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SECURITIES AND EXCHANGE COMMISSION
þ | Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
o | Transaction report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
California | 75-2987096 | |
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) | |
35 S. Lindan Avenue, Quincy, CA | 95971 | |
(Address of principal executive offices) | (Zip Code) |
Title of Each Class: | Name of Each Exchange on which Registered: | |
Common Stock, no par value | The NASDAQ Stock Market LLC |
Large Accelerated Filero | Accelerated Filero | Non-Accelerated Filero | Smaller Reporting Companyþ |
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EX-3.2 | ||||||||
EX-23 | ||||||||
EX-31.1 | ||||||||
EX-31.2 | ||||||||
EX-32.1 | ||||||||
EX-32.2 | ||||||||
EX-99.1 | ||||||||
EX-99.2 |
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• | Competitive pressure in the banking industry, competition in the markets the Company operates in and changes in the legal, accounting and regulatory environment |
• | Changes in the interest rate environment and volatility of rate sensitive assets and liabilities |
• | Declines in the health of the economy, nationally or regionally, which could reduce the demand for loans, reduce the ability of borrowers to repay loans and/or reduce the value of real estate collateral securing most of the Company’s loans |
• | Credit quality deterioration, which could cause an increase in the provision for loan and lease losses | ||
• | Devaluation of fixed income securities | ||
• | Asset/liability matching risks and liquidity risks | ||
• | Loss of key personnel | ||
• | Operational interruptions including data processing systems failure and fraud |
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ITEM 1. | BUSINESS |
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Requirement for the | ||||||||||||||||
Bank to be: | ||||||||||||||||
Adequately | Well | Plumas | Plumas | |||||||||||||
Capitalized | Capitalized | Bank | Bancorp | |||||||||||||
Tier 1 leverage capital ratio | 4.0 | % | 5.0 | % | 8.9 | % | 8.9 | % | ||||||||
Tier 1 risk-based capital ratio | 4.0 | % | 6.0 | % | 12.8 | % | 12.7 | % | ||||||||
Total risk-based capital ratio | 8.0 | % | 10.0 | % | 14.0 | % | 13.9 | % |
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• | raised the minimum designated reserve ratio (“DDR”) which the FDIC must set each year, to 1.35 percent (from the former minimum of 1.15 percent) and removed the upper limit on the DRR (which was formerly capped at 1.5 percent) and therefore on the size of the fund; |
• | required that the fund reserve ratio reach 1.35 percent by September 30, 2020 (rather than 1.15 percent by the end of 2016, as formerly required); |
• | required that, in setting assessments, the FDIC “offset the effect of requiring that the reserve ratio reach 1.35 percent by September 30, 2020 rather than 1.15 percent by the end of 2016 on insured depository institutions with total consolidated assets of less than $10,000,000,000”; |
• | eliminated the requirement that the FDIC provide dividends from the fund when the reserve ratio is between 1.35 percent and 1.5 percent; and |
• | continued the FDIC’s authority to declare dividends when the reserve ratio at the end of a calendar year is at least 1.5 percent, but granted the FDIC sole discretion in determining whether to suspend or limit the declaration or payment of dividends. |
• | estimated operating expenses of the Deposit Insurance Fund; |
• | case resolution expenditures and income of the Deposit Insurance Fund; |
• | the projected effects of assessments on the capital and earnings of the institutions paying assessments to the Deposit Insurance Fund; |
• | the risk factors and other factors taken into account pursuant to 12 USC 1817(b)(1); and |
• | any other factors the Board may deem appropriate. |
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• | a membership stock requirement with an initial cap of $25 million (100% of “membership asset value” as defined), or |
• | an activity based stock requirement (based on percentage of outstanding advances). |
• | a bank’s or bank holding company’s executive officers, directors and principal shareholders (i.e., in most cases, those persons who own, control or have power to vote more than 10% of any class of voting securities), |
• | any company controlled by any such executive officer, director or shareholder, or |
• | any political or campaign committee controlled by such executive officer, director or principal shareholder. |
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• | A new Capital Assistance Program to help ensure that our banking institutions have sufficient capital to withstand the challenges ahead, paired with a supervisory process to produce a more consistent and forward-looking assessment of the risks on banks’ balance sheets and their potential capital needs. |
• | A new Public-Private Investment Fund on an initial scale of up to $500 billion, with the potential to expand up to $1 trillion, to catalyze the removal of legacy assets from the balance sheets of financial institutions. This fund will combine public and private capital with government financing to help free up capital to support new lending. |
• | A new Treasury and Federal Reserve initiative to dramatically expand — up to $1 trillion — the existing Term Asset-Backed Securities Lending Facility (TALF) in order to reduce credit spreads and restart the securitized credit markets that in recent years supported a substantial portion of lending to households, students, small businesses, and others. |
• | An extension of the FDIC’s Temporary Liquidity Guarantee Program to October 31, 2009. A new framework of governance and oversight to help ensure that banks receiving funds are held responsible for appropriate use of those funds through stronger conditions on lending, dividends and executive compensation along with enhanced reporting to the public. |
• | accelerated from 2011 to 2008 the date that the Federal Reserve Bank could pay interest on deposits of banks held with the Federal Reserve to meet reserve requirements; |
• | to the extent that the U. S. Treasury purchases mortgage securities as part of TARP, the Treasury shall implement a plan to minimize foreclosures including using guarantees and credit enhancements to support reasonable loan modifications, and to the extent loans are owned by the government to consent to the reasonable modification of such loans; |
• | limits executive compensation for executives for TARP participating financial institutions including a maximum corporate tax deduction limit of $500,000 for each of the top five highest paid executives of such institution, requiring clawbacks of incentive compensation that were paid based on inaccurate or false information, limiting golden parachutes for involuntary and certain voluntary terminations to 2.99x their average annual salary and bonus for the last five years, and prohibiting the payment of incentive compensation that encourages management to take unnecessary and excessive risks with respect to the institution; |
• | extends the mortgage debt forgiveness provision of the Mortgage Forgiveness Debt Relief Act of 2007 by three years (2012) to ease the income tax burden on those involved with certain foreclosures; and |
• | qualified financial institutions may count losses on FNMA and FHLMC preferred stock against ordinary income, rather than capital gain income. |
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• | Authorized a bank or trust acting in any capacity under a court or private trust to arrange for the deposit of securities in a securities depository or federal reserve bank, and provided how they may be held by the securities depository; |
• | Reduced from 5% to 1% the amount of eligible assets to be maintained at an approved depository by an office of a foreign (other nation) bank for the protection of the interests of creditors of the bank’s business in this state or for the protection of the public interest; |
• | Enabled the DFI to issue an order against a bank licensee parent or subsidiary; |
• | Provided that the examinations may be conducted in alternate examination periods if the DFI concludes that an examination of the state bank by the appropriate federal regulator carries out the purpose of this section, but the DFI may not accept two consecutive examination reports made by federal regulators; |
• | Provided that the DFI may examine subsidiaries of every California state bank, state trust company, and foreign (other nation) bank to the extent and whenever and as often as the DFI shall deem advisable; | ||
• | Enabled the DFI issue an order or a final order to now include any bank holding company or subsidiary of the bank, trust company, or foreign banking corporation that is violating or failing to comply with any applicable law, or is conducting activities in an unsafe or injurious manner; |
• | Enabled the DFI to take action against a person who has engaged in or participated in any unsafe or unsound act with regard to a bank, including a former employee who has left the bank. |
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ITEM 1A. | RISK FACTORS |
ITEM 1B. | UNRESOLVED STAFF COMMENTS |
ITEM 2. | PROPERTIES |
35 South Lindan Avenue Quincy, California (1) | 32 Central Avenue Quincy, California (1) | 80 W. Main St. Quincy, California (3) | ||
424 N. Mill Creek Quincy, California (1) | 336 West Main Street Quincy, California | 120 North Pine Street Portola, California | ||
43163 Highway 299E Fall River Mills, California | 121 Crescent Street Greenville, California | 255 Main Street Chester, California | ||
510 North Main Street Alturas, California | 3000 Riverside Drive Susanville, California | 8475 North Lake Boulevard Kings Beach, California | ||
11638 Donner Pass Road Truckee, California | 2175 Civic Center Drive Redding, California |
243 North Lake Boulevard | 1005 Terminal Way, Ste. 246 | 470 Nevada St., Suite 108 | ||
Tahoe City, California | Reno, Nevada (1) | Auburn, California (2) |
(1) | Non-branch administrative or credit administrative offices. | |
(2) | Commercial lending office. | |
(3) | Leased to a third party. |
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Year Ending | ||||
December 31, | ||||
2011 | $ | 133,000 | ||
2012 | 128,000 | |||
2013 | 60,000 | |||
2014 | 37,000 | |||
2015 | 9,000 | |||
$ | 367,000 | |||
ITEM 3. | LEGAL PROCEEDINGS |
ITEM 4. | (REMOVED AND RESERVED) |
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ITEM 5. | MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCK- HOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. |
Common | ||||||||||||
Quarter | Dividends | High | Low | |||||||||
4th Quarter 2010 | — | $ | 3.09 | $ | 1.92 | |||||||
3rd Quarter 2010 | — | $ | 3.22 | $ | 2.53 | |||||||
2nd Quarter 2010 | — | $ | 3.39 | $ | 2.46 | |||||||
1st Quarter 2010 | — | $ | 3.78 | $ | 2.21 | |||||||
4th Quarter 2009 | — | $ | 4.80 | $ | 2.88 | |||||||
3rd Quarter 2009 | — | $ | 4.99 | $ | 3.80 | |||||||
2nd Quarter 2009 | — | $ | 5.96 | $ | 3.80 | |||||||
1st Quarter 2009 | — | $ | 7.81 | $ | 3.80 |
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Number of securities remaining | ||||||||||||
available for future issuance | ||||||||||||
Number of securities to | Weighted-average | under equity compensation | ||||||||||
be issued upon exercise | exercise price of | plans (excluding securities | ||||||||||
of outstanding options | outstanding options | reflected in column (a)) | ||||||||||
Plan Category | (a) | (b) | (c) | |||||||||
Equity compensation plans approved by security holders | 312,030 | $ | 13.41 | 561,155 | ||||||||
Equity compensation plans not approved by security holders | None | Not Applicable | None | |||||||||
Total | 312,030 | $ | 13.41 | 561,155 | ||||||||
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ITEM 6. | SELECTED FINANCIAL DATA |
At or for the year ended December 31, | ||||||||||||||||||||
2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||
(dollars in thousands except per share information) | ||||||||||||||||||||
Statement of Operations | ||||||||||||||||||||
Interest income | $ | 20,680 | $ | 22,836 | $ | 25,440 | $ | 30,284 | $ | 29,483 | ||||||||||
Interest expense | 3,147 | 3,655 | 5,364 | 8,536 | 6,954 | |||||||||||||||
Net interest income | 17,533 | 19,181 | 20,076 | 21,748 | 22,529 | |||||||||||||||
Provision for loan losses | 5,500 | 14,500 | 4,600 | 800 | 1,000 | |||||||||||||||
Noninterest income | 8,561 | 5,752 | 5,091 | 5,448 | 5,159 | |||||||||||||||
Noninterest expense | 19,234 | 26,354 | 20,475 | 19,671 | 18,290 | |||||||||||||||
Provision for (benefit from) income taxes | 389 | (6,775 | ) | (212 | ) | 2,502 | 3,196 | |||||||||||||
Net income (loss) | $ | 971 | $ | (9,146 | ) | $ | 304 | $ | 4,223 | $ | 5,202 | |||||||||
Balance sheet (end of period) | ||||||||||||||||||||
Total assets | $ | 484,480 | $ | 528,117 | $ | 457,175 | $ | 453,115 | $ | 473,239 | ||||||||||
Total loans | $ | 314,200 | $ | 332,678 | $ | 366,017 | $ | 352,949 | $ | 354,712 | ||||||||||
Allowance for loan losses | $ | 7,324 | $ | 9,568 | $ | 7,224 | $ | 4,211 | $ | 3,917 | ||||||||||
Total deposits | $ | 424,887 | $ | 433,255 | $ | 371,493 | $ | 391,940 | $ | 402,176 | ||||||||||
Total shareholders’ equity | $ | 37,988 | $ | 38,231 | $ | 35,437 | $ | 37,139 | $ | 35,852 | ||||||||||
Balance sheet (period average) | ||||||||||||||||||||
Total assets | $ | 500,082 | $ | 490,000 | $ | 447,720 | $ | 464,974 | $ | 468,988 | ||||||||||
Total loans | $ | 323,906 | $ | 354,482 | $ | 355,416 | $ | 353,384 | $ | 335,226 | ||||||||||
Total deposits | $ | 430,777 | $ | 403,896 | $ | 382,279 | $ | 403,772 | $ | 415,700 | ||||||||||
Total shareholders’ equity | $ | 38,941 | $ | 43,839 | $ | 37,343 | $ | 37,041 | $ | 33,682 | ||||||||||
Capital ratios | ||||||||||||||||||||
Leverage ratio | 8.9 | % | 7.9 | % | 9.8 | % | 10.0 | % | 9.5 | % | ||||||||||
Tier 1 risk-based capital | 12.7 | % | 10.4 | % | 11.0 | % | 11.6 | % | 10.9 | % | ||||||||||
Total risk-based capital | 13.9 | % | 11.6 | % | 12.2 | % | 12.7 | % | 11.8 | % | ||||||||||
Asset quality ratios | ||||||||||||||||||||
Nonperforming loans/total loans | 8.07 | % | 4.30 | % | 7.31 | % | 0.75 | % | 0.29 | % | ||||||||||
Nonperforming assets/total assets | 7.07 | % | 4.84 | % | 6.78 | % | 0.70 | % | 0.22 | % | ||||||||||
Allowance for loan losses/total loans | 2.33 | % | 2.88 | % | 1.97 | % | 1.19 | % | 1.10 | % | ||||||||||
Net loan charge-offs | $ | 7,744 | $ | 12,156 | $ | 1,587 | $ | 506 | $ | 339 | ||||||||||
Performance ratios | ||||||||||||||||||||
Return (loss) on average assets | 0.19 | % | (1.87 | )% | 0.07 | % | 0.91 | % | 1.11 | % | ||||||||||
Return (loss) on average common equity | 1.1 | % | (29.5 | )% | 0.8 | % | 11.4 | % | 15.4 | % | ||||||||||
Return (loss) on average equity | 2.5 | % | (20.9 | )% | 0.8 | % | 11.4 | % | 15.4 | % | ||||||||||
Net interest margin | 4.24 | % | 4.52 | % | 4.99 | % | 5.18 | % | 5.32 | % | ||||||||||
Loans to deposits | 73.9 | % | 76.8 | % | 98.5 | % | 90.1 | % | 88.2 | % | ||||||||||
Efficiency ratio | 73.7 | % | 105.7 | % | 81.4 | % | 72.3 | % | 66.1 | % | ||||||||||
Per share information | ||||||||||||||||||||
Basic earnings (loss) | $ | 0.06 | $ | (2.05 | ) | $ | 0.06 | $ | 0.85 | $ | 1.04 | |||||||||
Diluted earnings (loss) | $ | 0.06 | $ | (2.05 | ) | $ | 0.06 | $ | 0.84 | $ | 1.02 | |||||||||
Common cash dividends | $ | 0.00 | $ | 0.00 | $ | 0.24 | $ | 0.30 | $ | 0.26 | ||||||||||
Dividend payout ratio | — | % | — | % | 400 | % | 35.3 | % | 25.0 | % | ||||||||||
Book value per common share | $ | 5.51 | $ | 5.58 | $ | 7.42 | $ | 7.63 | $ | 7.14 | ||||||||||
Common shares outstanding at period end | 4,776,339 | 4,776,339 | 4,775,339 | 4,869,130 | 5,023,205 |
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ITEM 7. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
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Year ended December 31, | ||||||||||||||||||||||||||||||||||||
2010 | 2009 | 2008 | ||||||||||||||||||||||||||||||||||
Interest | Rates | Interest | Rates | Interest | Rates | |||||||||||||||||||||||||||||||
Average | income/ | earned | Average | income/ | earned | Average | income/ | earned | ||||||||||||||||||||||||||||
balance | expense | / paid | balance | expense | / paid | balance | expense | / paid | ||||||||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||||||
Interest bearing deposits | $ | 19,808 | $ | 48 | 0.24 | % | $ | 6,298 | $ | 15 | 0.24 | % | $ | — | $ | — | — | % | ||||||||||||||||||
Federal funds sold | — | — | — | 12 | — | — | 118 | 3 | 2.54 | |||||||||||||||||||||||||||
Investment securities(1) | 69,357 | 1,772 | 2.55 | 64,047 | 2,163 | 3.38 | 46,658 | 1,887 | 4.04 | |||||||||||||||||||||||||||
Total loans(2)(3) | 323,906 | 18,860 | 5.82 | 354,482 | 20,658 | 5.83 | 355,416 | 23,550 | 6.63 | |||||||||||||||||||||||||||
Total earning assets | 413,071 | 20,680 | 5.01 | % | 424,839 | 22,836 | 5.38 | % | 402,192 | 25,440 | 6.33 | % | ||||||||||||||||||||||||
Cash and due from banks | 38,945 | 27,372 | 12,174 | |||||||||||||||||||||||||||||||||
Other assets | 48,066 | 37,789 | 33,354 | |||||||||||||||||||||||||||||||||
Total assets | $ | 500,082 | $ | 490,000 | $ | 447,720 | ||||||||||||||||||||||||||||||
Liabilities and shareholders’ equity | ||||||||||||||||||||||||||||||||||||
Interest bearing demand deposits | $ | 101,519 | 382 | 0.38 | % | $ | 98,394 | 671 | 0.68 | % | $ | 73,338 | 548 | 0.75 | % | |||||||||||||||||||||
Money market deposits | 42,514 | 221 | 0.52 | 41,844 | 346 | 0.83 | 37,626 | 312 | 0.83 | |||||||||||||||||||||||||||
Savings deposits | 51,011 | 86 | 0.17 | 50,286 | 90 | 0.18 | 48,573 | 161 | 0.33 | |||||||||||||||||||||||||||
Time deposits | 124,810 | 2,007 | 1.61 | 105,313 | 2,062 | 1.96 | 110,743 | 3,501 | 3.16 | |||||||||||||||||||||||||||
Short-term borrowings | 986 | 5 | 0.51 | 24,292 | 80 | 0.33 | 11,857 | 202 | 1.70 | |||||||||||||||||||||||||||
Long-term borrowings | 9,973 | 130 | 1.30 | 1,589 | 27 | 1.70 | — | — | — | |||||||||||||||||||||||||||
Junior subordinated debentures | 10,310 | 312 | 3.03 | 10,310 | 371 | 3.60 | 10,310 | 623 | 6.04 | |||||||||||||||||||||||||||
Other | 123 | 4 | 3.25 | 212 | 8 | 3.77 | 309 | 17 | 5.50 | |||||||||||||||||||||||||||
Total interest bearing liabilities | 341,246 | 3,147 | 0.92 | % | 332,240 | 3,655 | 1.10 | % | 292,756 | 5,364 | 1.83 | % | ||||||||||||||||||||||||
Noninterest bearing demand deposits | 110,923 | 108,059 | 111,999 | |||||||||||||||||||||||||||||||||
Other liabilities | 8,972 | 5,862 | 5,622 | |||||||||||||||||||||||||||||||||
Shareholders’ equity | 38,941 | 43,839 | 37,343 | |||||||||||||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 500,082 | $ | 490,000 | $ | 447,720 | ||||||||||||||||||||||||||||||
Net interest income | $ | 17,533 | $ | 19,181 | $ | 20,076 | ||||||||||||||||||||||||||||||
Net interest spread(4) | 4.09 | % | 4.28 | % | 4.50 | % | ||||||||||||||||||||||||||||||
Net interest margin(5) | 4.24 | % | 4.52 | % | 4.99 | % |
(1) | Interest income is reflected on an actual basis and is not computed on a tax-equivalent basis. | |
(2) | Average nonaccrual loan balances of $18.8 million for 2010, $25.1 million for 2009 and $5.2 million for 2008 are included in average loan balances for computational purposes. | |
(3) | Loan origination fees and costs are included in interest income as adjustments of the loan yields over the life of the loan using the interest method. Loan interest income includes net loan costs of $20,000, $214,000 and $288,000 for 2010, 2009 and 2008, respectively. | |
(4) | Net interest spread represents the average yield earned on interest-earning assets less the average rate paid on interest-bearing liabilities. | |
(5) | Net interest margin is computed by dividing net interest income by total average earning assets. |
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2010 compared to 2009 | 2009 compared to 2008 | |||||||||||||||||||||||||||||||
Increase (decrease) due to change in: | Increase (decrease) due to change in: | |||||||||||||||||||||||||||||||
Average | Average | Average | Average | |||||||||||||||||||||||||||||
Volume(1) | Rate(2) | Mix(3) | Total | Volume(1) | Rate(2) | Mix(3) | Total | |||||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||||||||||||
Interest bearing deposits | $ | 32 | $ | — | $ | 1 | $ | 33 | $ | — | $ | — | $ | 15 | $ | 15 | ||||||||||||||||
Federal funds sold | — | — | — | — | (3 | ) | (3 | ) | 3 | (3 | ) | |||||||||||||||||||||
Investment securities | 179 | (527 | ) | (43 | ) | (391 | ) | 703 | (311 | ) | (116 | ) | 276 | |||||||||||||||||||
Loans | (1,782 | ) | (18 | ) | 2 | (1,798 | ) | (62 | ) | (2,838 | ) | 8 | (2,892 | ) | ||||||||||||||||||
Total interest income | (1,571 | ) | (545 | ) | (40 | ) | (2,156 | ) | 638 | (3,152 | ) | (90 | ) | (2,604 | ) | |||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||||||||||
Interest bearing demand deposits | 21 | (301 | ) | (9 | ) | (289 | ) | 187 | (48 | ) | (16 | ) | 123 | |||||||||||||||||||
Money market deposits | 5 | (128 | ) | (2 | ) | (125 | ) | 35 | — | (1 | ) | 34 | ||||||||||||||||||||
Savings deposits | 1 | (5 | ) | — | (4 | ) | 6 | (74 | ) | (3 | ) | (71 | ) | |||||||||||||||||||
Time deposits | 382 | (369 | ) | (68 | ) | (55 | ) | (172 | ) | (1,333 | ) | 66 | (1,439 | ) | ||||||||||||||||||
Short-term borrowings | (77 | ) | 43 | (41 | ) | (75 | ) | 212 | (163 | ) | (171 | ) | (122 | ) | ||||||||||||||||||
Long-term borrowings | 142 | (6 | ) | (33 | ) | 103 | — | — | 27 | 27 | ||||||||||||||||||||||
Junior subordinated debentures | — | (59 | ) | — | (59 | ) | — | (252 | ) | — | (252 | ) | ||||||||||||||||||||
Other borrowings | (3 | ) | (1 | ) | — | (4 | ) | (5 | ) | (5 | ) | 1 | (9 | ) | ||||||||||||||||||
Total interest expense | 471 | (826 | ) | (153 | ) | (508 | ) | 263 | (1,875 | ) | (97 | ) | (1,709 | ) | ||||||||||||||||||
Net interest income | $ | (2,042 | ) | $ | 281 | $ | 113 | $ | (1,648 | ) | $ | 375 | $ | (1,277 | ) | $ | 7 | $ | (895 | ) | ||||||||||||
(1) | The volume change in net interest income represents the change in average balance multiplied by the previous year’s rate. | |
(2) | The rate change in net interest income represents the change in rate multiplied by the previous year’s average balance. | |
(3) | The mix change in net interest income represents the change in average balance multiplied by the change in rate. |
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Years Ended December 31, | Change during Year | |||||||||||||||||||
2010 | 2009 | 2008 | 2010 | 2009 | ||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||
Service charges on deposit accounts | $ | 3,642 | $ | 3,796 | $ | 3,951 | $ | (154 | ) | $ | (155 | ) | ||||||||
Sale of merchant processing Portfolio | 1,435 | — | — | 1,435 | — | |||||||||||||||
Gain on sale of investments | 1,160 | 10 | — | 1,150 | 10 | |||||||||||||||
Gain on sale of loans, net | 1,055 | 593 | 111 | 462 | 482 | |||||||||||||||
Earnings on bank owned life insurance policies | 444 | 434 | 421 | 10 | 13 | |||||||||||||||
Loan servicing fees | 195 | 139 | 96 | 56 | 43 | |||||||||||||||
Merchant processing | 141 | 282 | 286 | (141 | ) | (4 | ) | |||||||||||||
Customer service fees | 135 | 121 | 114 | 14 | 7 | |||||||||||||||
Safe deposit box and night depository income | 66 | 68 | 67 | (2 | ) | 1 | ||||||||||||||
Impairment loss on investment security | — | — | (415 | ) | — | 415 | ||||||||||||||
Other income | 288 | 309 | 460 | (21 | ) | (151 | ) | |||||||||||||
Total non-interest income | $ | 8,561 | $ | 5,752 | $ | 5,091 | $ | 2,809 | $ | 661 | ||||||||||
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Years Ended December 31, | Change during Year | |||||||||||||||||||
2010 | 2009 | 2008 | 2010 | 2009 | ||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||
Salaries and employee benefits | $ | 9,732 | $ | 11,054 | $ | 10,884 | $ | (1,322 | ) | $ | 170 | |||||||||
Occupancy and equipment | 3,096 | 3,759 | 3,838 | (663 | ) | (79 | ) | |||||||||||||
Outside service fees | 1,212 | 990 | 803 | 222 | 187 | |||||||||||||||
FDIC insurance | 1,009 | 1,125 | 258 | (116 | ) | 867 | ||||||||||||||
Professional fees | 587 | 789 | 688 | (202 | ) | 101 | ||||||||||||||
OREO costs | 573 | 370 | 175 | 203 | 195 | |||||||||||||||
Provision for OREO losses | 356 | 4,800 | 618 | (4,444 | ) | 4,182 | ||||||||||||||
Telephone and data communications | 338 | 392 | 400 | (54 | ) | (8 | ) | |||||||||||||
Loan collection costs | 261 | 399 | 205 | (138 | ) | 194 | ||||||||||||||
Advertising and promotion | 252 | 327 | 448 | (75 | ) | (121 | ) | |||||||||||||
Business development | 250 | 333 | 467 | (83 | ) | (134 | ) | |||||||||||||
Armored car and courier | 239 | 281 | 289 | (42 | ) | (8 | ) | |||||||||||||
Director compensation and retirement | 233 | 293 | 323 | (60 | ) | (30 | ) | |||||||||||||
Insurance | 218 | 142 | 235 | 76 | (93 | ) | ||||||||||||||
Postage | 207 | 207 | 208 | — | (1 | ) | ||||||||||||||
Core deposit intangible amortization | 173 | 173 | 216 | — | (43 | ) | ||||||||||||||
Stationery and supplies | 145 | 183 | 236 | (38 | ) | (53 | ) | |||||||||||||
(Gain) loss on sale of OREO | (43 | ) | 158 | — | (201 | ) | 158 | |||||||||||||
Other operating expense | 396 | 579 | 184 | (183 | ) | 395 | ||||||||||||||
Total non-interest expense | $ | 19,234 | $ | 26,354 | $ | 20,475 | $ | (7,120 | ) | $ | 5,879 | |||||||||
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At December 31, | ||||||||||||||||||||
2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||
Real estate — mortgage | $ | 162,513 | $ | 161,397 | $ | 151,943 | $ | 128,357 | $ | 116,329 | ||||||||||
Real estate — construction and land development | 31,199 | 38,061 | 73,820 | 76,478 | 75,930 | |||||||||||||||
Commercial | 33,433 | 37,056 | 42,528 | 39,584 | 36,182 | |||||||||||||||
Consumer | 48,586 | 54,442 | 61,706 | 72,768 | 90,694 | |||||||||||||||
Agriculture | 38,469 | 41,722 | 36,020 | 35,762 | 35,577 | |||||||||||||||
Total loans | 314,200 | 332,678 | 366,017 | 352,949 | 354,712 | |||||||||||||||
Less: | ||||||||||||||||||||
Deferred costs | (275 | ) | (298 | ) | (279 | ) | (564 | ) | (1,182 | ) | ||||||||||
Allowance for loan losses | 7,324 | 9,568 | 7,224 | 4,211 | 3,917 | |||||||||||||||
Net loans | $ | 307,151 | $ | 323,408 | $ | 359,072 | $ | 349,302 | $ | 351,977 | ||||||||||
Within | After One | After | ||||||||||||||
One Year | Through Five Years | Five Years | Total | |||||||||||||
(dollars in thousands) | ||||||||||||||||
Real estate — mortgage | $ | 20,691 | $ | 32,704 | $ | 109,118 | $ | 162,513 | ||||||||
Real estate — construction and land development | 10,328 | 12,046 | 8,825 | 31,199 | ||||||||||||
Commercial | 10,229 | 10,542 | 12,662 | 33,433 | ||||||||||||
Consumer | 7,057 | 10,870 | 30,659 | 48,586 | ||||||||||||
Agriculture | 13,852 | 9,621 | 14,996 | 38,469 | ||||||||||||
Total | $ | 62,157 | $ | 75,783 | $ | 176,260 | $ | 314,200 | ||||||||
Loans maturing after one year with: | ||||||||||||||||
Fixed interest rates | $ | 24,771 | $ | 53,221 | $ | 77,992 | ||||||||||
Variable interest rates | 51,011 | 123,040 | 174,051 | |||||||||||||
Total | $ | 75,782 | $ | 176,261 | $ | 252,043 | ||||||||||
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• | specific allocation determined in accordance with ASC Topic 310 — Receivables (formerly FAS 114,“Accounting for Impairment of a loan”)based on probable losses on specific loans. |
• | general reserves determined in accordance with guidance in ASC Topic 450 — Contingencies (formerly SFAS No. 5,“Accounting for Contingencies”),based on historical loan loss experience adjusted for other qualitative risk factors both internal and external to the Company. |
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• | loan origination |
• | loan renewal |
• | loan servicing actions (change in terms, collateral release, etc.) |
• | annual financial review |
• | delinquency monitoring and follow-up |
• | loan review process |
• | audit process |
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For the Year Ended December 31, | ||||||||||||||||||||
2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||
Balance at beginning of period | $ | 9,568 | $ | 7,224 | $ | 4,211 | $ | 3,917 | $ | 3,256 | ||||||||||
Charge-offs: | ||||||||||||||||||||
Commercial and agricultural | 1,219 | 663 | 477 | 83 | 126 | |||||||||||||||
Real estate mortgage | 3,105 | 1,145 | 95 | — | — | |||||||||||||||
Real estate construction | 3,617 | 10,133 | 522 | 46 | — | |||||||||||||||
Consumer | 408 | 559 | 689 | 657 | 519 | |||||||||||||||
Total charge-offs | 8,349 | 12,500 | 1,783 | 786 | 645 | |||||||||||||||
Recoveries: | ||||||||||||||||||||
Commercial and agricultural | 26 | 18 | 11 | 53 | 46 | |||||||||||||||
Real estate mortgage | 396 | 8 | 14 | — | — | |||||||||||||||
Real estate construction | 65 | 90 | — | — | — | |||||||||||||||
Consumer | 118 | 228 | 171 | 227 | 260 | |||||||||||||||
Total recoveries | 605 | 344 | 196 | 280 | 306 | |||||||||||||||
Net charge-offs | 7,744 | 12,156 | 1,587 | 506 | 339 | |||||||||||||||
Provision for loan losses | 5,500 | 14,500 | 4,600 | 800 | 1,000 | |||||||||||||||
Balance at end of period | $ | 7,324 | $ | 9,568 | $ | 7,224 | $ | 4,211 | $ | 3,917 | ||||||||||
Net charge-offs during the period to average loans | 2.39 | % | 3.43 | % | 0.45 | % | 0.14 | % | 0.10 | % | ||||||||||
Allowance for loan losses to total loans | 2.33 | % | 2.88 | % | 1.97 | % | 1.19 | % | 1.10 | % |
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At December 31, | ||||||||||||||||||||
2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||
Nonaccrual loans | $ | 25,313 | $ | 14,263 | $ | 26,444 | $ | 2,618 | $ | 972 | ||||||||||
Loans past due 90 days or more and still accruing | 45 | 28 | 297 | 14 | 41 | |||||||||||||||
Total nonperforming loans | 25,358 | 14,291 | 26,741 | 2,632 | 1,013 | |||||||||||||||
Other real estate owned | 8,867 | 11,204 | 4,148 | 402 | — | |||||||||||||||
Other vehicles owned | 17 | 65 | 129 | 135 | 47 | |||||||||||||||
Total nonperforming assets | $ | 34,242 | $ | 25,560 | $ | 31,018 | $ | 3,169 | $ | 1,060 | ||||||||||
Interest income forgone on nonaccrual loans | $ | 1,021 | $ | 568 | $ | 576 | $ | 161 | $ | 53 | ||||||||||
Interest income recorded on a Cash basis on nonaccrual loans | $ | 608 | $ | 369 | $ | 74 | $ | 118 | $ | 116 | ||||||||||
Nonperforming loans to total Loans | 8.07 | % | 4.30 | % | 7.31 | % | 0.75 | % | 0.29 | % | ||||||||||
Nonperforming assets to total Assets | 7.07 | % | 4.84 | % | 6.78 | % | 0.70 | % | 0.22 | % |
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Year Ended December 31, | ||||||||
2010 | 2009 | |||||||
(in thousands) | ||||||||
Beginning Balance | $ | 11,204 | $ | 4,148 | ||||
Additions | 1,438 | 14,006 | ||||||
Dispositions | (3,419 | ) | (2,150 | ) | ||||
Write-downs | (356 | ) | (4,800 | ) | ||||
Ending Balance | $ | 8,867 | $ | 11,204 | ||||
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December 31, | ||||||||||||
Available-for-sale (fair value) | 2010 | 2009 | 2008 | |||||||||
(dollars in thousands) | ||||||||||||
U.S. Treasuries | $ | 1,032 | $ | 1,052 | $ | 1,508 | ||||||
U.S. Government agencies | 40,430 | 55,889 | 10,392 | |||||||||
Corporate debt securities | — | — | 1,550 | |||||||||
U.S. Government agency mortgage-backed Securities | 21,273 | 19,287 | 12,357 | |||||||||
Municipal obligations | 282 | 11,722 | — | |||||||||
Total | $ | 63,017 | $ | 87,950 | $ | 25,807 | ||||||
December 31, | ||||||||||||
Held-to-maturity (amortized cost) | 2010 | 2009 | 2008 | |||||||||
(dollars in thousands) | ||||||||||||
Municipal obligations | $ | — | $ | — | $ | 12,567 | ||||||
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(dollars in thousands) | After One Through | After Five Through | ||||||||||||||||||||||||||||||||||||||
Available-for-sale | One Year or Less | Five Years | Ten Years | After Ten Years | Total | |||||||||||||||||||||||||||||||||||
(Fair Value) | Amount | Yield | Amount | Yield | Amount | Yield | Amount | Yield | Amount | Yield | ||||||||||||||||||||||||||||||
U.S. Treasuries | $ | 1,032 | 1.07 | % | $ | — | — | % | $ | — | — | % | $ | — | — | % | $ | 1,032 | 1.07 | % | ||||||||||||||||||||
U.S. Government agencies | 1,012 | 1.17 | % | 39,418 | 1.76 | % | — | — | % | — | — | % | 40,430 | 1.74 | % | |||||||||||||||||||||||||
U.S. Government agency mortgage-backed securities | 405 | 4.01 | % | 1,097 | 3.84 | % | 3,263 | 3.86 | % | 16,508 | 3.21 | % | 21,273 | 3.35 | % | |||||||||||||||||||||||||
Municipal obligations | — | — | % | — | — | % | 282 | 4.85 | % | — | — | % | 282 | 4.85 | % | |||||||||||||||||||||||||
Total | $ | 2,449 | 1.59 | % | $ | 40,515 | 1.81 | % | $ | 3,545 | 3.97 | % | $ | 16,508 | 3.21 | % | $ | 63,017 | 2.29 | % | ||||||||||||||||||||
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Amount | ||||
Remaining Maturity: | ||||
Three months or less | $ | 14,558 | ||
Over three months to six months | 15,938 | |||
Over six months to 12 months | 15,937 | |||
Over 12 months | 5,671 | |||
Total | $ | 52,104 | ||
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December 31, 2010 | December 31, 2009 | |||||||||||||||
Amount | Ratio | Amount | Ratio | |||||||||||||
Tier 1 Leverage Ratio | ||||||||||||||||
Plumas Bancorp and Subsidiary | $ | 42,994 | 8.9 | % | $ | 40,564 | 7.9 | % | ||||||||
Minimum regulatory requirement | 19,361 | 4.0 | % | 20,652 | 4.0 | % | ||||||||||
Plumas Bank | 43,262 | 8.9 | % | 38,172 | 7.4 | % | ||||||||||
Minimum requirement for “Well-Capitalized” institution under the prompt corrective action plan | 24,190 | 5.0 | % | 25,848 | 5.0 | % | ||||||||||
Minimum regulatory requirement | 19,352 | 4.0 | % | 20,678 | 4.0 | % | ||||||||||
Tier 1 Risk-Based Capital Ratio | ||||||||||||||||
Plumas Bancorp and Subsidiary | 42,994 | 12.7 | % | 40,564 | 10.4 | % | ||||||||||
Minimum regulatory requirement | 13,570 | 4.0 | % | 15,641 | 4.0 | % | ||||||||||
Plumas Bank | 43,262 | 12.8 | % | 38,172 | 9.8 | % | ||||||||||
Minimum requirement for “Well-Capitalized” institution under the prompt corrective action plan | 20,342 | 6.0 | % | 23,433 | 6.0 | % | ||||||||||
Minimum regulatory requirement | 13,561 | 4.0 | % | 15,622 | 4.0 | % | ||||||||||
Total Risk-Based Capital Ratio | ||||||||||||||||
Plumas Bancorp and Subsidiary | 47,274 | 13.9 | % | 45,512 | 11.6 | % | ||||||||||
Minimum regulatory requirement | 27,140 | 8.0 | % | 31,281 | 8.0 | % | ||||||||||
Plumas Bank | 47,539 | 14.0 | % | 43,113 | 11.0 | % | ||||||||||
Minimum requirement for “Well-Capitalized” institution under the prompt corrective action plan | 33,903 | 10.0 | % | 39,056 | 10.0 | % | ||||||||||
Minimum regulatory requirement | 27,123 | 8.0 | % | 31,244 | 8.0 | % |
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ITEM 7A. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
ITEM 8. | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA |
Page | ||||
F-1 | ||||
F-2 | ||||
F-3 | ||||
F-5 | ||||
F-7 | ||||
F-10 |
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Plumas Bancorp and Subsidiary
March 23, 2011
F - 1
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2010 | 2009 | |||||||
ASSETS | ||||||||
Cash and cash equivalents | $ | 64,628,000 | $ | 59,493,000 | ||||
Investment securities | 63,017,000 | 87,950,000 | ||||||
Loans, less allowance for loan losses of $7,324,000 in 2010 and $9,568,000 in 2009 | 307,151,000 | 323,408,000 | ||||||
Premises and equipment, net | 14,431,000 | 14,544,000 | ||||||
Intangible assets, net | 475,000 | 648,000 | ||||||
Bank owned life insurance | 10,463,000 | 10,111,000 | ||||||
Other real estate and vehicles acquired through foreclosure | 8,884,000 | 11,269,000 | ||||||
Accrued interest receivable and other assets | 15,431,000 | 20,694,000 | ||||||
Total assets | $ | 484,480,000 | $ | 528,117,000 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Deposits: | ||||||||
Non-interest bearing | $ | 111,802,000 | $ | 111,958,000 | ||||
Interest bearing | 313,085,000 | 321,297,000 | ||||||
Total deposits | 424,887,000 | 433,255,000 | ||||||
Short-term borrowings | — | 20,000,000 | ||||||
Long-term debt | — | 20,000,000 | ||||||
Accrued interest payable and other liabilities | 11,295,000 | 6,321,000 | ||||||
Junior subordinated deferrable interest debentures | 10,310,000 | 10,310,000 | ||||||
Total liabilities | 446,492,000 | 489,886,000 | ||||||
Commitments and contingencies (Note 11) | ||||||||
Shareholders’ equity: | ||||||||
Serial preferred stock — no par value; 10,000,000 shares authorized; 11,949 issued and outstanding at December 31, 2010 and 2009 | 11,682,000 | 11,595,000 | ||||||
Common stock — no par value; 22,500,000 shares authorized; issued and outstanding — 4,776,339 shares at December 31, 2010 and 2009 | 6,027,000 | 5,970,000 | ||||||
Retained earnings | 20,331,000 | 20,044,000 | ||||||
Accumulated other comprehensive (loss) income | (52,000 | ) | 622,000 | |||||
Total shareholders’ equity | 37,988,000 | 38,231,000 | ||||||
Total liabilities and shareholders’ equity | $ | 484,480,000 | $ | 528,117,000 | ||||
part of these consolidated financial statements.
F - 2
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2010 | 2009 | 2008 | ||||||||||
Interest income: | ||||||||||||
Interest and fees on loans | $ | 18,860,000 | $ | 20,658,000 | $ | 23,550,000 | ||||||
Interest on investment securities: | ||||||||||||
Taxable | 1,649,000 | 1,708,000 | 1,398,000 | |||||||||
Exempt from Federal income taxes | 123,000 | 455,000 | 489,000 | |||||||||
Other | 48,000 | 15,000 | 3,000 | |||||||||
Total interest income | 20,680,000 | 22,836,000 | 25,440,000 | |||||||||
Interest expense: | ||||||||||||
Interest on deposits | 2,696,000 | 3,169,000 | 4,522,000 | |||||||||
Interest on borrowings | 135,000 | 80,000 | 202,000 | |||||||||
Interest on junior subordinated deferrable interest debentures | 312,000 | 371,000 | 623,000 | |||||||||
Other | 4,000 | 35,000 | 17,000 | |||||||||
Total interest expense | 3,147,000 | 3,655,000 | 5,364,000 | |||||||||
Net interest income before provision for loan losses | 17,533,000 | 19,181,000 | 20,076,000 | |||||||||
Provision for loan losses | 5,500,000 | 14,500,000 | 4,600,000 | |||||||||
Net interest income after provision for loan losses | 12,033,000 | 4,681,000 | 15,476,000 | |||||||||
Non-interest income: | ||||||||||||
Service charges | 3,642,000 | 3,796,000 | 3,951,000 | |||||||||
Sale of merchant processing portfolio | 1,435,000 | — | — | |||||||||
Gain on sale of investments | 1,160,000 | 10,000 | — | |||||||||
Gain on sale of loans | 1,055,000 | 593,000 | 111,000 | |||||||||
Impairment loss on investment security | — | — | (415,000 | ) | ||||||||
Earnings on bank owned life insurance policies | 444,000 | 434,000 | 421,000 | |||||||||
Other | 825,000 | 919,000 | 1,023,000 | |||||||||
Total non-interest income | 8,561,000 | 5,752,000 | 5,091,000 | |||||||||
F - 3
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(Continued)
For the Years Ended December 31, 2010, 2009 and 2008
2010 | 2009 | 2008 | ||||||||||
Non-interest expenses: | ||||||||||||
Salaries and employee benefits | $ | 9,732,000 | $ | 11,054,000 | $ | 10,884,000 | ||||||
Occupancy and equipment | 3,096,000 | 3,759,000 | 3,838,000 | |||||||||
Provision for losses on other real estate | 356,000 | 4,800,000 | 618,000 | |||||||||
Other | 6,050,000 | 6,741,000 | 5,135,000 | |||||||||
Total non-interest expenses | 19,234,000 | 26,354,000 | 20,475,000 | |||||||||
Income (loss) before income taxes | 1,360,000 | (15,921,000 | ) | 92,000 | ||||||||
Provision (benefit) for income taxes | 389,000 | (6,775,000 | ) | (212,000 | ) | |||||||
Net income (loss) | 971,000 | (9,146,000 | ) | 304,000 | ||||||||
Preferred stock dividends accrued and discount accretion | (684,000 | ) | (628,000 | ) | — | |||||||
Net income (loss) available to common shareholders | $ | 287,000 | $ | (9,774,000 | ) | $ | 304,000 | |||||
Basic earnings (loss) per common share | $ | 0.06 | $ | (2.05 | ) | $ | 0.06 | |||||
Diluted earnings (loss) per common share | $ | 0.06 | $ | (2.05 | ) | $ | 0.06 | |||||
Common dividends per share | $ | — | $ | — | $ | 0.24 | ||||||
part of these consolidated financial statements.
F - 4
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Accumulated | ||||||||||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||||||||
Comprehensive | Total | Total | ||||||||||||||||||||||||||||||
Preferred Stock | Common Stock | Retained | (Loss) Income | Shareholders’ | Comprehensive | |||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Earnings | (Net of Taxes) | Equity | Income (loss) | |||||||||||||||||||||||||
Balance, January 1, 2008 | 4,869,130 | $ | 5,042,000 | $ | 32,204,000 | $ | (107,000 | ) | $ | 37,139,000 | ||||||||||||||||||||||
Cumulative effect of change in accounting principle, adoption of EITF 06-4 | (420,000 | ) | (420,000 | ) | ||||||||||||||||||||||||||||
Comprehensive income: | ||||||||||||||||||||||||||||||||
Net income | 304,000 | 304,000 | $ | 304,000 | ||||||||||||||||||||||||||||
Other comprehensive income, net of tax: | ||||||||||||||||||||||||||||||||
Net change in unrealized (losses)/gains on available-for-sale investment securities | 424,000 | 424,000 | 424,000 | |||||||||||||||||||||||||||||
Total comprehensive income | $ | 728,000 | ||||||||||||||||||||||||||||||
Cash dividends — $0.24 per share | (1,153,000 | ) | (1,153,000 | ) | ||||||||||||||||||||||||||||
Stock options exercised and related tax benefit | 12,476 | 68,000 | 68,000 | |||||||||||||||||||||||||||||
Stock-based compensation expense | 292,000 | 292,000 | ||||||||||||||||||||||||||||||
Repurchase and retirement of common stock | (106,267 | ) | (100,000 | ) | (1,117,000 | ) | (1,217,000 | ) | ||||||||||||||||||||||||
Balance, December 31, 2008 | 4,775,339 | $ | 5,302,000 | $ | 29,818,000 | $ | 317,000 | $ | 35,437,000 | |||||||||||||||||||||||
F - 5
Table of Contents
(Continued)
For the Years Ended December 31, 2010, 2009 and 2008
Accumulated | ||||||||||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||||||||
Comprehensive | Total | Total | ||||||||||||||||||||||||||||||
Preferred Stock | Common Stock | Retained | (loss) Income | Shareholders’ | Comprehensive | |||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Earnings | (Net of Taxes) | Equity | Income (loss) | |||||||||||||||||||||||||
Balance, December 31, 2008 | 4,775,339 | $ | 5,302,000 | $ | 29,818,000 | $ | 317,000 | $ | 35,437,000 | |||||||||||||||||||||||
Comprehensive loss: | ||||||||||||||||||||||||||||||||
Net loss | (9,146,000 | ) | (9,146,000 | ) | $ | (9,146,000 | ) | |||||||||||||||||||||||||
Other comprehensive income, net of tax: | ||||||||||||||||||||||||||||||||
Unrealized gains on securities transferred from held-to-maturity to available- for-sale | 197,000 | 197,000 | 197,000 | |||||||||||||||||||||||||||||
Net change in unrealized gains on available-for-sale investment securities | 108,000 | 108,000 | 108,000 | |||||||||||||||||||||||||||||
Total comprehensive loss | $ | (8,841,000 | ) | |||||||||||||||||||||||||||||
Preferred stock issued | 11,949 | $ | 11,516,000 | 11,516,000 | ||||||||||||||||||||||||||||
Stock warrants issued | 407,000 | 407,000 | ||||||||||||||||||||||||||||||
Preferred stock dividends & accretion | 79,000 | (628,000 | ) | (549,000 | ) | |||||||||||||||||||||||||||
Stock options exercised and related tax benefit | 1,000 | 5,000 | 5,000 | |||||||||||||||||||||||||||||
Stock-based compensation expense | 256,000 | 256,000 | ||||||||||||||||||||||||||||||
Balance, December 31, 2009 | 11,949 | 11,595,000 | 4,776,339 | 5,970,000 | 20,044,000 | 622,000 | 38,231,000 | |||||||||||||||||||||||||
Comprehensive Income: | ||||||||||||||||||||||||||||||||
Net lncome | 971,000 | 971,000 | $ | 971,000 | ||||||||||||||||||||||||||||
Other comprehensive loss, net of tax: | ||||||||||||||||||||||||||||||||
Net change in unrealized gains on available-for-sale investment securities | (674,000 | ) | (674,000 | ) | (674,000 | ) | ||||||||||||||||||||||||||
Total comprehensive income | $ | 297,000 | ||||||||||||||||||||||||||||||
Preferred stock dividends & accretion | 87,000 | (684,000 | ) | (597,000 | ) | |||||||||||||||||||||||||||
Stock-based compensation expense | 57,000 | 57,000 | ||||||||||||||||||||||||||||||
Balance, December 31, 2010 | 11,949 | $ | 11,682,000 | 4,776,339 | $ | 6,027,000 | $ | 20,331,000 | $ | (52,000 | ) | $ | 37,988,000 | |||||||||||||||||||
F - 6
Table of Contents
2010 | 2009 | 2008 | ||||||||||
Cash flows from operating activities: | ||||||||||||
Net income (loss) | $ | 971,000 | $ | (9,146,000 | ) | $ | 304,000 | |||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||||||
Provision for loan losses | 5,500,000 | 14,500,000 | 4,600,000 | |||||||||
Change in deferred loan origination costs/fees, net | (79,000 | ) | (19,000 | ) | 285,000 | |||||||
Stock-based compensation expense | 57,000 | 256,000 | 292,000 | |||||||||
Depreciation and amortization | 1,693,000 | 1,929,000 | 1,984,000 | |||||||||
Amortization of investment security premiums | 514,000 | 283,000 | 56,000 | |||||||||
Accretion of investment security discounts | (55,000 | ) | (53,000 | ) | (55,000 | ) | ||||||
Impairment loss on investment security | 415,000 | |||||||||||
Gain on sale of investments | (1,160,000 | ) | (10,000 | ) | ||||||||
Gain on sale of loans held for sale | (1,055,000 | ) | (593,000 | ) | ||||||||
Loans originated for sale | (21,286,000 | ) | (12,598,000 | ) | ||||||||
Proceeds from loan sales | 14,873,000 | 11,393,000 | ||||||||||
Provision for losses on other real estate | 356,000 | 4,800,000 | 618,000 | |||||||||
Proceeds from secured borrowing | 4,284,000 | |||||||||||
Net loss (gain) on sale of premises and equipment | 4,000 | (6,000 | ) | 13,000 | ||||||||
Net (gain) loss on sale of other real estate and vehicles owned | (58,000 | ) | 198,000 | 18,000 | ||||||||
Earnings on bank owned life insurance policies | (444,000 | ) | (434,000 | ) | (421,000 | ) | ||||||
Expenses on bank owned life insurance policies | 92,000 | 89,000 | 83,000 | |||||||||
Provision (benefit) for deferred income taxes | 389,000 | (3,852,000 | ) | (1,459,000 | ) | |||||||
Decrease (increase) in accrued interest receivable and other assets | 5,322,000 | (7,022,000 | ) | 297,000 | ||||||||
Increase (decrease) increase in accrued interest payable and other liabilities | 197,000 | 355,000 | (711,000 | ) | ||||||||
Net cash provided by operating activities | 10,115,000 | 70,000 | 6,319,000 | |||||||||
F - 7
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(Continued)
For the Years Ended December 31, 2010, 2009 and 2008
2010 | 2009 | 2008 | ||||||||||
Cash flows from investing activities: | ||||||||||||
Proceeds from matured and called available- for-sale investment securities | $ | 31,895,000 | $ | 8,000,000 | $ | 16,475,000 | ||||||
Proceeds from matured and called held-to- maturity investment securities | 1,836,000 | 920,000 | ||||||||||
Proceeds from sale of held-to-maturity securities | 943,000 | |||||||||||
Proceeds from sale of available-for-sale securities | 40,902,000 | 86,000 | ||||||||||
Purchases of available-for-sale investment securities | (57,238,000 | ) | (65,876,000 | ) | (2,990,000 | ) | ||||||
Purchases of held-to-maturity investment securities | (1,586,000 | ) | ||||||||||
Proceeds from principal repayments from available-for-sale government-guaranteed mortgage-backed securities | 8,927,000 | 7,320,000 | 2,819,000 | |||||||||
Net decrease (increase) in loans | 16,623,000 | 8,683,000 | (19,520,000 | ) | ||||||||
Proceeds from sale of vehicles | 177,000 | 270,000 | 376,000 | |||||||||
Proceeds from sale of other real estate | 3,462,000 | 1,992,000 | ||||||||||
Purchases of premises and equipment | (1,210,000 | ) | (253,000 | ) | (2,566,000 | ) | ||||||
Net cash provided by (used in) investing activities | 43,538,000 | (38,585,000 | ) | (4,486,000 | ) | |||||||
Cash flows from financing activities: | ||||||||||||
Net (decrease) increase in demand, interest-bearing and savings deposits | (3,353,000 | ) | 37,383,000 | 9,658,000 | ||||||||
Net (decrease) increase in time deposits | (5,015,000 | ) | 24,379,000 | (30,105,000 | ) | |||||||
Net (decrease) increase in short-term borrowings | (20,000,000 | ) | (14,000,000 | ) | 26,500,000 | |||||||
Proceeds from long-term debt | 20,000,000 | |||||||||||
Repayment of long-term debt | (20,000,000 | ) | ||||||||||
Issuance of preferred stock, net of discount | 11,516,000 | |||||||||||
Payment of cash dividend on preferred stock | (150,000 | ) | (473,000 | ) | ||||||||
Issuance of common stock warrant | 407,000 | |||||||||||
Proceeds from exercise of stock options | 5,000 | 68,000 | ||||||||||
Repurchase and retirement of common stock | (1,217,000 | ) | ||||||||||
Payment of cash dividends on common stock | (1,153,000 | ) | ||||||||||
Net cash (used in) provided by financing activities | (48,518,000 | ) | 79,217,000 | 3,751,000 | ||||||||
Increase in cash and cash equivalents | 5,135,000 | 40,702,000 | 5,584,000 | |||||||||
Cash and cash equivalents at beginning of year | 59,493,000 | 18,791,000 | 13,207,000 | |||||||||
Cash and cash equivalents at end of year | $ | 64,628,000 | $ | 59,493,000 | $ | 18,791,000 | ||||||
F - 8
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(Continued)
For the Years Ended December 31, 2010, 2009 and 2008
2010 | 2009 | 2008 | ||||||||||
Supplemental disclosure of cash flow information: | ||||||||||||
Cash paid during the year for: | ||||||||||||
Interest expense | $ | 3,000,000 | $ | 3,666,000 | $ | 5,804,000 | ||||||
Income taxes | $ | $ | 65,000 | $ | 1,385,000 | |||||||
Non-cash investing activities: | ||||||||||||
Real estate acquired through foreclosure | $ | 1,391,000 | $ | 14,053,000 | $ | 4,364,000 | ||||||
Vehicles acquired through repossession | $ | 112,000 | $ | 245,000 | $ | 388,000 | ||||||
Reclassification of loans to other assets | $ | 113,000 | ||||||||||
Investment securities transferred from held-to-maturity to available-for-sale | $ | $ | 11,722,000 | $ | ||||||||
Net change in unrealized gain/loss on available-for-sale investment securities | $ | (674,000 | ) | $ | 108,000 | $ | 424,000 |
part of these consolidated financial statements.
F - 9
Table of Contents
1. | THE BUSINESS OF PLUMAS BANCORP |
2. | REGULATORY MATTERS |
• | Within 240 days of the date of the Order, increase and maintain the Bank’s leverage ratio to at least 10% and maintain its total risk-based capital ratio at 13% or more; |
• | Reduce or eliminate certain classified assets by $19.4 million within 180 days of the date of the Order and reducing them by an additional $4.9 million within 240 days of the Order; |
• | Obtain an independent study of the management and personnel structure of the Bank within 150 days of the date of the Order to determine whether the Bank is staffed by qualified individuals commensurate with its size and risk profile to ensure the safe and profitable operation of the Bank; | ||
• | Not pay cash dividends to Plumas Bancorp without the prior written consent of the FDIC and DFI. |
F - 10
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(Continued)
2. | REGULATORY MATTERS(Continued) |
3. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
F - 11
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(Continued)
3. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued) |
• | Available-for-sale securities reported at fair value, with unrealized gains and losses excluded from earnings and reported, net of taxes, as accumulated other comprehensive income (loss) within shareholders’ equity. |
• | Held-to-maturity securities, which management has the positive intent and ability to hold, reported at amortized cost, adjusted for the accretion of discounts and amortization of premiums. |
for-sale (see note 5). This transfer increases the Company’s flexibility in managing its investment portfolio allowing the investments to be sold in implementing its asset/liability management strategies and in response to changes in interest rates, prepayment rates and similar factors. All transfers between categories are accounted for at fair value. There were no transfers between categories during 2010 or 2008. As of December 31, 2010 and 2009 the Company did not have any investment securities classified as trading and gains or losses on the sale of securities are computed on the specific identification method. Interest earned on investment securities is reported in interest income, net of applicable adjustments for accretion of discounts and amortization of premiums.
F - 12
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(Continued)
3. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued) |
F - 13
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(Continued)
3. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued) |
F - 14
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(Continued)
3. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued) |
F - 15
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(Continued)
3. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued) |
F - 16
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(Continued)
3. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued) |
F - 17
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(Continued)
3. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued) |
F - 18
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(Continued)
3. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued) |
F - 19
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(Continued)
3. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued) |
statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination.
F - 20
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(Continued)
3. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued) |
with the estimated expected life of the Company’s stock options. The Company bases its expected life assumption on its historical experience and on the terms and conditions of the stock options it grants to employees. The risk-free rate is based on the U.S. Treasury yield curve for the periods within the contractual life of the options in effect at the time of the grant. The Company also makes assumptions regarding estimated forfeitures that will impact the total compensation expenses recognized under the Plans.
2008 | ||||
Expected life of stock options | 5.2 years | |||
Interest rate—stock options | 2.98 | % | ||
Volatility—stock options | 25.3 | % | ||
Dividend yields | 2.61 | % | ||
Weighted-average fair value of options granted during the year | $ | 2.54 |
F - 21
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(Continued)
3. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued) |
F - 22
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(Continued)
3. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued) |
4. | FAIR VALUE MEASUREMENTS |
December 31, 2010 | December 31, 2009 | |||||||||||||||
Carrying | Fair | Carrying | Fair | |||||||||||||
Amount | Value | Amount | Value | |||||||||||||
Financial assets: | ||||||||||||||||
Cash and cash equivalents | $ | 64,628,000 | $ | 64,628,000 | $ | 59,493,000 | $ | 59,493,000 | ||||||||
Investment securities | 63,017,000 | 63,017,000 | 87,950,000 | 87,950,000 | ||||||||||||
Loans | 307,151,000 | 304,045,000 | 323,408,000 | 325,589,000 | ||||||||||||
FHLB stock | 2,188,000 | 2,188,000 | 1,933,000 | 1,933,000 | ||||||||||||
Bank owned life insurance | 10,463,000 | 10,463,000 | 10,111,000 | 10,111,000 | ||||||||||||
Accrued interest receivable | 1,784,000 | 1,784,000 | 2,487,000 | 2,487,000 | ||||||||||||
Financial liabilities: | ||||||||||||||||
Deposits | $ | 424,887,000 | $ | 425,009,000 | $ | 433,255,000 | $ | 433,311,000 | ||||||||
Short-term borrowings | 20,000,000 | 20,000,000 | ||||||||||||||
Long-term debt | 20,000,000 | 19,817,000 | ||||||||||||||
Junior subordinated deferrable interest debentures | 10,310,000 | 2,992,000 | 10,310,000 | 2,909,000 | ||||||||||||
Accrued interest payable | 623,000 | 623,000 | 476,000 | 476,000 |
F - 23
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(Continued)
4. | FAIR VALUE MEASUREMENTS (Continued) |
F - 24
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(Continued)
4. | FAIR VALUE MEASUREMENTS (Continued) |
F - 25
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(Continued)
4. | FAIR VALUE MEASUREMENTS (Continued) |
Fair Value Measurements at December 31, 2010 Using | ||||||||||||||||
Quoted Prices in | ||||||||||||||||
Active Markets for | Significant Other | Significant | ||||||||||||||
Identical Assets | Observable Inputs | Unobservable | ||||||||||||||
Total Fair Value | (Level 1) | (Level 2) | Inputs (Level 3) | |||||||||||||
Assets: | ||||||||||||||||
U.S. Treasury securities | $ | 1,032,000 | $ | 1,032,000 | ||||||||||||
U.S. Government agencies | 40,430,000 | 40,430,000 | ||||||||||||||
U.S. Government agencies collateralized by mortgage obligations | 21,273,000 | $ | 21,273,000 | |||||||||||||
Obligations of states and political subdivisions | 282,000 | 282,000 | ||||||||||||||
$ | 63,017,000 | $ | 41,744,000 | $ | 21,273,000 | $ | 0 | |||||||||
Fair Value Measurements at December 31, 2009 Using | ||||||||||||||||
Quoted Prices in | ||||||||||||||||
Active Markets for | Significant Other | Significant | ||||||||||||||
Identical Assets | Observable Inputs | Unobservable | ||||||||||||||
Total Fair Value | (Level 1) | (Level 2) | Inputs (Level 3) | |||||||||||||
Assets: | ||||||||||||||||
U.S. Treasury securities | $ | 1,052,000 | $ | 1,052,000 | ||||||||||||
U.S. Government agencies | 55,889,000 | 55,889,000 | ||||||||||||||
U.S. Government agencies collateralized by mortgage obligations | 19,287,000 | $ | 19,287,000 | |||||||||||||
Obligations of states and political subdivisions | 11,722,000 | 11,722,000 | ||||||||||||||
$ | 87,950,000 | $ | 68,663,000 | $ | 19,287,000 | $ | 0 | |||||||||
F - 26
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(Continued)
4. | FAIR VALUE MEASUREMENTS(Continued) |
Fair Value Measurements at December 31, 2010 Using | ||||||||||||||||||||
Quoted Prices in | Significant | |||||||||||||||||||
Active Markets for | Significant Other | Unobservable | ||||||||||||||||||
Identical Assets | Observable Inputs | Inputs | Total Gains | |||||||||||||||||
Total Fair Value | (Level 1) | (Level 2) | (Level 3) | (Losses) | ||||||||||||||||
Assets: | ||||||||||||||||||||
Impaired loans | $ | 13,521,000 | $ | 13,521,000 | $ | (1,356,000 | ) | |||||||||||||
Other real estate | 8,867,000 | 8,867,000 | (235,000 | ) | ||||||||||||||||
$ | 22,388,000 | $ | 22,388,000 | $ | (1,591,000 | ) | ||||||||||||||
Fair Value Measurements at December 31, 2009 Using | ||||||||||||||||||||
Quoted Prices in | Significant | |||||||||||||||||||
Active Markets for | Significant Other | Unobservable | ||||||||||||||||||
Identical Assets | Observable Inputs | Inputs | Total Gains | |||||||||||||||||
Total Fair Value | (Level 1) | (Level 2) | (Level 3) | (Losses) | ||||||||||||||||
Assets: | ||||||||||||||||||||
Impaired loans | $ | 9,435,000 | $ | 9,435,000 | $ | (5,127,000 | ) | |||||||||||||
Other real estate | 11,204,000 | 11,204,000 | (4,457,000 | ) | ||||||||||||||||
$ | 20,639,000 | $ | 20,639,000 | $ | (9,584,000 | ) | ||||||||||||||
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(Continued)
4. | FAIR VALUE MEASUREMENTS(Continued) |
5. | INVESTMENT SECURITIES |
2010 | ||||||||||||||||
Gross | Gross | Estimated | ||||||||||||||
Amortized | Unrealized | Unrealized | Fair | |||||||||||||
Cost | Gains | Losses | Value | |||||||||||||
Debt securities: | ||||||||||||||||
U.S. Treasury securities | $ | 1,025,000 | $ | 7,000 | $ | 1,032,000 | ||||||||||
U.S. Government agencies | 40,662,000 | 58,000 | $ | (290,000 | ) | 40,430,000 | ||||||||||
U.S. Government agencies collateralized by mortgage obligations | 21,110,000 | 270,000 | (107,000 | ) | 21,273,000 | |||||||||||
Obligations of states and political subdivisions | 308,000 | (26,000 | ) | 282,000 | ||||||||||||
$ | 63,105,000 | $ | 335,000 | $ | (423,000 | ) | $ | 63,017,000 | ||||||||
2009 | ||||||||||||||||
Gross | Gross | Estimated | ||||||||||||||
Amortized | Unrealized | Unrealized | Fair | |||||||||||||
Cost | Gains | Losses | Value | |||||||||||||
Debt securities: | ||||||||||||||||
U.S. Treasury securities | $ | 1,059,000 | $ | (7,000 | ) | $ | 1,052,000 | |||||||||
U.S. Government agencies | 55,520,000 | $ | 420,000 | (51,000 | ) | 55,889,000 | ||||||||||
U.S. Government agencies collateralized by mortgage obligations | 18,925,000 | 362,000 | 19,287,000 | |||||||||||||
Obligations of states and political subdivisions | 11,387,000 | 360,000 | (25,000 | ) | 11,722,000 | |||||||||||
$ | 86,891,000 | $ | 1,142,000 | $ | (83,000 | ) | $ | 87,950,000 | ||||||||
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(Continued)
5. | INVESTMENT SECURITIES(Continued) |
Less than 12 Months | ||||||||
Fair | Unrealized | |||||||
December 31, 2010 | Value | Losses | ||||||
Debt securities: | ||||||||
U.S. Government agencies | $ | 14,763,000 | $ | 290,000 | ||||
U.S. Government agencies collateralized by mortgage obligations | 13,205,000 | 107,000 | ||||||
Obligations of states and political subdivisions | 282,000 | 26,000 | ||||||
$ | 28,250,000 | $ | 423,000 | |||||
Less than 12 Months | ||||||||
Fair | Unrealized | |||||||
December 31, 2009 | Value | Losses | ||||||
Debt securities: | ||||||||
U.S. Treasury securities | $ | 1,052,000 | $ | 7,000 | ||||
U.S. Government agencies | 10,787,000 | 51,000 | ||||||
Obligations of states and political subdivisions | 1,208,000 | 25,000 | ||||||
$ | 13,047,000 | $ | 83,000 | |||||
F - 29
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(Continued)
5. | INVESTMENT SECURITIES(Continued) |
Estimated | Estimated | |||||||
Amortized | Fair | |||||||
Cost | Value | |||||||
Within one year | $ | 2,033,000 | $ | 2,044,000 | ||||
After one year through five years | 39,654,000 | 39,418,000 | ||||||
After five years through ten years | 308,000 | 282,000 | ||||||
41,995,000 | 41,744,000 | |||||||
Investment securities not due at a single maturity date: | ||||||||
Government-guaranteed mortgage-backed securities | 21,110,000 | 21,273,000 | ||||||
$ | 63,105,000 | $ | 63,017,000 | |||||
F - 30
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(Continued)
6. | LOANS AND THE ALLOWANCE FOR LOAN LOSSES |
December 31, | ||||||||
2010 | 2009 | |||||||
Commercial | $ | 33,433,000 | $ | 37,056,000 | ||||
Agricultural | 38,469,000 | 41,722,000 | ||||||
Real estate — residential | 43,291,000 | 59,815,000 | ||||||
Real estate — commercial | 119,222,000 | 101,582,000 | ||||||
Real estate — construction and land development | 31,199,000 | 38,061,000 | ||||||
Equity lines of credit | 36,946,000 | 34,814,000 | ||||||
Installment | 2,879,000 | 3,334,000 | ||||||
Other | 8,761,000 | 16,294,000 | ||||||
314,200,000 | 332,678,000 | |||||||
Deferred loan costs, net | 275,000 | 298,000 | ||||||
Allowance for loan losses | (7,324,000 | ) | (9,568,000 | ) | ||||
$ | 307,151,000 | $ | 323,408,000 | |||||
Year Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Balance, beginning of year | $ | 9,568,000 | $ | 7,224,000 | $ | 4,211,000 | ||||||
Provision charged to operations | 5,500,000 | 14,500,000 | 4,600,000 | |||||||||
Losses charged to allowance | (8,349,000 | ) | (12,500,000 | ) | (1,783,000 | ) | ||||||
Recoveries | 605,000 | 344,000 | 196,000 | |||||||||
Balance, end of year | $ | 7,324,000 | $ | 9,568,000 | $ | 7,224,000 | ||||||
F - 31
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(Continued)
6. | LOANS AND THE ALLOWANCE FOR LOAN LOSSES (Continued) |
Commercial Credit Exposure | ||||||||||||||||
Credit Risk Profile by Internally Assigned Grade | ||||||||||||||||
Real Estate — | Real Estate — | |||||||||||||||
Commercial | Agricultural | Residential | Commercial | |||||||||||||
Grade: | ||||||||||||||||
Pass | $ | 28,923 | $ | 34,081 | $ | 39,194 | $ | 96,527 | ||||||||
Watch | 904 | 646 | 1,738 | 8,192 | ||||||||||||
Substandard | 3,606 | 3,742 | 2,295 | 14,503 | ||||||||||||
Doubtful | — | — | 64 | — | ||||||||||||
Total | $ | 33,433 | $ | 38,469 | $ | 43,291 | $ | 119,222 | ||||||||
Commercial Credit Exposure | ||||||||||||
Credit Risk Profile by Internally Assigned Grade | ||||||||||||
Real Estate — | ||||||||||||
Construction | Equity LOC | Total | ||||||||||
Grade: | ||||||||||||
Pass | $ | 15,987 | $ | 34,787 | $ | 249,499 | ||||||
Watch | 2,165 | 585 | 14,230 | |||||||||
Substandard | 12,982 | 1,502 | 38,630 | |||||||||
Doubtful | 65 | 72 | 201 | |||||||||
Total | $ | 31,199 | $ | 36,946 | $ | 302,560 | ||||||
Consumer Credit Exposure | ||||||||||||
Credit Risk Profile Based on Payment Activity | ||||||||||||
Installment | Other | Total | ||||||||||
Grade: | ||||||||||||
Performing | $ | 2,830 | $ | 8,643 | $ | 11,473 | ||||||
Non-performing | 49 | 118 | 167 | |||||||||
Total | $ | 2,879 | $ | 8,761 | $ | 11,640 | ||||||
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(Continued)
6. | LOANS AND THE ALLOWANCE FOR LOAN LOSSES (Continued) |
Real Estate- | Real Estate- | Real Estate- | ||||||||||||||||||||||||||||||||||
Commercial | Agricultural | Residential | Commercial | Construction | Equity LOC | Installment | Other | Total | ||||||||||||||||||||||||||||
Allowance for Loan Losses | ||||||||||||||||||||||||||||||||||||
Ending balance | $ | 760 | $ | 184 | $ | 632 | $ | 1,819 | $ | 3,011 | $ | 652 | $ | 66 | $ | 200 | $ | 7,324 | ||||||||||||||||||
Ending balance: individually evaluated for impairment | $ | 22 | $ | — | $ | 121 | $ | 201 | $ | 1,479 | $ | 72 | $ | 8 | $ | — | $ | 1,903 | ||||||||||||||||||
Ending balance: collectively evaluated for impairment | $ | 738 | $ | 184 | $ | 511 | $ | 1,618 | $ | 1,532 | $ | 580 | $ | 58 | $ | 200 | $ | 5,421 | ||||||||||||||||||
Loans | ||||||||||||||||||||||||||||||||||||
Ending balance | $ | 33,433 | $ | 38,469 | $ | 43,291 | $ | 119,222 | $ | 31,199 | $ | 36,946 | $ | 2,879 | $ | 8,761 | $ | 314,200 | ||||||||||||||||||
Ending balance: individually evaluated for impairment | $ | 2,706 | $ | 868 | $ | 3,870 | $ | 8,204 | $ | 11,501 | $ | 1,382 | $ | 106 | $ | 118 | $ | 28,755 | ||||||||||||||||||
Ending balance: collectively evaluated for impairment | $ | 30,727 | $ | 37,601 | $ | 39,421 | $ | 111,018 | $ | 19,698 | $ | 35,564 | $ | 2,773 | $ | 8,643 | $ | 285,445 | ||||||||||||||||||
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(Continued)
6. | LOANS AND THE ALLOWANCE FOR LOAN LOSSES (Continued) |
30-89 Days | 90 Days and | Total | ||||||||||||||||||||||
Past Due | Still Accruing | Nonaccrual | Past Due | Current | Total | |||||||||||||||||||
Commercial: | ||||||||||||||||||||||||
Commercial | $ | 352 | $ | — | $ | 2,706 | $ | 3,058 | $ | 30,375 | $ | 33,433 | ||||||||||||
Agricultural | 272 | — | 868 | 1,140 | 37,329 | 38,469 | ||||||||||||||||||
Real estate — construction | 136 | — | 9,797 | 9,933 | 21,266 | 31,199 | ||||||||||||||||||
Real estate | 802 | — | 8,204 | 9,006 | 110,216 | 119,222 | ||||||||||||||||||
Residential: | ||||||||||||||||||||||||
Real estate | 400 | — | 2,189 | 2,589 | �� | 40,702 | 43,291 | |||||||||||||||||
Equity LOC | 494 | — | 1,382 | 1,876 | 35,070 | 36,946 | ||||||||||||||||||
Consumer: | ||||||||||||||||||||||||
Installment | 56 | — | 49 | 105 | 2,774 | 2,879 | ||||||||||||||||||
Other | 348 | 45 | 118 | 511 | 8,250 | 8,761 | ||||||||||||||||||
Total | $ | 2,860 | $ | 45 | $ | 25,313 | $ | 28,218 | $ | 285,982 | $ | 314,200 | ||||||||||||
Unpaid | Average | Interest | ||||||||||||||||||
Recorded | Principal | Related | Recorded | Income | ||||||||||||||||
Investment | Balance | Allowance | Investment | Recognized | ||||||||||||||||
With no related allowance recorded: | ||||||||||||||||||||
Commercial | $ | 2,680 | $ | 3,018 | ||||||||||||||||
Agricultural | 868 | 1,109 | ||||||||||||||||||
Real estate — construction | 4,151 | 5,169 | ||||||||||||||||||
Real estate | 5,994 | 5,994 | ||||||||||||||||||
Real estate — residential | 2,244 | 2,245 | ||||||||||||||||||
Equity Lines of Credit | 1,310 | 1,310 | ||||||||||||||||||
Installment | 98 | 98 | ||||||||||||||||||
Other | 118 | 118 | ||||||||||||||||||
With an allowance recorded: | ||||||||||||||||||||
Commercial | 26 | 26 | $ | 22 | ||||||||||||||||
Agricultural | — | — | — | |||||||||||||||||
Real estate — construction | 7,350 | 8,770 | 1,479 | |||||||||||||||||
Real estate — mortgage | 2,210 | 2,210 | 201 | |||||||||||||||||
Real estate — residential | 1,626 | 1,743 | 121 | |||||||||||||||||
Equity Lines of Credit | 72 | 72 | 72 | |||||||||||||||||
Installment | 8 | 8 | 8 | |||||||||||||||||
Other | — | — | — | |||||||||||||||||
Total: | ||||||||||||||||||||
Commercial | 2,706 | 3,044 | 22 | $ | 1,924 | $ | 11 | |||||||||||||
Agricultural | 868 | 1,109 | — | 1,454 | 102 | |||||||||||||||
Real estate — construction | 11,501 | 13,939 | 1,479 | 8,440 | 100 | |||||||||||||||
Real estate — mortgage | 8,204 | 8,204 | 201 | 7,516 | 261 | |||||||||||||||
Real estate — residential | 3,870 | 3,988 | 121 | 750 | 121 | |||||||||||||||
Equity Lines of Credit | 1,382 | 1,382 | 72 | 565 | — | |||||||||||||||
Installment | 106 | 106 | 8 | 44 | 2 | |||||||||||||||
Other | 118 | 118 | — | 140 | 11 | |||||||||||||||
Total | $ | 28,755 | $ | 31,890 | $ | 1,903 | $ | 20,833 | $ | 608 | ||||||||||
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7. | PREMISES AND EQUIPMENT |
Premises and equipment consisted of the following: |
December 31, | ||||||||
2010 | 2009 | |||||||
Land | $ | 2,628,000 | $ | 2,377,000 | ||||
Premises | 15,394,000 | 14,220,000 | ||||||
Furniture, equipment and leasehold improvements | 9,810,000 | 10,108,000 | ||||||
27,832,000 | 26,705,000 | |||||||
Less accumulated depreciation and amortization | (13,401,000 | ) | (12,161,000 | ) | ||||
$ | 14,431,000 | $ | 14,544,000 | |||||
Depreciation and amortization included in occupancy and equipment expense totaled $1,521,000, $1,756,000 and $1,769,000 for the years ended December 31, 2010, 2009 and 2008, respectively. |
8. | DEPOSITS |
Interest-bearing deposits consisted of the following: |
December 31, | ||||||||
2010 | 2009 | |||||||
Interest-bearing demand deposits | $ | 100,000,000 | $ | 106,083,000 | ||||
Money market | 42,279,000 | 44,239,000 | ||||||
Savings | 53,150,000 | 48,304,000 | ||||||
Time, $100,000 or more | 52,104,000 | 55,003,000 | ||||||
Other time | 65,552,000 | 67,668,000 | ||||||
$ | 313,085,000 | $ | 321,297,000 | |||||
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8. | DEPOSITS(Continued) | |
At December 31, 2010, the scheduled maturities of time deposits were as follows: |
Year Ending | ||||
December 31, | ||||
2011 | $ | 101,785,000 | ||
2012 | 12,885,000 | |||
2013 | 1,431,000 | |||
2014 | 1,106,000 | |||
2015 | 449,000 | |||
$ | 117,656,000 | |||
At December 31, 2010, the contractual maturities of time deposits with a denomination of $100,000 and over were as follows: $14,558,000 in 3 months or less, $15,938,000 over 3 months through 6 months, $15,937,000 over 6 months through 12 months, and $5,671,000 over 12 months. |
Deposit overdrafts reclassified as loan balances were $314,000 and $328,000 at December 31, 2010 and 2009, respectively. |
9. | BORROWING ARRANGEMENTS |
The Company is a member of the FHLB and can borrow up to $91,408,000 from the FHLB secured by commercial and residential mortgage loans with carrying values totaling $150,217,000. The Company is required to hold FHLB stock as a condition of membership. At December 31, 2010, the Company held $2,188,000 of FHLB stock which is recorded as a component of other assets. At this level of stock holdings the Company can borrow up to $46,561,000. To borrow the $91,408,000 in available credit the Company would need to purchase $2,108,000 in additional FHLB stock. In addition, the Company has the ability to secure advances through the Federal Reserve Bank of San Francisco discount window. These advances also must be collateralized. |
Short-term borrowings at December 31, 2009 consisted of a $20,000,000 FHLB advance at 0.47% which matured and was repaid on January 19, 2010. Long-term borrowings at December 31, 2009 consisted of two $10,000,000 FHLB advances. The first advance was scheduled to mature on November 23, 2011 with an interest rate of 1.00%. The second advance was scheduled to mature on November 23, 2012 and had an interest rate of 1.60%. During July 2010 the Company prepaid the two long term advances incurring a $226,000 prepayment penalty. There were no borrowings outstanding at December 31, 2010. |
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10. | JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES |
Plumas Statutory Trust I and II are Connecticut business trusts formed by the Company with capital of $275,000 and $152,000, respectively, for the sole purpose of issuing trust preferred securities fully and unconditionally guaranteed by the Company. Under applicable regulatory guidance, the amount of trust preferred securities that is eligible as Tier 1 capital is limited to twenty-five percent of the Company’s Tier 1 capital, as defined, on a pro forma basis. At December 31, 2010, all of the trust preferred securities that have been issued qualify as Tier 1 capital. |
During 2002, Plumas Statutory Trust I issued 6,000 Floating Rate Capital Trust Pass-Through Securities (“Trust Preferred Securities”), with a liquidation value of $1,000 per security, for gross proceeds of $6,000,000. During 2005, Plumas Statutory Trust II issued 4,000 Trust Preferred Securities with a liquidation value of $1,000 per security, for gross proceeds of $4,000,000. The entire proceeds were invested by Trust I in the amount of $6,186,000 and Trust II in the amount of $4,124,000 in Floating Rate Junior Subordinated Deferrable Interest Debentures (the “Subordinated Debentures”) issued by the Company, with identical maturity, repricing and payment terms as the Trust Preferred Securities. The Subordinated Debentures represent the sole assets of Trusts I and II. |
Trust I’s Subordinated Debentures mature on September 26, 2032, bear a current interest rate of 3.70% (based on 3-month LIBOR plus 3.40%), with repricing and payments due quarterly. Trust II’s Subordinated Debentures mature on September 28, 2035, bear a current interest rate of 1.78% (based on 3-month LIBOR plus 1.48%), with repricing and payments due quarterly. The Subordinated Debentures are redeemable by the Company, subject to receipt by the Company of prior approval from the Federal Reserve Board of Governors, on any quarterly anniversary date on or after the 5-year anniversary date of the issuance. The redemption price is par plus accrued and unpaid interest, except in the case of redemption under a special event which is defined in the debenture. The Trust Preferred Securities are subject to mandatory redemption to the extent of any early redemption of the Subordinated Debentures and upon maturity of the Subordinated Debentures on September 26, 2032 for Trust I and September 28, 2035 for Trust II. |
Holders of the Trust Preferred Securities are entitled to a cumulative cash distribution on the liquidation amount of $1,000 per security. The interest rate of the Trust Preferred Securities issued by Trust I adjust on each quarterly anniversary date to equal the 3-month LIBOR plus 3.40%. The Trust Preferred Securities issued by Trust II adjust on each quarterly anniversary date to equal the 3-month LIBOR plus 1.48%. Both Trusts I and II have the option to defer payment of the distributions for a period of up to five years, as long as the Company is not in default on the payment of interest on the Subordinated Debentures. The Trust Preferred Securities were sold and issued in private transactions pursuant to an exemption from registration under the Securities Act of 1933, as amended. The Company has guaranteed, on a subordinated basis, distributions and other payments due on the Trust Preferred Securities. |
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10. | JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES (Continued) |
Since the second quarter of 2010, the Company has deferred regularly scheduled quarterly interest payments on its outstanding junior subordinated debentures relating to its two trust preferred securities. While the Company has accrued for this obligation, it is currently deferring the interest payments on the junior subordinated debentures as permitted by the agreements. As of December 31, 2010, the amount of the arrearage on the payments on the subordinated debt associated with the trust preferred securities is $233,000. |
Interest expense recognized by the Company for the years ended December 31, 2010, 2009 and 2008 related to the subordinated debentures was $312,000, $371,000 and $623,000, respectively. |
11. | COMMITMENTS AND CONTINGENCIES |
Leases |
The Company has commitments for leasing premises under the terms of noncancelable operating leases expiring from 2010 to 2015. Future minimum lease payments are as follows: |
Year Ending | ||||
December 31, | ||||
2011 | $ | 133,000 | ||
2012 | 128,000 | |||
2013 | 60,000 | |||
2014 | 37,000 | |||
2015 | 9,000 | |||
$ | 367,000 | |||
Rental expense included in occupancy and equipment expense totaled $20,000, $317,000 and $347,000 for the years ended December 31, 2010, 2009 and 2008, respectively. |
Financial Instruments With Off-Balance-Sheet Risk |
The Company is a party to financial instruments with off-balance-sheet risk in the normal course of business in order to meet the financing needs of its customers. These financial instruments include commitments to extend credit and letters of credit. These instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized on the consolidated balance sheet. |
The Company’s exposure to credit loss in the event of nonperformance by the other party for commitments to extend credit and letters of credit is represented by the contractual amount of those instruments. The Company uses the same credit policies in making commitments and letters of credit as it does for loans included on the consolidated balance sheet. |
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11. | COMMITMENTS AND CONTINGENCIES(Continued) |
December 31, | ||||||||
2010 | 2009 | |||||||
Commitments to extend credit | $ | 71,605,000 | $ | 67,258,000 | ||||
Letters of credit | $ | 164,000 | $ | 304,000 |
Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since some of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Company upon extension of credit, is based on management’s credit evaluation of the borrower. Collateral held varies, but may include accounts receivable, crops, inventory, equipment, income-producing commercial properties, farm land and residential properties. |
Letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loans to customers. The fair value of the liability related to these letters of credit, which represents the fees received for issuing the guarantees, was not significant at December 31, 2010 and 2009. The Company recognizes these fees as revenues over the term of the commitment or when the commitment is used. |
At December 31, 2010, consumer loan commitments represent approximately 14% of total commitments and are generally unsecured. Commercial and agricultural loan commitments represent approximately 36% of total commitments and are generally secured by various assets of the borrower. Real estate loan commitments, including consumer home equity lines of credit, represent the remaining 50% of total commitments and are generally secured by property with a loan-to-value ratio not to exceed 80%. In addition, the majority of the Company’s commitments have variable interest rates. |
Concentrations of Credit Risk |
The Company grants real estate mortgage, real estate construction, commercial, agricultural and consumer loans to customers throughout Plumas, Nevada, Placer, Lassen, Sierra, Shasta and Modoc counties in California and Washoe county in Northern Nevada. |
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11. | COMMITMENTS AND CONTINGENCIES(Continued) |
Concentrations of Credit Risk (Continued) |
Although the Company has a diversified loan portfolio, a substantial portion of its portfolio is secured by commercial and residential real estate. A continued substantial decline in the economy in general, or a continued decline in real estate values in the Company’s primary market areas in particular, could have an adverse impact on the collectibility of these loans. However, personal and business income represent the primary source of repayment for a majority of these loans. |
Contingencies |
The Company is subject to legal proceedings and claims which arise in the ordinary course of business. In the opinion of management, the amount of ultimate liability with respect to such actions will not materially affect the financial position or results of operations of the Company. |
12. | SHAREHOLDERS’ EQUITY |
Dividend Restrictions |
The Company’s ability to pay cash dividends is dependent on dividends paid to it by the Bank and limited by California corporation law. Under California law, the holders of common stock of the Company are entitled to receive dividends when and as declared by the Board of Directors, out of funds legally available, subject to certain restrictions. The California general corporation law prohibits the Company from paying dividends on its common stock unless: (i) its retained earnings, immediately prior to the dividend payment, equals or exceeds the amount of the dividend or (ii) immediately after giving effect to the dividend, the sum of the Company’s assets (exclusive of goodwill and deferred charges) would be at least equal to 125% of its liabilities (not including deferred taxes, deferred income and other deferred liabilities) and the current assets of the Company would be at least equal to its current liabilities, or, if the average of its earnings before taxes on income and before interest expense for the two preceding fiscal years was less than the average of its interest expense for the two preceding fiscal years, at least equal to 125% of its current liabilities. |
Dividends from the Bank to the Company are restricted under California law to the lesser of the Bank’s retained earnings or the Bank’s net income for the latest three fiscal years, less dividends previously declared during that period, or, with the approval of the Department of Financial Institutions (“DFI”), to the greater of the retained earnings of the Bank, the net income of the Bank for its last fiscal year, or the net income of the Bank for its current fiscal year. As of December 31, 2010, the bank was restricted, without prior approval from the DFI, from paying cash dividends to the Company. In addition the Company’s ability to pay dividends is subject to certain covenants contained in the indentures relating to the Trust Preferred Securities issued by the business trusts (see Note 10 for additional information related to the Trust Preferred Securities). |
As describe below, dividends on common stock are also limited related to the Company’s participation in the Capital Purchase Program. Additionally, Plumas Bancorp was required by the Federal Reserve Bank of San Francisco (FRB) to obtain the FRB’s prior written consent before paying any dividends on its common stock or its Series A Preferred Stock, or making any payments on its trust preferred securities. |
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12. | SHAREHOLDERS’ EQUITY(Continued) |
On January 30, 2009 the Company entered into a Letter Agreement (the “Purchase Agreement”) with the United States Department of the Treasury (“Treasury”), pursuant to which the Company issued and sold (i) 11,949 shares of the Company’s Fixed Rate Cumulative Perpetual Preferred Stock, Series A (the “Series A Preferred Stock”) and (ii) a warrant (the “Warrant”) to purchase 237,712 shares of the Company’s common stock, no par value (the “Common Stock”), for an aggregate purchase price of $11,949,000 in cash. |
The Warrant has a 10-year term and is exercisable, with an exercise price, subject to antidilution adjustments, equal to $7.54 per share of the Common Stock. Treasury has agreed not to exercise voting power with respect to any shares of Common Stock issued upon exercise of the Warrant. |
The Company allocated the proceeds received on January 30, 2009 between the Series A Preferred Stock and the Warrant based on the estimated relative fair value of each. The fair value of the Warrant was estimated based on a Black-Scholes-Merton model and totaled $320,000. The discount recorded on the Series A Preferred Stock was based on a discount rate of 12% and will be amortized by the level-yield method over 5 years. Discount accretion for the year ended December 31, 2009 totaled $79,000. |
The Series A Preferred Stock qualifies as Tier 1 capital and will pay cumulative dividends quarterly at a rate of 5% per annum for the first five years, and 9% per annum thereafter. The Company may redeem the Series A Preferred Stock at its liquidation preference ($1,000 per share) plus accrued and unpaid dividends under the American Recovery and Reinvestment Act of 2009, subject to the Treasury’s consultation with the Company’s appropriate federal regulator. |
With respect to dividends on the Company’s common stock, Treasury’s consent shall be required for any increase in common dividends per share until the third anniversary of the date of its investment unless prior to such third anniversary the Series A Preferred Stock is redeemed in whole or the Treasury has transferred all of the Senior Preferred Series A Preferred Stock to third parties. Furthermore, with respect to dividends on certain other series of preferred stock, restrictions from Treasury may apply. The Company does not have any outstanding preferred stock other than the Series A Preferred Stock discussed above. |
During the second quarter of 2010, Plumas Bancorp, as required by the FRB, suspended quarterly cash dividend payments on its Series A Preferred Stock. While Plumas Bancorp has accrued for this obligation, it is currently in arrears in the amount of $449,000 with the dividend payments on the Series A Preferred Stock as of December 31, 2010. |
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12. | SHAREHOLDERS’ EQUITY(Continued) |
Earnings Per Share |
Basic earnings per share is computed by dividing income (loss) available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock, such as stock options, result in the issuance of common stock which shares in the earnings of the Company. The treasury stock method has been applied to determine the dilutive effect of stock options in computing diluted earnings per share. |
For the Year Ended December 31, | ||||||||||||
(In thousands, except per share data) | 2010 | 2009 | 2008 | |||||||||
Net Income (loss): | ||||||||||||
Net income (loss) | $ | 971 | $ | (9,146 | ) | $ | 304 | |||||
Dividends accrued and discount accreted on preferred shares | (684 | ) | (628 | ) | — | |||||||
Net income (loss) available to common shareholders | $ | 287 | $ | (9,774 | ) | $ | 304 | |||||
Earnings (loss) Per Share: | ||||||||||||
Basic earnings (loss) per share | $ | 0.06 | $ | (2.05 | ) | $ | 0.06 | |||||
Diluted earnings (loss) per share | $ | 0.06 | $ | (2.05 | ) | $ | 0.06 | |||||
Weighted Average Number of Shares Outstanding: | ||||||||||||
Basic shares | 4,776 | 4,776 | 4,817 | |||||||||
Diluted shares | 4,776 | 4,776 | 4,835 |
Included in diluted shares were dilutive stock options totaling 18,022 for the year ended December 31, 2008. |
Shares of common stock issuable under stock options for which the exercise prices were greater than the average market prices were not included in the computation of diluted earnings per share due to their antidilutive effect. When a net loss occurs, no difference in earnings per share is calculated because the conversion of potential common stock is anti-dilutive. Stock options not included in the computation of diluted earnings per share, due to shares not being in the-money and having an antidilutive effect, were 312,000 and 394,000 for the years ended December 31, 2010 and 2008, respectively. |
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12. | SHAREHOLDERS’ EQUITY(Continued) |
Stock Options |
In 2001 and 1991, the Company established Stock Option Plans for which 873,185 shares of common stock remain reserved for issuance to employees and directors and 561,155 shares are available for future grants under incentive and nonstatutory agreements as of December 31, 2010. The Plans require that the option price may not be less than the fair market value of the stock at the date the option is granted, and that the stock must be paid in full at the time the option is exercised. Payment in full for the option price must be made in cash or with Company common stock previously acquired by the optionee and held by the optionee for a period of at least six months. The Plans do not provide for the settlement of awards in cash and new shares are issued upon option exercise. The options expire on dates determined by the Board of Directors, but not later than ten years from the date of grant. Upon grant, options vest ratably over a three to five year period. A summary of the combined activity within the Plans follows: |
Weighted | ||||||||||||||||
Weighted | Average | |||||||||||||||
Average | Remaining | |||||||||||||||
Exercise | Contractual | |||||||||||||||
Shares | Price | Term | Intrinsic Value | |||||||||||||
Options outstanding at January 1, 2008 | 395,772 | $ | 13.37 | |||||||||||||
Options granted | 90,300 | 12.40 | ||||||||||||||
Options exercised | (12,476 | ) | 5.38 | |||||||||||||
Options cancelled | (6,640 | ) | 14.30 | |||||||||||||
Options outstanding at December 31, 2008 | 466,956 | $ | 13.38 | |||||||||||||
Options exercised | (1,000 | ) | 5.43 | |||||||||||||
Options cancelled | (61,990 | ) | 12.38 | |||||||||||||
Options outstanding at December 31, 2009 | 403,966 | $ | 13.56 | |||||||||||||
Options cancelled | (91,936 | ) | 14.05 | |||||||||||||
Options outstanding at December 31, 2010 | 312,030 | $ | 13.41 | 3.7 | $ | — | ||||||||||
Options exercisable at December 31, 2010 | 255,437 | $ | 13.24 | 3.4 | $ | — | ||||||||||
Expected to vest after December 31, 2010 | 49,219 | $ | 14.19 | 4.8 | $ | — |
As of December 31, 2010, there was $72,000 of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the 2001 Plan. That cost is expected to be recognized over a weighted average period of 0.8 years. |
The total fair value of options vested was $210,000 for the year ended December 31, 2010. The total intrinsic value of options at time of exercise was $1,000 and $56,000 for the years ended December 31, 2009 and 2008, respectively. |
Cash received from option exercise for the years ended December 31, 2009 and 2008 was $5,000 and $68,000, respectively. There was no tax benefit realized for the tax deduction from options exercised in 2009 or 2008. |
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12. | SHAREHOLDERS’ EQUITY(Continued) |
Regulatory Capital |
The Company and the Bank are subject to certain regulatory capital requirements administered by the Board of Governors of the Federal Reserve System and the Federal Deposit Insurance Corporation (FDIC). Failure to meet these minimum capital requirements can initiate certain mandatory and possibly additional discretionary, actions by regulators that, if undertaken, could have a direct material effect on the Company’s consolidated financial statements. |
Under capital adequacy guidelines, the Company and the Bank must meet specific capital guidelines that involved quantitative measures of their assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. These quantitative measures are established by regulation and require that minimum amounts and ratios of total and Tier 1 capital to risk-weighted assets and of Tier 1 capital to average assets be maintained. Capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. |
The Bank is also subject to additional capital guidelines under the regulatory framework for prompt corrective action. To be categorized as well capitalized, the Bank must maintain total risk-based, Tier 1 risk-based and Tier 1 leverage ratios as set forth in the table on the following page and cannot be subject to a written agreement, order or capital directive issued by the FDIC. As a result of a regulatory examination in 2010, the Bank also became subject to Tier 1 leverage ratio of 9% and will become subject to a 10% Tier 1 leverage ratio and 13% total risk-based ratio under the Order described in Note 2. At December 31, 2010, the Tier 1 leverage ratio was 8.9% and the total risk-based capitol ratio was 14.0%. |
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12. | SHAREHOLDERS’ EQUITY(Continued) |
December 31, | ||||||||||||||||
2010 | 2009 | |||||||||||||||
Amount | Ratio | Amount | Ratio | |||||||||||||
Leverage Ratio | ||||||||||||||||
Plumas Bancorp and Subsidiary | $ | 42,994,000 | 8.9 | % | $ | 40,564,000 | 7.9 | % | ||||||||
Minimum regulatory requirement | $ | 19,361,000 | 4.0 | % | $ | 20,652,000 | 4.0 | % | ||||||||
Plumas Bank | $ | 43,262,000 | 8.9 | % | $ | 38,172,000 | 7.4 | % | ||||||||
Minimum requirement for “Well- Capitalized” institution under the prompt corrective action plan | $ | 24,190,000 | 5.0 | % | $ | 25,848,000 | 5.0 | % | ||||||||
Minimum regulatory requirement | $ | 19,352,000 | 4.0 | % | $ | 20,678,000 | 4.0 | % | ||||||||
Tier 1 Risk-Based Capital Ratio | ||||||||||||||||
Plumas Bancorp and Subsidiary | $ | 42,994,000 | 12.7 | % | $ | 40,564,000 | 10.4 | % | ||||||||
Minimum regulatory requirement | $ | 13,570,000 | 4.0 | % | $ | 15,641,000 | 4.0 | % | ||||||||
Plumas Bank | $ | 43,262,000 | 12.8 | % | $ | 38,172,000 | 9.8 | % | ||||||||
Minimum requirement for “Well- Capitalized” institution under the prompt corrective action plan | $ | 20,342,000 | 6.0 | % | $ | 23,433,000 | 6.0 | % | ||||||||
Minimum regulatory requirement | $ | 13,561,000 | 4.0 | % | $ | 15,622,000 | 4.0 | % | ||||||||
Total Risk-Based Capital Ratio | ||||||||||||||||
Plumas Bancorp and Subsidiary | $ | 47,274,000 | 13.9 | % | $ | 45,512,000 | 11.6 | % | ||||||||
Minimum regulatory requirement | $ | 27,140,000 | 8.0 | % | $ | 31,281,000 | 8.0 | % | ||||||||
Plumas Bank | $ | 47,539,000 | 14.0 | % | $ | 43,113,000 | 11.0 | % | ||||||||
Minimum requirement for “Well- Capitalized” institution under the prompt corrective action plan | $ | 33,903,000 | 10.0 | % | $ | 39,056,000 | 10.0 | % | ||||||||
Minimum regulatory requirement | $ | 27,123,000 | 8.0 | % | $ | 31,244,000 | 8.0 | % |
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13. | OTHER EXPENSES |
Year Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Outside service fees | $ | 1,212,000 | $ | 990,000 | $ | 803,000 | ||||||
FDIC Insurance | 1,009,000 | 1,125,000 | 258,000 | |||||||||
Professional fees | 587,000 | 789,000 | 688,000 | |||||||||
OREO expenses | 573,000 | 370,000 | 175,000 | |||||||||
Telephone and data communications | 338,000 | 392,000 | 400,000 | |||||||||
Loan collection expenses | 261,000 | 399,000 | 205,000 | |||||||||
Advertising and promotion | 252,000 | 327,000 | 448,000 | |||||||||
Business development | 250,000 | 333,000 | 467,000 | |||||||||
Armored car and courier | 239,000 | 281,000 | 289,000 | |||||||||
Director compensation and retirement | 233,000 | 293,000 | 323,000 | |||||||||
Insurance | 218,000 | 142,000 | 235,000 | |||||||||
Postage | 207,000 | 207,000 | 208,000 | |||||||||
Core deposit intangible amortization | 173,000 | 173,000 | 216,000 | |||||||||
Stationery and supplies | 145,000 | 183,000 | 236,000 | |||||||||
(Gain) loss on sale of other real estate | (43,000 | ) | 158,000 | |||||||||
Other operating expenses | 396,000 | 579,000 | 184,000 | |||||||||
$ | 6,050,000 | $ | 6,741,000 | $ | 5,135,000 | |||||||
14. | INCOME TAXES |
Federal | State | Total | ||||||||||
2010 | ||||||||||||
Current | $ | 4,000 | $ | 4,000 | ||||||||
Deferred | $ | 277,000 | 108,000 | 385,000 | ||||||||
Provision for income taxes | $ | 277,000 | $ | 112,000 | $ | 389,000 | ||||||
Federal | State | Total | ||||||||||
2009 | ||||||||||||
Current | $ | (2,803,000 | ) | $ | (120,000 | ) | $ | (2,923,000 | ) | |||
Deferred | (2,122,000 | ) | (1,730,000 | ) | (3,852,000 | ) | ||||||
Benefit from income taxes | $ | (4,925,000 | ) | $ | (1,850,000 | ) | $ | (6,775,000 | ) | |||
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(Continued)
14. | INCOME TAXES(Continued) |
Federal | State | Total | ||||||||||
2008 | ||||||||||||
Current | $ | 788,000 | $ | 459,000 | $ | 1,247,000 | ||||||
Deferred | (1,002,000 | ) | (457,000 | ) | (1,459,000 | ) | ||||||
(Benefit from) provision for Income taxes | $ | (214,000 | ) | $ | 2,000 | $ | (212,000 | ) | ||||
December 31, | ||||||||
2010 | 2009 | |||||||
Deferred tax assets: | ||||||||
Allowance for loan losses | $ | 1,490,000 | $ | 2,838,000 | ||||
Net operating loss carryovers | 2,418,000 | 1,353,000 | ||||||
Deferred compensation | 1,614,000 | 1,588,000 | ||||||
Core deposit premium | 255,000 | 266,000 | ||||||
OREO valuation allowance | 1,723,000 | 2,066,000 | ||||||
Other | 521,000 | 427,000 | ||||||
Total deferred tax assets | 8,021,000 | 8,538,000 | ||||||
Deferred tax liabilities: | ||||||||
Prepaid costs | (104,000 | ) | (95,000 | ) | ||||
Deferred loan costs | (739,000 | ) | (782,000 | ) | ||||
Premises and equipment | (135,000 | ) | ||||||
Unrealized gain on available-for-sale investment securities | (437,000 | ) | ||||||
Other | (174,000 | ) | (173,000 | ) | ||||
Total deferred tax liabilities | (1,017,000 | ) | (1,622,000 | ) | ||||
Net deferred tax assets | $ | 7,004,000 | $ | 6,916,000 | ||||
Deferred tax assets and liabilities are recognized for the tax consequences of temporary differences between the reported amount of assets and liabilities and their tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The determination of the amount of deferred income tax assets which are more likely than not to be realized is primarily dependent on projections of future earnings, which are subject to uncertainty and estimates that may change given economic conditions and other factors. The realization of deferred income tax assets is assessed and a valuation allowance is recorded if it is “more likely than not” that all or a portion of the deferred tax asset will not be realized. “More likely than not” is defined as greater than a 50% chance. All available evidence, both positive and negative is considered to determine whether, based on the weight of that evidence, a valuation allowance is needed. |
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(Continued)
14. | INCOME TAXES(Continued) |
• | The Company’s 2009 net loss was largely attributable to losses on its Construction and Land Development portfolio that represented approximately 80% of net charge-offs during the year ended December 31, 2009. This portfolio has significantly decreased during the last two years and the Company is not growing the portfolio. |
• | The Company’s 2009 net loss was also attributable to large write-downs in Construction and Land Development real estate owned which represented the majority of its provision for losses on other real estate during 2009. During 2010 other real estate write-downs decreased by $4.4 million from $4.8 million during the year ended December 31, 2009 to $356 thousand during 2010. |
• | The Company has a long history of earnings profitability. |
• | The Company was profitable in 2010 and is projecting future taxable and book income will be generated by operations. |
• | The size of loan credits in the Company’s pipeline of potential problem loans has significantly decreased. |
• | The Company does not have a history of net operating losses or tax credits expiring unused. |
• | The Company recorded a large net loss in 2009 and is in a cumulative loss position for the current and preceding two years. |
2010 | 2009 | 2008 | ||||||||||
Federal income tax, at statutory rate | 34.0 | % | 34.0 | % | 34.0 | % | ||||||
State franchise tax, net of Federal tax effect | 5.5 | % | 7.0 | % | 1.7 | % | ||||||
Interest on obligations of states and political subdivisions | (4.4 | )% | 1.3 | % | (256.3 | )% | ||||||
Net increase in cash surrender value of bank owned life insurance | (8.8 | )% | 0.8 | % | (125.1 | )% | ||||||
Other | 2.3 | % | (0.5 | )% | 114.7 | % | ||||||
Effective tax rate | 28.6 | % | 42.6 | % | (231.0 | )% | ||||||
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(Continued)
14. | INCOME TAXES(Continued) |
15. | RELATED PARTY TRANSACTIONS |
Balance, January 1, 2010 | $ | 1,370,000 | ||
Disbursements | 12,000 | |||
Amounts repaid | (367,000 | ) | ||
Balance, December 31, 2010 | $ | 1,015,000 | ||
Undisbursed commitments to related parties, December 31, 2010 | $ | 194,000 | ||
16. | EMPLOYEE BENEFIT PLANS |
• | For the years ended December 31, 2009 and 2008 and the three months ended March 31, 2010 a contribution which matches the participant’s contribution, up to a maximum of 3% of the employee’s compensation. No contribution was made for the nine months ended December 31, 2010. |
• | An additional discretionary contribution. No discretionary contribution was made for the years ended December 31, 2010, 2009 and 2008. |
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(Continued)
16. | EMPLOYEE BENEFIT PLANS(Continued) |
17. | COMPREHENSIVE INCOME (LOSS) |
Comprehensive income (loss) is reported in addition to net income for all periods presented. Comprehensive income (loss) is a more inclusive financial reporting methodology that includes disclosure of other comprehensive income (loss) that historically has not been recognized in the calculation of net income. The unrealized gains and losses on the Company’s available-for-sale investment securities are included in other comprehensive income (loss). Total comprehensive income (loss) and the components of accumulated other comprehensive income (loss) are presented in the consolidated statement of changes in shareholders’ equity. |
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(Continued)
17. | COMPREHENSIVE INCOME (LOSS)(Continued) |
Tax | ||||||||||||
Before | Benefit | After | ||||||||||
Tax | (Expense) | Tax | ||||||||||
For the Year Ended December 31, 2010 | ||||||||||||
Total other comprehensive loss: | ||||||||||||
Unrealized holding gains | $ | 12,000 | $ | (5,000 | ) | $ | 7,000 | |||||
Reclassification adjustment for gains included in net income | (1,160,000 | ) | 479,000 | (681,000 | ) | |||||||
Total other comprehensive loss | $ | (1,148,000 | ) | $ | 474,000 | $ | (674,000 | ) | ||||
For the Year Ended December 31, 2009 | ||||||||||||
Total other comprehensive income: | ||||||||||||
Unrealized gains on securities transferred from held-to-maturity to available for-sale | $ | 335,000 | $ | (138,000 | ) | $ | 197,000 | |||||
Unrealized holding gains | 184,000 | (75,000 | ) | 109,000 | ||||||||
Reclassification adjustment for gains included in net loss | (10,000 | ) | — | (10,000 | ) | |||||||
Total other comprehensive income | $ | 509,000 | $ | (213,000 | ) | $ | 296,000 | |||||
For the Year Ended December 31, 2008 | ||||||||||||
Total other comprehensive income: | ||||||||||||
Unrealized holding gains | $ | 1,138,000 | $ | (470,000 | ) | $ | 668,000 | |||||
Reclassification adjustment for impairment loss included in net income | (415,000 | ) | 171,000 | (244,000 | ) | |||||||
Total other comprehensive income | $ | 723,000 | $ | (299,000 | ) | $ | 424,000 | |||||
18. | INTANGIBLE ASSETS |
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(Continued)
18. | INTANGIBLE ASSETS(Continued) |
December 31, 2010 | December 31, 2009 | |||||||||||||||
Gross Carrying | Accumulated | Gross Carrying | Accumulated | |||||||||||||
Amount | Amortization | Amount | Amortization | |||||||||||||
Core Deposit Intangibles | $ | 1,709,000 | $ | 1,234,000 | $ | 1,709,000 | $ | 1,061,000 |
Year Ending | ||||
December 31, | ||||
2011 | $ | 173,000 | ||
2012 | 173,000 | |||
2013 | 129,000 | |||
$ | 475,000 | |||
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(Continued)
19. | PARENT ONLY CONDENSED FINANCIAL STATEMENTS |
2010 | 2009 | |||||||
ASSETS | ||||||||
Cash and cash equivalents | $ | 626,000 | $ | 3,710,000 | ||||
Investment in bank subsidiary | 47,399,000 | 44,734,000 | ||||||
Other assets | 1,071,000 | 452,000 | ||||||
Total assets | $ | 49,096,000 | $ | 48,896,000 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Other liabilities | $ | 798,000 | $ | 355,000 | ||||
Junior subordinated deferrable interest debentures | 10,310,000 | 10,310,000 | ||||||
Total liabilities | 11,108,000 | 10,665,000 | ||||||
Shareholders’ equity: | ||||||||
Preferred stock | 11,682,000 | 11,595,000 | ||||||
Common stock | 6,027,000 | 5,970,000 | ||||||
Retained earnings | 20,331,000 | 20,044,000 | ||||||
Accumulated other comprehensive (loss) income | (52,000 | ) | 622,000 | |||||
Total shareholders’ equity | 37,988,000 | 38,231,000 | ||||||
Total liabilities and shareholders’ equity | $ | 49,096,000 | $ | 48,896,000 | ||||
2010 | 2009 | 2008 | ||||||||||
Income: | ||||||||||||
Dividends declared by bank subsidiary | $ | — | $ | — | $ | 3,000,000 | ||||||
Earnings from investment in Plumas Statutory Trusts I and II | 9,000 | 11,000 | 19,000 | |||||||||
Total income | 9,000 | 11,000 | 3,019,000 | |||||||||
Expenses: | ||||||||||||
Interest on junior subordinated deferrable interest debentures | 312,000 | 371,000 | 623,000 | |||||||||
Other expenses | 242,000 | 808,000 | 730,000 | |||||||||
Total expenses | 554,000 | 1,179,000 | 1,353,000 | |||||||||
Income (loss) before equity in undistributed income of subsidiary | (545,000 | ) | (1,168,000 | ) | 1,666,000 | |||||||
Equity in undistributed income (loss) of subsidiary | 1,292,000 | (8,452,000 | ) | (1,911,000 | ) | |||||||
Income (loss) before income taxes | 747,000 | (9,620,000 | ) | (245,000 | ) | |||||||
Income tax benefit | 224,000 | 474,000 | 549,000 | |||||||||
Net income (loss) | $ | 971,000 | $ | (9,146,000 | ) | $ | 304,000 | |||||
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(Continued)
19. | PARENT ONLY CONDENSED FINANCIAL STATEMENTS(Continued) |
2010 | 2009 | 2008 | ||||||||||
Cash flows from operating activities: | ||||||||||||
Net income (loss) | $ | 971,000 | $ | (9,146,000 | ) | $ | 304,000 | |||||
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: | ||||||||||||
Undistributed (income) loss of subsidiary | (1,292,000 | ) | 8,452,000 | 1,911,000 | ||||||||
Stock-based compensation expense | 10,000 | 47,000 | 58,000 | |||||||||
(Increase) decrease in other assets | (619,000 | ) | 124,000 | (35,000 | ) | |||||||
Increase in other liabilities | (4,000 | ) | 115,000 | 28,000 | ||||||||
Net cash (used in) provided by operating activities | (934,000 | ) | (408,000 | ) | 2,266,000 | |||||||
Cash flows from investing activities: | ||||||||||||
Investment in bank subsidiary | (2,000,000 | ) | (8,000,000 | ) | ||||||||
Net cash used in investing activities | (2,000,000 | ) | (8,000,000 | ) | — | |||||||
Cash flows from financing activities: | ||||||||||||
Payment of cash dividends on common stock | (1,153,000 | ) | ||||||||||
Payment of cash dividends on preferred stock | (150,000 | ) | (473,000 | ) | ||||||||
Issuance of preferred stock, net of discount | 11,517,000 | |||||||||||
Issuance of common stock warrant | 407,000 | |||||||||||
Proceeds from the exercise of stock options | 5,000 | 68,000 | ||||||||||
Repurchase and retirement of common stock | (1,217,000 | ) | ||||||||||
Net cash (used in) provided by financing activities | (150,000 | ) | 11,456,000 | (2,302,000 | ) | |||||||
(Decrease) increase in cash and cash equivalents | (3,084,000 | ) | 3,048,000 | (36,000 | ) | |||||||
Cash and cash equivalents at beginning of year | 3,710,000 | 662,000 | 698,000 | |||||||||
Cash and cash equivalents at end of year | $ | 626,000 | $ | 3,710,000 | $ | 662,000 | ||||||
Non-cash investing activities: | ||||||||||||
Net change in unrealized gain/loss on investment securities available-for-sale | $ | (674,000 | ) | $ | 305,000 | $ | 424,000 |
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ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE |
ITEM 9A. | CONTROLS AND PROCEDURES |
/s/ Andrew J. Ryback | ||
Interim President and Chief Executive Officer | ||
/s/ Richard L. Belstock | ||
Senior Vice President and Interim Chief Financial Officer |
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ITEM 9B. | OTHER INFORMATION |
ITEM 10. | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE |
ITEM 11. | EXECUTIVE COMPENSATION |
ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS |
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ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE |
ITEM 14. | PRINCIPAL ACCOUNTANT FEES AND SERVICES |
ITEM 15. | EXHIBITS AND FINANCIAL STATEMENT SCHEDULES |
3.1 | Articles of Incorporation as amended of Registrant included as exhibit 3.1 to the Registrant’s Form S-4, File No. 333-84534, which is incorporated by reference herein. | |||
3.2 | Bylaws of Registrant as amended on March 16, 2011. | |||
3.3 | Amendment of the Articles of Incorporation of Registrant dated November 1, 2002, is included as exhibit 3.3 to the Registrant’s 10-Q for September 30, 2005, which is incorporated by this reference herein. | |||
3.4 | Amendment of the Articles of Incorporation of Registrant dated August 17, 2005, is included as exhibit 3.4 to the Registrant’s 10-Q for September 30, 2005, which is incorporated by this reference herein. | |||
4 | Specimen form of certificate for Plumas Bancorp included as exhibit 4 to the Registrant’s Form S-4, File No. 333-84534, which is incorporated by reference herein. | |||
4.1 | Certificate of Determination of Fixed Rate Cumulative Perpetual Preferred Stock, Series A, is included as exhibit 4.1 to Registrant’s 8-K filed on January 30, 2009, which is incorporated by this reference herein. | |||
10.1 | Executive Salary Continuation Agreement of Andrew J. Ryback dated December 17, 2008, is included as exhibit 10.1 to the Registrant’s 10-K for December 31, 2008, which is incorporated by this reference herein. | |||
10.2 | Split Dollar Agreement of Andrew J. Ryback dated August 23, 2005, is included as Exhibit 10.2 to the Registrant’s 8-K filed on October 17, 2005, which is incorporated by this reference herein. | |||
10.8 | Director Retirement Agreement of John Flournoy dated March 21, 2007, is included as Exhibit 10.8 to Registrant’s 10-Q for March 31, 2007, which is incorporated by this reference herein. | |||
10.11 | First Amendment to Executive Salary Continuation Agreement of Robert T. Herr dated September 15, 2004, is included as Exhibit 10.11 to the Registrant’s 8-K filed on September 17, 2004, which is incorporated by this reference herein. |
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10.18 | Amended and Restated Director Retirement Agreement of Daniel E. West dated May 10, 2000, is included as Exhibit 10.18 to the Registrant’s 10-QSB for June 30, 2002, which is incorporated by this reference herein. | |||
10.19 | Consulting Agreement of Daniel E. West dated May 10, 2000, is included as Exhibit 10.19 to the Registrant’s 10-QSB for June 30, 2002, which is incorporated by this reference herein. | |||
10.20 | Split Dollar Agreements of Robert T. Herr dated September 15, 2004, is included as Exhibit 10.20 to the Registrant’s 8-K filed on September 17, 2004, which is incorporated by this reference herein. | |||
10.21 | Amended and Restated Director Retirement Agreement of Alvin G. Blickenstaff dated April 19, 2000, is included as Exhibit 10.21 to the Registrant’s 10-QSB for June 30, 2002, which is incorporated by this reference herein. | |||
10.22 | Consulting Agreement of Alvin G. Blickenstaff dated May 8, 2000, is included as Exhibit 10.22 to the Registrant’s 10-QSB for June 30, 2002, which is incorporated by this reference herein. | |||
10.24 | Amended and Restated Director Retirement Agreement of Gerald W. Fletcher dated May 10, 2000, is included as Exhibit 10.24 to the Registrant’s 10-QSB for June 30, 2002, which is incorporated by this reference herein. | |||
10.25 | Consulting Agreement of Gerald W. Fletcher dated May 10, 2000, is included as Exhibit 10.25 to the Registrant’s 10-QSB for June 30, 2002, which is incorporated by this reference herein. | |||
10.27 | Amended and Restated Director Retirement Agreement of Arthur C. Grohs dated May 9, 2000, is included as Exhibit 10.27 to the Registrant’s 10-QSB for June 30, 2002, which is incorporated by this reference herein. | |||
10.28 | Consulting Agreement of Arthur C. Grohs dated May 9, 2000, is included as Exhibit 10.28 to the Registrant’s 10-QSB for June 30, 2002, which is incorporated by this reference herein. | |||
10.33 | Amended and Restated Director Retirement Agreement of Terrance J. Reeson dated April 19, 2000, is included as Exhibit 10.33 to the Registrant’s 10-QSB for June 30, 2002, which is incorporated by this reference herein. | |||
10.34 | Consulting Agreement of Terrance J. Reeson dated May 10, 2000, is included as Exhibit 10.34 to the Registrant’s 10-QSB for June 30, 2002, which is incorporated by this reference herein. | |||
10.35 | Letter Agreement, dated January 30, 2009 by and between Plumas Bancorp, Inc. and the United States Department of the Treasury and Securities Purchase Agreement — Standard Terms attached thereto, is included as exhibit 10.1 to Registrant’s 8-K filed on January 30, 2009, which is incorporated by this reference herein. | |||
10.36 | Form of Senior Executive Officer letter agreement, is included as exhibit 10.2 to Registrant’s 8-K filed on January 30, 2009, which is incorporated by this reference herein. | |||
10.37 | Deferred Fee Agreement of Alvin Blickenstaff is included as Exhibit 10.37 to the Registrant’s 10-Q for March 31, 2009, which is incorporated by this reference herein. | |||
10.40 | 2001 Stock Option Plan as amended is included as exhibit 99.1 of the Form S-8 filed July 23, 2002, File No. 333-96957, which is incorporated by this reference herein. | |||
10.41 | Form of Indemnification Agreement (Plumas Bancorp) is included as Exhibit 10.41 to the Registrant’s 10-Q for March 31, 2009, which is incorporated by this reference herein. |
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10.42 | Form of Indemnification Agreement (Plumas Bank) is included as Exhibit 10.42 to the Registrant’s 10-Q for March 31, 2009, which is incorporated by this reference herein. | |||
10.43 | Plumas Bank 401(k) Profit Sharing Plan as amended is included as exhibit 99.1 of the Form S-8 filed February 14, 2003, File No. 333-103229, which is incorporated by this reference herein. | |||
10.44 | Executive Salary Continuation Agreement of Robert T. Herr dated June 4, 2002, is included as Exhibit 10.44 to the Registrant’s 10-Q for March 31, 2003, which is incorporated by this reference herein. | |||
10.46 | 1991 Stock Option Plan as amended is included as Exhibit 10.46 to the Registrant’s 10-Q for September 30, 2004, which is incorporated by this reference herein. | |||
10.47 | Specimen form of Incentive Stock Option Agreement under the 1991 Stock Option Plan is included as Exhibit 10.47 to the Registrant’s 10-Q for September 30, 2004, which is incorporated by this reference herein. | |||
10.48 | Specimen form of Non-Qualified Stock Option Agreement under the 1991 Stock Option Plan is included as Exhibit 10.48 to the Registrant’s 10-Q for September 30, 2004, which is incorporated by this reference herein. | |||
10.49 | Amended and Restated Plumas Bancorp Stock Option Plan is included as Exhibit 10.49 to the Registrant’s 10-Q for September 30, 2006, which is incorporated by this reference herein. | |||
10.50 | Executive Salary Continuation Agreement of Rose Dembosz, is included as exhibit 10.50 to the Registrant’s 10-K for December 31, 2008, which is incorporated by this reference herein. | |||
10.51 | First Amendment to Split Dollar Agreement of Andrew J. Ryback, is included as exhibit 10.51 to the Registrant’s 10-K for December 31, 2008, which is incorporated by this reference herein. | |||
10.56 | Second Amendment to Executive Salary Continuation Agreement of Robert T. Herr dated June 4, 2002 and Amended September 15, 2004, is included as exhibit 10.56 to the Registrant’s 10-K for December 31, 2008, which is incorporated by this reference herein. | |||
10.57 | First Amendment to Split Dollar Agreements of Robert T. Herr dated September 15, 2004, is included as exhibit 10.57 to the Registrant’s 10-K for December 31, 2008, which is incorporated by this reference herein. | |||
10.58 | Executive Salary Continuation Agreement of Robert T. Herr dated December 17, 2008, is included as exhibit 10.58 to the Registrant’s 10-K for December 31, 2008, which is incorporated by this reference herein. | |||
10.64 | First Amendment to the Plumas Bank Amended and Restated Director Retirement Agreement for Alvin Blickenstaff adopted on September 19, 2007, is included as Exhibit 10.64 to the Registrant’s 8-K filed on September 25, 2007, which is incorporated by this reference herein. | |||
10.65 | First Amendment to the Plumas Bank Amended and Restated Director Retirement Agreement for Arthur C. Grohs adopted on September 19, 2007, is included as Exhibit 10.65 to the Registrant’s 8-K filed on September 25, 2007, which is incorporated by this reference herein. | |||
10.67 | First Amendment to the Plumas Bank Amended and Restated Director Retirement Agreement for Terrance J. Reeson adopted on September 19, 2007, is included as Exhibit 10.67 to the Registrant’s 8-K filed on September 25, 2007, which is incorporated by this reference herein. | |||
10.69 | First Amendment to the Plumas Bank Amended and Restated Director Retirement Agreement for Daniel E. West adopted on September 19, 2007, is included as Exhibit 10.69 to the Registrant’s 8-K filed on September 25, 2007, which is incorporated by this reference herein. |
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10.70 | First Amendment to the Plumas Bank Amended and Restated Director Retirement Agreement for Gerald W. Fletcher adopted on October 9, 2007, is included as Exhibit 10.70 to the Registrant’s 10-Q for September 30, 2007, which is incorporated by this reference herein. | |||
10.71 | Consent Order issued by the FDIC and CDFI to Plumas Bank on March 18, 2011, is included as Exhibit 10.1 of the Registrant’s 8-K filed on March 21, 2011, which is incorporated by this reference herein. | |||
10.72 | Stipulation and Consent to the Issuance of Consent Order among Plumas Bank and the FDIC entered into on March 16, 2011, is included as Exhibit 10.2 of the Registrant’s 8-K filed on March 21, 2011, which is incorporated by this reference herein. | |||
11 | Computation of per share earnings appears in the attached 10-K under Item 8 Financial Statements Plumas Bancorp and Subsidiary Notes to Consolidated Financial Statements as Footnote 12 — Shareholders’ Equity. | |||
21.01 | Plumas Bank — California. | |||
21.02 | Plumas Statutory Trust I — Connecticut. | |||
21.03 | Plumas Statutory Trust II — Connecticut. | |||
23 | Independent Registered Public Accountant’s Consent letter dated March 23, 2011 | |||
31.1 | Rule 13a-14(a) [Section 302] Certification of Principal Financial Officer dated March 23, 2011 | |||
31.2 | Rule 13a-14(a) [Section 302] Certification of Principal Executive Officer dated March 23, 2011 | |||
32.1 | Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 dated March 23, 2011. | |||
32.2 | Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 dated March 23, 2011. | |||
99.1 | Certification of Chief Executive Officer pursuant to Section 111(b)(4) of the Emergency Economic Stabilization Act of 2008 dated March 23, 2011. | |||
99.2 | Certification of Chief Financial Officer pursuant to Section 111(b)(4) of the Emergency Economic Stabilization Act of 2008 dated March 23, 2011. |
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(Registrant)
/s/ ANDREW J. RYBACK | ||||
Andrew J. Ryback | ||||
Interim President and Chief Executive Officer | ||||
/s/ RICHARD L. BELSTOCK | ||||
Richard L. Belstock | ||||
Senior Vice President and Interim Chief Financial Officer | ||||
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/s/ DANIEL E. WEST | Dated: March 23, 2011 | |
/s/ TERRANCE J. REESON | Dated: March 23, 2011 | |
/s/ ALVIN G. BLICKENSTAFF | Dated: March 23, 2011 | |
/s/ W. E. ELLIOTT | Dated: March 23, 2011 | |
/s/ GERALD W. FLETCHER | Dated: March 23, 2011 | |
/s/ JOHN FLOURNOY | Dated: March 23, 2011 | |
/s/ ARTHUR C. GROHS | Dated: March 23, 2011 | |
/s/ ROBERT J. MCCLINTOCK | Dated: March 23, 2011 |
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