2024.
Current wording
**Repurchase Agreements.**The Bank offers a repurchase agreement product for its larger customers which use securities sold under agreements to repurchase as an alternative to interest-bearing deposits. Securities sold under agreements to repurchase totaled $99.4 million and $97.9 million at March 31, 2026 and December 31, 2025, respectively. The balances at March 31, 2026, are secured by U.S. Government agency securities with a carrying amount of $112.5 million. Interest expense recognized on repurchase agreements for the three-months ended March 31, 2026 and 2025, was $441 thousand and $10 thousand, respectively.
Previous wording
Shareholders’ Equity. Shareholders’ equity increased by $68 million from $178 million at December 31, 2024 to $246 million at September 30, 2025. The $68 million increase includes earnings during the nine-month period of $18.6 million, common stock and stock options issued in the acquisition of Cornerstone totaling $45.2 million, a decrease in accumulated other comprehensive loss of $8.7 million and restricted stock and stock option activity totaling $1.2 million. These items were partially offset by the payment of cash dividends totaling $5.6 million.
Current wording
Shareholders’ Equity. Shareholders’ equity increased by $4.3 million from $261.1 million at December 31, 2025 to $265.4 million at March 31, 2026. The $4.3 million increase includes earnings during the three-month period of $9.8 million, stock option exercises of $1.4 million and stock-based compensation expense of $121 thousand. These items were partially offset by an increase in accumulated other comprehensive loss of $2.6 million, the payment of cash dividends totaling $2.3 million and common stock repurchases of $2.0 million.
Previous wording
It is the policy of the Company to periodically distribute excess retained earnings to the shareholders through the payment of cash dividends. Such dividends help promote shareholder value and capital adequacy by enhancing the marketability of the Company’s stock. All authority to provide a return to the shareholders in the form of a cash or stock dividend or split rests with the Board of Directors. The Board will periodically, but on no regular schedule, review the appropriateness of a cash dividend payment. Banking regulations limit the amount of dividends that may be paid without prior approval of regulatory agencies. The Company paid a quarterly cash dividend of $0.30 per share on August 15, 2025, May 15, 2025 and February 17, 2025 and a quarterly cash dividend of $0.27 per share on February 15, 2024, May 15, 2024, August 15, 2024, and November 15, 2024.
Current wording
It is the policy of the Company to periodically distribute excess retained earnings to the shareholders through the payment of cash dividends. Such dividends help promote shareholder value and capital adequacy by enhancing the marketability of the Company’s stock. All authority to provide a return to the shareholders in the form of a cash or stock dividend or split rests with the Board of Directors. The Board will periodically, but on no regular schedule, review the appropriateness of a cash dividend payment. Banking regulations limit the amount of dividends that may be paid without prior approval of regulatory agencies. The Company paid a quarterly cash dividend of $0.33 per share on February 18, 2026 and a quarterly cash dividend of $0.30 per share on February 17, 2025, May 15, 2025, August 15, 2025 and November 17, 2025.
Previous wording
**Loan Commitments.**In the normal course of business, there are various commitments outstanding to extend credits that are not reflected in the financial statements. Commitments to extend credit and letters of credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Annual review of commercial credit lines, letters of credit and ongoing monitoring of outstanding balances reduces the risk of loss associated with these commitments. As of September 30, 2025, the Company had $276 million in unfunded loan commitments and $1.6 million in letters of credit. This compares to $155 million in unfunded loan commitments at December 31, 2024 and no letters of credit. Of the $276 million in unfunded loan commitments, $193 million and $83 million represent commitments to commercial and consumer customers, respectively. Of the total unfunded commitments at September 30, 2025, $125 million were secured by real estate, of which $51 million was secured by commercial real estate and $74 million was secured by residential real estate mostly in the form of equity lines of credit. The commercial loan commitments not secured by real estate primarily represent business lines of credit, while the consumer loan commitments not secured by real estate primarily represent revolving credit card lines and overdraft protection lines. Since some of the commitments are expected to expire without being drawn upon the total commitment amounts do not necessarily represent future cash requirements.
Current wording
**Loan Commitments.**In the normal course of business, there are various commitments outstanding to extend credits that are not reflected in the financial statements. Commitments to extend credit and letters of credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Annual review of commercial credit lines, letters of credit and ongoing monitoring of outstanding balances reduces the risk of loss associated with these commitments. As of March 31, 2026, the Company had $247 million in unfunded loan commitments and $5.3 million in letters of credit. This compares to $249 million in unfunded loan commitments at December 31, 2025 and $1.6 million in letters of credit. Of the $247 million in unfunded loan commitments, $158 million and $84 million represent commitments to commercial and consumer customers, respectively. Of the total unfunded commitments at March 31, 2026, $110 million were secured by real estate, of which $35 million was secured by commercial real estate and $75 million was secured by residential real estate mostly in the form of equity lines of credit. The commercial loan commitments not secured by real estate primarily represent business lines of credit, while the consumer loan commitments not secured by real estate primarily represent revolving credit card lines and overdraft protection lines. Since some of the commitments are expected to expire without being drawn upon the total commitment amounts do not necessarily represent future cash requirements.
Previous wording
**Operating Leases.**The Company’s leases twelve branches. Our Yuba City branch is classified as owned; however, it is subject to a long-term land lease. The Company also leases two lending offices and two administrative offices. The expiration dates of the leases vary, with the first such lease expiring during 2026 and the last such lease expiring during 2044. Including variable lease expense, total rent expense for the nine months ended September 30, 2025, and 2024 was $2.6 million and $2.2 million, respectively.
Current wording
**Operating Leases.**The Company leases eleven branches. Our Yuba City branch is classified as owned; however, it is subject to a long-term land lease. The Company also leases two lending offices and five administrative offices. The Company also leases two lending offices and two administrative offices. The expiration dates of the leases vary, with the first such lease expiring during 2026 and the last such lease expiring during 2044. Including variable lease expense, total rent expense for the three months ended March 31, 2026, and 2025 was $1.0 million and $852 thousand, respectively.
Previous wording
The Company is a member of the Federal Home Loan Bank of San Francisco (FHLB) and can borrow up to $272 million from the FHLB secured by commercial and residential mortgage loans with carrying values totaling $462 million. The Company is also eligible to borrow at the Federal Reserve Bank (FRB) Discount Window. At September 30, 2025, the Company could borrow up to $63 million at the Discount Window secured by investment securities with a fair value of $72 million. In addition to its FHLB borrowing line and the Discount Window, the Company has unsecured short-term borrowing agreements with two of its correspondent banks in the amounts of $50 million and $20 million. There were no outstanding borrowings to the FHLB, FRB Discount Window or the correspondent banks at September 30, 2025 and December 31, 2024.
Current wording
The Company is a member of the Federal Home Loan Bank of San Francisco (FHLB) and can borrow up to $439 million from the FHLB secured by commercial and residential mortgage loans with carrying values totaling $699 million. The Company is also eligible to borrow at the Federal Reserve Bank (FRB) Discount Window. At March 31, 2026, the Company could borrow up to $47 million at the Discount Window secured by investment securities with a fair value of $41 million. In addition to its FHLB borrowing line and the Discount Window, the Company has unsecured short-term borrowing agreements with two of its correspondent banks in the amounts of $50 million and $20 million. There were no outstanding borrowings to the FHLB, FRB Discount Window or the correspondent banks at March 31, 2026 and December 31, 2025.
Previous wording
Deposits represent the Bank's primary source of funds. Deposits are primarily core deposits in that they are demand, savings and time deposits generated from local businesses and individuals. These sources are considered to be relatively stable, long- term relationships thereby enhancing steady growth of the deposit base without major fluctuations in overall deposit balances. The Company experiences, to a small degree, some seasonality with the slower growth period between November through April, and the higher growth period from May through October. The Company estimates that it has approximately $724 million in uninsured deposits which includes uninsured deposits of Plumas Bancorp. Of this amount, $162 million represents deposits that are collateralized such as deposits of states, municipalities and tribal accounts. Uninsured amounts are estimated based on the portion of the account balances in excess of FDIC insurance limits.
Current wording
Deposits represent the Bank's primary source of funds. Deposits are primarily core deposits in that they are demand, savings and time deposits generated from local businesses and individuals. These sources are considered to be relatively stable, long- term relationships thereby enhancing steady growth of the deposit base without major fluctuations in overall deposit balances. The Company experiences, to a small degree, some seasonality with the slower growth period between November through April, and the higher growth period from May through October. The Company estimates that it has approximately $694 million in uninsured deposits which includes uninsured deposits of Plumas Bancorp. Of this amount, $177 million represents deposits that are collateralized such as deposits of states, municipalities and tribal accounts. Uninsured amounts are estimated based on the portion of the account balances in excess of FDIC insurance limits.
Rearranged previous paragraphs (6)
Previous report — wording carried elsewhere
RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED September 30, 2025
Previous report — wording carried elsewhere
The following table presents for the nine-month periods indicated the distribution of consolidated average assets, liabilities and shareholders' equity. It also presents the amounts of interest income from interest earning assets and the resultant annualized yields expressed in both dollars and annualized yield percentages, as well as the amounts of interest expense on interest bearing liabilities and the resultant cost expressed in both dollars and annualized rate percentages. Average balances are based on daily averages. Nonaccrual loans are included in the calculation of average loans while nonaccrued interest thereon is excluded from the computation of yields earned:
Previous report — wording carried elsewhere
The following table sets forth changes in interest income and interest expense for the nine-months ended September 30, 2025, and the amount of change attributable to variances in volume, rates and the combination of volume and rates based on the relative changes of volume and rates:
Previous report — wording carried elsewhere
**Provision for income taxes.**The provision for income taxes decreased from $7.5 million, or 26.4% of pre-tax income, during the nine months ended September 30, 2024 to $7.0 million, or 27.2% of pre-tax income, during the current nine-month period. The percentages for 2025 and 2024 differ from statutory rates as tax exempt items of income, such as earnings on Bank owned life insurance and municipal securities interest, decrease taxable income while non-deductible merger transaction costs incurred during the current period increase taxable income.
Previous report — wording carried elsewhere
The following is a detailed discussion of each component of the change in net income.
Previous report — wording carried elsewhere
Net interest margin for the three months ended September 30, 2025, was 4.83%, up from 4.76% for the same period in 2024.