Plumas Bancorp (NASDAQ:PLBC), the parent company of Plumas Bank, recently announced that its board of directors declared a regular quarterly cash dividend on Plumas Bancorp common stock of $0.27 per share, payable Feb. 15 to stockholders of record as of Feb. 1.
In addition, Plumas Bancorp announced record earnings for the year ended Dec. 31, 2023. For the 12 months ended Dec. 31, 2023, the company reported net income of $29.8 million or $5.08 per share, an increase of $3.3 million, or 13% from $26.4 million or $4.53 per share earned during 2022. Earnings per diluted share increased to $5.02 during the 12 months ended Dec. 31, 2023, up $0.55 from $4.47 during 2022.
Earnings during the fourth quarter of 2023 totaled $7.5 million or $1.28 per share, a decrease of $297,000, or 4% from $7.8 million or $1.34 per share during the fourth quarter of 2022. Diluted earnings per share decreased to $1.27 per share during the three months ended Dec. 31, 2023, down from $1.32 per share during the quarter ended Dec. 31, 2022.
Return on average assets was 1.88% during the 12 months ended Dec. 31, 2023, up from 1.61% during 2022. Return on average equity increased to 23.4% for the 12 months ended Dec. 31, 2023, up from 21.9% during 2022. Return on average assets was 1.87% during the three months ended Dec. 31, 2023, and 1.88% during the three months ended Dec. 31, 2022. Return on average equity decreased to 23.9% for the three months ended Dec. 31, 2023, down from 27.9% during the fourth quarter of 2022.
Balance sheet highlights
The following compares Dec. 31, 2023, to Dec. 31, 2022:
- Cash and due from banks declined by $98 million to $86 million.
- Gross loans, excluding loans held for sale, increased by $47 million, or 5%, to $959 million.
- Investment securities increased by $44 million, or 10%, to $489 million.
- Deposits declined by $124 million, or 9%, to $1.3 billion.
- Total borrowings increased by $80 million to $90 million.
- Shareholders’ equity increased by $28 million, or 24%, to $147 million.
President’s comments
Andrew J. Ryback, director, president and chief executive officer of Plumas Bancorp and Plumas Bank, stated, “As you know, the last year and a half has been a period of rapidly rising rates. This rising rate environment, coupled with another Fed policy, that of quantitative tightening, has resulted in reductions to the money supply and the impairment of banks to generate new deposits and fund new loans.
“In response, we have invested in retooling our lending system and processes for enhanced efficiency and decision making. This change will position us well for future loan growth. As for deposits, we remain disciplined in protecting our lower cost of funds but have offered time deposit specials so that we can compete for new deposits.
“Rapidly rising rates have also put pressure on variable-rate borrowers, creating some elevated loan loss risk in the banking industry. At Plumas, however, we do not expect significant losses because criticized assets are being proactively addressed with advanced preparation of solutions and collaborative monitoring for potential challenges. Additionally, nonperforming loans are well-collateralized.
“In the fourth quarter we terminated our indirect auto loan program. Ending this program, which was our lowest yielding loan segment, also improved our loan loss risk profile since this program had historically higher charge-off rates. Terminating this program also improved our consumer compliance risk profile.
“Another current industry challenge is that of margin compression. Fortunately, at Plumas, our extremely low cost of funds coupled with higher yielding loans has resulted in margin expansion rather than the more typical margin compression experienced by most banks.
“The higher-rate environment presented some opportunities that we took advantage of during 2023. One of those opportunities involved harvesting a significant gain from an interest rate swap while locking in lower-cost borrowing. We also developed a sale leaseback strategy, which we expect to implement in the first quarter of 2024 and which will provide an opportunity to restructure our investment portfolio by divesting lower-yielding securities and replacing them with higher-yielding securities. This possible restructuring of our investment portfolio has the potential to enhance the bank’s interest income streams for years to come.
“Looking forward, the Fed is signaling some rate decreases in the coming year, which we anticipate will result in improved demand for loans. We also anticipate stabilization of deposit balances as clients may be less likely to self-fund with savings and more likely to borrow with rates declining. As the banking environment for community banks improves, we expect to continue to outperform the industry and will explore avenues for strategic opportunities that align with our long-term growth objectives.
“We would like to thank our clients, communities, employees and investors for their continued support which empowers Plumas Bank to be here. For good,” Ryback concluded.
More details are available on the Plumas Bank website.
Information submitted by Plumas Bank