Plumas Bancorp has a market cap of $13.9 million; its shares were traded at around $2.9 with and P/S ratio of 0.5.
Highlight of Business Operations:Earnings for the first quarter of 2010 were $134 thousand compared to a net loss of $1.28 million for the quarter ended March 31, 2009. This $1.4 million increase in earnings includes a $1.4 million decrease in the provision for loan losses, a $557 thousand increase in non-interest income, and a $595 thousand decline in non-interest expense, partially offset by a decline of $205 thousand in net interest income and a $936 thousand decrease in the benefit for income taxes.
During 2009 we recorded a loan loss provision of $14.5 million including $2.9 million during the first quarter of 2009. Most of the 2009 provision for loan losses can be attributed to declines in collateral value and increases in net charges-offs related to our real estate construction and land development loan portfolio. During 2009 we significantly reduced our exposure to these loans as demonstrated by a decline in loan balances in this portfolio of $35.7 million from $73.8 million at December 31, 2008 to $38.1 million at December 31, 2009. We further reduced these balances to $37.1 million at March 31, 2010. While the first quarter loan loss is much higher than we would have liked, we are pleased with the progress made in reducing our construction and land development portfolio. See Provision for Loan Losses and Analysis of Allowance for Loan losses for a further discussion of our loan loss provision.
Total assets at March 31, 2010 were $510 million, a decrease of $18 million from the $528 million at December 31, 2009. Cash and due from banks increased by $9.4 million from $59.5 million at December 31, 2009 to $68.9 million at March 31, 2010. Funding was provided by a $22.4 million decline in investment securities from $87.9 million at December 31, 2009 to $65.5 million at March 31, 2010. Included in the decline in investment securities were sales totaling $14 million with a gain on sale of $570 thousand. Net loans decreased by $5 million which included net charge-offs of $2.8 million during the three months ended March 31, 2010. Short-term borrowings, which totaled $20 million at December 31, 2009, matured in January of 2010 resulting in an $18 million decline in total liabilities. Deposits decreased slightly from $433 million at December 31, 2009 to $432 million at March 31, 2010. The decline in borrowings and deposits was slightly offset by a $3.1 million increase in other liabilities. Included in other liabilities is a $3.4 million secured borrowing which represents SBA loans sold but subject to a 90 day premium recourse provision. Under ASC Topic 860, Accounting for Transfers of Financial Assets, we are required to maintain this liability and the related loans on balance sheet until the premium recourse period has passed. Once the 90 days has passed and no premium recourse remains we will remove the sold loans from assets, derecognize the secured borrowing and record the gain on sale.
Interest income decreased $167 thousand or 3%, to $5.4 million for the three months ended March 31, 2010 primarily as a result of a reduction in loan balances. Interest and fees on loans decreased $333 thousand to $4.8 million for the three months ended March 31, 2010 as compared to $5.1 million during the first quarter of 2009. The Companys average loan balances were $328 million for the three months ended March 31, 2010, down $34.6 million, or 10%, from $362 million for the same period in 2009. The average rate earned on the Companys loan balances increased 19 basis points to 5.90% during the first three months of 2010 compared to 5.71% during the first three months of 2009. The increase in loan yield reflects a decline in nonperforming loan balances. Nonperforming loans totaled $18.2 million at March 31, 2010 down from $30.9 million at March 31, 2009. Interest income on investment securities increased by $161 thousand as an increase in average balances of $38.2 million, from $45.9 million for the quarter ended March 31, 2009 to $84.1 million during the current quarter, was partially offset by a decline in yield of 105 basis points. Much of the decline in yield is related to the increase in investment balance as additions to the investment portfolio had a lower yield than investments purchased prior to March 31, 2009.
Interest expense on long-term borrowings, which at March 31, 2010 consisted of two $10 million FHLB advances, totaled $64 thousand. The first advance matures on November 23, 2011 and bears interest at 1.00%. The second advance matures on November 23, 2012 and bears interest at 1.60%. Interest rates on both advances are fixed until maturity. There were no long-term borrowings outstanding during the first quarter of 2009. Interest on short-term borrowings decreased by $12 thousand to $5 thousand related to a decline in average balance of $22.5 million from $26.5 million during the 2009 quarter to $4 million during the current quarter. Interest expense paid on junior subordinated debentures, which fluctuates with changes in the 3-month London Interbank Offered Rate (LIBOR) rate, decreased by $36 thousand as a result of a decrease in the LIBOR rate.
Net charge-offs as an annualized percentage of average loans increased from 0.53% during the quarter ended March 31, 2009 to 3.47% during the current quarter; however, we experienced a significant decline in nonperforming loans from $30.9 million at March 31, 2009 to $18.2 million at March 31, 2010. While we incurred a significant increase in net charge-offs most of the amounts charged off had been incorporated in the allowance for loan losses at December 31, 2009 as specific reserves on impaired loans. The allowance for loan losses totaled $8.3 million at March 31, 2010 and $9.6 million at March 31, 2009. The decrease in the allowance for loan losses from March 31, 2009 is attributable to a $1.9 million decrease in specific reserves related to impaired loans from $4.9 million at March 31, 2009 to $3.0 million at March 31, 2010. General reserves increased by $553 thousand to $5.3 million at March 31, 2010. The allowance for loan losses as a percentage of total loans decreased slightly from 2.67% at March 31, 2009 to 2.53% at March 31, 2010.
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