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Stonegate Capital Partners Updates Coverage On Plumas Bancorp (NASDAQ: PLBC)

DALLAS, TX / ACCESSWIRE / November 24, 2020 / Plumas Bancorp (NASDAQ:PLBC): The full report can be accessed by clicking on the following link: http://stonegateinc.com/reports/PLBC Q320.pdf

Company Description

Plumas Bancorp (the Company or Plumas) was incorporated in California in 1980 and is the bank holdings company of Plumas Bank; The Company owns all outstanding shares of Plumas Bank. Plumas Bank provides various banking products and services for small and middle market businesses and individuals in Northeastern California and Northwestern Nevada with a focus on personal service. Plumas offers an array of deposit products such as checking, savings, and retirement accounts in addition to its loan portfolio consisting of commercial, industrial, agricultural, and construction loans. Plumas also provides consumer, home equity, and auto loans. Plumas currently operates 13 branches including 11 in California and two in Nevada. Plumas also operates 3 lending offices located in Northern California and Southern Oregon.

SUMMARY

  • Profits Continue Despite COVID - The Company reported Q320 net income of $3.7M ($0.71/share), down 8% compared to Q319 due to a reduction in interest income and increased provisions for loan losses. The Company's interest income was down 2% y/y due to declines in market interest rates, which was partially offset by a decrease in interest expenses. The provision for loan losses increased $0.5M during the three months ended September 30, 2020, or 167% due to the pandemic and anticipated future economic conditions. Nonetheless, Plumas has had a strong history of profitable operation that we would expect to continue.

  • Strong Core Deposits - Plumas has a strong history of increasing its demand, savings, and money market deposits from local businesses and individuals. This continued throughout Q320 as total deposits grew by 26% to reach $997.5M at September 30, 2020. Since 2015, the Company has grown deposits at a ~14% 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 to a single industry.

  • Non-Interest Earnings Income Growth- In addition to the Company's primary source of revenue, interest income, Plumas also derives ~ 18% 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. Plumas has grown non-interest income ~8% since 2015.

  • 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.

  • Valuation - We use a comp analysis on P/E and P/TBV to help frame valuation. Using a P/E range of 9x to 11x with a mid-point of 10x on our FY20 EPS estimate results in a valuation range of $24.75 to $30.25 with a mid-point of $27.50. Using a P/TBV multiple range of 1.4x to 1.7x, we arrive at a valuation range of $26.00 to $31.50 with a mid-point of $29.75. Additional details can be found on page 8.

About Stonegate Capital Partners

Stonegate Capital Partners is a Dallas-based corporate advisory firm dedicated to serving the specialized needs of small-cap public companies. Since our inception, our mission has been to find innovative, undervalued public companies for our network of leading institutional investors who seek high-quality investment opportunities.

CONTACT:
Stonegate Capital Partners
info@stonegateinc.com
(214) 987-4121

SOURCE: Stonegate Capital Partners



View source version on accesswire.com:
https://www.accesswire.com/618221/Stonegate-Capital-Partners-Updates-Coverage-On-Plumas-Bancorp-NASDAQ-PLBC

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