Stonegate Capital Partners Updates Coverage On Plumas Bancorp (Nasdaq: PLBC) 2022 Q4

DALLAS, TX -- March 6th, 2023 -- Plumas Bancorp (Nasdaq: PLBC): Stonegate Capital Partners updates coverage on Plumas Bancorp (Nasdaq: PLBC). The full report can be accessed by clicking on the following link: https://stonegateinc.com/reports/PLBC_4Q22.pdf

Company Summary:

• Continued growth: Assets slightly increased to $1.62B at 4Q22 end, up from $1.61B at 4Q21. Deposits also increased to $1.46B in 4Q22 from $1.44B in 4Q21. Non-performing assets have decreased by $4.2M Y/Y to $1.2M at 4Q22, a decrease of 78%. Additionally, investment securities have grown by $139M Y/Y to $445M.
• Strong core deposits: Plumas has a strong history of increasing its demand, savings, and money market deposits from local businesses and individuals. In total, deposits grew by 1% Y/Y to reach $1.5B on Dec 31, 2022. Since 2018, the Company has grown deposits at a ~19% CAGR.
• Diversified loan portfolio: PLBC provides a range of lending services including retail consumer, automobile, home equity, commercial real estate, commercial and industrial term loans, as well as SBA government-guaranteed loans, agricultural loans, and credit lines. The breadth of loan diversification helps Plumas to avoid becoming overly concentrated in a single industry.
• Non-interest earnings income growth: In addition to the Company’s primary source of revenue, interest income, Plumas also derived ~$11.0M of its revenue from a variety of noninterest income items including loan servicing fees, service charges on deposit accounts, interchange revenue and gains on sales of SBA 7a loans. Non-interest income has increased in FY22 by $2.3M.
• Successful growth strategy: The Company continued to expand its branch operations into targeted growth markets of Northern California and Northwestern Nevada over the years with great success including the purchase of Mutual of Omaha Bank’s Carson City Branch in October 2018 and the acquisition of Feather River Bancorp in 2021. Most recently the company announced the opening of its Chico, California branch that will open in 2Q23.
• Valuation: We use a comp analysis on P/E and P/BV to help frame valuation. Using a P/E range of 10.5x to 11.5x with a mid-point of 11x on our FY23 EPS estimate results in a valuation range of $53.28 to $58.33 with a mid-point of $55.82. Using a P/BV multiple range of 1.6x to 2.0x, we arrive at a valuation range of $32.55 to $40.69 with a mid-point of $36.62. Additional details can be found on page 10.