##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
 FORM 10-Q (Mark One)x
    
    QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THESECURITIES EXCHANGE ACT OF 1934FOR THE QUARTERLY PERIOD ENDED March 31, 2004o
    
    TRANSITION REPORT UNDER SECTION 13 OR 15 (D) OF THESECURITIES EXCHANGE ACT OF 1934FOR THE TRANSITION PERIOD FROM    TO
 COMMISSION FILE NUMBER: 000-49883 PLUMAS BANCORP  California
(State or Other Jurisdiction of Incorporation or
Organization)
    
    75-2987096
(I.R.S. Employer Identification No.)
 35 S. Lindan Avenue, Quincy, California
(Address of Principal Executive Offices)
    
    95971
(Zip Code)
 Registrants Telephone Number, Including Area Code (530) 283-7307 Indicated by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. x o
 Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). o x
 Indicate the number of shares outstanding of each of the issuers classes of
common stock, as of May 10, 2004; 3,259,742 shares




---



TABLE OF CONTENTS  PART I  FINANCIAL INFORMATIONITEM 1. FINANCIAL STATEMENTCONSOLIDATED BALANCE SHEETCONSOLIDATED STATEMENT OF INCOMECONSOLIDATED STATEMENT OF CASH FLOWSNOTES TO CONSOLIDATED FINANCIAL STATEMENTSPART I  FINANCIAL INFORMATIONITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKITEM 4. CONTROLS AND PROCEDURESPART II  OTHER INFORMATIONITEM 1. LEGAL PROCEEDINGSITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDSITEM 3. DEFAULTS UPON SENIOR SECURITIESITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERSITEM 5. OTHER INFORMATIONITEM 6. EXHIBITS AND REPORTS ON FORM 8-KSIGNATURESEXHIBIT 31.1EXHIBIT 31.2EXHIBIT 31.3EXHIBIT 32.1EXHIBIT 32.2EXHIBIT 32.3    Table of Contents  
 PART I  FINANCIAL INFORMATION 
 ITEM 1. FINANCIAL STATEMENT
 PLUMAS BANCORP 
 CONSOLIDATED BALANCE SHEET
  Unaudited
    
    AuditedMarch 31,
    
    December 31,2004
    
    2003AssetsCash and due from banks
    
    $
    23,183
    
    
    $
    24,717Federal funds sold
    
    
    19,390
    
    
    
    5,295Loans held for sale
    
    
    
    
    
    
    276Investment securities (market value of $116,094 at
March 31, 2004 and $116,102 at December 31, 2003)
    
    
    115,792
    
    
    
    115,883Loans, less allowance for loan losses of $2,643 at
March 31, 2004 and $2,564 at December 31, 2003 (Notes
3 and 4)
    
    
    211,700
    
    
    
    214,863Bank premises and equipment, net
    
    
    10,181
    
    
    
    10,306Intangible assets, net
    
    
    2,167
    
    
    
    2,238Accrued interest receivable and other assets
    
    
    14,503
    
    
    
    16,684Total assets
    
    $
    396,916
    
    
    $
    390,262Liabilities and Shareholders EquityDeposits:Non-interest bearing
    
    $
    96,391
    
    
    $
    96,830Interest bearing
    
    
    264,149
    
    
    
    259,012Total deposits
    
    
    360,540
    
    
    
    355,842Accrued interest payable and other liabilities
    
    
    3,092
    
    
    
    2,485Junior subordinated deferrable interest debentures
    
    
    6,186
    
    
    
    6,186Total liabilities
    
    
    369,818
    
    
    
    364,513Commitments and contingencies (Note 4)
    
    
    
    
    
    
    Shareholders equity (Notes 5 and 8):Serial preferred stock, no par value; 10,000,000
shares authorized, no shares issued or outstanding
    
    
    
    
    
    
    Common stock, no par value; 15,000,000 shares
authorized; issued and outstanding  3,258,728
shares at March 31, 2004 and 3,242,027 shares at
December 31, 2003
    
    
    3,989
    
    
    
    3,945Retained earnings
    
    
    22,364
    
    
    
    21,638Accumulated other comprehensive income (Note 6)
    
    
    745
    
    
    
    166Total shareholders equity
    
    
    27,098
    
    

    
    25,749Total liabilities and shareholders equity
    
    $
    396,916
    
    
    $
    390,262
 See notes to consolidated financial statements. 2




---



##### Table of Contents



PLUMAS BANCORP 
 CONSOLIDATED STATEMENT OF INCOME
  UnauditedFor the Three MonthsEnded March 31,2004
    
    2003Interest Income:Interest and fees on loans
    
    $
    3,886
    
    
    $
    3,968Interest on investment securities:Taxable
    
    
    745
    
    
    
    509Exempt from Federal income taxes
    
    
    71
    
    
    
    33Interest on Federal funds sold
    
    
    33
    
    
    
    32Interest on loans held for sale
    
    
    1
    
    
    
    10Total interest income
    
    
    4,736
    
    
    
    4,552Interest Expense:Interest on deposits
    
    
    634
    
    
    
    789Other
    
    
    73
    
    
    
    77Total interest expense
    
    
    707
    
    
    
    866Net interest income before provision for loan losses
    
    
    4,029
    
    
    
    3,686Provision for Loan Losses
    
    
    150
    
    
    
    225Net interest income after provision for loan losses
    
    
    3,879
    
    
    
    3,461Non-Interest Income:Service charges
    
    
    611
    
    
    
    469Gain on sale of loans, net
    
    
    49
    
    
    
    29Gain on sale of available-for-sale investment securities, net
    
    
    90
    
    
    
    62Loss on sale of other real estate and write-off of judgment receivable
    
    
    (53
    )
    
    
    (5
    )Earnings on cash surrender value of life insurance policies
    
    
    107
    
    
    
    54Other income
    
    
    216
    
    
    
    194Total non-interest income
    
    
    1,020
    
    
    
    803Non-Interest Expense:Salaries and employee benefits
    
    
    2,210
    
    
    
    1,772Occupancy and equipment
    
    
    674
    
    
    
    517Other expense
    
    
    877
    
    
    
    797Total non-interest expense
    
    
    3,761
    
    
    
    3,086Income before income taxes
    
    
    1,138
    
    
    
    1,178Income Tax Expense
    
    
    412
    
    
    
    462Net income
    
    $
    726
    
    
    $
    716Basic earnings per share (Notes 5 and 8)
    
    $
    0.22
    
    
    $
    0.22Diluted earnings per share (Notes 5 and 8)
    
    $
    0.22
    
    
    $
    0.22
 See notes to consolidated financial statements. 3




---



##### Table of Contents



PLUMAS BANCORP 
 CONSOLIDATED STATEMENT OF CASH FLOWS
  UnauditedFor the Three MonthsEnded March 31,2004
    
    2003Cash Flows from Operating Activities:Net income
    
    $
    726
    
    
    $
    716Adjustments to reconcile net income to net cash provided by operating
activities:Provision for loan losses
    
    
    150
    
    
    
    225Deferred loan origination fees, net
    
    
    (122
    )
    
    
    10Depreciation, amortization and accretion, net
    
    
    460
    
    
    
    305Net realized gain on available-for-sale investment securities
    
    
    (90
    )
    
    
    (62
    )Amortization of investment security premiums
    
    
    271
    
    
    
    163Accretion of investment security discounts
    
    
    (15
    )
    
    
    (4
    )Net loss on sale of premises and equipment
    
    
    2
    
    
    
    Net loss on sale of other real estate and write-off of judgment receivable
    
    
    53
    
    
    
    5Net decrease in loans held for sale
    
    
    276
    
    
    
    857Increase in cash surrender value of life insurance
    
    
    (90
    )
    
    
    (46
    )Net decrease (increase) in accrued interest receivable and other assets
    
    
    1,819
    
    
    
    (187
    )Net decrease in accrued interest payable and other liabilities
    
    
    607
    
    
    
    216Deferred taxes, net
    
    
    
    
    
    
    Net cash provided by operating activities
    
    
    4,047
    
    
    
    2,198Cash Flows from Investing Activities:Proceeds from matured and called available-for-sale investment securities
    
    
    5,500
    
    
    
    1,500Proceeds from matured and called held-to-maturity investment securities
    
    
    775
    
    
    
    2,000Proceeds from sales of available-for-sale investment securities
    
    
    9,293
    
    
    
    3,648Purchases of available-for-sale investment securities
    
    
    (13,827
    )
    
    
    (9,346
    )Purchases of held-to-maturity investment securities
    
    
    (1,197
    )
    
    
    Proceeds from principal repayments from available-for-sale
government-guaranteed mortgage-backed securities
    
    
    338
    
    
    
    266Proceeds from principal repayments from held-to-maturity
government-guaranteed mortgage-backed securities
    
    
    28
    
    
    
    134Net decrease (increase) in loans
    
    
    3,135
    
    
    
    (2,907
    )Proceeds from sale of other real estate
    
    
    
    
    
    
    40Purchase of premises and equipment
    
    
    (273
    )
    
    
    (131
    )Deposits on single premium cash surrender value life insurance policies
    
    
    
    
    
    
    (220
    )Net cash provided by (used in) investing activities
    
    
    3,772
    
    
    
    (5,016
    )
 Continued on next page. 4




---



##### Table of Contents



PLUMAS BANCORP
CONSOLIDATED STATEMENT OF CASH FLOWS
(In thousands)
(Continued) UnauditedFor the Three MonthsEnded March 31,2004
    
    2003Cash Flows from Financing Activities:Net increase (decrease) in demand, interest bearing and savings deposits
    
    $
    3,700
    
    
    $
    (3,076
    )Net increase (decrease) in time deposits
    
    
    998
    
    
    
    (1,412
    )Proceeds from exercise of stock options
    
    
    44
    
    
    
    110Net cash provided by (used in) financing activities
    
    
    4,742
    
    
    
    (4,378
    )Increase (decrease) in cash and cash equivalents
    
    
    12,561
    
    
    
    (7,196
    )Cash and Cash Equivalents at Beginning of Year
    
    
    30,012
    
    
    
    37,930Cash and Cash Equivalents at End of Period
    
    $
    42,573
    
    
    $
    30,734Supplemental Disclosure of Cash Flow Information:Cash paid during the period for:Interest expense
    
    $
    707
    
    
    $
    838Income taxes
    
    $
    
    
    
    $
    302Non-Cash Investing Activities:Real estate acquired through foreclosure
    
    $
    
    
    
    $
    Net change in unrealized gain on available-for-sale securities
    
    $
    (985
    )
    
    $
    141Non-Cash Financing Activities:Common stock retired in connection with the exercise of stock options
    
    $
    122
    
    
    $
    52
 See notes to consolidated financial statements. 5




---



##### Table of Contents



PLUMAS BANCORP 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  1. GENERAL Plumas Bancorp (the Company) was incorporated on January 17, 2002 and
subsequently obtained approval from various state and federal agencies to be a
bank holding company in connection with the merger of Plumas Bank (the Bank).
The Company became the sole shareholder of the Bank on June 21, 2002 pursuant
to a Plan of Reorganization and Merger Agreement dated April 3, 2002. Pursuant
to that plan, on June 21, 2002 each outstanding share of the Banks common
stock was exchanged for one share of common stock of the Company. The Company
formed Plumas Statutory Trust I for the sole purpose of issuing trust preferred
securities on September 26, 2002. The Bank operates twelve branches in California, including branches in Alturas,
Chester, Fall River Mills, Greenville, Kings Beach, Loyalton, Portola, Quincy,
Susanville, Tahoe City, Truckee and Westwood. The Banks deposits are insured
by the Federal Deposit Insurance Corporation (FDIC) up to applicable legal
limits. The Banks primary source of revenue is generated from providing loans
to customers who are predominately small and middle market businesses and
individuals residing in the surrounding areas. 2. CONSOLIDATED FINANCIAL STATEMENTS The consolidated financial statements include the accounts of the Company and
the accounts of its wholly-owned subsidiary, Plumas Bank. Plumas Statutory
Trust I is not consolidated into the Companys consolidated financial
statements and, accordingly, is accounted for under the equity method. In the
opinion of management, the unaudited consolidated financial statements contain
all adjustments (consisting of only normal recurring adjustments) necessary to
present fairly the Companys financial position at March 31, 2004 and December
31, 2003 and the results of operations and cash flows for the three months
ended March 31, 2004 and 2003. Certain reclassifications have been made to
prior years balances to conform to classifications used in 2004. Certain disclosures normally presented in the notes to the consolidated
financial statements prepared in accordance with accounting principles
generally accepted in the United States of America have been omitted. These
interim financial statements should be read in conjunction with the
consolidated financial statements and notes thereto included in the Companys
2003 Annual Report to Shareholders on Form 10-K. The results of operations for
the three-month period ended March 31, 2004 and 2003 may not necessarily be
indicative of future operating results. In preparing such financial statements, management is required to make
estimates and assumptions that affect the reported amounts of assets and
liabilities as of the date of the balance sheet and revenues and expenses for
the periods reported. Actual results could differ significantly from those
estimates. 3. LOANS Outstanding loans are summarized below: March 31,
    
    December 31,2004
    
    2003Commercial

    
    $
    48,639
    
    
    $
    51,073Agricultural
    
    
    26,550
    
    
    
    26,537Real estate  mortgage
    
    
    67,170
    
    
    
    67,532Real estate  construction and land development
    
    
    25,489
    
    
    
    26,194Consumer
    
    
    46,903
    
    
    
    46,621214,751
    
    
    
    217,957Deferred loans fees, net
    
    
    (408
    )
    
    
    (530
    )Allowance for loan losses
    
    
    (2,643
    )
    
    
    (2,564
    )$
    211,700
    
    
    $
    214,863
 6




---



##### Table of Contents



4. COMMITMENTS AND CONTINGENCIES In the normal course of business, there are various outstanding commitments to
extend credit which are not reflected in the financial statements, including
loan commitments of $63,017,000 and $60,203,000 and letters of credit of
$1,745,000 and $1,802,000 at March 31, 2004 and December 31, 2003,
respectively. Of the loan commitments outstanding at March 31, 2004, $13,446,000 are real
estate construction loan commitments that are expected to fund within the next
twelve months. The remaining commitments primarily relate to revolving lines
of credit or other commercial loans, and many of these are expected to expire
without being drawn upon. Therefore, the total commitments do not necessarily
represent future cash requirements. Each loan commitment and the amount and
type of collateral obtained, if any, are evaluated on an individual basis.
Collateral held varies, but may include real property, bank deposits, debt or
equity securities or business assets. Stand-by letters of credit are conditional commitments written to guarantee the
performance of a customer to a third party. These guarantees are primarily
related to the purchases of inventory by commercial customers and are typically
short-term in nature. Credit risk is similar to that involved in extending
loan commitments to customers and accordingly, evaluation and collateral
requirements similar to those for loan commitments are used. 5. EARNINGS PER SHARE COMPUTATION Basic earnings per share are computed by dividing net income by the weighted
average common shares outstanding for the period. Diluted earnings per share
reflect the potential dilution that could occur if outstanding stock options
were exercised. Diluted earnings per share are computed by dividing net income
by the weighted average common shares outstanding for the period plus the
dilutive effect of options. For the Three MonthsEnded March 31,2004
    
    2003Earnings Per Share:Basic earnings per share
    
    $
    0.22
    
    
    $
    0.22Diluted earnings per share
    
    $
    0.22
    
    
    $
    0.22Weighted Average Number of Shares Outstanding:Basic shares
    
    
    3,250,087
    
    
    
    3,217,940Diluted shares
    
    
    3,357,326
    
    
    
    3,300,254
 6. COMPREHENSIVE INCOME Total comprehensive income for the three months ended March 31, 2004 and 2003
totaled $1,305,000 and $633,000, respectively. Comprehensive income is
comprised of net unrealized gains (losses), net of taxes, on available-for-sale
investment securities, which were $579,000 and $(83,000) for the three months
ended March 31, 2004 and 2003, respectively, together with net income. At March 31, 2004 and December 31, 2003, accumulated other comprehensive income
totaled $745,000 and $166,000, respectively, and is reflected as a component of
shareholders equity. 7. ACCOUNTING PRONOUCEMENTS For a description of significant accounting policies, see Note 2 to the
consolidated financial statements included in the Companys 2003 Annual Report
on Form 10-K. 7




---



##### Table of Contents



8. STOCK-BASED COMPENSATION At March 31, 2004, the Company had two stock-based compensation plans, the
Plumas Bank 2001 and 1991 Stock Option Plans. The Company accounts for these
plans under the recognition and measurement principles of APB Opinion No. 25,
Accounting for Stock Issued to Employees, and related Interpretations. No
stock-based compensation cost is reflected in net income, as all options
granted under these plans had an exercise price equal to the market value of
the underlying common stock on the date of grant. Pro forma adjustments to the Companys consolidated net earnings and earnings
per share are disclosed during the years in which the options become vested.
The following table illustrates the effect on net income and earnings per share
if the Company had applied the fair value recognition provisions of FASB
Statements No. 123, Accounting for Stock-Based Compensation, to stock-based
compensation: For the Three MonthsEnded March 31,2004
    
    2003Net income as reported
    
    $
    726
    
    
    $
    716Deduct: Total stock-based compensation expense
determined under the fair value based method
for all awards, net of related tax effects
    
    
    32
    
    
    
    21Pro forma net income
    
    $
    694
    
    
    $
    695Basic earnings per share  as reported
    
    $
    0.22
    
    
    $
    0.22Basic earnings per share  pro forma
    
    $
    0.21
    
    
    $
    0.22Diluted earnings per share  as reported
    
    $
    0.22
    
    
    $
    0.22Diluted earnings per share  pro forma
    
    $
    0.21
    
    
    $
    0.21
 The fair value of each option grant is estimated on the date of grant using an
option-pricing model with the following assumptions: For the Three Months EndedMarch 31, 2004
    
    March 31, 2003Weighted average fair value of options granted
    
    
    N/A
    
    
    $
    3.91Dividend yield
    
    
    N/A
    
    
    
    1.4
    %Expected volatility
    
    
    N/A
    
    
    
    17.3
    %Risk-free interest rate
    
    
    N/A
    
    
    
    2.6
    %Expected option life in years
    
    
    N/A
    
    
    
    5.0
 There were no option grants made during the three-month period ended March 31,
2004. 8




---



##### Table of Contents



PART I  FINANCIAL INFORMATION 
 ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS Certain matters discussed in this Quarterly Report are forward-looking
statements that are subject to risks and uncertainties that could cause actual
results to differ materially from those projected in the forward-looking
statements. Such risks and uncertainties include, among others, (1)
significant increases in competitive pressures in the financial services
industry; (2) changes in the interest rate environment resulting in reduced
margins; (3) general economic conditions, either nationally or regionally,
maybe less favorable than expected, resulting in, among other things, a
deterioration in credit quality; (4) changes in regulatory environment; (5)
loss of key personnel; (6) fluctuations in the real estate market; (7) changes
in business conditions and inflation; (8) operational risks including data
processing systems failures or fraud; and (9) changes in securities markets.
Therefore, the information set forth herein should be carefully considered when
evaluating the business prospects of Plumas Bancorp. When the Company uses in this Quarterly Report the words anticipate,
estimate, expect, project, intend, commit, believe and similar
expressions, the Company intends to identify forward-looking statements. Such
statements are not guarantees of performance and are subject to certain risks,
uncertainties and assumptions, including those described in this Quarterly
Report. Should one or more of these risks or uncertainties materialize, or
should underlying assumptions prove incorrect, actual results may vary
materially from those anticipated, estimated, expected, projected, intended,
committed or believed. The future results and stockholder values of the
Company may differ materially from those expressed in these forward-looking
statements. Many of the factors that will determine these results and values
are beyond the Companys ability to control or predict. For those statements,
the Company claims the protection of the safe harbor for forward-looking
statements contained in the Private Securities Litigation Reform Act of 1995. INTRODUCTION Plumas Bancorp (the Company) is traded on the OTC Bulletin Board under the
ticker symbol PLBC. The following discussion and analysis sets forth certain
statistical information relating to the Company as of March 31, 2004 and
December 31, 2003 and for the three months ended March 31, 2004 and 2003. This
discussion should be read in conjunction with the financial statements and
related notes included elsewhere in this Quarterly Report on Form 10-Q and the
financial statements and notes thereto included in Plumas Bancorps Annual
Report filed on Form 10-K for the year ended December 31, 2003. OVERVIEW The Companys net income increased $10,000, or 1.4%, to $726,000 for the three
months ended March 31, 2004 from $716,000 for the same period in 2003. The
primary contributors to the increase in net income for the first three months
of 2003 were a $343 thousand increase in net interest income, a $75 thousand
decrease in the provision for loan losses, a $217 thousand increase in
non-interest income and a $50 thousand decrease in the provision for income
taxes, mostly offset by a $675 thousand increase in non-interest expenses. Total assets at March 31, 2004 were $397 million, an increase of $6.7 million,
or 1.7%, from the $390 million at December 31, 2003. The growth in assets was
funded by growth in the Companys deposits. Deposits grew $4.7 million, or
1.3%, to $361 million at March 31, 2004 from the $356 million at December 31,
2003. The return on average assets was 0.74% for the three months ended March 31,
2004 compared to 0.89% for the same period in 2003. The return on average
equity was 10.7% for the three months ended March 31, 2004 compared to 11.9%
for the same period in 2003. Although the Companys earnings increased during
the first three months of 2004 when compared to the same period in 2003, the
continued growth in assets combined with a declining rate environment have
resulted in declines in the return on average asset and 9




---



##### Table of Contents



equity ratios. Total average assets for the three months ended March 31, 2004
increased $69 million, or 21%, from the same period in 2003. Total average
equity for the three months ended March 31, 2004 increased $3 million, or 12%,
from the same period in 2003. RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2004 Net interest income before provision for loan losses.Net interest income, on
a nontax-equivalent basis, was $4.0 million for the three months ended March
31, 2004, an increase of $343,000, or 9%, from $3.7 million for the same period
in 2003. The increase in net interest income was primarily attributed to
volume increases in the Companys average investment balances combined with
declines in rates paid on the Companys deposits, somewhat offset by declines
in the yield on the Companys interest-earning assets. Interest income increased $184,000 or 4%, to $4.7 million for the three months
ended March 31, 2004, up from $4.5 million for the same period in 2003. The
increase in interest income was primarily attributed to volume increases in
investment balances partially offset by falling yields on loan and investment
balances. The Companys average investment balances were $111 million for the
three months ended March 31, 2004, up $46 million, or 71%, from the $65 million
for the same period in 2003. The Companys average loan yield was 7.10% for
the three months ended March 31, 2004, down 45 basis points, or 6%, from the
7.55% yield for the same period in 2003. In addition, the Companys average
investment yield was 2.93% for the three months ended March 31, 2004, down 39
basis points, or 12%, from the 3.32% yield for the same period in 2003. Interest expense decreased $159,000, or 18%, to $707,000 for the three months
ended March 31, 2004, down from $866,000 for the same period in 2003. The
decrease in interest expense was primarily attributed to rate decreases for
time deposits partially offset by volume increases in all of the Companys
deposit products. The Companys average rate paid on time deposits was 1.82%
for the three months ended March 31, 2004, down 61 basis points, or 25%, from
the 2.43% paid for the same period in 2003. The net interest margin for the three months ended March 31, 2004 decreased 46
basis points, or 9%, to 4.67%, down from 5.13% for the same period in 2003. 10




---



##### Table of Contents



The following table presents for the three-month periods indicated the
distribution of consolidated average assets, liabilities and shareholders
equity. It also presents the amounts of interest income from interest-earning
assets and the resultant yields expressed in both dollars and yield
percentages, as well as, the amounts of interest expense on interest-bearing
liabilities and the resultant cost expressed in both dollars and rate
percentages. Nonaccrual loans are included in the calculation of average loans
while nonaccrued interest thereon is excluded from the computation of yields
earned: For the Three Months Ended March 31, 2004
    
    For the Three Months Ended March 31, 2003Yield
    
    
    
    
    
    
    
    
    
    YieldAverage Balance
    
    Interest
    
    /
    
    Average Balance
    
    Interest
    
    /(in thousands)
    
    (in thousands)
    
    Rate
    
    (in thousands)
    
    (in thousands)
    
    RateInterest-earning assets:Loans (1) (2)
    
    $
    217,201
    
    
    $
    3,887
    
    
    
    7.10
    %
    
    $
    208,868
    
    
    $
    3,977
    
    
    
    7.55
    %Investment securities (1)
    
    
    110,677
    
    
    
    816
    
    
    
    2.93
    %
    
    
    64,676
    
    
    
    542
    
    
    
    3.32
    %Federal funds sold
    
    
    14,653
    
    
    
    33
    
    
    
    0.89
    %
    
    
    11,627
    
    
    
    33
    
    
    
    1.13
    %Total earning assets
    
    
    342,531
    
    
    
    4,736
    
    
    
    5.49
    %
    
    
    285,171
    
    
    
    4,552
    
    
    
    6.33
    %Cash and demand deposits with banks
    
    
    24,691
    
    
    
    
    
    
    
    
    
    
    
    19,181Other assets
    
    
    24,716
    
    
    
    
    
    
    
    
    
    
    
    18,236Total assets
    
    $
    391,938
    
    
    
    
    
    
    
    
    
    
    $
    322,588Interest-bearing liabilities:NOW deposits
    
    $
    42,874
    
    
    
    16
    
    
    
    0.15
    %
    
    $
    33,400
    
    
    
    25
    
    
    
    0.30
    %Money market deposits
    
    
    65,997
    
    
    
    124
    
    
    
    0.75
    %
    
    
    59,458
    
    
    
    159
    
    
    
    1.06
    %Savings deposits
    
    
    60,969
    
    
    
    68
    
    
    
    0.44
    %
    
    
    45,241
    
    
    
    98
    
    
    
    0.86
    %Time deposits
    
    
    92,939
    
    
    
    426
    
    
    
    1.82
    %
    
    
    82,639
    
    
    
    507
    
    
    
    2.43
    %Other borrowings (3)
    
    
    6,391
    
    
    
    73
    
    
    
    4.53
    %
    
    
    6,368
    
    
    
    77
    
    
    
    4.80
    %Total interest-bearing liabilities
    
    
    269,170
    
    
    
    707
    
    
    
    1.04
    %
    
    
    227,106
    
    
    
    866
    
    
    
    1.51
    %Non-interest bearing deposits
    
    
    93,210
    
    
    
    
    
    
    
    
    
    
    
    69,138Other liabilities
    
    
    2,500
    
    
    
    
    
    
    
    
    
    
    
    2,287Shareholders equity
    
    
    27,058
    
    
    
    
    
    
    
    
    
    
    
    24,057Total liabilities & equity
    
    $
    391,938
    
    
    
    
    
    
    
    
    
    
    $
    322,588Cost of funding interest-earning assets (4)
    
    
    
    
    
    
    
    
    
    
    0.82
    %
    
    
    
    
    
    
    
    
    
    
    1.20
    %Net interest income and margin (5)
    
    
    
    
    
    $
    4,029
    
    
    
    4.67
    %
    
    
    
    
    
    $
    3,686
    
    
    
    5.13
    %
   (1)
    
    Not computed on a tax-equivalent basis.(2)
    
    Loan fees included in loan interest income for the three-month periods
ended March 31, 2004 and 2003 amounted to $136 and $153, respectively.(3)
    
    For the purpose of this schedule the interest expense related to the
Companys junior subordinated debentures is included in other borrowings.(4)
    
    Total interest expense divided by the average balance of total earning
assets.(5)
    
    Net interest income divided by the average balance of total earning assets. 11




---



##### Table of Contents



The following table sets forth changes in interest income and interest expense,
for the three-month periods indicated and the amount of change attributable to
variances in volume, rates and the combination of volume and rates based on the
relative changes of volume and rates: 2004 over 2003 change in net interest income(in thousands)Volume (1)
    
    Rate (2)
    
    Mix (3)
    
    TotalInterest-earning assets:Loans
    
    $
    159
    
    
    $
    (239
    )
    
    $
    (10
    )
    
    $
    (90
    )Investment securities
    
    
    385
    
    
    
    (65
    )
    
    
    (46
    )
    
    
    274Federal funds sold
    
    
    9
    
    
    
    (7
    )
    
    
    (2
    )
    
    
    Total interest income
    
    
    553
    
    
    
    (311
    )
    
    
    (58
    )
    
    
    184Interest-bearing liabilities:NOW deposits
    
    
    7
    
    
    
    (13
    )
    
    
    (3
    )
    
    
    (9
    )Money market deposits
    
    
    17
    
    
    
    (47
    )
    
    
    (5
    )
    
    
    (35
    )Savings deposits
    
    
    35
    
    
    
    (48
    )
    
    
    (17
    )
    
    
    (30
    )Time deposits
    
    
    63
    
    
    
    (128
    )
    
    
    (16
    )
    
    
    (81
    )Other borrowings
    
    
    
    
    
    
    (4
    )
    
    
    
    
    
    
    (4
    )Total interest expense
    
    
    122
    
    
    
    (240
    )
    
    
    (41
    )
    
    
    (159
    )Net interest income
    
    $
    431
    
    
    $
    (71
    )
    
    $
    (17
    )
    
    $
    343
   (1)
    
    The volume change in net interest income represents the change in average
balance divided by the previous years rate.(2)
    
    The rate change in net interest income represents the change in rate
divided by the previous years average balance.(3)
    
    The mix change in net interest income represents the change in average
balance multiplied by the change in rate. Provision for loan losses.The Company recorded $150,000 in provision for loan
losses for the three months ended March 31, 2004, down $75,000, or 33%, from
the $225,000 provision for the same period in 2003. Management assesses its
loan quality monthly to maintain an adequate allowance for loan losses. Based
on information currently available, management believes that the allowance for
loan losses is adequate to absorb potential risks in the portfolio. However,
no assurance can be given that the Company may not sustain charge-offs which
are in excess of the allowance in any given period. The Companys loan
portfolio composition and non-performing assets are further discussed under the
financial condition section below. Non-interest income.During the three months ended March 31, 2004, total
non-interest income increased $217,000, or 27%, to $1,020,000, up from $803,000
for the comparable period in 2003. The increase in non-interest income was
primarily the result of increases in service charge revenue, earnings on
bank-owned life insurance policies (BOLI) and gains on the sale of investment
securities. The large portion of the growth in service charge revenue resulted
from an increase in the Banks overall number of fee generating accounts. As a
result of the acquisition in mid-November 2003 of five branches from a
competitor, the Bank began servicing over 7,300 new deposit accounts. During the last half of 2003, the Bank increased its holding in BOLI by $3.2
million to provide additional coverage for an executive officer of the Company.
As a result, the tax-exempt earnings from these policies increased by $53
thousand to $107 thousand for the three months ended March 31, 2003 from $54
thousand for the same period in 2003. 12




---



##### Table of Contents



Lastly, the Company continued to take advantage of opportunities to record
gains in the investment portfolio, recording $90 thousand in gains on the sale
of $9.3 million in available-for-sale U.S. agency securities. Non-interest expenses.Non-interest expenses consist of salaries and related
employee benefits, occupancy and equipment expenses, professional fees,
business development expenses, telephone expense, stationery and supplies
expense, armored car and courier expense, advertising and promotion expense,
loan expenses, directors fees, and other operating expenses. For the three
months ended March 31, 2004, non-interest expense increased $675,000, or 22%,
to $3.8 million, up from $3.1 million for the comparable period in 2003. Salaries and employee benefits increased $438,000, or 25%, over the same
three-month period last year. This increase was due primarily to the staffing
additions related to the Banks three new branch offices, expansion of the
Companys centralized lending function, staffing additions to manage the
overall growth and increased employee benefit costs related to health-care and
salary continuation plans. Occupancy and equipment increased $157,000, or 30%, over the same three-month
period last year. This increase was due primarily to additional depreciation
and operating costs associated with three new branches. These new branches
began serving the communities of Tahoe City, Kings Beach and Loyalton in
November 2003. Other increases in occupancy and equipment relate to
depreciation on capitalized upgrades to the Companys network security and
monitoring systems, network operating system, item processing system and
remodeling costs associated with the administrative building. The following table describes the components of non-interest expense for the
three-month periods ending March 31, 2004 and 2003. UnauditedFor the Three MonthsEnded March 312004
    
    2003Salaries and employee benefits
    
    $
    2,210
    
    
    $
    1,772Occupancy and equipment
    
    
    674
    
    
    
    517Professional fees
    
    
    186
    
    
    
    138Business development
    
    
    93
    
    
    
    81Armored car and courier
    
    
    89
    
    
    
    79Telephone and data communication
    
    
    76
    
    
    
    89Stationery and supplies
    
    
    73
    
    
    
    61Director compensation
    
    
    72
    
    
    
    63Deposit premium amortization
    
    
    71
    
    
    
    34Postage
    
    
    65
    
    
    
    66Advertising and promotion
    
    
    56
    
    
    
    45Insurance
    
    
    56
    
    
    
    52Loan and collection expenses
    
    
    25
    
    
    
    61Other expense
    
    
    15
    
    
    
    28Total non-interest expense
    
    $
    3,761
    
    
    $
    3,086
 FINANCIAL CONDITION Loan portfolio composition.The Company continues to manage the mix of its
loan portfolio consistent with its identity as a community bank serving the
financing needs of all sectors of Northeastern California. Although the
Company offers a broad array of financing options, it continues to concentrate
its focus on small- to medium-sized commercial businesses. These commercial
loans are diversified as to the industries and types of businesses, thus
limiting material exposure from any one industry concentration. The Company
offers both fixed and floating rate loans and obtains collateral in the form of
real property, business assets and deposit accounts, but looks to business and
personal cash flows as its primary source of 13




---



##### Table of Contents



repayment. As of March 31, 2004, consumer loans increased to 21.8% of the loan
portfolio compared to 21.4% at December 31, 2003. Both real estate and
agricultural loan balances increased slightly to 43.1% and 12.4% of total
loans, respectively, as of March 31, 2004 versus 43.0% and 12.2%, respectively,
at December 31, 2003. Commercial loans decreased to 22.7% of the loan
portfolio as of March 31, 2004 as compared to 23.4% at December 31, 2003. Nonperforming assets.Nonperforming loan balances at March 31, 2004 were
$889,000, an increase of $42,000, or 5%, over the $847,000 balance at December
31, 2003. As a result of the slight increase in the non-performing loan balances,
nonperforming loans as a percent of total loans increased to 0.41% as of March
31, 2004 up from the 0.39% as of December 31, 2003. However, nonperforming
assets as a percent of total assets remained at 0.22% for both March 31, 2004
and December 31, 2003. Analysis of allowance for loan losses.Net charge-offs during the three months
ended March 31, 2004 totaled $71,000, or 0.03% of total loans, compared to
$141,000, or 0.07% of total loans, for the comparable period in 2003. Net
charge-offs during the first quarter of 2004 were comprised of $115,000 of
charge-offs less $44,000 recoveries, compared to $179,000 of charge-offs less
$38,000 for the comparable period in 2003. The allowance for loan losses stood
at 1.23% of total loans as of March 31, 2004, versus 1.18% of total loans as of
December 31, 2003. Based on an evaluation of the credit quality of the loan
portfolio and delinquency trends and charge-offs, management believes the
allowance for loan losses to be adequate. The following table provides certain information for the three-month period
indicated with respect to the Companys allowance for loan losses as well as
charge-off and recovery activity. UnauditedFor the Three MonthsEnded March 312004
    
    2003Balance at January 1,
    
    $
    2,564
    
    
    $
    2,471Charge-offs:Commercial and agricultural
    
    
    
    
    
    
    (19
    )Real estate mortgage
    
    
    
    
    
    
    (26
    )Real estate construction
    
    
    
    
    
    
    Consumer
    
    
    (115
    )
    
    
    (134
    )Total charge-offs
    
    
    (115
    )
    
    
    (179
    )Recoveries:Commercial and agricultural
    
    
    2
    
    
    
    10Real estate mortgage
    
    
    
    
    
    
    Real estate construction
    
    
    
    
    
    
    Consumer
    
    
    42
    
    
    
    28Total recoveries
    
    
    44
    
    
    
    38Net charge-offs
    
    
    (71
    )
    
    
    (141
    )Provision for loan losses
    
    
    150
    
    
    
    225Balance at March 31,
    
    $
    2,643
    
    
    $
    2,555Net charge-offs during the three-month period to average loans
    
    
    0.03
    %
    
    
    0.07
    %Allowance for loan losses to total Loans
    
    
    1.23
    %
    
    
    1.21
    %
 14




---



##### Table of Contents



Investment securities and Federal funds sold.While the balance of investment
securities remained consistent at $116 million, Federal funds sold increased by
$14 million or 266.2% to $19 million at March 31, 2004 from $5 million at
December 31, 2003. The Companys investment in U.S. Treasury securities and direct obligations of
U.S. agencies decreased to 81.7% of the investment portfolio at March 31, 2004,
versus 82.6% at December 31, 2003. The Companys investment in corporate bonds
slightly increased to 11.0% of the investment portfolio at March 31, 2004,
versus 10.8% at December 31, 2003. Tax-exempt municipal obligation bonds
increased to 7.3% at March 31, 2004, up from 6.6% at December 31, 2003. Accrued interest receivable and other assets.Accrued interest receivable and
other assets decreased $2.1 million, or 13%, to $14.5 million as of March 31,
2004, down from $16.7 million at December 31, 2003. This decrease related
primarily to a decline in other assets from a payment on a $1.4 million
receivable balance in the first quarter of 2004. This receivable recorded at
the end of 2003 related to a court judgment on loans previously considered
impaired. Deposits.Total deposits were $361 million as of March 31, 2004, an increase
of $4.7 million, or 1%, from the December 31, 2003 balance of $356 million.
The Company continues to manage the mix of its deposits consistent with its
identity as a community bank serving the financial needs of its customers.
Non-interest bearing demand deposits and interest checking deposits decreased
to 38.2% of total deposits as of March 31, 2004, down slightly from 38.9% of
total deposits as of December 31, 2003. Money market and savings deposits
increased to 35.6% of total deposits as of March 31, 2004 compared to 34.9% as
of December 31, 2003. Time deposits remained at 26.2% of total deposits for
both March 31, 2004 and December 31, 2003. CAPITAL RESOURCES Shareholders equity as of March 31, 2004 increased $1.3 million, or 5%, to
$27.1 million from $25.7 million as of December 31, 2003. This increase was
primarily due to the retention of first quarter 2004 earnings and a $579
thousand increase in accumulated comprehensive income. The Company and the Bank are subject to certain regulatory capital requirements
administered by the Board of Governors of the Federal Reserve System and the
Federal Deposit Insurance Corporation (FDIC). Failure to meet these minimum
capital requirements can initiate certain mandatory, and possibly additional
discretionary, actions by regulators that, if undertaken, could have a direct
material effect on the Companys consolidated financial statements. Under
capital adequacy guidelines and the regulatory framework for prompt corrective
action, the Bank must meet specific capital guidelines that involve
quantitative measures of the Banks assets, liabilities and certain
off-balance-sheet items as calculated under regulatory accounting practices.
The Companys and the Banks capital amounts and classification are also
subject to qualitative judgments by the regulators about components, risk
weightings and other factors. Quantitative measures established by regulation to ensure capital adequacy
require the Company and the Bank to maintain minimum amounts and ratios of
total and Tier 1 capital to risk-weighted assets and of Tier 1 capital to
average assets. Each of these components is defined in the regulations.
Management believes that the Company and the Bank met all their capital
adequacy requirements as of March 31, 2004. 15




---



##### Table of Contents



Plumas BancorpActual
    
    MinimumCapitalCapital
    
    Ratio
    
    RequirementLeverage
    
    $
    30,186
    
    
    
    7.8
    %
    
    
    4.0
    %Tier 1 Risk-Based
    
    
    30,186
    
    
    
    10.9
    %
    
    
    4.0
    %Total Risk-Based
    
    
    32,829
    
    
    
    11.9
    %
    
    
    8.0
    %
 Plumas BankActual
    
    MinimumCapitalCapital
    
    Ratio
    
    RequirementLeverage
    
    $
    29,696
    
    
    
    7.6
    %
    
    
    4.0
    %Tier 1 Risk-Based
    
    
    29,696
    
    
    
    10.7
    %
    
    
    4.0
    %Total Risk-Based
    
    
    32,339
    
    
    
    11.7
    %
    
    
    8.0
    %
 LIQUIDITY The Company manages its liquidity to provide the ability to generate funds to
support asset growth, meet deposit withdrawals (both anticipated and
unanticipated), fund customers borrowing needs, satisfy maturity of short-term
borrowings and maintain reserve requirements. The Companys liquidity needs
are managed using assets or liabilities, or both. On the asset side, in
addition to Federal Funds sold, the Company maintains an investment portfolio
containing U.S. government securities and agency securities that are classified
as available-for-sale. On the liability side, liquidity needs are managed by
charging competitive offering rates on deposit products and the use of
established lines of credit from correspondent financial institutions and the
Federal Home Loan Bank. The Company has unsecured short-term borrowing agreements with two of its
correspondent banks in the amounts of $10 million and $5 million. In addition,
the Company can borrow up to $9.6 million from the Federal Home Loan Bank
secured by residential mortgage loans. There were no short-term borrowings
outstanding at March 31, 2004. Customer deposits are the Companys primary source of funds. Those funds are
held in various types of accounts with varying maturities. The Company does
not accept brokered deposits. During the first quarter of 2004, deposits
increased $4.7 million, or 1%, from the December 31, 2003 balance of $356
million. The Company has historically experienced a seasonal trend in regards
to deposits; whereas the majority of the Companys annual deposit growth occurs
in the summer and fall months. The Companys available-for-sale securities portfolio, Federal funds sold, and
cash and due from banks serve as the primary sources of liquidity, providing
adequate funding for loans during periods of high loan demand. During periods
of decreased lending activity, proceeds from the maturity or sale of investment
securities, loan payments, and new deposits are invested in short-term earning
assets, such as Federal funds sold and investment securities, to serve as a
source of funding for future loan growth. Management believes that the
Companys available sources of funds, including short-term borrowings, will
provide adequate liquidity for its operations in the foreseeable future. 16




---



##### Table of Contents



ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK Market risk is the risk of loss in a financial instrument arising from adverse
changes in market rates and prices such as interest rates, commodity prices and
equity prices. As a financial institution, the Companys market risk arises
primarily from interest rate risk exposure. Fluctuation in interest rates will
ultimately impact both the level of income and expense recorded on a large
portion of the Companys assets and liabilities, and the market value of all
interest earning assets and interest bearing liabilities, dependent upon the
stated or estimated maturity date. Since virtually all of the Companys
interest earning assets and all of the Companys interest bearing liabilities,
with the exception of the junior subordinated debentures, are located at the
Bank level, virtually all of the Companys interest rate risk exposure lies at
the Bank level. As a result, all significant interest rate risk management
procedures are performed at the Bank level. Based upon the nature of its
operations, the Bank is not subject to foreign currency exchange or commodity
price risk. The Banks real estate loan portfolio, concentrated primarily
within northeastern California, is subject to risks associated with the local
economies. The fundamental objective of the Banks management of its assets and
liabilities is to maximize the economic value of the Company while maintaining
adequate liquidity and an exposure to interest rate risk deemed by management
to be acceptable. Management believes an acceptable degree of exposure to
interest rate risk results from the management of assets and liabilities
through maturities, pricing and mix to attempt to neutralize the potential
impact of changes in market interest rates. The Banks profitability is
dependent to a large extent upon its net interest income which is the
difference between its interest income on interest-earning assets, such as
loans and securities, and its interest expense on interest-bearing liabilities,
such as deposits and borrowings. The Bank, like other financial institutions,
is subject to interest rate risk to the degree that its interest-earning assets
reprice differently than its interest-bearing liabilities. The Bank manages
its mix of assets and liabilities with the goals of limiting its exposure to
interest rate risk, ensuring adequate liquidity, and coordinating its sources
and uses of funds. The Bank seeks to control its interest rate risk exposure in a manner that will
allow for adequate levels of earnings and capital over a range of possible
interest rate environments. The Bank has adopted formal policies and practices
to monitor and manage interest rate risk exposure. As part of this effort, the
Bank measures interest rate risk utilizing both an internal asset liability
management system as well as employing independent third party reviews to
confirm the reasonableness of the assumptions used to measure and report the
Banks interest rate risk, enabling management to make any adjustments
necessary. Interest rate risk is managed by the Banks Asset Liability Committee (ALCO),
which includes members of senior management. The ALCO monitors interest rate
risk by analyzing the potential impact on the net interest income from
potential changes in interest rates and considers the impact of alternative
strategies or changes in balance sheet structure. The ALCO manages the Banks
balance sheet in part to maintain the potential impact on net interest income
within acceptable ranges despite changes in interest rates. The Banks
exposure to interest rate risk is reviewed on at least a quarterly basis by
ALCO. In managements opinion there has not been a material change in the Companys
market risk or interest rate risk profile for the three months ended March 31,
2004 compared to December 31, 2003 as discussed in the Companys 2003 annual
report on Form 10-K. 17




---



##### Table of Contents



ITEM 4. CONTROLS AND PROCEDURES The Companys Chief Executive Officer, Chief Financial Officer and Controller,

based on their evaluation within 90 days prior to the date of this report of
the Companys disclosure controls and procedures (as defined in Exchange Act
Rule 13a15(e), have concluded that the Companys disclosure controls and
procedures are adequate and effective for purposes of Rule 13a15(e) in timely
alerting them to material information relating to the Company required to be
included in the Companys filings with the SEC under the Securities Exchange
Act of 1934. There were no significant changes in the Companys internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of their evaluation. 
 PART II  OTHER INFORMATION 
 ITEM 1. LEGAL PROCEEDINGS From time to time, the Company and/or its subsidiaries are a party to claims
and legal proceedings arising in the ordinary course of business. In the
opinion of the Companys management, the amount of ultimate liability with
respect to such proceedings will not have a material adverse effect on the
financial condition or results of operations of the Company taken as a whole. 
 ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS None. 
 ITEM 3. DEFAULTS UPON SENIOR SECURITIES None. 
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None. 
 ITEM 5. OTHER INFORMATION None. 
 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K The following documents are included or incorporated by reference in this
Quarterly Report on Form 10Q: 3.1
    
    Articles of Incorporation as amended of Registrant included as
exhibit 3.1 to the Registrants Form S-4, File No. 333-84534, which
is incorporated by reference herein.3.2
    
    Bylaws of Registrant included as exhibit 3.2 to the Registrants
Form S-4, File No. 333-84534, which is incorporated by reference
herein.4
    
    Specimen form of certificate for Plumas Bancorp included as exhibit
4 to the Registrants Form S-4, File No. 333-84534, which is
incorporated by reference herein.10.1
    
    Employment Agreement of William E. Elliott dated May 16, 2001, is
included as Exhibit 10.1 to the Registrants 10-QSB for June 30,
2002, which is incorporated by this reference herein.10.2
    
    Incentive Stock Option Agreement as amended of William E. Elliott
dated November 18, 1998, is included as Exhibit 10.2 to the
Registrants 10-QSB for June 30, 2002, which is incorporated by this
reference herein.10.3
    
    Executive Salary Continuation Agreement as amended of William E.
Elliott dated October 13, 1993, is included as Exhibit 10.3 to the
Registrants 10-QSB for June 30, 2002, which
 18




---



##### Table of Contents



is incorporated by this reference herein.10.4
    
    Split Dollar Agreements of William E. Elliott dated January 23,
2002, is included as Exhibit 10.4 to the Registrants 10-QSB for
June 30, 2002, which is incorporated by this reference herein.10.5
    
    Incentive Stock Option Agreement as amended of Douglas N. Biddle
dated November 18, 1998, is included as Exhibit 10.5 to the
Registrants 10-QSB for June 30, 2002, which is incorporated by this
reference herein.10.6
    
    Executive Salary Continuation Agreement as amended of Douglas N.
Biddle dated June 2, 1994, is included as Exhibit 10.6 to the
Registrants 10-QSB for June 30, 2002, which is incorporated by this
reference herein.10.7
    
    Split Dollar Agreements of Douglas N. Biddle dated January 24, 2002,
is included as Exhibit 10.7 to the Registrants 10-QSB for June 30,
2002, which is incorporated by this reference herein.10.8
    
    Incentive Stock Option Agreement as amended of Dennis C. Irvine
dated November 18, 1998, is included as Exhibit 10.8 to the
Registrants 10-QSB for June 30, 2002, which is incorporated by this
reference herein.10.9
    
    Executive Salary Continuation Agreement as amended of Dennis C.
Irvine dated June 2, 1994, is included as Exhibit 10.9 to the
Registrants 10-QSB for June 30, 2002, which is incorporated by this
reference herein.10.10
    
    Split Dollar Agreements of Dennis C. Irvine dated January 24, 2002,
is included as Exhibit 10.10 to the Registrants 10-QSB for June 30,
2002, which is incorporated by this reference herein.10.11
    
    Incentive Stock Option Agreement as amended of Robert T. Herr dated
July 19, 2000, is included as Exhibit 10.11 to the Registrants
10-QSB for June 30, 2002, which is incorporated by this reference
herein.10.12
    
    Non-Qualified Stock Option Agreement as amended of Jerry V. Kehr
dated November 18, 1998, is included as Exhibit 10.12 to the
Registrants 10-QSB for June 30, 2002, which is incorporated by this
reference herein.10.13
    
    Deferred Fee Agreement as amended of Jerry V. Kehr dated August 19,
1998, is included as Exhibit 10.13 to the Registrants 10-QSB for
June 30, 2002, which is incorporated by this reference herein.10.14
    
    Amended and Restated Director Retirement Agreement of Jerry V. Kehr
dated April 28, 2000, is included as Exhibit 10.14 to the
Registrants 10-QSB for June 30, 2002, which is incorporated by this
reference herein.10.15
    
    Consulting Agreement of Jerry V. Kehr dated May 10, 2000, is
included as Exhibit 10.15 to the Registrants 10-QSB for June 30,
2002, which is incorporated by this reference herein.10.16
    
    Non-Qualified Stock Option Agreement as amended of Daniel E. West
dated November 19, 1997, is included as Exhibit 10.16 to the
Registrants 10-QSB for June 30, 2002, which is incorporated by this
reference herein.10.17
    
    Non-Qualified Stock Option Agreement as amended of Daniel E. West
dated November 18, 1998, is included as Exhibit 10.17 to the
Registrants 10-QSB for June 30, 2002, which is incorporated by this
reference herein.10.18
    
    Amended and Restated Director Retirement Agreement of Daniel E. West
dated May 10, 2000, is included as Exhibit 10.18 to the Registrants
10-QSB for June 30, 2002, which is incorporated by this reference
herein.10.19
    
    Consulting Agreement of Daniel E. West dated May 10, 2000, is
included as Exhibit 10.19 to the Registrants 10-QSB for June 30,
2002, which is incorporated by this reference herein.10.20
    
    Non-Qualified Stock Option Agreement as amended of Alvin G.
Blickenstaff dated November 18, 1998, is included as Exhibit 10.20
to the Registrants 10-QSB for June 30, 2002, which is incorporated
by this reference herein.10.21
    
    Amended and Restated Director Retirement Agreement of Alvin G.
Blickenstaff dated April 19, 2000, is included as Exhibit 10.21 to
the Registrants 10-QSB for June 30, 2002, which is incorporated by
this reference herein.10.22
    
    Consulting Agreement of Alvin G. Blickenstaff dated May 8, 2000, is
included as Exhibit
 19




---



##### Table of Contents



10.22 to the Registrants 10-QSB for June 30,
2002, which is incorporated by this reference herein.10.23
    
    Non-Qualified Stock Option Agreement as amended of Gerald W.
Fletcher dated November 18, 1998, is included as Exhibit 10.23 to
the Registrants 10-QSB for June 30, 2002, which is incorporated by
this reference herein.10.24
    
    Amended and Restated Director Retirement Agreement of Gerald W.
Fletcher dated May 10, 2000, is included as Exhibit 10.24 to the
Registrants 10-QSB for June 30, 2002, which is incorporated by this
reference herein.10.25
    
    Consulting Agreement of Gerald W. Fletcher dated May 10, 2000, is
included as Exhibit 10.25 to the Registrants 10-QSB for June 30,
2002, which is incorporated by this reference herein.10.26
    
    Non-Qualified Stock Option Agreement as amended of Arthur C. Grohs
dated November 18, 1998, is included as Exhibit 10.26 to the
Registrants 10-QSB for June 30, 2002, which is incorporated by this
reference herein.10.27
    
    Amended and Restated Director Retirement Agreement of Arthur C.
Grohs dated May 9, 2000, is included as Exhibit 10.27 to the
Registrants 10-QSB for June 30, 2002, which is incorporated by this
reference herein.10.28
    
    Consulting Agreement of Arthur C. Grohs dated May 9, 2000, is
included as Exhibit 10.28 to the Registrants 10-QSB for June 30,
2002, which is incorporated by this reference herein.10.29
    
    Non-Qualified Stock Option Agreement as amended of Christine
McArthur dated August 16, 2000, is included as Exhibit 10.29 to the
Registrants 10-QSB for June 30, 2002, which is incorporated by this
reference herein.10.30
    
    Amended and Restated Director Retirement Agreement of Christine
McArthur dated May 12, 2000, is included as Exhibit 10.30 to the
Registrants 10-QSB for June 30, 2002, which is incorporated by this
reference herein.10.31
    
    Consulting Agreement of Christine McArthur dated May 12, 2000, is
included as Exhibit 10.31 to the Registrants 10-QSB for June 30,
2002, which is incorporated by this reference herein.10.32
    
    Non-Qualified Stock Option Agreement as amended of Terrance J.
Reeson dated November 18, 1998, is included as Exhibit 10.32 to the
Registrants 10-QSB for June 30, 2002, which is incorporated by this
reference herein.10.33
    
    Amended and Restated Director Retirement Agreement of Terrance J.
Reeson dated April 19, 2000, is included as Exhibit 10.33 to the
Registrants 10-QSB for June 30, 2002, which is incorporated by this
reference herein.10.34
    
    Consulting Agreement of Terrance J. Reeson dated May 10, 2000, is
included as Exhibit 10.34 to the Registrants 10-QSB for June 30,
2002, which is incorporated by this reference herein.10.35
    
    Non-Qualified Stock Option Agreement as amended of Walter Sphar
dated November 18, 1998, is included as Exhibit 10.35 to the
Registrants 10-QSB for June 30, 2002, which is incorporated by this
reference herein.10.36
    
    Amended and Restated Director Retirement Agreement of Walter Sphar
dated April 20, 2000, is included as Exhibit 10.36 to the
Registrants 10-QSB for June 30, 2002, which is incorporated by this
reference herein.10.37
    
    Consulting Agreement of Walter Sphar dated May 9, 2000, is included
as Exhibit 10.37 to the Registrants 10-QSB for June 30, 2002, which
is incorporated by this reference herein.10.38
    
    Non-Qualified Stock Option Agreement as amended of Thomas Watson
dated November 21, 2001, is included as Exhibit 10.38 to the
Registrants 10-QSB for June 30, 2002, which is incorporated by this
reference herein.10.39
    
    Deferred Fee Agreement of Thomas Watson dated March 3, 2001, is
included as Exhibit 10.39 to the Registrants 10-QSB for June 30,
2002, which is incorporated by this reference herein.10.40
    
    Form of Indemnification Agreement, is included as Exhibit 10.41 to
the Registrants 10-QSB for June 30, 2002, which is incorporated by
this reference herein.10.41
    
    2001 Stock Option Plan as amended is included as exhibit 99.1 of the
Form S-8 filed July
 20




---



##### Table of Contents



23, 2002, File No. 333-9695710.42
    
    1991 Stock Option Plan as amended is included as exhibit 99.1 of the
Form S-8 filed August 19, 2002, File No. 333-9831910.43
    
    Plumas Bank 401(k) Profit Sharing Plan as amended is included as
exhibit 99.1 of the Form S-8 filed February 14, 2003, File No.
333-10322910.44
    
    Executive Salary Continuation Agreement of Robert T. Herr dated June
4, 2002, is included as Exhibit 10.44 to the Registrants 10-Q for
March 31, 2003, which is incorporated by this reference herein.10.45
    
    Branch Purchase and Assumption Agreement dated April 25, 2003, is
included as Exhibit 10.45 to the Registrants 10-Q for March 31,
2003, which is incorporated by this reference herein.10.46
    
    Incentive Stock Option Agreement of William E. Elliott dated
December 18, 2002, is included as Exhibit 10.46 to the Registrants
10-Q for June 30, 2003, which is incorporated by this reference
herein.10.47
    
    Incentive Stock Option Agreement of Douglas N. Biddle dated December
18, 2002, is included as Exhibit 10.47 to the Registrants 10-Q for
June 30, 2003, which is incorporated by this reference herein.10.48
    
    Incentive Stock Option Agreement of Dennis C. Irvine dated December
18, 2002, is included as Exhibit 10.48 to the Registrants 10-Q for
June 30, 2003, which is incorporated by this reference herein.10.49
    
    Incentive Stock Option Agreement of Robert T. Herr dated December
18, 2002, is included as Exhibit 10.49 to the Registrants 10-Q for
June 30, 2003, which is incorporated by this reference herein.10.50
    
    Non-Qualified Stock Option Agreement of Jerry V. Kehr dated December
18, 2002, is included as Exhibit 10.50 to the Registrants 10-Q for
June 30, 2003, which is incorporated by this reference herein.10.51
    
    Non-Qualified Stock Option Agreement of Daniel E. West dated
December 18, 2002, is included as Exhibit 10.51 to the Registrants
10-Q for June 30, 2003, which is incorporated by this reference
herein.10.52
    
    Non-Qualified Stock Option Agreement of Alvin G. Blickenstaff dated
December 18, 2002, is included as Exhibit 10.52 to the Registrants
10-Q for June 30, 2003, which is incorporated by this reference
herein.10.53
    
    Non-Qualified Stock Option Agreement of Gerald W. Fletcher dated
December 18, 2002, is included as Exhibit 10.53 to the Registrants
10-Q for June 30, 2003, which is incorporated by this reference
herein.10.54
    
    Non-Qualified Stock Option Agreement of Arthur C. Grohs dated
December 18, 2002, is included as Exhibit 10.54 to the Registrants
10-Q for June 30, 2003, which is incorporated by this reference
herein.10.55
    
    Non-Qualified Stock Option Agreement of Christine McArthur dated
December 18, 2002, is included as Exhibit 10.55 to the Registrants
10-Q for June 30, 2003, which is incorporated by this reference
herein.10.56
    
    Non-Qualified Stock Option Agreement of Terrance J. Reeson dated
December 18, 2002, is included as Exhibit 10.56 to the Registrants
10-Q for June 30, 2003, which is incorporated by this reference
herein.10.57
    
    Non-Qualified Stock Option Agreement of Walter Sphar dated December
18, 2002, is included as Exhibit 10.57 to the Registrants 10-Q for
June 30, 2003, which is incorporated by this reference herein.10.58
    
    Non-Qualified Stock Option Agreement of Thomas Watson dated December
18, 2002, is included as Exhibit 10.58 to the Registrants 10-Q for
June 30, 2003, which is incorporated by this reference herein.10.59
    
    Director Retirement Agreement of Thomas Watson dated May 1, 2003, is
included as Exhibit 10.59 to the Registrants 10-Q for June 30,
2003, which is incorporated by this reference herein.10.60
    
    Consulting Agreement of Thomas Watson dated May 1, 2003, is included
as Exhibit 10.60 to the Registrants 10-Q for June 30, 2003, which
is incorporated by this reference herein.
 21




---



##### Table of Contents



10.61
    
    Third Amendment to Executive Salary Continuation Agreement of
William E. Elliott dated November 12, 2003, is included as Exhibit
10.61 to the Registrants 10-K for December 31, 2003, which is
incorporated by this reference herein.11
    
    Computation of per share earnings appears in the attached 10-Q under
Plumas Bancorp Notes to Consolidated Financial Statements as
Footnote 5  Earnings Per Share Computation.31.1
    
    Rule 13a-14(a) [Section 302] Certification of Principal Accounting
Officer dated May 14, 2004.31.2
    
    Rule 13a-14(a) [Section 302] Certification of Principal Financial
Officer dated May 14, 2004.31.3
    
    Rule 13a-14(a) [Section 302] Certification of Principal Executive
Officer dated May 14, 2004.32.1
    
    Certification of Principal Accounting Officer pursuant to 18 U.S.C.
Section 1350, As Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 dated May 14, 2004.32.2
    
    Certification of Principal Financial Officer pursuant to 18 U.S.C.
Section 1350, As Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 dated May 14, 2004.32.3
    
    Certification of Principal Executive Officer pursuant to 18 U.S.C.
Section 1350, As Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 dated May 14, 2004.
  (b)
    
    Reports on Form 8-K  On January 22, 2004, the Company filed a Current Report on Form 8-K. The
Current Report included as an exhibit, the press release dated January 21,
2004, filed by the Company containing unaudited financial information, forth
quarter earnings and 2003 earnings. 22




---



##### Table of Contents



SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized. PLUMAS BANCORP
(Registrant)Date: May 13, 2004/s/ William E. ElliottWilliam E. ElliottPresident/Chief Executive Officer/s/ Douglas N. BiddleDouglas N. BiddleExecutive Vice President Chief Financial Officer/s/ Andrew J. RybackAndrew J. RybackSenior Vice President Controller
 23