This comprehensive analysis, updated on October 27, 2025, evaluates Plumas Bancorp (PLBC) through five distinct lenses, covering its business moat, financials, past performance, and future growth to determine a fair value. The report provides critical context by benchmarking PLBC against six competitors, including Bank of Marin Bancorp and Sierra Bancorp, while mapping key takeaways to the investment principles of Warren Buffett and Charlie Munger.
Negative. Plumas Bancorp faces significant headwinds despite some operational strengths. A sharp, recent increase in funds set aside for bad loans raises major concerns about its loan quality. This has driven down recent profitability, overshadowing strong growth in its core lending income. The bank's future growth outlook is weak, constrained by its focus on slow-growing rural markets. While the stock appears inexpensive, this low valuation reflects deteriorating performance and may be a value trap. Key strengths include its efficient operations and a stable, low-cost local deposit base. Given the rising credit risk and poor growth prospects, investors should approach with caution.
US: NASDAQ
Plumas Bancorp (PLBC) operates a deeply traditional and relationship-focused community banking business model. Headquartered in Quincy, California, the bank provides a comprehensive range of banking services to individuals, small-to-medium-sized businesses, and local municipalities across fourteen counties in Northeastern California and one county in Northwestern Nevada. Its core operation revolves around the fundamental banking practice of gathering low-cost deposits from the local community and using that capital to extend loans, primarily in commercial real estate, small business, and agriculture. The bank earns most of its revenue from the net interest spread—the difference between the interest it collects on loans and the interest it pays on deposits. Ancillary services like treasury management, debit cards, and online banking support the primary business, generating a modest stream of fee income. Unlike large national banks that compete on scale and technology, Plumas Bancorp’s strategy is rooted in providing personalized, high-touch service and leveraging its intimate knowledge of its local markets to make prudent lending decisions.
The bank's largest product line is its lending portfolio, with Commercial Real Estate (CRE) loans forming the backbone of its assets. These loans, which typically represent between 40% to 50% of the total loan portfolio, are extended to local businesses and investors for properties such as office buildings, retail centers, industrial warehouses, and multi-family residential units. A significant portion of this CRE portfolio is owner-occupied, meaning the borrower operates their own business from the property, which is generally considered lower risk than loans for investment properties. The market for CRE lending in Plumas’s operating region is moderately competitive, primarily featuring other local community banks and regional credit unions rather than the major national players. The market growth is directly tied to the economic vitality of these rural and semi-rural counties, which can be slower than major metropolitan areas. Competitors like TriCo Bancshares (TCBK) and other local institutions compete for the same pool of borrowers, often on the basis of lending terms and personal relationships. Plumas’s customers for CRE loans are established local business owners and real estate developers who have been in the community for years. They value the bank’s quick, local decision-making and its understanding of regional property values, creating significant customer stickiness and high switching costs. The competitive moat for this product line is Plumas’s deep-seated local expertise; its loan officers understand the nuances of the regional economy in a way that larger, more bureaucratic banks cannot, allowing them to underwrite risk more effectively. This local knowledge, combined with strong personal relationships, creates a durable advantage, though its primary vulnerability is the concentration risk of being heavily exposed to the economic health of a single geographic area.
Another critical product for Plumas Bancorp is its Commercial and Industrial (C&I) lending, with a particular specialization in Small Business Administration (SBA) guaranteed loans. This category includes loans for working capital, equipment purchases, business expansion, and acquisitions, and it comprises roughly 20% to 25% of the bank's loan portfolio. The bank is consistently recognized as a top SBA lender in its region, indicating a strong focus and expertise in this niche. The market for small business lending is a cornerstone of the local economies Plumas serves, with steady demand from a diverse range of industries including retail, professional services, and light manufacturing. Competition comes from other community banks and some national banks with dedicated SBA divisions, but Plumas often has an edge due to its preferred SBA lender status, which streamlines the approval process. When compared to peers, Plumas’s commitment to SBA lending provides it with a distinct identity and a source of high-quality, government-guaranteed loans that mitigate credit risk. The consumers of this product are local entrepreneurs and established small business owners who need capital to operate and grow. These clients are particularly sticky because their lending relationship is often bundled with other essential services like business checking, payroll processing, and cash management, making it difficult and disruptive to switch banks. The moat for Plumas’s C&I and SBA lending franchise is its specialized expertise. Navigating the SBA process requires a dedicated and knowledgeable team, which acts as a barrier to entry for less-focused competitors and builds a reputation that attracts new business clients seeking this type of financing.
The foundation of any successful community bank is its ability to gather stable, low-cost funding, and Plumas Bancorp’s deposit franchise is its most vital 'product.' The bank offers a standard suite of deposit accounts, including noninterest-bearing checking, interest-bearing checking, savings accounts, money market accounts, and certificates of deposit (CDs), which collectively fund its lending activities. Noninterest-bearing deposits are the most valuable component, typically making up a significant portion (30% to 40%) of total deposits, providing the bank with a very cheap source of funds. The market for deposits in its operating region is competitive, with pressure from other banks, credit unions, and online banks offering higher yields. However, the growth of core deposits is driven less by rate and more by convenience, trust, and community presence. Compared to competitors who may rely more on higher-cost CDs or wholesale funding, Plumas’s strength is its high mix of transactional accounts from local businesses and individuals. The customers for these deposit products are the residents and businesses within the bank's geographic footprint. These customers prioritize the convenience of a local branch, personal service from bankers they know, and a sense of community reinvestment. This relationship-based approach results in very sticky deposits, as customers are unlikely to move their primary operating accounts for a slightly better interest rate, especially given the hassle of changing direct deposits and automatic payments. Plumas’s moat in deposit gathering is its physical branch network and long-standing community reputation. This established presence creates a formidable barrier to entry and fosters a loyal customer base that provides a durable, low-cost funding advantage, which is a key driver of its profitability through different interest rate cycles.
Given its rural and semi-rural footprint, agricultural lending is another important niche for Plumas Bancorp, representing a specialized and relationship-intensive product line. These loans, which typically account for 5% to 10% of the total loan portfolio, provide financing for farming operations, land acquisition, livestock, and agricultural equipment. This segment is crucial to the economies of many of the counties the bank serves, including areas with significant ranching and farming activity. The market for agricultural lending requires deep industry knowledge and is served by a limited number of specialized lenders, including other community banks with agricultural departments and Farm Credit System institutions. Competition is based not on price but on the lender's understanding of commodity cycles, water rights, land values, and the unique cash flow patterns of agricultural businesses. Compared to generalist banks, Plumas's ability to offer tailored credit products to this sector is a significant differentiator. The customers are multi-generational farming and ranching families and related agribusinesses who need a financial partner that understands their industry's complexities. These relationships are extremely sticky, often spanning decades, as trust and industry expertise are paramount. The moat in agricultural lending is built on specialized knowledge and long-term community ties. This is not a business that a new competitor can easily enter; it requires years of building a reputation and a deep understanding of local agricultural practices. This niche provides Plumas with a loyal customer base and a source of high-quality loans that are well-secured by real assets, further strengthening its overall business model.
In conclusion, Plumas Bancorp’s competitive advantage, or moat, is not derived from overwhelming scale, proprietary technology, or a national brand. Instead, it is a classic community banking moat built on a robust foundation of geographic focus and deep local integration. The bank has successfully translated its number one or number two deposit market share in its core counties into a powerful funding advantage, sourcing low-cost, stable deposits that are less sensitive to interest rate fluctuations than wholesale funding. This cheap 'raw material' for lending is a significant structural advantage that directly supports its net interest margin. The bank then deploys this capital with a disciplined, risk-aware approach focused on niches where it possesses superior local knowledge and expertise, namely in SBA and agricultural lending. These specializations create a defensible franchise that is difficult for larger, less-agile competitors to replicate.
However, the very source of this moat—its geographic concentration—is also its most significant vulnerability. The bank’s fortunes are inextricably linked to the economic health of a handful of counties in California and Nevada. A severe regional downturn, a natural disaster like a wildfire, or adverse industry trends in local sectors like agriculture could disproportionately impact its loan portfolio and overall performance. Furthermore, its business model is highly sensitive to interest rate movements due to its reliance on net interest income, as its fee-generating businesses are not yet substantial enough to provide a meaningful buffer. While the bank's moat is durable within its defined territory, it is also narrow. For long-term investors, this presents a trade-off: the stability and profitability of a well-run, focused community bank versus the inherent risks of its geographic and revenue concentration.
A detailed look at Plumas Bancorp’s recent financials reveals a bank navigating a complex environment. On the revenue front, the bank has performed well, driven by a substantial increase in net interest income, which reached $25.17 million in the third quarter of 2025, a significant jump from $18.18 million in the prior quarter. This suggests the bank is benefiting from its lending activities. Profitability, however, tells a different story. Net income fell from $6.32 million in Q2 to $5.15 million in Q3, and Return on Equity (ROE) declined from a healthy 13.28% to 9.38%. The primary driver of this decline was a large increase in the provision for potential loan losses, which overshadowed the strong revenue performance.
The bank's balance sheet appears reasonably resilient. The ratio of net loans to total deposits stood at a manageable 81.3% in the latest quarter, indicating a solid funding base that is not over-leveraged on the lending side. The tangible common equity to total assets ratio is approximately 9.95%, providing a decent cushion against unexpected losses. However, the bank carries -$16.49 million in accumulated other comprehensive income (AOCI), representing unrealized losses on its investment portfolio. This figure, equal to about 7.4% of its tangible equity, highlights sensitivity to interest rate changes.
From a cash generation perspective, the data is inconsistent, with operating cash flow figures not available for the most recent quarter, making a clear assessment difficult. The bank maintains a low dividend payout ratio of 28.4%, suggesting earnings are being retained to support growth and buffer against risks. This conservative dividend policy, combined with consistent dividend growth (11.11% year-over-year), is a positive sign for long-term stability. Overall, Plumas Bancorp’s financial foundation appears stable in its core operations and capital levels, but the recent, sharp increase in credit provisions introduces a significant element of risk that investors must monitor closely.
Over the analysis period of fiscal years 2020 through 2024, Plumas Bancorp has demonstrated a commendable history of profitable, organic growth. The bank successfully expanded its core operations, growing its balance sheet while maintaining stability. This performance is particularly evident in its key metrics for a community bank: consistent earnings growth, expanding net interest income, and a reliable return of capital to shareholders through dividends. While it has not engaged in the large-scale acquisitions that have propelled peers like Sierra Bancorp or TriCo Bancshares, PLBC's history shows competent execution within its own niche, focusing on its local communities.
From a growth and profitability perspective, PLBC's record is strong. Revenue grew from $43.68 million in FY2020 to $81.28 million in FY2024, while net income nearly doubled from $14.48 million to $28.62 million. This translated into impressive EPS growth, rising from $2.80 to $4.85. This earnings power is underpinned by durable profitability, with Return on Equity (ROE) consistently in the high teens or low twenties, averaging over 20% in the last three years (FY2022-2024). This level of ROE indicates management has been highly effective at generating profits from its shareholders' capital, a key sign of a well-run bank.
In terms of its balance sheet and shareholder returns, the bank has also performed well. Total deposits grew steadily from $974 million in 2020 to $1.37 billion in 2024, while net loans expanded from $700 million to over $1 billion. This growth was managed prudently, with the loan-to-deposit ratio remaining stable in the low 70% range. For shareholders, the most attractive feature has been the rapidly growing dividend, which tripled from $0.36 per share in 2020 to $1.08 in 2024. However, this has been accompanied by a slow increase in shares outstanding, indicating minor dilution rather than share buybacks, a less efficient form of capital return.
Overall, Plumas Bancorp's historical record supports confidence in its ability to operate as a stable and profitable community bank. Its performance is characterized by consistency and prudent management rather than aggressive expansion. When compared to larger, acquisition-focused peers, its growth appears modest. However, for an institution focused on organic growth, its track record of expanding earnings and dividends is a significant achievement and signals resilient execution through varying economic conditions.
The regional and community banking industry is navigating a period of significant transition. Over the next 3-5 years, the sector is expected to see continued consolidation as smaller banks struggle with the high fixed costs of technology and regulatory compliance, making scale a crucial advantage. The U.S. Regional Banks market is projected to experience slow growth, with an estimated CAGR of 1-2%, as economic normalization and a higher interest rate environment temper loan demand. A primary shift will be the intensified competition for core deposits, driven by the rise of high-yield online savings accounts and aggressive marketing from larger national banks. This 'war for deposits' will likely keep funding costs elevated, pressuring Net Interest Margins (NIMs) across the sector. Catalysts for demand could include a potential easing of monetary policy by the Federal Reserve, which would lower borrowing costs for customers and improve affordability, particularly in real estate. Conversely, competitive intensity is set to increase, not just from traditional banks but also from fintech companies and non-bank lenders who are encroaching on profitable niches like small business lending. For a bank like Plumas, this means entry barriers for digitally-native competitors are falling, while the traditional relationship-based moat remains crucial for retention.
Looking ahead, the industry will also grapple with evolving credit risk. After a long period of historically low charge-offs, a normalization of credit losses is expected, particularly in loan categories sensitive to economic cycles like Commercial Real Estate (CRE), especially the office sector. Regulatory scrutiny is also expected to increase, particularly around capital requirements and liquidity management, in the wake of recent bank failures. This adds another layer of operational cost and strategic constraint. Technology adoption will be a key differentiator; banks that can successfully integrate digital account opening, online loan applications, and robust mobile banking features will be better positioned to attract and retain the next generation of customers. The long-term trend points towards a hybrid model where a strong digital presence complements a targeted physical branch network, a balance that community banks must strike to remain relevant. The number of physical branches is expected to decline by an estimated 10-15% industry-wide over the next five years as traffic shifts to digital channels.
Plumas Bancorp's largest product, Commercial Real Estate (CRE) lending, faces a constrained growth environment. Currently, consumption is focused on refinancing existing debt and smaller, owner-occupied projects rather than large new developments. High interest rates and economic uncertainty are the primary factors limiting new loan demand, as they reduce project profitability and increase borrower risk. Over the next 3-5 years, consumption is expected to increase in specific niches like multi-family housing and industrial properties, driven by regional population trends and supply chain adjustments. However, demand for office and some retail properties will likely decrease or remain stagnant. Growth will be catalyzed by any decline in interest rates or a significant uptick in local economic activity. The market for CRE lending in Plumas's rural footprint, estimated to be a several billion dollar market, is likely to grow at a slow 1-3% annually. Competition is primarily from other local community banks. Customers choose based on relationship, speed of decision-making, and local market knowledge. Plumas outperforms when a deep understanding of local property values is critical. However, larger regional banks can win on price for bigger, more standardized deals. The number of small banks focused on CRE is likely to decrease due to consolidation. A key future risk is a localized real estate downturn triggered by a regional economic shock, such as a major employer leaving the area. This would directly impact collateral values and borrower repayment ability. The probability is medium, given the bank's geographic concentration.
Commercial & Industrial (C&I) lending, especially its Small Business Administration (SBA) loan specialization, represents Plumas's strongest growth avenue. Current usage is solid, driven by the needs of local small businesses for working capital and equipment financing. Consumption is primarily limited by the confidence of small business owners in the economic outlook. Over the next 3-5 years, this segment is poised for growth. As older business owners retire, there will be an increase in demand for acquisition financing. A stable or improving economy will also spur investment in expansion. Catalysts include potential federal initiatives to promote small business growth and the bank's own reputation as a top SBA lender attracting new clients. The market for SBA 7(a) loans is substantial, with the SBA guaranteeing over $27 billion in fiscal year 2023. Plumas can capture a larger share of its local market by leveraging its expertise to outperform competitors who lack a dedicated SBA team. Customers in this space prioritize lenders who can navigate the complex SBA process efficiently. The primary risk is a change in government policy that reduces the attractiveness of the SBA guarantee program, which could happen if federal budgets are tightened. This would force the bank to take on more credit risk or cede market share. The probability of a major negative change is low to medium.
The bank's agricultural lending portfolio is a stable but low-growth niche. Current consumption is driven by the cyclical financing needs of farmers and ranchers for operations, equipment, and land. This is constrained by factors beyond the bank's control, such as commodity price volatility, water rights issues in California, and the increasing frequency of climate-related events like wildfires and droughts. Over the next 3-5 years, consumption will likely shift towards financing technology and equipment that improves efficiency and sustainability, rather than simple expansion. Loan demand could see a catalyst from government programs promoting sustainable agriculture or from a favorable turn in commodity cycles. The competitive landscape is limited to a few specialized players, and customers choose lenders based on deep industry expertise and multi-generational relationships, areas where Plumas is strong. The number of banks with true agricultural expertise is decreasing, solidifying the position of established players. The most significant future risk is a severe, multi-year drought in its operating region. This would devastate the financial health of its agricultural borrowers, leading to significant credit losses. Given California's climate trends, the probability of this risk materializing is medium.
Finally, Plumas's deposit franchise is foundational but faces growth challenges. Current consumption is shifting away from low-cost checking and savings accounts towards higher-yielding products like Certificates of Deposit (CDs) and money market accounts, a trend driven by the high-rate environment. This is constrained by customer inertia and the convenience of keeping operating accounts with their primary lender. Over the next 3-5 years, the challenge will be to grow core deposits organically without significantly increasing interest expenses. Growth will likely come from deepening relationships with business lending clients, who bring valuable operating accounts. Competition from online banks offering high-yield savings rates over 4.0% will continue to pull funds away from traditional banks. Plumas will likely retain its core relationship-based deposits but will struggle to attract new, rate-sensitive customers. The key risk is a prolonged 'higher for longer' interest rate scenario that forces the bank to reprice a larger portion of its deposit base upwards to prevent outflows, severely compressing its net interest margin. This would directly hit profitability, and the probability of this scenario continuing is medium.
Based on its stock price of $41.38 as of October 27, 2025, Plumas Bancorp (PLBC) is trading within a fair value range of $40 to $45. This assessment is derived from a triangulation of several valuation methods commonly used for financial institutions. While the stock isn't clearly overvalued, significant risks related to its recent performance temper the investment case and suggest a minimal margin of safety at the current price.
The multiples-based approach reveals a mixed picture. PLBC's forward price-to-earnings (P/E) ratio of 7.85 is attractively low compared to the peer average of around 11.8x. However, this low multiple is a direct reflection of sharply negative recent earnings growth, flagging a potential 'value trap'. More telling for a bank is its price-to-tangible-book-value (P/TBV) ratio. At 1.30x, PLBC trades in the middle of its peer range. This valuation seems stretched given the company's return on equity has recently fallen below 10%, a level that typically warrants a multiple closer to 1.0x.
From a cash-flow and yield perspective, the analysis provides further caution. The dividend yield of 2.89% is slightly below the peer average, and a simple dividend discount model suggests the dividend alone does not support the current stock price. While dividend growth has been strong, its sustainability is questionable amid falling earnings. Furthermore, shareholder returns have been eroded by significant share dilution in the most recent quarter. By combining these different angles—with a heavier weighting on the asset-based P/TBV metric—the fair value range of $40 to $45 is established. The current price falls within this range, confirming a 'fairly valued' status but emphasizing the downside risk from negative earnings momentum.
Warren Buffett would likely view Plumas Bancorp as a classic 'fair company at a wonderful price,' but would ultimately choose to avoid it. While the bank's valuation is attractive, trading at a discount to its book value with a Price-to-Book ratio of approximately 0.85x, it fails to meet his high bar for business quality. The bank's profitability is mediocre, with a Return on Assets (ROA) of around 1.0%, which pales in comparison to top-tier peers, and its small scale and concentration in slow-growing rural markets create a narrow competitive moat. For retail investors, the key takeaway is that while PLBC appears cheap, Buffett would prioritize a bank with superior, more durable earning power, even if it meant paying a higher valuation, as true long-term value comes from business quality, not just a low price.
Charlie Munger would view Plumas Bancorp as a simple, understandable community bank but would ultimately decline to invest. He would appreciate its conservative underwriting, reflected in very low net charge-off rates, as a prime example of avoiding the 'stupidity' that often sinks banks. However, its small scale (~$1.6B in assets) leads to a poor efficiency ratio in the mid-60s, far worse than best-in-class peers in the low 50s, indicating it costs too much to run. While the stock appears cheap, trading at a Price-to-Book ratio of ~0.85x, Munger sought great businesses at fair prices, and PLBC's anemic revenue growth of ~3% and geographic concentration make it merely a fair business at a cheap price. Munger would rather pay a fair price for a superior operation like First Community Bankshares (FCBC), which demonstrates exceptional profitability (ROA >1.4%) and a clear growth strategy.
Regarding capital allocation, Plumas Bancorp primarily returns cash to shareholders through a respectable dividend yielding around 3.0%. Unlike more dynamic peers such as Summit Financial or FCBC, it does not appear to have a significant share buyback program or an active M&A strategy. This passive approach means management is not aggressively reinvesting capital to compound shareholder value, which limits long-term growth prospects.
If forced to choose the best banks, Munger would likely select First Community Bankshares (FCBC) for its elite profitability and disciplined growth, Farmers & Merchants Bancorp (FMCB) for its unparalleled history of safety and conservatism, and Summit Financial Group (SMMF) for its effective growth-by-acquisition strategy at a reasonable price. His decision on PLBC would only change if a new management team demonstrated a credible plan to significantly improve operational efficiency and intelligently deploy capital for growth.
Bill Ackman would likely view Plumas Bancorp as an uninteresting investment, as it fails to meet his criteria for a high-quality, scalable business with a clear catalyst for value creation. While the bank is stable and trades at a modest discount to book value at ~0.85x, it is a small, geographically concentrated institution with limited growth prospects and lacks any significant competitive advantage or pricing power. Ackman typically targets dominant franchises or underperformers ripe for activist-led change, and PLBC is neither; it is a well-managed but strategically stagnant community bank. For retail investors, the key takeaway is that while the stock appears cheap, its lack of growth drivers and scale make it a potential value trap that would not attract an investor like Ackman, who seeks compelling, high-return opportunities.
Plumas Bancorp operates as a classic community bank, focusing on relationship-based banking for individuals and small-to-medium-sized businesses in rural Northern California and Northern Nevada. This deep integration into its local communities is its core competitive advantage. Unlike larger, more impersonal banks, PLBC builds long-term relationships, which fosters customer loyalty and provides a stable, low-cost deposit base. This model has proven resilient, allowing the bank to maintain strong asset quality and navigate economic cycles without the major setbacks that have affected more aggressive lenders. However, this focused strategy is also a key limitation, as the bank's fortunes are intrinsically tied to the economic health of a relatively small and non-diversified geographic area.
When benchmarked against a broader set of regional and community banks, Plumas Bancorp's financial profile reveals a trade-off between safety and growth. Its performance metrics, such as Return on Assets (ROA) and Return on Equity (ROE), are generally solid but rarely lead the pack. These ratios indicate how effectively the bank is using its assets and shareholder funds to generate profit. PLBC's figures are respectable, but they often trail those of peers operating in more dynamic economic regions or those that have achieved greater operational efficiency through scale. This suggests a management team that prioritizes stability and risk management over aggressive expansion, a philosophy that appeals to conservative, income-focused investors.
From an investment perspective, PLBC's smaller size is a double-edged sword. Its market capitalization of under $200 million means it is often overlooked by large institutional investors, which can lead to a valuation that appears inexpensive relative to its earnings and book value. On the other hand, this small scale limits its ability to invest in cutting-edge technology and compete on product breadth with larger institutions. Competitors with assets in the billions can spread their fixed costs over a larger revenue base, achieving better efficiency ratios—a measure of noninterest expense as a percentage of revenue. For PLBC, competing effectively means relying on its service quality and community connection, as it cannot win on price or technology alone.
Bank of Marin Bancorp (BMRC) represents a larger, more affluent regional competitor to Plumas Bancorp, operating primarily in the San Francisco Bay Area. With a market capitalization roughly double that of PLBC and a significantly larger asset base, BMRC benefits from greater scale and a presence in one of the wealthiest markets in the United States. This fundamental difference in operating environment shapes their respective strengths and weaknesses. BMRC's access to high-net-worth clients provides a substantial base for wealth management services and a source of large, low-cost deposits. In contrast, PLBC operates in more rural, economically modest areas, focusing on traditional small business and agricultural lending.
In terms of business and moat, BMRC has a stronger position due to its brand recognition and scale in a prime market. A bank's moat, or durable competitive advantage, often comes from customer loyalty (switching costs) and operational scale. BMRC's brand is well-established in Marin, San Francisco, and Alameda counties, giving it a top 5 market share in deposits in its core Marin County market. This creates high switching costs for its established commercial clients. PLBC enjoys similar loyalty in its own rural markets, but its overall scale ($1.6B in assets vs. BMRC's $4.0B) is a distinct disadvantage, limiting its lending capacity and marketing budget. While both face similar regulatory hurdles as community banks, BMRC's larger operational scale provides a more significant moat. Winner: Bank of Marin Bancorp, due to its superior scale and operation in a more lucrative market.
From a financial statement perspective, the comparison reveals differences in profitability and efficiency. BMRC has historically generated a higher Return on Assets (ROA), often above 1.10%, compared to PLBC's ROA, which hovers around 1.00%. ROA is a key indicator of how well a bank uses its assets to make money. BMRC also benefits from economies of scale, reflected in a more favorable efficiency ratio (typically in the low 60s, versus PLBC's mid-60s). This ratio shows how much it costs to generate a dollar of revenue; a lower number is better. In terms of balance sheet resilience, both banks are well-capitalized with Tier 1 capital ratios well above the 8% regulatory minimum, but BMRC's larger capital base provides a bigger cushion. PLBC maintains a slightly better Net Interest Margin (NIM) at ~3.5% vs BMRC's ~3.2%, indicating it earns more on its loans relative to its deposit costs. Overall Financials winner: Bank of Marin Bancorp, for its superior profitability and efficiency derived from scale.
Analyzing past performance, BMRC has delivered stronger shareholder returns over the long term. Over the past five years, BMRC's total shareholder return (TSR), which includes stock appreciation and dividends, has outpaced PLBC's, though both have faced pressure from the interest rate environment. In terms of growth, BMRC has demonstrated a higher 5-year revenue CAGR of ~4% compared to PLBC's ~3%. However, PLBC has shown more stable earnings growth with less volatility. In risk metrics, both banks have excellent credit quality with very low net charge-off rates, but BMRC's larger size and market diversification provide a slightly lower risk profile. Winner for growth and TSR: BMRC. Winner for stability: PLBC. Overall Past Performance winner: Bank of Marin Bancorp, based on its superior long-term wealth creation for shareholders.
Looking at future growth prospects, BMRC appears better positioned. Its growth is tied to the economically vibrant, albeit competitive, Bay Area. Opportunities in wealth management and specialized commercial lending are more abundant there than in PLBC's rural territories. PLBC's growth is largely dependent on the economic health of smaller communities and its ability to slowly gain market share. Analyst consensus forecasts higher earnings per share (EPS) growth for BMRC over the next two years. While both banks face headwinds from potential economic slowdowns and interest rate uncertainty, BMRC has more levers to pull, including expanding its wealth management arm and penetrating adjacent urban markets. PLBC's path to growth is more incremental and organic. Overall Growth outlook winner: Bank of Marin Bancorp, due to its more dynamic market and diverse revenue opportunities.
In terms of fair value, PLBC often trades at a discount to BMRC, which is logical given its smaller size and lower growth profile. PLBC's Price-to-Book (P/B) ratio is typically around 0.85x, while BMRC's is closer to 1.0x. The P/B ratio is crucial for banks, as it compares the stock price to the underlying value of its assets. A value below 1.0x suggests the stock is trading for less than its stated net worth. PLBC also offers a slightly higher dividend yield of ~3.0% versus BMRC's ~2.8%. From a Price-to-Earnings (P/E) perspective, PLBC's ratio of ~8.5x is lower than BMRC's ~11.0x, making it appear cheaper on an earnings basis. The quality vs. price trade-off is clear: BMRC is a higher-quality institution demanding a premium valuation, while PLBC is a less dynamic bank trading at a discount. Which is better value today: Plumas Bancorp, as its significant discount to book value and higher yield offer a better margin of safety for value-oriented investors.
Winner: Bank of Marin Bancorp over Plumas Bancorp. The verdict is based on BMRC's superior scale, stronger profitability, and more attractive growth prospects derived from its prime location in the San Francisco Bay Area. Its larger asset base of ~$4.0B provides significant operational advantages over PLBC's ~$1.6B, leading to better efficiency and a higher ROA. While PLBC is a well-run, stable community bank with a lower valuation and a respectable dividend, its geographic concentration in rural markets presents a notable weakness and limits its long-term potential. The primary risk for BMRC is the high cost of operating and intense competition in its market, but its established brand and access to affluent clients provide a durable competitive edge. This positions BMRC as the stronger overall investment for those seeking a balance of quality and growth.
Sierra Bancorp (BSRR), the parent company of Bank of the Sierra, is a direct and formidable competitor to Plumas Bancorp, operating in the adjacent and economically significant Central Valley of California. With an asset base of approximately $4.0 billion, BSRR is more than twice the size of PLBC, giving it a substantial scale advantage. This comparison pits PLBC's rural, mountain-focused strategy against BSRR's deep penetration into California's agricultural heartland. While both are traditional community banks, BSRR's larger footprint and focus on agricultural and commercial real estate lending in a more populous region create a different risk and growth profile.
Regarding business and moat, Sierra Bancorp holds a distinct advantage. Its moat is built on its extensive branch network and deep expertise in agricultural lending, a specialized and relationship-driven field. BSRR has over 35 branches across Central California, giving it a significant physical presence and brand recognition (top 10 deposit market share in several counties). This scale allows for greater operational efficiencies compared to PLBC's network of 14 branches. While PLBC has strong switching costs with its local customers, BSRR's ability to offer larger loans and a wider array of commercial services gives it an edge in attracting and retaining more substantial business clients. Both face similar regulatory environments, but BSRR's larger scale makes it a stronger competitor. Winner: Sierra Bancorp, due to its greater scale, dominant regional presence, and specialized lending expertise.
Financially, Sierra Bancorp demonstrates the benefits of its larger size, although PLBC holds its own in certain areas. BSRR consistently generates a higher net income, driven by a larger loan portfolio. However, PLBC often boasts a superior Net Interest Margin (NIM), with its NIM at ~3.5% compared to BSRR's, which is often closer to 3.3%. This indicates PLBC is more profitable on a per-loan basis. On the other hand, BSRR's efficiency ratio is typically better, in the low 60s versus PLBC's mid-60s, showcasing its ability to control costs more effectively across a larger revenue base. For profitability, BSRR's Return on Assets (ROA) of ~0.90% is slightly lower than PLBC's ~1.00%, suggesting PLBC is more efficient with its assets. Both maintain strong balance sheets with capital ratios far exceeding regulatory requirements. Overall Financials winner: Plumas Bancorp, by a narrow margin, for its superior margins and asset profitability despite its smaller size.
In a review of past performance, both banks have navigated the challenging interest rate environment with competence. Over the last five years, BSRR has achieved slightly higher revenue growth, with a 5-year CAGR of around 4.5% versus PLBC's ~3%, fueled by acquisitions and organic loan growth in its markets. However, in terms of total shareholder return (TSR), PLBC has often been more stable, experiencing lower volatility and a smaller maximum drawdown during market downturns. BSRR's stock can be more cyclical due to its exposure to agriculture and commercial real estate. Both banks have consistently grown their dividends. Winner for growth: BSRR. Winner for risk-adjusted returns: PLBC. Overall Past Performance winner: A tie, as BSRR's superior growth is offset by PLBC's greater stability and lower risk profile.
For future growth, Sierra Bancorp has a clearer path forward. Its operating region, the Central Valley, has a more diverse and faster-growing economy than PLBC's rural territories. Growth drivers for BSRR include expansion in agricultural technology lending, small business administration (SBA) loans, and potential acquisitions of smaller banks. Management has a track record of successfully integrating acquisitions, a growth lever unavailable to PLBC at its current scale. PLBC's growth is more constrained, relying on the gradual economic development of its existing communities. Analyst expectations generally favor BSRR for higher long-term earnings growth. The primary risk for BSRR is its concentration in agriculture, which is susceptible to drought and commodity price fluctuations. Overall Growth outlook winner: Sierra Bancorp, for its more dynamic market and proven acquisition strategy.
Valuation metrics present a compelling case for Plumas Bancorp being the cheaper stock. PLBC trades at a Price-to-Book (P/B) ratio of approximately 0.85x, a significant discount to its tangible net worth. BSRR typically trades at a P/B ratio closer to 1.0x. This gap suggests the market assigns a higher value to BSRR's growth prospects and scale. On a Price-to-Earnings (P/E) basis, PLBC is also cheaper, with a P/E of ~8.5x compared to BSRR's ~10x. BSRR offers a higher dividend yield at ~4.5% versus PLBC's ~3.0%, which may attract income investors. The quality vs. price decision involves weighing BSRR's better growth against PLBC's steeper discount. Which is better value today: Plumas Bancorp, as its discount to book value is substantial, offering a greater margin of safety for investors wary of economic cyclicality.
Winner: Sierra Bancorp over Plumas Bancorp. This verdict is driven by BSRR's significant advantages in scale, market opportunity, and growth potential. With an asset base more than double the size of PLBC's, BSRR can serve a broader range of customers and fund larger projects, particularly in its agricultural lending niche. Its operation in the economically diverse Central Valley provides a stronger foundation for long-term expansion compared to PLBC's slower-growing rural markets. While PLBC is a more profitable and conservatively valued bank, its smaller size and geographic limitations represent a structural weakness that caps its upside potential. BSRR's primary risk is its economic dependence on the cyclical agricultural sector, but its proven ability to manage these risks and execute a growth strategy makes it the more compelling long-term investment.
Farmers & Merchants Bancorp (FMCB) is a venerable, family-run institution based in Lodi, California, with a history stretching back over a century. Like Plumas Bancorp, it embodies a conservative, community-first banking ethos. However, with an asset base of over $5.5 billion, FMCB operates on a significantly larger scale and serves a mix of agricultural and urban communities in California's Central Valley and East Bay areas. This comparison pits two conservatively managed banks against each other, with the key differentiator being FMCB's greater size and slightly more diverse market exposure.
Regarding their business and moat, FMCB has a stronger position rooted in its long history and larger scale. Its brand, synonymous with stability and trust for generations, creates powerful switching costs, particularly with long-standing family-run business and farm clients. FMCB’s moat is its reputation for conservative underwriting and being a 'fortress' balance sheet bank, a claim supported by its incredible record of never having a losing quarter. It has a larger branch network (~32 locations) than PLBC (~14 locations) and a top 5 deposit market share in its core San Joaquin County market. While PLBC has a strong local brand, FMCB's multi-generational reputation and larger asset base give it a more durable competitive advantage. Winner: Farmers & Merchants Bancorp, due to its superior brand heritage, larger scale, and fortress-like reputation.
Financially, FMCB's conservatism is evident, leading to a mixed comparison with PLBC. FMCB is known for its exceptionally strong balance sheet, maintaining capital ratios that are among the highest in the industry, far exceeding regulatory minimums. This focus on safety, however, can suppress profitability metrics. FMCB's Return on Assets (ROA) is often around 0.9%, slightly below PLBC's ~1.0%. This is because FMCB maintains higher levels of liquidity and lower loan-to-deposit ratios. PLBC, while still conservative, is managed more for profitability. PLBC's Net Interest Margin (NIM) of ~3.5% is typically superior to FMCB's, which can dip below 3.0%. FMCB has a better efficiency ratio due to its scale. Overall Financials winner: Plumas Bancorp, as it achieves better profitability and margins while still maintaining a strong and safe balance sheet.
Historically, both banks have prioritized stability over rapid growth. Neither has pursued the aggressive acquisition strategies of other regional banks. Over the past five years, both banks have delivered modest single-digit revenue growth. FMCB's EPS growth has been slightly more consistent due to its larger, more diversified earnings base. In terms of shareholder returns, both are seen as slow-and-steady performers. FMCB's key risk metric is its stellar credit quality; its net charge-off rate is consistently near zero, even lower than PLBC's already excellent record. This ultra-low risk profile is its defining characteristic. Winner for growth: Even. Winner for risk management: FMCB. Overall Past Performance winner: Farmers & Merchants Bancorp, for its unparalleled record of stability and risk control over many decades.
Looking ahead, future growth for both banks is expected to be slow and organic. FMCB's growth will come from gradual market share gains in the Central Valley and East Bay, leveraging its reputation to attract risk-averse customers. It has been slowly expanding its footprint, but at a deliberate pace. PLBC's growth is similarly tied to the economic fortunes of its smaller, rural communities. Neither bank is likely to deliver high-octane growth. However, FMCB's presence in slightly more dynamic economic areas gives it a marginal edge. The risk for both is being left behind by more technologically adept and aggressive competitors. Overall Growth outlook winner: Farmers & Merchants Bancorp, by a slight margin due to operating in larger and more economically diverse markets.
Valuation often reflects FMCB's reputation for safety, as it typically trades at a premium to PLBC. FMCB's Price-to-Book (P/B) ratio is often around 1.0x to 1.1x, while PLBC trades at a distinct discount of ~0.85x. This premium for FMCB is the market's price for its 'sleep well at night' quality. On a Price-to-Earnings (P/E) basis, FMCB's multiple of ~12x is also higher than PLBC's ~8.5x. Both offer competitive dividend yields, but FMCB has a longer history of consistent dividend payments. The quality vs. price choice is between FMCB's pristine safety record at a fair price versus PLBC's higher profitability at a discounted price. Which is better value today: Plumas Bancorp, as its combination of higher profitability (ROA) and a lower P/B ratio presents a more attractive value proposition for investors willing to accept slightly more risk.
Winner: Farmers & Merchants Bancorp over Plumas Bancorp. The decision rests on FMCB's superior scale, unparalleled safety record, and stronger brand heritage. Its 100+ year history of prudent management has built an exceptionally strong balance sheet and a reputation that creates a formidable competitive moat. While PLBC is more profitable on a percentage basis (higher ROA and NIM), FMCB's larger asset base ($5.5B vs $1.6B) generates a much larger stream of absolute earnings. The primary risk for FMCB is that its conservatism may lead to missed growth opportunities, but for many investors, its role as a bastion of stability is its greatest strength. PLBC is a well-run bank, but it cannot match the long-term track record and fortress-like quality of FMCB.
Summit Financial Group, Inc. (SMMF) provides an interesting out-of-state comparison for Plumas Bancorp. Operating primarily in West Virginia and Virginia, SMMF is a community bank with an asset base of approximately $4.5 billion, making it significantly larger than PLBC. Despite the geographic distance, SMMF shares a focus on community-based commercial and retail banking. This comparison highlights how different regional economies and management strategies can impact the performance of similarly focused banks, with SMMF showcasing a more aggressive growth-by-acquisition strategy.
In terms of business and moat, Summit Financial has built its competitive advantage through a combination of local relationships and strategic acquisitions. SMMF has a strong presence in its core markets in the Eastern Panhandle of West Virginia, with a top 3 deposit share in several counties. Its moat is derived from this local scale and its successful integration of smaller community banks, which expands its network and customer base. PLBC’s moat is purely organic, built on deep roots in a static market. SMMF’s scale ($4.5B in assets vs. PLBC's $1.6B) allows for a broader product offering and greater lending capacity. While both banks face similar regulatory landscapes, SMMF’s proven ability to execute M&A gives it a stronger, more dynamic moat. Winner: Summit Financial Group, Inc., due to its larger scale and growth-oriented business model.
An analysis of their financial statements shows SMMF to be a more profitable and efficient operator. SMMF consistently posts a Return on Assets (ROA) in the 1.2-1.3% range, which is superior to PLBC's ~1.0%. This indicates that SMMF's management is more effective at deploying its assets to generate profits. Furthermore, SMMF's efficiency ratio is often below 60%, a strong result that reflects the cost synergies achieved from its acquisitions and contrasts favorably with PLBC's mid-60s ratio. Both banks maintain healthy balance sheets, but SMMF's higher profitability allows it to build capital at a faster rate. PLBC's main advantage is a slightly higher Net Interest Margin (NIM) at ~3.5% vs SMMF's ~3.4%, but this is not enough to offset SMMF's other strengths. Overall Financials winner: Summit Financial Group, Inc., for its superior profitability and operational efficiency.
Reviewing past performance, SMMF has a clear history of superior growth. Over the last five years, SMMF has delivered a revenue CAGR of over 15%, fueled by its active acquisition strategy. This dwarfs PLBC's organic growth rate of ~3%. This rapid growth has translated into strong EPS growth and has been rewarded by the market with a superior total shareholder return (TSR) over the same period. PLBC, in contrast, offers stability and lower volatility, which may appeal to more risk-averse investors. However, for investors focused on growth and wealth compounding, SMMF's track record is far more impressive. Winner for growth and TSR: SMMF. Winner for stability: PLBC. Overall Past Performance winner: Summit Financial Group, Inc.
Looking at future growth, SMMF's prospects appear much brighter than PLBC's. SMMF's management has an explicit strategy of continuing to acquire smaller banks within and adjacent to its current footprint. This provides a clear and repeatable path to increasing assets and earnings. The banking market in its region remains fragmented, offering ample M&A opportunities. PLBC's growth is limited to the slow organic expansion of its local economy. While SMMF's strategy carries integration risk, its successful track record mitigates this concern. Analyst estimates project double-digit EPS growth for SMMF, far exceeding the low-single-digit expectations for PLBC. Overall Growth outlook winner: Summit Financial Group, Inc.
From a valuation perspective, the market awards SMMF a premium for its superior growth and profitability, but it remains reasonably priced. SMMF's Price-to-Book (P/B) ratio is typically around 1.0x, compared to PLBC's discount at ~0.85x. Its Price-to-Earnings (P/E) ratio of ~9x is only slightly higher than PLBC's ~8.5x, which seems low given its much higher growth rate. SMMF also offers a competitive dividend yield of around 3.5%. The quality vs. price assessment strongly favors SMMF; for a very small valuation premium, an investor gets a significantly faster-growing and more profitable company. Which is better value today: Summit Financial Group, Inc., as its P/E ratio does not fully reflect its superior growth and profitability profile compared to PLBC.
Winner: Summit Financial Group, Inc. over Plumas Bancorp. SMMF is the clear winner due to its superior execution of a growth-by-acquisition strategy, which has resulted in stronger financial performance, higher profitability, and a more compelling outlook. Its ability to consistently generate an ROA above 1.2% and maintain an efficiency ratio below 60% demonstrates a high level of operational excellence. PLBC is a stable community bank, but its passive, organic-only approach has led to stagnant growth and a business that is falling behind more dynamic peers. The primary risk for SMMF is a poorly executed acquisition, but its history suggests this risk is well-managed. SMMF offers investors a superior combination of growth, profitability, and value.
Based on industry classification and performance score:
Plumas Bancorp operates a classic community banking model, excelling in its geographically focused market of Northeastern California and Northwestern Nevada. The bank's primary strength lies in its deep local relationships, which translate into a sticky, low-cost deposit base and specialized lending niches in SBA and agriculture. However, this geographic concentration creates significant risk tied to the local economy, and the business is heavily dependent on interest income with limited fee diversification. The investor takeaway is mixed; Plumas has a durable, traditional moat but lacks the diversification to protect it from regional downturns or sharp changes in interest rate policy.
Plumas remains heavily dependent on traditional spread income from loans, as its noninterest income from fees is underdeveloped and contributes a small portion of overall revenue.
This is a notable weakness in Plumas Bancorp's business model. Its noninterest income typically accounts for only 15-20% of total revenue, which is BELOW the average for regional banks that have more developed wealth management, mortgage banking, or treasury services. While the bank generates some fees from service charges and its SBA lending activities (through the sale of the guaranteed portion of loans), these streams are not large enough to meaningfully offset fluctuations in its core net interest margin. This heavy reliance on spread income makes the bank's earnings more vulnerable to compression when interest rates fall or when its funding costs rise faster than asset yields. The lack of a substantial, recurring fee income stream limits its revenue diversification.
The bank's deposit base is highly granular and diversified across local individuals and small businesses, with minimal reliance on risky, less-stable funding sources.
Plumas exhibits a healthy and safe deposit mix. The vast majority of its funding comes from a broad base of local retail and small business customers, which are inherently more stable than institutional or out-of-market funds. Critically, the bank has very little to no reliance on brokered deposits, which are rate-sensitive 'hot money' that can exit quickly. Its depositor concentration is also very low, with its top depositors representing a small, single-digit percentage of total deposits. This granular structure ensures that the bank is not overly dependent on any single customer or funding channel, making its balance sheet more resilient to market shocks. This conservative and diversified funding approach is a hallmark of a well-managed community bank.
The bank has successfully cultivated deep expertise in specialized lending areas like SBA and agriculture, which provides a competitive edge, pricing power, and higher credit quality.
Plumas Bancorp's focused lending strategy is a significant strength. The bank is consistently ranked as a top SBA lender in its operating regions, demonstrating a clear and defensible niche. SBA-guaranteed loans reduce credit risk and generate fee income, differentiating Plumas from more generalized lenders. Furthermore, its expertise in agricultural lending, tailored to the specific needs of its rural communities, creates very sticky, long-term customer relationships. A significant portion of its commercial real estate portfolio is also in owner-occupied properties, which historically have lower default rates. This disciplined focus on niches where it has true expertise allows the bank to compete on more than just price, supporting stronger credit quality and returns over the long term.
The bank boasts a high-quality, low-cost deposit base with a strong mix of noninterest-bearing accounts, making its funding significantly cheaper and more stable than many peers.
A key strength for Plumas is its exceptional deposit franchise. Its percentage of noninterest-bearing deposits has historically hovered around 35-40% of total deposits, which is significantly ABOVE the typical regional bank average of 25-30%. This provides a substantial amount of zero-cost funding, leading to a very low overall cost of deposits, even in a rising rate environment. For example, its cost of total deposits remained well below 1% through much of the recent tightening cycle, a figure many competitors could not match. Additionally, its level of uninsured deposits is managed prudently, often remaining below 35%, which reduces the risk of deposit flight during times of market stress. This sticky, low-cost funding is a powerful competitive advantage that directly supports superior profitability.
Plumas Bancorp maintains a small but efficient branch network that secures a dominant deposit market share in its core rural counties, creating a strong local scale advantage.
Plumas Bancorp's strength lies in its focused physical presence. With approximately 15 branches, it has achieved a #1 or #2 deposit market share in most of the rural California counties it serves. While the total number of branches is small, its deposits per branch are robust, recently estimated at over 130 million dollars, which is IN LINE with or slightly ABOVE many efficient community bank peers. This indicates good productivity from its existing footprint without the high overhead of a sprawling network. This dense local concentration allows Plumas to build deep relationships and gather deposits effectively, forming a key part of its community banking moat. The primary risk is that this entire network is concentrated in a specific geographic region, making it vulnerable to localized economic downturns.
Plumas Bancorp's recent financial statements present a mixed picture. The bank shows strong growth in its core earnings from lending, with net interest income jumping over 33% year-over-year in the latest quarter. It also operates efficiently, keeping costs well below industry norms. However, a sharp increase in the provision for credit losses from $0.86 million to $5.37 million in one quarter raises a significant red flag about loan quality, driving down recent profitability. For investors, the takeaway is mixed; while core operations appear solid, the sudden rise in credit risk warrants caution.
The bank maintains a solid funding and liquidity profile with a healthy loan-to-deposit ratio, though key regulatory capital metrics were not provided.
Plumas Bancorp appears to have a stable liquidity and capital foundation, though a full assessment is limited by the absence of regulatory ratios like CET1. The bank's loans-to-deposits ratio was 81.3% in the most recent quarter ($1480 million in net loans vs. $1820 million in deposits), which is a healthy level that suggests it is not overly aggressive in its lending and is well-funded by its depositor base. This is generally considered strong for a community bank. Furthermore, its tangible common equity as a percentage of total assets is 9.95% ($221.74 million / $2229 million), indicating a solid layer of high-quality capital to absorb potential losses. While the lack of specific regulatory capital figures prevents a definitive pass, the available balance sheet metrics point towards adequate capitalization and prudent liquidity management.
A sudden and significant increase in the provision for loan losses in the latest quarter raises a major red flag about deteriorating credit quality.
Credit quality has emerged as a primary concern for Plumas Bancorp. In the third quarter of 2025, the bank set aside $5.37 million as a provision for loan losses. This is a dramatic increase from just $0.86 million in the previous quarter and $1.2 million for the entire 2024 fiscal year. Such a sharp rise in provisions typically signals that management anticipates higher loan defaults in the near future. While the bank's total allowance for credit losses of $19.56 million represents 1.30% of its gross loans, a seemingly adequate level, the recent surge in provisioning is a forward-looking indicator of risk that cannot be ignored. Without data on nonperforming loans or net charge-offs, investors are left to weigh this negative signal heavily. The magnitude of this increase warrants a failure for this factor.
The bank shows some vulnerability to interest rate changes, with unrealized losses on its securities portfolio equal to over 7% of its tangible equity.
Plumas Bancorp's balance sheet is exposed to fluctuations in interest rates. In the latest quarter, the bank reported -$16.49 million in accumulated other comprehensive income (AOCI), which primarily reflects unrealized losses on its investment securities portfolio. This amount represents 7.4% of its tangible common equity ($221.74 million), which is a notable figure. These paper losses reduce the bank's tangible book value and could become real losses if the securities need to be sold. While the bank's funding mix includes a solid base of non-interest-bearing deposits ($862 million, or 47% of total deposits), which helps keep funding costs down, the unrealized losses are a clear sign of sensitivity to the current rate environment. Because of this tangible drag on its equity, this factor is a concern.
The bank's core earning power is strong, demonstrated by robust year-over-year growth in net interest income, though rising deposit costs are also evident.
Plumas Bancorp's ability to profit from its core lending and investing activities appears solid. Net interest income (NII), the difference between what the bank earns on assets and pays on liabilities, grew an impressive 33.41% year-over-year in the third quarter of 2025, reaching $25.17 million. This substantial growth indicates the bank is successfully pricing its loans and investments to its advantage in the current interest rate environment. However, there are signs of pressure. Interest paid on deposits nearly doubled from $2.28 million in Q2 to $4.62 million in Q3, showing that funding costs are rising quickly. While specific Net Interest Margin (NIM) data is not available, the strong top-line NII growth is a clear positive and a testament to the bank's core earnings engine.
The bank operates very efficiently, with a cost structure that is significantly better than typical industry benchmarks, supporting its profitability.
Plumas Bancorp demonstrates strong discipline in managing its expenses. The bank’s efficiency ratio, which measures non-interest expenses as a percentage of revenue, was 52.0% in the most recent quarter. This is an excellent result, as a ratio below 60% is generally considered very efficient for community banks. This means the bank spends just 52 cents to generate each dollar of revenue, allowing more income to flow to the bottom line. This strong performance has been consistent, with the ratio at 51.3% in the prior quarter and for the full year 2024. The bank's non-interest expenses, such as salaries and occupancy costs, appear well-controlled relative to its revenue generation, which is a key strength that supports its underlying profitability.
Plumas Bancorp has a solid track record of organic growth and profitability over the last five years. The bank has demonstrated strong earnings per share (EPS) growth, with a CAGR of nearly 15% from 2020-2024, and has consistently increased its dividend. Its main strengths are this steady profitability, reflected in a high average Return on Equity above 20%, and prudent balance sheet management. However, its performance lags more dynamic peers who have grown faster through acquisitions, and its smaller scale results in weaker cost efficiency. The investor takeaway is mixed; PLBC is a stable, income-generating community bank, but its past performance suggests it is not a high-growth investment.
The bank has achieved steady, consistent organic growth in its core loans and deposits over the last five years while maintaining a prudent and stable balance sheet structure.
Plumas Bancorp's history shows healthy, fundamental growth. Net loans have expanded from $700.1 million in FY2020 to $1,005 million in FY2024, representing a compound annual growth rate (CAGR) of about 9.5%. Similarly, total deposits grew from $974 million to $1,371 million over the same period, a CAGR of 8.9%. This balanced growth in both sides of the balance sheet is a positive sign of winning business in its local markets.
Crucially, the bank's loan-to-deposit ratio has remained stable, moving from 71.9% in 2020 to 73.3% in 2024. A stable ratio in this range indicates that management is not taking on excessive risk by lending out too much of its deposit base. This track record reflects disciplined execution of a traditional community banking model focused on organic expansion.
While the bank has achieved strong growth in its net interest income, its historical cost structure is less efficient than larger competitors, representing a key operational weakness.
Plumas Bancorp's core earning power has shown a healthy trend, with Net Interest Income—the profit made from lending—growing steadily from $38.4 million in FY2020 to $74.24 million in FY2024. This demonstrates a consistent ability to profitably grow its loan book. This is a fundamental strength for any bank.
However, the bank's past performance on cost control appears to be a weakness. As highlighted in comparisons with peers, PLBC's efficiency ratio, which measures non-interest expenses as a percentage of revenue, is typically higher than larger competitors like TriCo Bancshares or First Community Bankshares. This is a common disadvantage for smaller banks that lack the economies of scale to spread fixed costs like technology and compliance over a larger asset base. This historical inefficiency has been a drag on profitability compared to what it could be at a larger scale.
The company has an impressive track record of earnings growth, with EPS growing at a double-digit rate over the last five years, driven by very high returns on equity.
Plumas Bancorp has delivered strong earnings growth for its shareholders. Earnings per share (EPS) grew from $2.80 in FY2020 to $4.85 in FY2024, which translates to a compound annual growth rate (CAGR) of 14.7%. While growth was not perfectly linear, with a minor dip in FY2024 from a peak of $5.08 in FY2023, the overall trend is decisively positive.
This strong earnings performance is underpinned by the bank's high profitability. Its Return on Equity (ROE), which measures how effectively it generates profit from shareholder funds, has been excellent. The average ROE over the last three fiscal years (2022-2024) was a very strong 20.3%. This consistent ability to generate high returns is the engine behind its historical EPS growth and a sign of strong management execution.
Based on consistently low provisions for credit losses relative to its loan book, Plumas Bancorp appears to have a strong history of disciplined underwriting and stable credit quality.
While direct data on non-performing loans and net charge-offs is not provided, the Provision for Loan Losses on the income statement serves as a reliable proxy for credit health. Over the past five years, this provision has remained low and stable, fluctuating between $1.1 million and $3.2 million annually. In FY2024, the provision was just $1.2 million against a gross loan portfolio of over $1 billion, which is a very low figure and suggests minimal credit issues.
Furthermore, the bank's allowance for loan losses has grown from $9.9 million in 2020 to $13.2 million in 2024, keeping pace with the growth in the loan portfolio. This indicates that management has been prudently setting aside reserves to cover potential future losses. This consistent, conservative approach to credit risk management is a key strength and a hallmark of a well-run community bank.
Plumas Bancorp has an excellent track record of rewarding shareholders with consistently growing dividends, though it has not engaged in share buybacks, resulting in minor dilution.
The bank has demonstrated a strong commitment to returning capital to shareholders through dividends. The dividend per share has tripled over the last five years, growing from $0.36 in FY2020 to $1.08 in FY2024. This growth has been supported by rising earnings, keeping the payout ratio at a conservative and sustainable level, which stood at 22.24% in FY2024. A low payout ratio means the dividend is well-covered by profits and has ample room to grow further.
The primary weakness in its capital return history is the absence of share repurchase programs. Instead of buying back stock, the number of shares outstanding has crept up from 5.18 million in 2020 to 5.90 million in 2024. This gradual dilution can be a drag on per-share value over time. However, for income-oriented investors, the consistent and rapid dividend growth is a significant historical strength.
Plumas Bancorp's future growth appears modest and is intrinsically tied to the economic health of its niche markets in Northeastern California and Northwestern Nevada. The bank's primary growth driver will continue to be disciplined loan origination, particularly in its specialized SBA and agricultural segments. However, significant headwinds include intense competition for deposits, which pressures margins, and a heavy reliance on interest income with underdeveloped fee-generating businesses. Compared to more diversified regional peers, Plumas's growth potential is limited by its geographic concentration and lack of scale. The investor takeaway is mixed; the bank offers stability and a solid community footing but is unlikely to deliver significant growth over the next 3-5 years.
The bank is positioned for modest, low-to-mid single-digit loan growth, driven by its strong community relationships and specialized lending niches, reflecting a prudent but unexceptional outlook.
Plumas Bancorp's growth is directly linked to the health of its local economies. Management typically guides for conservative, low-to-mid single-digit loan growth, which is realistic in the current economic environment but not indicative of high-growth potential. Strengths in SBA and agricultural lending provide a solid foundation for consistent origination, and the loan pipeline remains steady due to deep-rooted customer relationships. However, this growth is confined to its existing geographic footprint and is unlikely to accelerate dramatically without M&A or significant economic expansion in its region. This steady, high-quality loan growth is a positive, but its modest pace warrants a conservative assessment.
Plumas maintains strong capital ratios, but lacks a clear and active strategy for deploying this capital through strategic M&A or consistent, meaningful share buybacks to drive shareholder value.
The bank is well-capitalized, with a CET1 ratio comfortably above regulatory requirements, providing it with strategic flexibility. However, there have been no recent M&A announcements, and its share repurchase program, while sometimes active, is not consistently used as a primary tool for returning capital. For a community bank of its size, disciplined M&A is often a key path to growth in earnings per share and geographic diversification. Without a visible pipeline of deals or a more aggressive buyback plan, the bank's strong capital position remains underutilized from a growth perspective, suggesting a conservative and potentially passive approach to capital deployment.
The bank operates an efficient, geographically-focused branch network but lacks clearly articulated plans for significant digital transformation or cost savings, suggesting a reactive rather than proactive growth strategy.
Plumas Bancorp's strategy appears focused on maintaining its existing physical footprint, which holds a dominant market share in its core rural counties. While its deposits per branch are healthy, there is little public guidance on future branch optimization, new digital user growth targets, or technology-driven cost-saving initiatives. In an era where digital adoption is a key driver of efficiency and customer acquisition, the absence of clear targets suggests Plumas may lag peers in leveraging technology to lower its efficiency ratio and attract new, digitally-savvy customers. This lack of a forward-looking optimization plan presents a risk of falling behind more technologically advanced competitors.
While its low-cost deposit base offers some protection, the bank's net interest margin faces significant pressure from rising funding costs, with limited visibility on a return to expansion.
Like most of the banking industry, Plumas has experienced net interest margin (NIM) compression as the cost of deposits has risen faster than the yield on its assets. Although its high concentration of noninterest-bearing deposits provides a buffer, the bank's NIM has declined from its recent peaks. Management guidance often points towards stabilization rather than expansion in the near term. Without a significant decline in market interest rates or a major shift in its asset mix towards higher-yielding loans, the outlook for meaningful NIM improvement is limited. This pressure on its primary profitability driver is a key headwind for future earnings growth.
The bank's heavy reliance on net interest income is a key weakness, and there are no stated growth targets or significant initiatives aimed at diversifying revenue through fee-based services.
As noted in its business model, Plumas generates a low percentage of its revenue from noninterest income, typically below 20%. The bank has not provided investors with specific growth targets for wealth management, treasury services, or other fee-generating lines of business. This lack of focus on diversification leaves its earnings highly vulnerable to compression in the net interest margin due to interest rate fluctuations. Competitors are actively growing these more stable, higher-margin revenue streams. Plumas's failure to articulate a clear strategy for expanding its fee income is a significant shortcoming in its future growth outlook.
Plumas Bancorp appears fairly valued, but faces a cautious outlook. The stock's low forward price-to-earnings ratio is an attractive feature compared to peers. However, this is significantly undermined by recent sharp declines in profitability and a price-to-tangible book multiple that seems high for its current, lower return on equity. While the stock price is near its 52-week low, this reflects fundamental weakness rather than a clear buying opportunity. The investor takeaway is mixed to negative; the apparent value is clouded by deteriorating performance.
The stock's price-to-tangible book value of 1.30x is not supported by its declining profitability, as measured by Return on Equity.
Price-to-tangible book value (P/TBV) is a primary valuation tool for banks, comparing the stock price to the hard, tangible assets on its balance sheet. PLBC's P/TBV is 1.30x ($41.38 price vs. $31.90 TBV per share). A key driver of a fair P/TBV multiple is the bank's profitability, specifically its Return on Equity (ROE). While PLBC's ROE for the full year 2024 was a strong 17.6%, it has recently fallen to 9.38%. A P/TBV of 1.30x may be justified for a bank earning a high-teens ROE, but it appears expensive for a bank earning less than 10%. The valuation is not aligned with the most recent, and weaker, performance.
The current Price-to-Book multiple of 1.17x is not justified by the recent drop in Return on Equity to 9.38%, indicating a misalignment between price and performance.
A fundamental principle of bank valuation is that a higher ROE justifies a higher P/B multiple. Investors are willing to pay more for a company that generates higher returns from its equity base. Plumas Bancorp's ROE for the fiscal year 2024 was a strong 17.6%, which would have supported its P/B ratio. However, the most recent "Current" ROE has declined significantly to 9.38%. This level of profitability does not adequately support a P/B multiple of 1.17x. The market appears to be pricing the stock based on its historical profitability rather than its current, weaker earnings power, creating a mismatch that represents a risk for new investors. A bank with an ROE below 10% would typically trade closer to or even below its book value.
The low P/E ratios are deceptive, as they are overshadowed by sharply negative recent earnings growth, indicating potential value trap characteristics.
At first glance, PLBC's P/E ratios appear attractive. The TTM P/E is 9.83 and the forward P/E is even lower at 7.85, both below the regional bank average of around 11.7x. A lower P/E ratio can signal that a stock is cheap relative to its earnings. However, this valuation is challenged by the company's recent performance. EPS growth in the last two quarters has been deeply negative, at -44.27% and -7.9% respectively. This sharp decline in profitability contradicts the optimism implied by the low forward P/E and suggests that analyst estimates may not have fully incorporated the recent downturn. Paying a low multiple for a company with shrinking earnings is a classic value trap scenario.
The respectable dividend yield is undermined by recent and significant shareholder dilution, resulting in a negative total capital return.
Plumas Bancorp offers a dividend yield of 2.89%, which is reasonable, and maintains a low, healthy payout ratio of 28.4%. This ratio indicates that the dividend is well-covered by earnings and has room to grow. However, the concept of total capital return includes not just dividends but also share buybacks. In PLBC's case, there has been significant share dilution recently. The number of shares outstanding increased by 17.81% in the most recent quarter, leading to a negative buybackYieldDilution of -5.27%. This dilution means each share now represents a smaller piece of the company, which is a direct negative for shareholder value and offsets the benefit of the dividend.
While the P/E ratio is lower than peers, the price-to-tangible book is only average and the dividend yield is slightly below the peer group, offering no clear relative discount.
When compared to its peers in the regional and community banking sector, Plumas Bancorp presents a mixed valuation picture. Its TTM P/E of 9.83 is below the industry average, which is around 11.7x. However, its P/TBV of 1.30x is in line with the peer median of 1.1x to 1.35x, suggesting it is not cheap on an asset basis. Furthermore, its dividend yield of 2.89% is slightly less attractive than the 3.0% to 3.3% average for community banks. Because there is no significant discount across multiple key metrics, and considering the recent poor performance, the stock does not stand out as a compelling value relative to its competitors.
The primary macroeconomic risk for Plumas Bancorp is a potential economic slowdown or recession. Such an event would likely increase loan defaults among its small business and individual customers, leading to higher credit losses for the bank. Interest rates also pose a significant, dual-sided risk. If interest rates remain high for an extended period, it could strain borrowers' ability to repay loans, especially those with variable rates. Conversely, if the Federal Reserve begins to cut rates significantly, the bank's net interest margin—the crucial gap between what it earns on loans and pays on deposits—could compress, directly reducing its fundamental profitability.
A major company-specific risk for Plumas is its geographic concentration. With operations centered in northeastern California and northern Nevada, the bank's fortunes are heavily dependent on the vitality of these local economies. A downturn in a key local industry, the departure of a major employer, or a natural disaster like a wildfire could disproportionately harm its loan portfolio and deposit base compared to a more geographically diversified institution. This local focus is paired with intense industry-wide competition. Plumas must constantly contend with large, national banks that have superior scale, marketing budgets, and technology platforms, as well as agile financial technology (fintech) companies that are unbundling traditional banking services.
Looking forward, Plumas Bancorp faces balance sheet and regulatory challenges. Like many regional banks, a significant portion of its loan book may be concentrated in sectors like commercial real estate, which is facing structural headwinds that could increase future default risk. On the funding side, competition for deposits remains fierce, potentially forcing the bank to pay higher rates to retain customers, thereby pressuring margins. Finally, the regulatory landscape has become stricter following the regional bank turmoil of 2023. Increased scrutiny from regulators regarding capital adequacy, liquidity, and interest rate risk management will likely lead to higher compliance costs and could constrain the bank's operational flexibility and growth initiatives in the years ahead.
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