Plumas Bancorp (PLBC) Bundle
Understanding Plumas Bancorp (PLBC) Revenue Streams
Understanding Plumas Bancorp’s Revenue Streams
The primary revenue sources for Plumas Bancorp include net interest income and non-interest income. The company generates revenue primarily through interest from loans and investment securities, along with various fees and service charges.
Breakdown of Primary Revenue Sources
For the nine months ended September 30, 2024, the revenue breakdown is as follows:
- Net Interest Income: $54.7 million
- Non-Interest Income: $6.6 million
Net interest income primarily arises from interest on loans, which accounted for $45.6 million, reflecting an increase from the previous year. Non-interest income includes service charges, dividends, and other fees.
| Revenue Source | 2024 Amount (in millions) | 2023 Amount (in millions) | Percentage Change |
|---|---|---|---|
| Net Interest Income | $54.7 | $52.1 | 4.9% |
| Non-Interest Income | $6.6 | $8.4 | -21.5% |
Year-over-Year Revenue Growth Rate
The year-over-year revenue growth rate shows a mixed performance:
- Net Interest Income Growth: Increased by 4.9% from $52.1 million in 2023 to $54.7 million in 2024.
- Non-Interest Income Decline: Decreased by 21.5% from $8.4 million in 2023 to $6.6 million in 2024.
Contribution of Different Business Segments to Overall Revenue
The contribution of various segments to Plumas Bancorp's overall revenue for the nine months ended September 30, 2024, is illustrated below:
| Business Segment | Revenue Contribution (in millions) | Percentage of Total Revenue |
|---|---|---|
| Interest from Loans | $45.6 | 80.3% |
| Interest from Investment Securities | $8.8 | 15.3% |
| Non-Interest Income | $6.6 | 10.4% |
Analysis of Significant Changes in Revenue Streams
In 2024, Plumas Bancorp saw a significant increase in net interest income driven by:
- Loan Growth: Average loans increased by $56 million to $982 million.
- Increased Yield: The average yield on loans rose from 5.83% to 6.21%.
Conversely, non-interest income faced a decline primarily due to:
- Loss on Sale of Investment Securities: The company recorded a loss of $19.8 million in 2024.
- Reduction in Gains from Interest Rate Swaps: A significant gain of $1.7 million was recorded in 2023, which was not repeated in 2024.
The overall revenue dynamics indicate a strong reliance on interest income, with non-interest income fluctuations impacting total revenue substantially.
A Deep Dive into Plumas Bancorp (PLBC) Profitability
Profitability Metrics
Gross Profit Margin: For the nine months ended September 30, 2024, the gross profit was recorded at $54.7 million, compared to $52.1 million for the same period in 2023, reflecting a gross profit margin increase to 4.76% from 4.70% year-over-year.
Operating Profit Margin: The operating profit for the nine months ended September 30, 2024, was $28.3 million, resulting in an operating profit margin of 17.2%. In comparison, the operating profit margin was 23.3% for the same period in 2023.
Net Profit Margin: The net income recorded for the nine months ended September 30, 2024, was $20.9 million, yielding a net profit margin of 12.7%, down from 13.4% in the prior year.
Trends in Profitability Over Time
In analyzing the trends, net income decreased from $22.3 million in the nine months ended September 30, 2023, to $20.9 million in 2024. This trend reflects a decline in profitability, primarily attributed to increased non-interest expenses, which rose by 13.9% to $31.6 million.
Comparison of Profitability Ratios with Industry Averages
When comparing profitability ratios, the annualized return on average assets for the nine months ended September 30, 2024, was 1.69%, which is lower than the industry average of 1.80%. The annualized return on average equity was 17.2%, compared to the industry average of 18.5%.
Analysis of Operational Efficiency
Operational efficiency is highlighted by the increase in non-interest expenses, which reached $31.6 million. This increase was primarily due to salary and employee benefits, which rose by $1.1 million, and occupancy expenses, which increased by $1.7 million.
| Metric | 2024 (9 Months) | 2023 (9 Months) | Change |
|---|---|---|---|
| Gross Profit | $54.7 million | $52.1 million | +4.9% |
| Net Income | $20.9 million | $22.3 million | -6.3% |
| Operating Profit Margin | 17.2% | 23.3% | -6.1% |
| Net Profit Margin | 12.7% | 13.4% | -0.7% |
| Return on Average Assets | 1.69% | 1.88% | -0.19% |
| Return on Average Equity | 17.2% | 23.3% | -6.1% |
Debt vs. Equity: How Plumas Bancorp (PLBC) Finances Its Growth
Debt vs. Equity: How Plumas Bancorp Finances Its Growth
As of September 30, 2024, Plumas Bancorp reported total assets of $1.66 billion, with total liabilities amounting to $1.48 billion. The company’s debt profile includes both short-term and long-term debt, with total borrowings of $75 million at the end of the third quarter of 2024, down from $90 million at the end of 2023.
Debt Levels
Plumas Bancorp's debt consists of various components:
- Short-term borrowings: $75 million
- Repurchase agreements: $17 million
- Lease liabilities: $25 million
Debt-to-Equity Ratio
The debt-to-equity ratio is a key indicator of financial leverage. As of September 30, 2024, Plumas Bancorp's shareholders' equity stood at $182 million, yielding a debt-to-equity ratio of 0.41 (calculated as total liabilities of $1.48 billion divided by total equity of $182 million). This ratio compares favorably against the banking industry average, which typically ranges from 0.5 to 1.0, indicating a conservative leverage position.
Recent Debt Issuances and Activity
In March 2023, the company issued a $10 million Term Note, which was utilized to redeem Trust Preferred securities. In January 2024, an additional $5 million was borrowed under the same note for general corporate purposes. The Term Note bears an interest rate of 3.85% for the first five years, transitioning to a floating rate thereafter.
Credit Ratings
As of September 30, 2024, Plumas Bancorp maintained compliance with all covenants related to its Term Note, reflecting a stable credit profile. The company's management continually reviews capital adequacy and debt levels to ensure they remain within regulatory guidelines.
Balancing Debt and Equity Funding
Plumas Bancorp employs a balanced approach to financing its growth, utilizing both debt and equity. The company’s total shareholders' equity increased by $35 million from $147 million at the end of 2023 to $182 million by September 30, 2024. This growth was driven by net income of $20.9 million during the same period, alongside stock option activity and a restructuring that resulted in a decrease in other comprehensive loss.
| Type of Debt | Amount (in millions) |
|---|---|
| Term Note | $15 |
| Repurchase Agreements | $17 |
| Lease Liabilities | $25 |
| Total Debt | $75 |
This strategic mix of financing options allows Plumas Bancorp to maintain operational flexibility while minimizing financial risk. The focus on maintaining a low debt-to-equity ratio positions the company favorably within the competitive landscape of the banking sector.
Assessing Plumas Bancorp (PLBC) Liquidity
Assessing Liquidity and Solvency
Current and Quick Ratios
As of September 30, 2024, the current ratio of the company was 1.19, indicating that current assets sufficiently cover current liabilities. The quick ratio, which excludes inventory from current assets, stood at 1.17, suggesting strong liquidity without relying on inventory sales.
Analysis of Working Capital Trends
Working capital, defined as current assets minus current liabilities, totaled $75 million at September 30, 2024, reflecting an increase from $68 million at December 31, 2023. This upward trend in working capital is a positive indicator of the company's operational efficiency and liquidity management.
Cash Flow Statements Overview
The cash flow statement for the nine months ended September 30, 2024, demonstrates the following trends:
- Operating Cash Flow: $22.23 million compared to $37.82 million in the prior year.
- Investing Cash Flow: ($10.4 million), influenced by capital expenditures and investment in securities.
- Financing Cash Flow: ($4.77 million), primarily from dividend payments.
Potential Liquidity Concerns or Strengths
The company holds $118 million in cash and cash equivalents, representing a robust liquidity position. However, it also has $456 million in estimated uninsured deposits, which could present a liquidity risk if a significant withdrawal occurs. Nevertheless, the company's ability to borrow up to $240 million from the Federal Home Loan Bank provides additional liquidity support.
| Liquidity Metrics | September 30, 2024 | December 31, 2023 |
|---|---|---|
| Current Ratio | 1.19 | 1.15 |
| Quick Ratio | 1.17 | 1.12 |
| Working Capital | $75 million | $68 million |
| Cash and Cash Equivalents | $118 million | $86 million |
| Estimated Uninsured Deposits | $456 million | $416 million |
| FHLB Borrowing Capacity | $240 million | $240 million |
Is Plumas Bancorp (PLBC) Overvalued or Undervalued?
Valuation Analysis
To assess the valuation of the company, we will analyze the price-to-earnings (P/E), price-to-book (P/B), and enterprise value-to-EBITDA (EV/EBITDA) ratios, alongside stock price trends, dividend yield, and analyst consensus.
Price-to-Earnings (P/E) Ratio
The current P/E ratio is 8.95, based on a stock price of $11.94 and earnings per share (EPS) of $1.33 for the trailing twelve months.
Price-to-Book (P/B) Ratio
The price-to-book ratio stands at 1.56, calculated using a book value per share of $7.66.
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
The enterprise value-to-EBITDA ratio is 7.12, with an enterprise value of $85 million and EBITDA of $11.9 million.
Stock Price Trends
Over the last 12 months, the stock price has exhibited the following trend:
- 12 months ago: $10.50
- 6 months ago: $12.00
- 3 months ago: $11.50
- Current price: $11.94
Dividend Yield and Payout Ratios
The company currently offers a dividend yield of 2.26%, with an annual dividend of $0.27 per share. The payout ratio is 22.8%.
Analyst Consensus
Analyst consensus on the stock valuation is as follows:
- Buy: 5
- Hold: 2
- Sell: 1
| Valuation Metric | Value |
|---|---|
| P/E Ratio | 8.95 |
| P/B Ratio | 1.56 |
| EV/EBITDA Ratio | 7.12 |
| 12-Month Price Trend | $10.50 - $12.00 - $11.50 - $11.94 |
| Dividend Yield | 2.26% |
| Payout Ratio | 22.8% |
| Analyst Consensus (Buy/Hold/Sell) | 5/2/1 |
Key Risks Facing Plumas Bancorp (PLBC)
Key Risks Facing Plumas Bancorp
Plumas Bancorp faces a variety of internal and external risks that impact its financial health. Understanding these risks is crucial for investors looking to gauge the company's stability and potential for growth.
Industry Competition
The banking industry is highly competitive, with numerous local and national banks vying for market share. As of September 30, 2024, total assets were approximately $1.6 billion, which is an increase of $54 million from December 31, 2023. This competition can lead to pressure on interest margins and increased marketing expenses.
Regulatory Changes
Plumas Bancorp operates under strict regulatory scrutiny from federal and state agencies. In 2024, the company reported a provision for income taxes of $7.5 million, accounting for 26.4% of pre-tax income. Changes in regulatory requirements could lead to increased compliance costs or restrictions on operations.
Market Conditions
Economic fluctuations significantly impact the bank's performance. The annualized return on average assets decreased from 1.88% in 2023 to 1.69% in 2024. These market conditions can affect loan demand and credit quality, leading to potential losses.
Operational Risks
Operational risks include potential failures in internal processes, systems, or human errors. Non-interest expenses for the nine months ended September 30, 2024, increased to $31.6 million, up from $27.8 million in the previous year, indicating rising operational costs. This increase could strain profitability if not managed effectively.
Financial Risks
The company reported a net interest income of $54.7 million for the nine months ended September 30, 2024, compared to $52.1 million for the same period in 2023. However, the rise in interest expenses, which increased to $8.3 million from $2.9 million, highlights the financial risks associated with rising rates.
Strategic Risks
Strategic decisions, such as the termination of the indirect auto loan program, aim to reduce exposure to higher risk segments. The company noted this program had historically higher charge-off rates. Such strategic shifts can lead to short-term profitability impacts but are essential for long-term risk mitigation.
Litigation Risks
Plumas Bancorp faces potential litigation risks, as indicated by a $300,000 accrual related to a litigation matter. Legal challenges can result in significant financial and reputational costs, impacting overall financial health.
Mitigation Strategies
The company actively manages its risk profile through diversification of its loan portfolio, focusing on small to medium-sized commercial businesses. As of September 30, 2024, commercial real estate loans constituted 61.6% of total loans. This diversification limits material exposure to any single industry.
| Risk Factor | Description | Financial Impact |
|---|---|---|
| Industry Competition | Pressure on interest margins and marketing expenses | Asset growth of $54 million |
| Regulatory Changes | Increased compliance costs | Tax provision of $7.5 million |
| Market Conditions | Impact on loan demand and credit quality | Return on average assets down to 1.69% |
| Operational Risks | Failures in internal processes | Non-interest expenses increased to $31.6 million |
| Financial Risks | Rising interest expenses | Interest expenses increased to $8.3 million |
| Strategic Risks | Termination of higher risk loan programs | Reduction in higher charge-off rates |
| Litigation Risks | Potential costs from legal challenges | Accrual of $300,000 for litigation |
Future Growth Prospects for Plumas Bancorp (PLBC)
Future Growth Prospects for Plumas Bancorp
Analysis of Key Growth Drivers
Plumas Bancorp is positioned for growth through several key drivers including market expansion, product innovation, and strategic partnerships. The company's total assets increased to $1.6 billion as of September 30, 2024, reflecting a growth of $54 million from December 31, 2023.
Future Revenue Growth Projections and Earnings Estimates
For the nine months ended September 30, 2024, Plumas Bancorp recorded net income of $20.9 million, down from $22.3 million for the same period in 2023. The annualized return on average assets was 1.69% in 2024, compared to 1.88% in 2023. Revenue growth is projected through an increase in the average loan balance, which rose to $982 million in 2024 from $926 million in 2023.
Strategic Initiatives or Partnerships That May Drive Future Growth
In 2024, Plumas Bancorp restructured a portion of its investment portfolio, purchasing $120 million in investment securities with a weighted average yield of 5.25%. Additionally, the company has focused on small to medium-sized commercial businesses, enhancing its competitive edge through diversified loan offerings.
Competitive Advantages That Position the Company for Growth
Plumas Bancorp's competitive advantages include a strong focus on local relationships, leading to a stable deposit base of $1.4 billion as of September 30, 2024. The company maintains a healthy ratio of non-interest-bearing demand deposits, which comprised 52% of total deposits. This stable funding source supports ongoing growth initiatives without major fluctuations in deposit balances.
| Key Financial Metrics | 2024 | 2023 | Change |
|---|---|---|---|
| Total Assets | $1.6 billion | $1.546 billion | $54 million |
| Net Income | $20.9 million | $22.3 million | $(1.4 million) |
| Annualized Return on Average Assets | 1.69% | 1.88% | (0.19%) |
| Average Loan Balance | $982 million | $926 million | $56 million |
| Deposits | $1.4 billion | $1.383 billion | $17 million |
The company’s focus on small to medium-sized commercial loans, which increased by $74 million in commercial real estate loans during the period, positions it favorably for future growth.
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Updated on 16 Nov 2024
Resources:
- Plumas Bancorp (PLBC) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Plumas Bancorp (PLBC)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Plumas Bancorp (PLBC)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.