##### 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 THE SECURITIES
EXCHANGE ACT OF 1934
|           |  | FOR THE QUARTERLY PERIOD ENDED September 30, 2003                                

|  |  |                                                                                    
|- |  | -----------------------------------------------------------------------------------
|o |  | TRANSITION REPORT UNDER SECTION 13 OR 15 (D) OF THE
SECURITIES EXCHANGE ACT OF 1934
|  |  | FOR THE TRANSITION PERIOD FROM ____________ TO ______________                      

COMMISSION FILE NUMBER: 000-49883

PLUMAS BANCORP

(Exact Name of Registrant as Specified in Its Charter)


|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|California                                                     |  | 75-2987096                          
|(State or Other Jurisdiction of
Incorporation or Organization) |  | (I.R.S. Employer Identification No.)
|                                                               |  |                                     
|35 S. Lindan Avenue, Quincy, California                        |  | 95971                               
|(Address of Principal Executive Offices)                       |  | (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.

Yes x No o


Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).

Yes o No x


Indicate the number of shares outstanding of each of the issuers classes of
common stock, as of November 10, 2003; 3,238,507 shares





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TABLE OF CONTENTS



|                               |                                                                                               |                                            |  |  |  |  |  | 
|------------------------------ | --------------------------------------------------------------------------------------------- | ------------------------------------------ |  |  |  |  |  | 
|PART I  FINANCIAL INFORMATION
|                               | ITEM 1. FINANCIAL STATEMENT                                                                  
|                               |                                                                                               | CONSOLIDATED BALANCE SHEET                
|                               |                                                                                               | CONSOLIDATED STATEMENT OF INCOME          
|                               |                                                                                               | CONSOLIDATED STATEMENT OF CASH FLOWS      
|                               |                                                                                               | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|PART I  FINANCIAL INFORMATION
|                               | ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|                               | ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                           
|                               | ITEM 4. CONTROLS AND PROCEDURES                                                              
|PART II  OTHER INFORMATION   
|                               | ITEM 1. LEGAL PROCEEDINGS                                                                    
|                               | ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS                                            
|                               | ITEM 3. DEFAULTS UPON SENIOR SECURITIES                                                      
|                               | ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                  
|                               | ITEM 5. OTHER INFORMATION                                                                    
|                               | ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K                                                     
|SIGNATURES                    
|EXHIBIT 31.1                  
|EXHIBIT 31.2                  
|EXHIBIT 31.3                  
|EXHIBIT 32.1                  
|EXHIBIT 32.2                  
|EXHIBIT 32.3                  



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PART I  FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENT

PLUMAS BANCORP
CONSOLIDATED BALANCE SHEET
(In thousands, except share data)

|                                                                                                                     |                                                                                                                                                                     |                |                            |                                            |         |               |         |              |         |         |         | 
|-------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------- | -------------------------- | ------------------------------------------ | ------- | ------------- | ------- | ------------ | ------- | ------- | ------- | 
|                                                                                                                     |                                                                                                                                                                     |                |                            |                                            |         | Unaudited     |         | Audited     
|                                                                                                                     |                                                                                                                                                                     |                |                            |                                            |         | September 30, |         | December 31,
|                                                                                                                     |                                                                                                                                                                     |                |                            |                                            |         | 2003          |         | 2002        
|                                                                                                                     |                                                                                                                                                                     |                |                            |                                            |         |               |         |             
|Assets                                                                                                               |                                                                                                                                                                     |                |                            |                                            |         |               |         |             
|Cash and due from banks                                                                                              |                                                                                                                                                                     | $              | 22,771                     |                                            |         | $             | 22,665  |             
|Federal funds sold                                                                                                   |                                                                                                                                                                     |                | 18,535                     |                                            |         |               | 15,265  |             
|Loans held for sale                                                                                                  |                                                                                                                                                                     |                | 111                        |                                            |         |               | 1,472   |             
|Investment securities (market value of $67,909 at September 30, 2003 and
$61,807 at December 31, 2002)               |                                                                                                                                                                     |                | 67,655                     |                                            |         |               | 61,436  |             
|Loans less allowance for loan losses of $2,642 at September 30, 2003 and
$2,471 at December 31, 2002 (Notes 3 and 4) |                                                                                                                                                                     |                | 212,006                    |                                            |         |               | 204,649 |             
|Bank premises and equipment, net                                                                                     |                                                                                                                                                                     |                | 9,127                      |                                            |         |               | 9,323   |             
|Intangible assets, net                                                                                               |                                                                                                                                                                     |                | 590                        |                                            |         |               | 690     |             
|Accrued interest receivable and other assets                                                                         |                                                                                                                                                                     |                | 12,335                     |                                            |         |               | 9,964   |             
|                                                                                                                     |                                                                                                                                                                     |                |                            |                                            |         |               |         |             
|                                                                                                                     |                                                                                                                                                                     |                |                            | Total assets                               |         | $             | 343,130 |              |         | $       | 325,464 | 
|                                                                                                                     |                                                                                                                                                                     |                |                            |                                            |         |               |         |             
|Liabilities and Shareholders Equity                                                                                 |                                                                                                                                                                     |                |                            |                                            |         |               |         |             
|Deposits:                                                                                                            |                                                                                                                                                                     |                |                            |                                            |         |               |         |             
|                                                                                                                     | Non-interest bearing                                                                                                                                                |                | $                          | 85,032                                     |         |               | $       | 73,552       |        
|                                                                                                                     | Interest bearing                                                                                                                                                    |                |                            | 224,369                                    |         |               |         | 220,387      |        
|                                                                                                                     |                                                                                                                                                                     |                |                            |                                            |         |               |         |             
|                                                                                                                     |                                                                                                                                                                     | Total deposits |                            |                                            | 309,401 |               |         |              | 293,939 |        
|Accrued interest payable and other liabilities                                                                       |                                                                                                                                                                     |                | 2,545                      |                                            |         |               | 2,237   |             
|Mandatorily redeemable cumulative trust preferred securities of subsidiary
grantor trust                             |                                                                                                                                                                     |                | 6,000                      |                                            |         |               | 6,000   |             
|                                                                                                                     |                                                                                                                                                                     |                |                            |                                            |         |               |         |             
|                                                                                                                     |                                                                                                                                                                     |                | Total liabilities          |                                            |         | 317,946       |         |              |         | 302,176 |        
|                                                                                                                     |                                                                                                                                                                     |                |                            |                                            |         |               |         |             
|Commitments and contingencies (Note 4)                                                                               |                                                                                                                                                                     |                |                           |                                            |         |               |        |             
|Shareholders equity (Notes 5 and 8):                                                                                |                                                                                                                                                                     |                |                            |                                            |         |               |         |             
|                                                                                                                     | 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  3,238,407 shares at September 30, 2003 and 3,209,396
shares at December 31, 2002 |                |                            | 3,906                                      |         |               |         | 3,743        |        
|                                                                                                                     | Retained earnings                                                                                                                                                   |                |                            | 21,046                                     |         |               |         | 19,135       |        
|                                                                                                                     | Accumulated other comprehensive income (Note 6)                                                                                                                     |                |                            | 232                                        |         |               |         | 410          |        
|                                                                                                                     |                                                                                                                                                                     |                |                            |                                            |         |               |         |             
|                                                                                                                     |                                                                                                                                                                     |                | Total shareholders equity |                                            |         | 25,184        |         |              |         | 23,288  |        
|                                                                                                                     |                                                                                                                                                                     |                |                            |                                            |         |               |         |             
|                                                                                                                     |                                                                                                                                                                     |                |                            | Total liabilities and shareholders equity |         | $             | 343,130 |              |         | $       | 325,464 | 
|                                                                                                                     |                                                                                                                                                                     |                |                            |                                            |         |               |         |             

See notes to consolidated financial statements.

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PLUMAS BANCORP
CONSOLIDATED STATEMENT OF INCOME
(In thousands, except per share data)

|                                           |                                                               |                                  |                            |                                                      |     |                      |       |                     |     |       |       |        |       |        |        |        |       |        |        | 
|------------------------------------------ | ------------------------------------------------------------- | -------------------------------- | -------------------------- | ---------------------------------------------------- | --- | -------------------- | ----- | ------------------- | --- | ----- | ----- | ------ | ----- | ------ | ------ | ------ | ----- | ------ | ------ | 
|                                           |                                                               |                                  |                            |                                                      |     | Unaudited            |       | Unaudited          
|                                           |                                                               |                                  |                            |                                                      |     | For the Three Months |       | For the Nine Months
|                                           |                                                               |                                  |                            |                                                      |     | Ended September 30   |       | Ended September 30 
|                                           |                                                               |                                  |                            |                                                      |     |                      |       |                    
|                                           |                                                               |                                  |                            |                                                      |     | 2003                 |       | 2002                |     | 2003  |       | 2002  
|                                           |                                                               |                                  |                            |                                                      |     |                      |       |                     |     |       |       |       
|Interest Income:                           |                                                               |                                  |                            |                                                      |     |                      |       |                     |     |       |       |        |       |        |        |       
|                                           | Interest and fees on loans                                    |                                  | $                          | 4,031                                                |     |                      | $     | 4,144               |     |       | $     | 12,198 |       |        | $      | 11,997 |      
|                                           | Interest on investment securities:                            |                                  |                            |                                                      |     |                      |       |                     |     |       |       |        |       |        |        |        |      
|                                           |                                                               | Taxable                          |                            |                                                      | 423 |                      |       |                     | 461 |       |       |        | 1,360 |        |        |        | 1,435 |       
|                                           |                                                               | Exempt from Federal income taxes |                            |                                                      | 33  |                      |       |                     | 35  |       |       |        | 100   |        |        |        | 108   |       
|                                           | Interest on Federal funds sold                                |                                  |                            | 39                                                   |     |                      |       | 90                  |     |       |       | 93     |       |        |        | 194    |      
|                                           | Interest on loans held for sale                               |                                  |                            | 8                                                    |     |                      |       | 7                   |     |       |       | 28     |       |        |        | 26     |      
|                                           |                                                               |                                  |                            |                                                      |     |                      |       |                     |     |       |       |        |       |        |        |        |      
|                                           |                                                               |                                  | Total interest income      |                                                      |     | 4,534                |       |                     |     | 4,737 |       |        |       | 13,779 |        |        |       | 13,760 |       
|                                           |                                                               |                                  |                            |                                                      |     |                      |       |                     |     |       |       |        |       |        |        |        |      
|Interest Expense:                          |                                                               |                                  |                            |                                                      |     |                      |       |                     |     |       |       |        |       |        |        |       
|                                           | Interest on deposits                                          |                                  |                            | 599                                                  |     |                      |       | 982                 |     |       |       | 2,101  |       |        |        | 3,031  |      
|                                           | Other                                                         |                                  |                            | 71                                                   |     |                      |       | 3                   |     |       |       | 220    |       |        |        | 5      |      
|                                           |                                                               |                                  |                            |                                                      |     |                      |       |                     |     |       |       |        |       |        |        |        |      
|                                           |                                                               |                                  | Total interest expense     |                                                      |     | 670                  |       |                     |     | 985   |       |        |       | 2,321  |        |        |       | 3,036  |       
|                                           |                                                               |                                  |                            |                                                      |     |                      |       |                     |     |       |       |        |       |        |        |        |      
|                                           |                                                               |                                  |                            | Net interest income before provision for loan
losses |     |                      | 3,864 |                     |     |       | 3,752 |        |       |        | 11,458 |        |       |        | 10,724 | 
|Provision for Loan Losses                  |                                                               |                                  | 175                        |                                                      |     |                      | 200   |                     |     |       | 625   |        |       |        | 725    |       
|                                           |                                                               |                                  |                            |                                                      |     |                      |       |                     |     |       |       |        |       |        |        |        |      
|                                           |                                                               |                                  |                            | Net interest income after provision for loan losses  |     |                      | 3,689 |                     |     |       | 3,552 |        |       |        | 10,833 |        |       |        | 9,999  | 
|Non-Interest Income:                       |                                                               |                                  |                            |                                                      |     |                      |       |                     |     |       |       |        |       |        |        |       
|                                           | Service charges                                               |                                  |                            | 507                                                  |     |                      |       | 498                 |     |       |       | 1,483  |       |        |        | 1,417  |      
|                                           | Gain on sale of loans, net                                    |                                  |                            | 7                                                    |     |                      |       | 11                  |     |       |       | 67     |       |        |        | 36     |      
|                                           | Gain on sale of available-for-sale investment securities, net |                                  |                            | 73                                                   |     |                      |       |                    |     |       |       | 189    |       |        |        | 62     |      
|                                           | Gain on sale of other real estate, net                        |                                  |                            |                                                     |     |                      |       |                    |     |       |       | 20     |       |        |        |       |      
|                                           | Earnings on cash surrender value of life insurance policies   |                                  |                            | 55                                                   |     |                      |       | 54                  |     |       |       | 164    |       |        |        | 162    |      
|                                           | Other income                                                  |                                  |                            | 251                                                  |     |                      |       | 211                 |     |       |       | 649    |       |        |        | 561    |      
|                                           |                                                               |                                  |                            |                                                      |     |                      |       |                     |     |       |       |        |       |        |        |        |      
|                                           |                                                               |                                  | Total non-interest income  |                                                      |     | 893                  |       |                     |     | 774   |       |        |       | 2,572  |        |        |       | 2,238  |       
|                                           |                                                               |                                  |                            |                                                      |     |                      |       |                     |     |       |       |        |       |        |        |        |      
|Non-Interest Expense:                      |                                                               |                                  |                            |                                                      |     |                      |       |                     |     |       |       |        |       |        |        |       
|                                           | Salaries and employee benefits                                |                                  |                            | 1,887                                                |     |                      |       | 1,554               |     |       |       | 5,382  |       |        |        | 4,593  |      
|                                           | Occupancy and equipment                                       |                                  |                            | 591                                                  |     |                      |       | 479                 |     |       |       | 1,696  |       |        |        | 1,300  |      
|                                           | Other expense                                                 |                                  |                            | 821                                                  |     |                      |       | 958                 |     |       |       | 2,543  |       |        |        | 2,674  |      
|                                           |                                                               |                                  |                            |                                                      |     |                      |       |                     |     |       |       |        |       |        |        |        |      
|                                           |                                                               |                                  | Total non-interest expense |                                                      |     | 3,299                |       |                     |     | 2,991 |       |        |       | 9,621  |        |        |       | 8,567  |       
|                                           |                                                               |                                  |                            |                                                      |     |                      |       |                     |     |       |       |        |       |        |        |        |      
|                                           |                                                               |                                  |                            | Income before income taxes                           |     |                      | 1,283 |                     |     |       | 1,335 |        |       |        | 3,784  |        |       |        | 3,670  | 
|Income Tax Expense                         |                                                               |                                  | 501                        |                                                      |     |                      | 514   |                     |     |       | 1,486 |        |       |        | 1,430  |       
|                                           |                                                               |                                  |                            |                                                      |     |                      |       |                     |     |       |       |        |       |        |        |        |      
|                                           |                                                               |                                  |                            | Net income                                           |     | $                    | 782   |                     |     | $     | 821   |        |       | $      | 2,298  |        |       | $      | 2,240  | 
|                                           |                                                               |                                  |                            |                                                      |     |                      |       |                     |     |       |       |        |       |        |        |        |      
|Basic earnings per share (Notes 5 and 8)   |                                                               | $                                | 0.24                       |                                                      |     | $                    | 0.26  |                     |     | $     | 0.71  |        |       | $      | 0.70   |       
|                                           |                                                               |                                  |                            |                                                      |     |                      |       |                     |     |       |       |        |       |        |        |        |      
|Diluted earnings per share (Notes 5 and 8) |                                                               | $                                | 0.24                       |                                                      |     | $                    | 0.25  |                     |     | $     | 0.69  |        |       | $      | 0.69   |       
|                                           |                                                               |                                  |                            |                                                      |     |                      |       |                     |     |       |       |        |       |        |        |        |      

See notes to consolidated financial statements.

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PLUMAS BANCORP
CONSOLIDATED STATEMENT OF CASH FLOWS
(In thousands)

|                                      |                                                                                   |                                                                                                             |                                           |       |                     |         |      |       |         |         |  
|------------------------------------- | --------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------- | ----------------------------------------- | ----- | ------------------- | ------- | ---- | ----- | ------- | ------- | -
|                                      |                                                                                   |                                                                                                             |                                           |       | Unaudited          
|                                      |                                                                                   |                                                                                                             |                                           |       | For the Nine Months
|                                      |                                                                                   |                                                                                                             |                                           |       | Ended September 30 
|                                      |                                                                                   |                                                                                                             |                                           |       | 2003                |         | 2002
|Cash Flows from Operating Activities: |                                                                                   |                                                                                                             |                                           |       |                     |         |      |      
|                                      | Net income                                                                        |                                                                                                             | $                                         | 2,298 |                     |         | $    | 2,240 |        
|                                      | Adjustments to reconcile net income to net cash provided by operating
activities: |                                                                                                             |                                           |       |                     |         |      |       |        
|                                      |                                                                                   | Provision for loan losses                                                                                   |                                           |       | 625                 |         |      |       | 725     |        
|                                      |                                                                                   | Deferred loan origination fees, net                                                                         |                                           |       | (169                | )       |      |       | (189    | )      
|                                      |                                                                                   | Depreciation, amortization and accretion, net                                                               |                                           |       | 947                 |         |      |       | 768     |        
|                                      |                                                                                   | Net realized gain on available-for-sale investment securities                                               |                                           |       | (189                | )       |      |       | (62     | )      
|                                      |                                                                                   | Amortization of investment security premiums                                                                |                                           |       | 930                 |         |      |       | 142     |        
|                                      |                                                                                   | Accretion of investment security discounts                                                                  |                                           |       | (235                | )       |      |       | (68     | )      
|                                      |                                                                                   | Net loss on sale of premises and equipment                                                                  |                                           |       | 2                   |         |      |       | 6       |        
|                                      |                                                                                   | Net gain on sale of other real estate                                                                       |                                           |       | (20                 | )       |      |       |        |        
|                                      |                                                                                   | Net decrease in loans held for sale                                                                         |                                           |       | 1,361               |         |      |       | 190     |        
|                                      |                                                                                   | Increase in cash surrender value of life insurance                                                          |                                           |       | (138                | )       |      |       | (162    | )      
|                                      |                                                                                   | Net increase in accrued interest receivable and other assets                                                |                                           |       | (346                | )       |      |       | (255    | )      
|                                      |                                                                                   | Net decrease in accrued interest payable and other liabilities                                              |                                           |       | 308                 |         |      |       | 9       |        
|                                      |                                                                                   | Deferred taxes, net                                                                                         |                                           |       | 171                 |         |      |       | 24      |        
|                                      |                                                                                   |                                                                                                             |                                           |       |                     |         |      |       |        
|                                      |                                                                                   |                                                                                                             | Net cash provided by operating activities |       |                     | 5,545   |      |       |         | 3,368   |  
|                                      |                                                                                   |                                                                                                             |                                           |       |                     |         |      |       |        
|Cash Flows from Investing Activities: |                                                                                   |                                                                                                             |                                           |       |                     |         |      |      
|                                      |                                                                                   | Proceeds from matured and called available-for-sale investment securities                                   |                                           |       | 8,500               |         |      |       | 16,996  |        
|                                      |                                                                                   | Proceeds from matured and called held-to-maturity investment securities                                     |                                           |       | 4,677               |         |      |       | 5,606   |        
|                                      |                                                                                   | Proceeds from sales of available-for-sale investment securities                                             |                                           |       | 17,605              |         |      |       | 530     |        
|                                      |                                                                                   | Purchases of available-for-sale investment securities                                                       |                                           |       | (38,240             | )       |      |       | (26,355 | )      
|                                      |                                                                                   | Purchases of held-to-maturity investment securities                                                         |                                           |       | (457                | )       |      |       | (687    | )      
|                                      |                                                                                   | Proceeds from principal repayments from available-for-sale
government-guaranteed mortgage-backed securities |                                           |       | 566                 |         |      |       | 585     |        
|                                      |                                                                                   | Proceeds from principal repayments from held-to-maturity
government-guaranteed mortgage-backed securities   |                                           |       | 135                 |         |      |       | 726     |        
|                                      |                                                                                   | Net increase in loans                                                                                       |                                           |       | (7,988              | )       |      |       | (22,143 | )      
|                                      |                                                                                   | Proceeds from sale of other real estate                                                                     |                                           |       | 145                 |         |      |       |        |        
|                                      |                                                                                   | Purchase of premises and equipment                                                                          |                                           |       | (652                | )       |      |       | (1,760  | )      
|                                      |                                                                                   | Deposits on single premium cash surrender value life insurance policies                                     |                                           |       | (1,695              | )       |      |       | (510    | )      
|                                      |                                                                                   |                                                                                                             |                                           |       |                     |         |      |       |        
|                                      |                                                                                   |                                                                                                             | Net cash used in investing activities     |       |                     | (17,404 | )    |       |         | (27,012 | )
|                                      |                                                                                   |                                                                                                             |                                           |       |                     |         |      |       |        

Continued on next page.

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PLUMAS BANCORP
CONSOLIDATED STATEMENT OF CASH FLOWS
(In thousands)
(Continued)

|                                                  |                                                                       |                                                                                                                    |                                           |                                       |        |                     |        |      |        |        |       | 
|------------------------------------------------- | --------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------ | ----------------------------------------- | ------------------------------------- | ------ | ------------------- | ------ | ---- | ------ | ------ | ----- | 
|                                                  |                                                                       |                                                                                                                    |                                           |                                       |        | Unaudited          
|                                                  |                                                                       |                                                                                                                    |                                           |                                       |        | For the Nine Months
|                                                  |                                                                       |                                                                                                                    |                                           |                                       |        | Ended September 30 
|                                                  |                                                                       |                                                                                                                    |                                           |                                       |        |                    
|                                                  |                                                                       |                                                                                                                    |                                           |                                       |        | 2003                |        | 2002
|                                                  |                                                                       |                                                                                                                    |                                           |                                       |        |                     |        |     
|Cash Flows from Financing Activities:             |                                                                       |                                                                                                                    |                                           |                                       |        |                     |        |     
|                                                  |                                                                       | Net increase in demand, interest bearing and savings deposits                                                      |                                           | $                                     | 17,203 |                     |        | $    | 31,071 |       
|                                                  |                                                                       | Net decrease in time deposits                                                                                      |                                           |                                       | (1,741 | )                   |        |      | (3,521 | )     
|                                                  |                                                                       | Proceeds from exercise of stock options                                                                            |                                           |                                       | 160    |                     |        |      | 88     |       
|                                                  |                                                                       | Proceeds from issuance of mandatorily redeemable cumulative trust
preferred securities of subsidiary grantor trust |                                           |                                       |        |                     |        |      | 6,000  |       
|                                                  |                                                                       | Cash dividends paid                                                                                                |                                           |                                       | (387   | )                   |        |      | (703   | )     
|                                                  |                                                                       |                                                                                                                    |                                           |                                       |        |                     |        |      |        |       
|                                                  |                                                                       |                                                                                                                    | Net cash provided by financing activities |                                       |        | 15,235              |        |      |        | 32,935 |      
|                                                  |                                                                       |                                                                                                                    |                                           |                                       |        |                     |        |      |        |       
|                                                  |                                                                       |                                                                                                                    |                                           | Increase in cash and cash equivalents |        |                     | 3,376  |      |        |        | 9,291 | 
|Cash and Cash Equivalents at Beginning of Year    |                                                                       |                                                                                                                    | 37,930                                    |                                       |        |                     | 30,088 |     
|                                                  |                                                                       |                                                                                                                    |                                           |                                       |        |                     |        |      |        |       
|Cash and Cash Equivalents at End of Period        |                                                                       | $                                                                                                                  | 41,306                                    |                                       |        | $                   | 39,379 |     
|                                                  |                                                                       |                                                                                                                    |                                           |                                       |        |                     |        |      |        |       
|Supplemental Disclosure of Cash Flow Information: |                                                                       |                                                                                                                    |                                           |                                       |        |                     |        |     
|                                                  | Cash paid during the period for:                                      |                                                                                                                    |                                           |                                       |        |                     |        |      |       
|                                                  |                                                                       | Interest expense                                                                                                   |                                           | $                                     | 2,300  |                     |        | $    | 3,088  |       
|                                                  |                                                                       | Income taxes                                                                                                       |                                           | $                                     | 1,452  |                     |        | $    | 1,681  |       
|Non-Cash Investing Activities:                    |                                                                       |                                                                                                                    |                                           |                                       |        |                     |        |     
|                                                  | Real estate acquired through foreclosure                              |                                                                                                                    | $                                         | 175                                   |        |                     | $      | 46   |       
|                                                  | Net change in unrealized gain on available-for-sale securities        |                                                                                                                    | $                                         | (178                                  | )      |                     | $      | 488  |       
|Non-Cash Financing Activities:                    |                                                                       |                                                                                                                    |                                           |                                       |        |                     |        |     
|                                                  | Common stock retired in connection with the exercise of stock options |                                                                                                                    | $                                         | 74                                    |        |                     | $      |     |       
|                                                 
|See notes to consolidated financial statements.   |                                                                       |                                                                                                                    |                                           |                                       |        |                     |        |     

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PLUMAS BANCORP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

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s subsidiaries include the Bank and Plumas Statutory Trust I, which
was formed solely to facilitate the issuance of trust preferred securities.
The Bank operates nine branches in California, including branches in Alturas,
Chester, Fall River Mills, Greenville, Portola, Quincy, Susanville, 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

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 September 30,
2003 and December 31, 2002, the results of operations for the three months
ended September 30, 2003 and 2002 and the results of operations and cash flows
for the nine months ended September 30, 2003 and 2002. Certain
reclassifications have been made to prior years balances to conform to
classifications used in 2003.

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
2002 Annual Report to Shareholders. The results of operations for the
three-month and nine-month periods ended September 30, 2003 and 2002 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:

|                                                |  |               |         |              |  |   |         |  
|----------------------------------------------- |  | ------------- | ------- | ------------ |  | - | ------- | -
|                                                |  | September 30, |         | December 31,
|                                                |  | 2003          |         | 2002        
|                                                |  |               |         |             
|Commercial                                      |  | $             | 49,762  |              |  | $ | 52,432  |  
|Agricultural                                    |  |               | 29,048  |              |  |   | 25,610  |  
|Real estate  mortgage                          |  |               | 63,747  |              |  |   | 66,039  |  
|Real estate  construction and land development |  |               | 25,598  |              |  |   | 15,175  |  
|Consumer                                        |  |               | 46,925  |              |  |   | 48,465  |  
|                                                |  |               |         |              |  |   |         |  
|                                                |  |               | 215,080 |              |  |   | 207,721 |  
|Deferred loans fees, net                        |  |               | (432    | )            |  |   | (601    | )
|Allowance for loan losses                       |  |               | (2,642  | )            |  |   | (2,471  | )
|                                                |  |               |         |              |  |   |         |  
|                                                |  | $             | 212,006 |              |  | $ | 204,649 |  
|                                                |  |               |         |              |  |   |         |  

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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 $52,222,000 and $49,267,000 and letters of credit of
$1,947,000 and $509,000 at September 30, 2003 and December 31, 2002,
respectively.

Approximately $12,218,000 of the loan commitments outstanding at September 30,
2003 are for real estate construction loans and 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.

On April 30, 2003 the Company announced that it has entered into an agreement
with Placer Sierra Bank to purchase five branches from the Auburn, California
based bank, subject to regulatory approval. The five branches are in the
communities of Quincy, Portola, Loyalton, Truckee and Kings Beach, California.
As of September 30, 2003, total deposits at these branches amounted to $52.7
million. It is expected that assets acquired will include premises and
equipment of approximately $600 thousand and a core deposit intangible
estimated to range between $2.2 million and $2.5 million that will be amortized
using the straight-line method over a period of ten years.

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. Earnings per share computations have been
retroactively adjusted for stock splits for all periods presented.

|                                               |                            |  |                      |           |                     |  |      |           |      |  |   |           |  |  |   |           | 
|---------------------------------------------- | -------------------------- |  | -------------------- | --------- | ------------------- |  | ---- | --------- | ---- |  | - | --------- |  |  | - | --------- | 
|                                               |                            |  | For the Three Months |           | For the Nine Months
|                                               |                            |  | Ended September 30   |           | Ended September 30 
|                                               |                            |  |                      |           |                    
|                                               |                            |  | 2003                 |           | 2002                |  | 2003 |           | 2002
|                                               |                            |  |                      |           |                     |  |      |           |     
|Earnings Per Share:                            |                            |  |                      |           |                     |  |      |           |      |  |   |           |  |  |   |          
|                                               | Basic earnings per share   |  | $                    | 0.24      |                     |  | $    | 0.26      |      |  | $ | 0.71      |  |  | $ | 0.70      | 
|                                               | Diluted earnings per share |  | $                    | 0.24      |                     |  | $    | 0.25      |      |  | $ | 0.69      |  |  | $ | 0.69      | 
|Weighted Average Number of
Shares Outstanding: |                            |  |                      |           |                     |  |      |           |      |  |   |           |  |  |   |          
|                                               | Basic shares               |  |                      | 3,236,521 |                     |  |      | 3,199,819 |      |  |   | 3,227,648 |  |  |   | 3,196,157 | 
|                                               | Diluted shares             |  |                      | 3,327,606 |                     |  |      | 3,283,127 |      |  |   | 3,314,789 |  |  |   | 3,263,960 | 

6. COMPREHENSIVE INCOME

Total comprehensive income for the three months ended September 30, 2003 and
2002 totaled $473,000 and $969,000, respectively. Comprehensive income is
comprised of net unrealized (losses) gains, net of taxes, on available-for-sale
investment securities, which were $(309,000) and $148,000 for the three months
ended September 30, 2003 and 2002, respectively, together with net income.

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Total comprehensive income for the nine months ended September 30, 2003 and
2002 totaled $2,120,000 and $2,503,000, respectively. Comprehensive income is
comprised of net unrealized (losses) gains, net of taxes, on available-for-sale
investment securities, which were $(178,000) and $263,000 for the nine months
ended September 30, 2003 and 2002, respectively, along with net income. At
September 30, 2003 and December 31, 2002, accumulated other comprehensive
income totaled $232,000 and $410,000, respectively, and is reflected as a
component of shareholders equity.

7. ACCOUNTING PRONOUNCEMENTS

In January 2003, the FASB issued Interpretation No. 46, Consolidation of
Variable Interest Entities (FIN 46), which requires the consolidation of
variable interest entities, as defined. FIN 46 is currently applicable to
variable interest entities created after January 31, 2003. In October 2003, the
FASB agreed to defer the effective date of FIN 46 for variable interests held
by public companies in all entities that were acquired prior to February 1,
2003. This deferral is to allow time for certain implementation issues to be
addressed through the issuance of a potential modification to the
interpretation. The deferral revised the effective date for consolidation of
these entities to the period ended December 31, 2003 for calendar year end
companies. Based on the current rules, the Company does not believe that the
implementation of the interpretation will have a material impact on the
Companys financial position or results of operations.

In May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity. This
Statement establishes standards for how an issuer classifies and measures
certain financial instruments with characteristics of both liabilities and
equity. It requires that an issuer classify a financial instrument that is
within its scope as a liability (or an asset in some circumstances). This
Statement is effective for financial instruments entered into or modified by

the Company after May 31, 2003, and otherwise is effective at the beginning of
the first interim period beginning after June 15, 2003. The Company has
previously accounted for its mandatorily redeemable cumulative trust preferred
securities in a manner consistent with the Statement and, in managements
opinion, adoption of this Statement did not have a material effect on the
Companys consolidated financial position or results of operations.

On April 30, 2003, the Financial Accounting Standards Board issued Statement
No. 149, Amendment of Statement 133 on Derivative Instruments and Hedging
Activities. This Statement amends and clarifies the accounting for derivative
instruments by providing guidance related to circumstances under which a
contract with a net investment meets the characteristics of a derivative as
discussed in Statement 133. The Statement also clarifies when a derivative
contains a financing component. The Statement is intended to result in more
consistent reporting for derivative contracts and must be applied prospectively
for contracts entered into or modified after June 30, 2003, except for hedging
relationships designated after June 30, 2003. In managements opinion,
adoption of this statement is not expected to have a material effect on the
Companys consolidated financial position or results of operations.

8. STOCK-BASED COMPENSATION

At September 30, 2003, 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.

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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 Months |     | For the Nine Months
|                                                                                                                                       |                      |   | Ended September 30   |     | Ended September 30 
|                                                                                                                                       |                      |   |                      |     |                    
|                                                                                                                                       |                      |   | 2003                 |     | 2002                |   | 2003 |     | 2002
|Net income as reported                                                                                                                 |                      | $ | 782                  |     |                     | $ | 821  |     |      | $ | 2,298 |       |  | $ | 2,240 |      
|Deduct: Total stock-based compensation
expense determined under the fair value
based method for all awards, net of
related tax effects |                      |   | 23                   |     |                     |   |     |     |      |   | 65    |       |  |   | 165   |      
|                                                                                                                                       |                      |   |                      |     |                     |   |      |     |      |   |       |       |  |   |       |      
|                                                                                                                                       | Pro forma net income |   | $                    | 759 |                     |   | $    | 821 |      |   | $     | 2,233 |  |   | $     | 2,075 | 
|                                                                                                                                       |                      |   |                      |     |                     |   |      |     |      |   |       |       |  |   |       |      
|Basic earnings per share  as reported                                                                                                 |                      | $ | 0.24                 |     |                     | $ | 0.26 |     |      | $ | 0.71  |       |  | $ | 0.70  |      
|                                                                                                                                       |                      |   |                      |     |                     |   |      |     |      |   |       |       |  |   |       |      
|Basic earnings per share  pro forma                                                                                                   |                      | $ | 0.23                 |     |                     | $ | 0.26 |     |      | $ | 0.69  |       |  | $ | 0.65  |      
|                                                                                                                                       |                      |   |                      |     |                     |   |      |     |      |   |       |       |  |   |       |      
|Diluted earnings per share  as reported                                                                                               |                      | $ | 0.24                 |     |                     | $ | 0.25 |     |      | $ | 0.69  |       |  | $ | 0.69  |      
|                                                                                                                                       |                      |   |                      |     |                     |   |      |     |      |   |       |       |  |   |       |      
|Diluted earnings per share  pro forma                                                                                                 |                      | $ | 0.23                 |     |                     | $ | 0.25 |     |      | $ | 0.68  |       |  | $ | 0.63  |      
|                                                                                                                                       |                      |   |                      |     |                     |   |      |     |      |   |       |       |  |   |       |      

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 Nine-Months Ended,
|                                               |  |                           
|                                               |  | September 30, 2003         |      | September 30, 2002
|                                               |  |                            |      |                   
|Weighted average fair value of options granted |  | $                          | 4.06 |                    |  |  | N/A | 
|Dividend yield                                 |  |                            | 1.4  | %                  |  |  | N/A | 
|Expected volatility                            |  |                            | 17.3 | %                  |  |  | N/A | 
|Risk-free interest rate                        |  |                            | 2.5  | %                  |  |  | N/A | 
|Expected option life in years                  |  |                            | 5.0  |                    |  |  | N/A | 

There were no option grants made during the nine-month period ended September
30, 2002. There were no option grants made during the three-month periods
ended September 30, 2003 and September 30, 2002.

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PART I  FINANCIAL INFORMATION




ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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 September 30, 2003 and
December 31, 2002, for the three months ended September 30, 2003 and September
30, 2002 and for the nine months ended September 30, 2003 and September 30,
2002. 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-KSB for the year ended December 31,
2002. 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, are
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. Such risks
and uncertainties include, but are not limited to, those described in
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS. 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.

OVERVIEW

The Companys net income increased $58,000, or 2.6%, to $2,298,000 for the nine
months ended September 30, 2003 from $2,240,000 for the same period in 2002.
The primary contributors to the increase in net income for the first nine
months of 2003 were a $734 thousand increase in net interest income, a $100
thousand decrease in provision for loan losses and a $334 thousand increase in
non-interest income, partially offset by a $1,054 thousand increase in
non-interest expenses and a $56 thousand increase in income tax expense.

Total assets at September 30, 2003 were $343.1 million, an increase of $17.7
million, or 5.4%, from the $325.5 million at December 31, 2002. Growth in
assets was primarily directed to the Companys loan and investment portfolios.
The loan portfolio grew $7.4 million, or 3.6%, to $212.0 million while the
investment portfolio grew $6.2 million, or 10.1%, to $67.7 million during this
same period. The growth in assets was funded by growth in the Companys
deposits. Deposits grew $15.5 million, or 5.3%, to $309.4 million at September
30, 2003 from the $293.9 million at December 31, 2002.

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The return on average assets was 0.94% for the nine months ended September 30,
2003 compared to 1.05% for the same period in 2002. The return on average
equity was 12.5% for the nine months ended September 30, 2003 compared to 13.9%
for the same period in 2002. Although the Companys earnings increased during
the first nine months of 2003 when compared to the same period in 2002, the
Companys rapid growth during this same time-frame resulted in declines in the
return on average asset and equity ratios. Total average assets for the nine
months ended September 30, 2003 increased $41.0 million, or 14%, from the same
period in 2002. Total average equity for the nine months ended September 30,
2003 increased $3.1 million, or 14%, from the same period in 2002.

RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003

Net interest income before provision for loan losses.Net interest income, on
a nontax-equivalent basis, was $11.5 million for the nine months ended
September 30, 2003, an increase of $734,000, or 7%, from $10.7 million for the
same period in 2002. The increase in net interest income was primarily
attributed to declines in rates paid on the Companys deposits combined with
volume increases in the Companys average loan and investment balances that
were mostly offset by declines in the yield on the Companys interest-earning
assets.

Interest income remained relatively unchanged at $13.8 million for both nine
month periods ended September 30, 2003 and 2002. Interest income was static as
a result of volume increases in both the loan and investment portfolios being
offset by falling yields in both the loan and investment portfolios. The
Companys average loan balances were $214 million for the nine months ended
September 30, 2003, up $19 million, or 10%, from the $195 million for the same
period in 2002. Significantly offsetting the benefits of the increased loan
volume was the impact of falling weighted-average interest rates in the
Companys loan portfolio. The Companys average loan yield was 7.66% for the
nine months ended September 30, 2003, down 59 basis points, or 7%, from the
8.25% for the same period in 2002.

Interest expense decreased $715,000, or 24%, to $2.3 million for the nine
months ended September 30, 2003, down from $3.0 million for the same period in
2002. The decrease in interest expense was primarily attributed to rate
decreases on time deposits partially offset by interest expense on the
Companys trust preferred securities issued in September of 2002. The
Companys average rate paid on time deposits was 2.28% for the nine months
ended September 30, 2003, down 95 basis points, or 29%, from the 3.23% paid for
the same period in 2002.

The net interest margin for the nine months ended September 30, 2003 decreased
32 basis points, or 6%, to 5.33%, down from 5.65% for the same period in 2002.
Similar to most of the banking industry, the Companys net interest margin
continues to be challenged by the impact of the numerous decreases to the
Federal funds rate which have occurred over the past three years. The most
recent Federal funds rate cut occurred in June 2003 and amounted to 25 basis
points. This latest rate cut resulted in the Federal funds target rate hitting
the historic low rate of 1%. Maintaining the spread between loan yields and
the effective rates paid on deposits has become increasingly difficult as
deposit rates may be near the bottom of consumer tolerance and customers may
seek higher yielding alternatives outside of the Bank.

11



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The following table presents for the nine-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 Nine Months Ended September 30, 2003 |         | For the Nine Months Ended September 30, 2002
|                                            |                           |                                    |        |                                              |         |                                             
|                                            |                           |                                    |        | Average Balance                              |         | Interest                                     |        | Yield/ |        | Average Balance |      | Interest       |      | Yield/
|                                            |                           |                                    |        | (in thousands)                               |         | (in thousands)                               |        | Rate   |        | (in thousands)  |      | (in thousands) |      | Rate  
|                                            |                           |                                    |        |                                              |         |                                              |        |        |        |                 |      |                |      |       
|Interest-earning assets:                    |                           |                                    |        |                                              |         |                                              |        |        |        |                 |      |                |      |        |        |         |         |   |        |        |        |  |      |     
|                                            | Loans (1) (2)             |                                    | $      | 213,503                                      |         |                                              | $      | 12,226 |        |                 |      | 7.66           | %    |        | $      | 194,920 |         |   | $      | 12,023 |        |  |      | 8.25 | %   
|                                            | Investment securities (1) |                                    |        | 61,854                                       |         |                                              |        | 1,460  |        |                 |      | 3.16           | %    |        |        | 43,106  |         |   |        | 1,543  |        |  |      | 4.79 | %   
|                                            | Federal funds sold        |                                    |        | 11,815                                       |         |                                              |        | 93     |        |                 |      | 1.05           | %    |        |        | 15,578  |         |   |        | 194    |        |  |      | 1.67 | %   
|                                            |                           |                                    |        |                                              |         |                                              |        |        |        |                 |      |                |      |        |        |         |         |   |        |        |        |  |      |     
|                                            |                           | Total earning assets               |        |                                              | 287,172 |                                              |        |        | 13,779 |                 |      |                | 6.42 | %      |        |         | 253,604 |   |        |        | 13,760 |  |      |      | 7.25 | %
|                                            |                           |                                    |        |                                              |         |                                              |        |        |        |                 |      |                |      |        |        |         |         |   |        |        |        |  |      |     
|Cash and demand deposits with banks         |                           |                                    | 20,851 |                                              |         |                                              |        |        |        |                 |      |                |      |        | 15,501 |         |         |   |        |        |        |  |      |     
|Other assets                                |                           |                                    | 18,203 |                                              |         |                                              |        |        |        |                 |      |                |      |        | 16,166 |         |         |   |        |        |        |  |      |     
|                                            |                           |                                    |        |                                              |         |                                              |        |        |        |                 |      |                |      |        |        |         |         |   |        |        |        |  |      |     
|                                            |                           | Total assets                       |        | $                                            | 326,226 |                                              |        |        |        |                 |      |                |      |        |        | $       | 285,271 |   |        |        |        |  |      |      |      |  
|                                            |                           |                                    |        |                                              |         |                                              |        |        |        |                 |      |                |      |        |        |         |         |   |        |        |        |  |      |     
|Interest-bearing liabilities:               |                           |                                    |        |                                              |         |                                              |        |        |        |                 |      |                |      |        |        |         |         |   |        |        |        |  |      |     
|                                            | NOW deposits              |                                    | $      | 34,067                                       |         |                                              |        | 64     |        |                 |      | 0.25           | %    |        | $      | 32,630  |         |   |        | 87     |        |  |      | 0.36 | %   
|                                            | Money market deposits     |                                    |        | 57,731                                       |         |                                              |        | 395    |        |                 |      | 0.91           | %    |        |        | 49,509  |         |   |        | 579    |        |  |      | 1.56 | %   
|                                            | Savings deposits          |                                    |        | 46,393                                       |         |                                              |        | 247    |        |                 |      | 0.71           | %    |        |        | 37,717  |         |   |        | 319    |        |  |      | 1.13 | %   
|                                            | Time deposits             |                                    |        | 81,907                                       |         |                                              |        | 1,395  |        |                 |      | 2.28           | %    |        |        | 84,673  |         |   |        | 2,046  |        |  |      | 3.23 | %   
|                                            | Other borrowings (3)      |                                    |        | 6,187                                        |         |                                              |        | 220    |        |                 |      | 4.75           | %    |        |        | 96      |         |   |        | 5      |        |  |      | 6.96 | %   
|                                            |                           |                                    |        |                                              |         |                                              |        |        |        |                 |      |                |      |        |        |         |         |   |        |        |        |  |      |     
|                                            |                           | Total interest-bearing liabilities |        |                                              | 226,285 |                                              |        |        | 2,321  |                 |      |                | 1.37 | %      |        |         | 204,625 |   |        |        | 3,036  |  |      |      | 1.98 | %
|                                            |                           |                                    |        |                                              |         |                                              |        |        |        |                 |      |                |      |        |        |         |         |   |        |        |        |  |      |     
|Non-interest bearing deposits               |                           |                                    | 73,165 |                                              |         |                                              |        |        |        |                 |      |                |      |        | 57,049 |         |         |   |        |        |        |  |      |     
|Other liabilities                           |                           |                                    | 2,247  |                                              |         |                                              |        |        |        |                 |      |                |      |        | 2,131  |         |         |   |        |        |        |  |      |     
|Shareholders equity                        |                           |                                    | 24,529 |                                              |         |                                              |        |        |        |                 |      |                |      |        | 21,466 |         |         |   |        |        |        |  |      |     
|                                            |                           |                                    |        |                                              |         |                                              |        |        |        |                 |      |                |      |        |        |         |         |   |        |        |        |  |      |     
|                                            |                           | Total liabilities & equity         |        | $                                            | 326,226 |                                              |        |        |        |                 |      |                |      |        |        | $       | 285,271 |   |        |        |        |  |      |      |      |  
|                                            |                           |                                    |        |                                              |         |                                              |        |        |        |                 |      |                |      |        |        |         |         |   |        |        |        |  |      |     
|Cost of funding interest-earning assets (4) |                           |                                    |        |                                              |         |                                              |        |        |        |                 | 1.08 | %              |      |        |        |         |         |   |        |        |        |  | 1.60 | %   
|Net interest income and margin (5)          |                           |                                    |        |                                              |         | $                                            | 11,458 |        |        |                 | 5.33 | %              |      |        |        |         |         | $ | 10,724 |        |        |  | 5.65 | %   
|                                            |                           |                                    |        |                                              |         |                                              |        |        |        |                 |      |                |      |        |        |         |         |   |        |        |        |  |      |     



---

|(1) |  | Not computed on a tax-equivalent basis.                                                                                                                                                       
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Loan fees included in loan interest income for the nine-month periods
ended September 30, 2003 and 2002 amounted to $566 and $527, respectively.                                              
|   
|(3) |  | For the purpose of this schedule the interest expense related to the
Companys junior subordinated debentures is included in other borrowings.
These debentures were issued in September 2002.
|   
|(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.                                                                                                                   

12



---



##### Table of Contents



The following table sets forth changes in interest income and interest expense,
for the nine-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:

|                              |                       |                        |       |                                              |       |          |      |                |        |       |      |      |      |   |      |      |      |  
|----------------------------- | --------------------- | ---------------------- | ----- | -------------------------------------------- | ----- | -------- | ---- | -------------- | ------ | ----- | ---- | ---- | ---- | - | ---- | ---- | ---- | -
|                              |                       |                        |       | 2003 over 2002 change in net interest income
|                              |                       |                        |       |                                             
|                              |                       |                        |       |                                              |       |          |      | (in thousands) |        |       |      |     
|                              |                       |                        |       | Volume (1)                                   |       | Rate (2) |      | Mix (3)        |        | Total
|                              |                       |                        |       |                                              |       |          |      |                |        |      
|Interest-earning assets:      |                       |                        |       |                                              |       |          |      |                |        |       |      |      |      |   |      |     
|Loans                         |                       | $                      | 1,146 |                                              |       | $        | (861 | )              |        | $     | (82  | )    |      | $ | 203  |     
|Investment securities         |                       |                        | 671   |                                              |       |          | (526 | )              |        |       | (228 | )    |      |   | (83  | )   
|Federal funds sold            |                       |                        | (47   | )                                            |       |          | (71  | )              |        |       | 17   |      |      |   | (101 | )   
|                              |                       |                        |       |                                              |       |          |      |                |        |       |      |      |      |   |      |     
|                              |                       | Total interest income  |       |                                              | 1,770 |          |      |                | (1,458 | )     |      |      | (293 | ) |      |      | 19   |  
|                              |                       |                        |       |                                              |       |          |      |                |        |       |      |      |      |   |      |     
|Interest-bearing liabilities: |                       |                        |       |                                              |       |          |      |                |        |       |      |      |      |   |      |     
|                              | NOW deposits          |                        |       | 4                                            |       |          |      | (26            | )      |       |      | (1   | )    |   |      | (23  | )   
|                              | Money market deposits |                        |       | 96                                           |       |          |      | (240           | )      |       |      | (40  | )    |   |      | (184 | )   
|                              | Savings deposits      |                        |       | 73                                           |       |          |      | (118           | )      |       |      | (27  | )    |   |      | (72  | )   
|                              | Time deposits         |                        |       | (67                                          | )     |          |      | (603           | )      |       |      | 20   |      |   |      | (650 | )   
|                              | Other borrowings      |                        |       | 318                                          |       |          |      | (2             | )      |       |      | (102 | )    |   |      | 214  |     
|                              |                       |                        |       |                                              |       |          |      |                |        |       |      |      |      |   |      |     
|                              |                       | Total interest expense |       |                                              | 424   |          |      |                | (989   | )     |      |      | (150 | ) |      |      | (715 | )
|                              |                       |                        |       |                                              |       |          |      |                |        |       |      |      |      |   |      |     
|Net interest income           |                       | $                      | 1,346 |                                              |       | $        | (469 | )              |        | $     | (143 | )    |      | $ | 734  |     
|                              |                       |                        |       |                                              |       |          |      |                |        |       |      |      |      |   |      |     



---

|(1) |  | The volume change in net interest income represents the change in average
balance divided by the 2002 rate.     
|--- |  | ----------------------------------------------------------------------------------------------------------------
|   
|(2) |  | The rate change in net interest income represents the change in rate
divided by the 2002 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 $625,000 in provision for loan
losses for the nine months ended September 30, 2003, down $100,000, or 14%,
from the $725,000 provision for the same period in 2002. The Company 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 nine months ended September 30, 2003, total
non-interest income increased $334,000, or 15%, to $2.6 million, up from $2.2
million for the comparable period in 2002. The increase in non-interest income
is primarily due to increases in the number of fee generating accounts, gains
on the sale of investment securities, income from mortgage loan activity and
gains on the sale of mortgage loans.

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 nine
months ended September 30, 2003, non-interest expense increased $1.1 million,
or 12%, to $9.6 million, up from $8.6 million for the comparable period in
2002.

13



---



##### Table of Contents



Salaries and employee benefits increased $789,000, or 17%, over the same
nine-month period last year. This increase was due primarily to the continued
expansion of the Companys centralized lending function, staffing additions to
manage the overall growth and expansion of the Company and increased employee
benefit costs related to health-care and life insurance.

Occupancy and equipment expense increased $396,000, or 30%, over the same
nine-month period last year. This increase was due primarily to additional
depreciation and operating costs associated with new network security and
monitoring systems, upgrades to the networks operating system, enhancements to
the item processing system, installation of a new automated teller platform
system, the Companys new centralized lending facility, remodeling costs
associated with the Companys administrative building and leasing cost on the
Tahoe City branch that is scheduled to be opened in later part of 2003.

The following table describes the components of non-interest expense for the
nine-month periods ending September 30, 2003 and 2002:

|                               |                            |   |                     |       |      |   |       |       | 
|------------------------------ | -------------------------- | - | ------------------- | ----- | ---- | - | ----- | ----- | 
|                               |                            |   | Unaudited          
|                               |                            |   | For the Nine Months
|                               |                            |   | Ended September 30 
|                               |                            |   |                    
|                               |                            |   | 2003                |       | 2002
|                               |                            |   |                     |       |     
|Salaries and employee benefits |                            | $ | 5,382               |       |      | $ | 4,593 |      
|Occupancy and equipment        |                            |   | 1,696               |       |      |   | 1,300 |      
|Professional fees              |                            |   | 426                 |       |      |   | 550   |      
|Business development           |                            |   | 281                 |       |      |   | 258   |      
|Armored car and courier        |                            |   | 257                 |       |      |   | 236   |      
|Telephone                      |                            |   | 245                 |       |      |   | 259   |      
|Stationery and supplies        |                            |   | 218                 |       |      |   | 250   |      
|Advertising and promotion      |                            |   | 207                 |       |      |   | 202   |      
|Director compensation          |                            |   | 190                 |       |      |   | 167   |      
|Postage                        |                            |   | 190                 |       |      |   | 147   |      
|Loan expenses                  |                            |   | 165                 |       |      |   | 193   |      
|Other expense                  |                            |   | 364                 |       |      |   | 412   |      
|                               |                            |   |                     |       |      |   |       |      
|                               | Total non-interest expense |   | $                   | 9,621 |      |   | $     | 8,567 | 
|                               |                            |   |                     |       |      |   |       |      

RESULTS OF OPERATIONS FOR THE THREE
MONTHS ENDED SEPTEMBER 30, 2003

Net interest income before provision for loan losses.Net interest income, on
a nontax-equivalent basis, was $3.9 million for the three months ended
September 30, 2003, an increase of $112,000, or 3%, from $3.8 million for the
same period in 2002. The increase in net interest income was primarily
attributed to declines in rates paid on the Companys deposits combined with
volume increases in the Companys average loan and investment balances, mostly
offset by declines in the yield on the Companys interest-earning assets.


Interest income decreased $203,000 or 4%, to $4.5 million for the three months
ended September 30, 2003, down from $4.7 million for the same period in 2002.
The decrease in interest income was primarily attributed to falling yields on
loan and investment balances that were largely offset by volume increases in
loans and investment balances. The Companys average loan yield was 7.39% for
the three months ended September 30, 2003, down 72 basis points, or 9%, from
the 8.11% for the same period in 2002. Significantly offsetting the negative
impact of the declining loan yields was the increased loan volume. The
Companys average loan balances were $217 million for the three months ended
September 30, 2003, up $14 million, or 7%, from the $203 million for the same
period in 2002.

Interest expense decreased $315,000, or 32%, to $670,000 for the three months
ended September 30, 2003, down from $985,000 for the same period in 2002. The
decrease in interest expense was primarily attributed to rate decreases for
time and money market deposits partially offset by interest expense on the
Companys trust preferred securities issued in September of 2002. The
Companys average rate paid on

14



---



##### Table of Contents



time deposits was 2.07% for the three months ended September 30, 2003, down 90
basis points, or 30%, from the 2.96% paid for the same period in 2002.

The net interest margin for the three months ended September 30, 2003 decreased
38 basis points, or 7%, to 5.19%, down from 5.57% for the same period in 2002.

15



---



##### 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 September 30, |         | For the Three Months Ended September 30,
|                                            |                           |                                    |        | 2003                                     |         | 2002                                    
|                                            |                           |                                    |        |                                          |         |                                         
|                                            |                           |                                    |        | Average Balance                          |         | Interest                                 |       | Yield/ |       | Average Balance |      | Interest       |      | Yield/
|                                            |                           |                                    |        | (in thousands)                           |         | (in thousands)                           |       | Rate   |       | (in thousands)  |      | (in thousands) |      | Rate  
|                                            |                           |                                    |        |                                          |         |                                          |       |        |       |                 |      |                |      |       
|Interest-earning assets:                    |                           |                                    |        |                                          |         |                                          |       |        |       |                 |      |                |      |        |        |         |         |   |       |       |       |  |      |     
|                                            | Loans (1) (2)             |                                    | $      | 216,811                                  |         |                                          | $     | 4,039  |       |                 |      | 7.39           | %    |        | $      | 203,172 |         |   | $     | 4,151 |       |  |      | 8.11 | %   
|                                            | Investment securities (1) |                                    |        | 61,828                                   |         |                                          |       | 456    |       |                 |      | 2.93           | %    |        |        | 42,736  |         |   |       | 496   |       |  |      | 4.60 | %   
|                                            | Federal funds sold        |                                    |        | 16,757                                   |         |                                          |       | 39     |       |                 |      | 0.92           | %    |        |        | 21,178  |         |   |       | 90    |       |  |      | 1.69 | %   
|                                            |                           |                                    |        |                                          |         |                                          |       |        |       |                 |      |                |      |        |        |         |         |   |       |       |       |  |      |     
|                                            |                           | Total earning assets               |        |                                          | 295,396 |                                          |       |        | 4,534 |                 |      |                | 6.09 | %      |        |         | 267,086 |   |       |       | 4,737 |  |      |      | 7.04 | %
|                                            |                           |                                    |        |                                          |         |                                          |       |        |       |                 |      |                |      |        |        |         |         |   |       |       |       |  |      |     
|Cash and demand deposits with banks         |                           |                                    | 23,243 |                                          |         |                                          |       |        |       |                 |      |                |      |        | 15,947 |         |         |   |       |       |       |  |      |     
|Other assets                                |                           |                                    | 19,225 |                                          |         |                                          |       |        |       |                 |      |                |      |        | 16,895 |         |         |   |       |       |       |  |      |     
|                                            |                           |                                    |        |                                          |         |                                          |       |        |       |                 |      |                |      |        |        |         |         |   |       |       |       |  |      |     
|                                            |                           | Total assets                       |        | $                                        | 337,864 |                                          |       |        |       |                 |      |                |      |        |        | $       | 299,928 |   |       |       |       |  |      |      |      |  
|                                            |                           |                                    |        |                                          |         |                                          |       |        |       |                 |      |                |      |        |        |         |         |   |       |       |       |  |      |     
|Interest-bearing liabilities:               |                           |                                    |        |                                          |         |                                          |       |        |       |                 |      |                |      |        |        |         |         |   |       |       |       |  |      |     
|                                            | NOW deposits              |                                    | $      | 35,181                                   |         |                                          |       | 16     |       |                 |      | 0.18           | %    |        | $      | 34,406  |         |   |       | 30    |       |  |      | 0.35 | %   
|                                            | Money market deposits     |                                    |        | 58,389                                   |         |                                          |       | 105    |       |                 |      | 0.71           | %    |        |        | 52,017  |         |   |       | 214   |       |  |      | 1.63 | %   
|                                            | Savings deposits          |                                    |        | 48,575                                   |         |                                          |       | 55     |       |                 |      | 0.45           | %    |        |        | 39,801  |         |   |       | 113   |       |  |      | 1.13 | %   
|                                            | Time deposits             |                                    |        | 81,237                                   |         |                                          |       | 423    |       |                 |      | 2.07           | %    |        |        | 83,889  |         |   |       | 625   |       |  |      | 2.96 | %   
|                                            | Other borrowings (3)      |                                    |        | 6,195                                    |         |                                          |       | 71     |       |                 |      | 4.55           | %    |        |        | 197     |         |   |       | 3     |       |  |      | 6.04 | %   
|                                            |                           |                                    |        |                                          |         |                                          |       |        |       |                 |      |                |      |        |        |         |         |   |       |       |       |  |      |     
|                                            |                           | Total interest-bearing liabilities |        |                                          | 229,577 |                                          |       |        | 670   |                 |      |                | 1.16 | %      |        |         | 210,310 |   |       |       | 985   |  |      |      | 1.86 | %
|                                            |                           |                                    |        |                                          |         |                                          |       |        |       |                 |      |                |      |        |        |         |         |   |       |       |       |  |      |     
|Non-interest bearing deposits               |                           |                                    | 80,517 |                                          |         |                                          |       |        |       |                 |      |                |      |        | 65,401 |         |         |   |       |       |       |  |      |     
|Other liabilities                           |                           |                                    | 2,395  |                                          |         |                                          |       |        |       |                 |      |                |      |        | 2,001  |         |         |   |       |       |       |  |      |     
|Shareholders equity                        |                           |                                    | 25,375 |                                          |         |                                          |       |        |       |                 |      |                |      |        | 22,216 |         |         |   |       |       |       |  |      |     
|                                            |                           |                                    |        |                                          |         |                                          |       |        |       |                 |      |                |      |        |        |         |         |   |       |       |       |  |      |     
|                                            |                           | Total liabilities & equity         |        | $                                        | 337,864 |                                          |       |        |       |                 |      |                |      |        |        | $       | 299,928 |   |       |       |       |  |      |      |      |  
|                                            |                           |                                    |        |                                          |         |                                          |       |        |       |                 |      |                |      |        |        |         |         |   |       |       |       |  |      |     
|Cost of funding interest-earning assets (4) |                           |                                    |        |                                          |         |                                          |       |        |       |                 | 0.90 | %              |      |        |        |         |         |   |       |       |       |  | 1.46 | %   
|Net interest income and margin (5)          |                           |                                    |        |                                          |         | $                                        | 3,864 |        |       |                 | 5.19 | %              |      |        |        |         |         | $ | 3,752 |       |       |  | 5.57 | %   
|                                            |                           |                                    |        |                                          |         |                                          |       |        |       |                 |      |                |      |        |        |         |         |   |       |       |       |  |      |     



---

|(1) |  | Not computed on a tax-equivalent basis.                                                                                                                                                       
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Loan fees included in loan interest income for the three-month periods
ended September 30, 2003 and 2002 amounted to $206 and $141, respectively.                                             
|   
|(3) |  | For the purpose of this schedule the interest expense related to the
Companys junior subordinated debentures is included in other borrowings.
These debentures were issued in September 2002.
|   
|(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.                                                                                                                   

16



---



##### 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:

|                              |                       |                        |     |                                              |     |          |      |         |      |       |     |     |     |   |      |      |      |  
|----------------------------- | --------------------- | ---------------------- | --- | -------------------------------------------- | --- | -------- | ---- | ------- | ---- | ----- | --- | --- | --- | - | ---- | ---- | ---- | -
|                              |                       |                        |     | 2003 over 2002 change in net interest income
|                              |                       |                        |     |                                             
|                              |                       |                        |     | (in thousands)                              
|                              |                       |                        |     | Volume (1)                                   |     | Rate (2) |      | Mix (3) |      | Total
|                              |                       |                        |     |                                              |     |          |      |         |      |      
|Interest-earning assets:      |                       |                        |     |                                              |     |          |      |         |      |       |     |     |     |   |      |     
|Loans                         |                       | $                      | 279 |                                              |     | $        | (366 | )       |      | $     | (25 | )   |     | $ | (112 | )   
|Investment securities         |                       |                        | 222 |                                              |     |          | (181 | )       |      |       | (81 | )   |     |   | (40  | )   
|Federal funds sold            |                       |                        | (19 | )                                            |     |          | (41  | )       |      |       | 9   |     |     |   | (51  | )   
|                              |                       |                        |     |                                              |     |          |      |         |      |       |     |     |     |   |      |     
|                              |                       | Total interest income  |     |                                              | 482 |          |      |         | (588 | )     |     |     | (97 | ) |      |      | (203 | )
|                              |                       |                        |     |                                              |     |          |      |         |      |       |     |     |     |   |      |     
|Interest-bearing liabilities: |                       |                        |     |                                              |     |          |      |         |      |       |     |     |     |   |      |     
|                              | NOW deposits          |                        |     | 1                                            |     |          |      | (14     | )    |       |     |    |     |   |      | (13  | )   
|                              | Money market deposits |                        |     | 26                                           |     |          |      | (120    | )    |       |     | (15 | )   |   |      | (109 | )   
|                              | Savings deposits      |                        |     | 25                                           |     |          |      | (68     | )    |       |     | (15 | )   |   |      | (58  | )   
|                              | Time deposits         |                        |     | (20                                          | )   |          |      | (189    | )    |       |     | 6   |     |   |      | (203 | )   
|                              | Other borrowings      |                        |     | 91                                           |     |          |      | (1      | )    |       |     | (22 | )   |   |      | 68   |     
|                              |                       |                        |     |                                              |     |          |      |         |      |       |     |     |     |   |      |     
|                              |                       | Total interest expense |     |                                              | 123 |          |      |         | (392 | )     |     |     | (46 | ) |      |      | (315 | )
|                              |                       |                        |     |                                              |     |          |      |         |      |       |     |     |     |   |      |     
|Net interest income           |                       | $                      | 359 |                                              |     | $        | (196 | )       |      | $     | (51 | )   |     | $ | 112  |     
|                              |                       |                        |     |                                              |     |          |      |         |      |       |     |     |     |   |      |     



---

|(1) |  | The volume change in net interest income represents the change in average
balance divided by the 2002 rate.     
|--- |  | ----------------------------------------------------------------------------------------------------------------
|   
|(2) |  | The rate change in net interest income represents the change in rate
divided by the 2002 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 $175,000 in provision for loan
losses for the three months ended September 30, 2003, down $25,000, or 13%,
from the $200,000 provision for the same period in 2002. The Company 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 September 30, 2003, total
non-interest income increased $119,000, or 15%, to $893,000, up from $774,000
for the comparable period in 2002. The increase in non-interest income is
primarily due to gains on the sale of investment securities, income from
mortgage loan activity and loan servicing income.

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 September 30, 2003, non-interest expense increased $308,000, or
10%, to $3.3 million, up from $3.0 million for the comparable period in 2002.

17



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##### Table of Contents



Salaries and employee benefits increased $333,000, or 21%, over the same
three-month period last year. This increase was due primarily to the expansion
of the Companys centralized lending function, staffing additions to manage the
overall growth and expansion of the Company and increased employee benefit
costs related to health-care and life insurance.

Occupancy and equipment increased $112,000, or 23%, over the same three-month
period last year. This increase was due primarily to additional depreciation
and operating costs associated with new network security and monitoring
systems, upgrades to the networks operating system, enhancements to the item
processing system, the Companys new centralized lending facility, remodeling
costs associated with the administrative building and leasing cost on the
soon-to-be opened branch in Tahoe City.

The following table describes the components of non-interest expense for the
three-month periods ending September 30, 2003 and 2002.

|                               |                            |   |                      |       |      |   |       |       | 
|------------------------------ | -------------------------- | - | -------------------- | ----- | ---- | - | ----- | ----- | 
|                               |                            |   | Unaudited           
|                               |                            |   | For the Three Months
|                               |                            |   | Ended September 30  
|                               |                            |   |                     
|                               |                            |   | 2003                 |       | 2002
|                               |                            |   |                      |       |     
|Salaries and employee benefits |                            | $ | 1,887                |       |      | $ | 1,554 |      
|Occupancy and equipment        |                            |   | 591                  |       |      |   | 479   |      
|Professional fees              |                            |   | 140                  |       |      |   | 220   |      
|Business development           |                            |   | 81                   |       |      |   | 73    |      
|Advertising and promotion      |                            |   | 74                   |       |      |   | 64    |      
|Armored car and courier        |                            |   | 92                   |       |      |   | 80    |      
|Loan expenses                  |                            |   | 21                   |       |      |   | 83    |      
|Stationery and supplies        |                            |   | 82                   |       |      |   | 76    |      
|Telephone                      |                            |   | 88                   |       |      |   | 87    |      
|Director compensation          |                            |   | 63                   |       |      |   | 61    |      
|Postage                        |                            |   | 61                   |       |      |   | 39    |      
|Other expense                  |                            |   | 119                  |       |      |   | 175   |      
|                               |                            |   |                      |       |      |   |       |      
|                               | Total non-interest expense |   | $                    | 3,299 |      |   | $     | 2,991 | 
|                               |                            |   |                      |       |      |   |       |      

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 the area it serves. 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
offer diversification as to industries and types of businesses, thus limiting
material exposure in any industry concentrations. 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 repayment. As of September 30,
2003, agricultural loans grew to 13.5% of the loan portfolio versus 12.3% at
December 31, 2002. Real estate loans increased to 41.6% of the loan portfolio
versus 39.1% at December 31, 2002. Commercial loans decreased to 23.1% of the
portfolio as of September 30, 2003 as compared to 25.3% at December 31, 2002.
Consumer loans also decreased to 21.8% of the loan portfolio at September 30,
2003 compared to 23.3% at December 31, 2002.

Nonperforming assets.Nonperforming loans increased $996,000, or 56%, to
$2,782,000 as of September 30, 2003 as compared to $1,786,000 as of December
31, 2002.

In September 2003, the Bank purchased a $756,000 first-lien position
agricultural real estate loan from another institution. This loan was
purchased to improve the Banks collateral position on a $442,000 nonperforming
second-lien agricultural real estate loan to the same borrower. With this
purchase total nonperforming loans at September 30, 2003 to this agricultural
borrower amounted to $1,198,000, or 43%

18



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##### Table of Contents



of total nonperforming loans outstanding. Management believes that this
nonperforming agricultural loan balance will be satisfactory resolved without
loss to the Company.

As a result of the increase in the non-performing loan balance, nonperforming
loans as a percent of total loans increased to 1.29% as of September 30, 2003
up from the 0.86% as of December 31, 2002. Nonperforming assets as a percent
of total assets were 0.90% as of September 30, 2003 up from 0.59% at December
31, 2002.

Analysis of allowance for loan losses.Net charge-offs during the nine months
ended September 30, 2003 totaled $454,000, or 0.21% of total loans, compared to
$390,000, or 0.19% of total loans, for the comparable period in 2002. Net
charge-offs during the nine months ended September 30, 2003 were comprised of
$598,000 of less $144,000 recoveries, compared to $451,000 of charge-offs less
$61,000 for the comparable period in 2002. The allowance for loan losses stood
at 1.23% of total loans as of September 30, 2003, versus 1.19% of total loans
as of December 31, 2002. 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 nine-month periods
indicated with respect to the Companys allowance for loan losses as well as
charge-off and recovery activity.

|                                                              |                             |   |       |     |      |   |       |     | 
|------------------------------------------------------------- | --------------------------- | - | ----- | --- | ---- | - | ----- | --- | 
|                                                              |                             |   | 2003  |     | 2002
|                                                              |                             |   |       |     |     
|Balance at January 1,                                         |                             | $ | 2,471 |     |      | $ | 2,153 |    
|                                                              |                             |   |       |     |      |   |       |    
|Charge-offs:                                                  |                             |   |       |     |      |   |       |    
|                                                              | Commercial and agricultural |   |       | 187 |      |   |       | 127 | 
|                                                              | Real estate mortgage        |   |       | 26  |      |   |       | 13  | 
|                                                              | Real estate construction    |   |       |    |      |   |       |    | 
|                                                              | Consumer                    |   |       | 385 |      |   |       | 311 | 
|                                                              |                             |   |       |     |      |   |       |    
|Total charge-offs                                             |                             |   | 598   |     |      |   | 451   |    
|                                                              |                             |   |       |     |      |   |       |    
|Recoveries:                                                   |                             |   |       |     |      |   |       |    
|                                                              | Commercial and agricultural |   |       | 20  |      |   |       | 8   | 
|                                                              | Real estate mortgage        |   |       |    |      |   |       | 1   | 
|                                                              | Real estate construction    |   |       |    |      |   |       |    | 
|                                                              | Consumer                    |   |       | 124 |      |   |       | 52  | 
|                                                              |                             |   |       |     |      |   |       |    
|Total recoveries                                              |                             |   | 144   |     |      |   | 61    |    
|                                                              |                             |   |       |     |      |   |       |    
|Net charge-offs                                               |                             |   | 454   |     |      |   | 390   |    
|                                                              |                             |   |       |     |      |   |       |    
|Provision for loan losses                                     |                             |   | 625   |     |      |   | 725   |    
|                                                              |                             |   |       |     |      |   |       |    
|Balance at September 30,                                      |                             | $ | 2,642 |     |      | $ | 2,488 |    
|                                                              |                             |   |       |     |      |   |       |    
|Net charge-offs during the nine-month period to average loans |                             |   | 0.21  | %   |      |   | 0.20  | %  
|Allowance for loan losses to total Loans                      |                             |   | 1.23  | %   |      |   | 1.21  | %  

19



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Investment securities and Federal funds sold.Total investment securities and
Federal funds sold increased $9.5 million, or 12%, to $86.2 million as of
September 30, 2003, up from $76.7 million at December 31, 2002.

The Companys investment in U.S. Treasury securities and direct obligations of
U.S. agencies decreased to 78.5% of the investment portfolio at September 30,
2003, versus 87.3% at December 31, 2002. The Companys investment in corporate
bonds rose to 15.9% of the investment portfolio at September 30, 2003, versus
7.3% at December 31, 2002. The remainder of the Companys investment portfolio
consists of municipal obligations.

Accrued interest receivable and other assets.Accrued interest receivable and
other assets increased $2.4 million, or 24%, to $12.3 million as of September
30, 2003, up from $9.9 million at December 31, 2002. Included in this balance
at September 30, 2003, was $6.4 million of Bank-owned life insurance policies
on executive officers and directors, $2.1 million of accrued interest
receivable, $1.3 of deferred tax benefits and $2.5 million of prepaid balances
and other assets.

Of the $2.4 million increase in accrued interest receivable and other assets,
$1.7 million related to the purchase of additional Bank-owned life insurance
policies in conjunction with deferred compensation agreements with an executive
officer and director.

Deposits.Total deposits were $309.4 million as of September 30, 2003, an
increase of $15 million, or 5%, from the December 31, 2002 balance of $293.9
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
increased to 38.3% of total deposits as of September 30, 2003, up from 36.7% of
total deposits as of December 31, 2002. Money market and savings deposits
increased slightly to 35.4% of total deposits as of September 30, 2003 compared
to 35.1% as of December 31, 2002. Time deposits decreased to 26.3% of total
deposits as of June 30, 2003, versus 28.2% as of December 31, 2002.

CAPITAL RESOURCES

Shareholders equity as of September 30, 2003 increased $1.9 million, or 8%, to
$25.2 million from $23.3 million as of December 31, 2002. This increase was
primarily due to the retention of current period earnings partially offset by a
$387 thousand semi-annual cash dividend payment in the second quarter of 2003
and a $178 thousand decrease in accumulated comprehensive income.

The Bank is subject to certain regulatory capital requirements administered by
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 Banks 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 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 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 Bank met all its capital adequacy requirements as of September 30, 2003.

20



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##### Table of Contents



|                  |  |                |        |         |  |             |      |   |  |  |     |  
|----------------- |  | -------------- | ------ | ------- |  | ----------- | ---- | - |  |  | --- | -
|                  |  | Plumas Bancorp
|                  |  |               
|                  |  | Actual         |        | Minimum
|                  |  |                |        | Capital
|                  |  | Capital        |        | Ratio   |  | Requirement
|                  |  |                |        |         |  |            
|Leverage          |  | $              | 30,362 |         |  |             | 8.9  | % |  |  | 4.0 | %
|Tier 1 Risk-Based |  |                | 30,362 |         |  |             | 11.5 | % |  |  | 4.0 | %
|Total Risk-Based  |  |                | 33,004 |         |  |             | 12.6 | % |  |  | 8.0 | %

|                  |  |             |        |         |  |             |      |   |  |  |     |  
|----------------- |  | ----------- | ------ | ------- |  | ----------- | ---- | - |  |  | --- | -
|                  |  | Plumas
Bank
|                  |  |            
|                  |  | Actual      |        | Minimum
|                  |  |             |        | Capital
|                  |  | Capital     |        | Ratio   |  | Requirement
|                  |  |             |        |         |  |            
|Leverage          |  | $           | 29,918 |         |  |             | 8.9  | % |  |  | 4.0 | %
|Tier 1 Risk-Based |  |             | 29,918 |         |  |             | 11.4 | % |  |  | 4.0 | %
|Total Risk-Based  |  |             | 32,560 |         |  |             | 12.4 | % |  |  | 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.

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 nine months of 2003, deposits
increased $15.5 million, or 5%, from the December 31, 2002 balance of $293.9
million. Deposit growth during the first nine months of 2003 was used to fund
growth in the loan and investment securities portfolios. 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, funds obtained from the maturing or sale of investments,
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.

21



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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, other than those
which possess a short term to maturity. Since virtually all of the Companys
interest earning assets and all of the Companys interest bearing liabilities
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 profile for the nine months ended September 30, 2003 compared to
December 31, 2002 as discussed in the Companys 2002 annual report and form
10-KSB.

22



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##### 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14(c)), have concluded that the Companys disclosure controls and
procedures are adequate and effective for purposes of Rule 13a14(c) 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 is incorporated by this
reference herein.

23



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##### Table of Contents



|      |  |                                                                                                                                                                                                                             
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|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 10.22 to the Registrants 10-QSB for June 30,
2002, which is incorporated by this reference herein.                                 

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##### Table of Contents



|      |  |                                                                                                                                                                                                                          
|----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|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 23, 2002, File No. 333-96957                                                                                                    

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##### Table of Contents



|      |  |                                                                                                                                                                                                                
|----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.42 |  | 1991 Stock Option Plan as amended is included as exhibit 99.1 of the
Form S-8 filed August 19, 2002, File No. 333-98319                                                                                        
|      |  |                                                                                                                                                                                                                
|10.43 |  | 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.
333-103229                                                                     
|      |  |                                                                                                                                                                                                                
|10.44 |  | 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.                              

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##### Table of Contents



|     |  |                                                                                                                                                                                
|---- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|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 November 10, 2003.                                                                            
|     |  |                                                                                                                                                                                
|31.2 |  | Rule 13a-14(a) [Section 302] Certification of Principal Financial
Officer dated November 10, 2003.                                                                             
|     |  |                                                                                                                                                                                
|31.3 |  | Rule 13a-14(a) [Section 302] Certification of Principal Executive
Officer dated November 10, 2003.                                                                             
|     |  |                                                                                                                                                                                
|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 November 10, 2003.
|     |  |                                                                                                                                                                                
|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 November 10, 2003. 
|     |  |                                                                                                                                                                                
|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 November 10, 2003. 

(b)  Reports on Form 8-K



| |  | On September 29, 2003, the Company filed a Current Report on Form 8-K. The
Current Report included as an exhibit, the press release dated September 29,
2003, filed by the Company announcing final regulatory approval for the planned
purchase of five branches located in Northeastern California from Placer Sierra
Bank.
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | On October 16, 2003, the Company filed a Current Report on Form 8-K. The
Current Report included as an exhibit, the press release dated October 16,
2003, filed by the Company containing unaudited financial information and third
quarter earnings.                                                                        
|
| |  | On October 20, 2003, the Company filed a Current Report on Form 8-K. The
Current Report included as an exhibit, the press release dated October 20,
2003, filed by the Company containing unaudited financial information and
announcement of a semi-annual cash dividend.                                                   

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##### 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: November 10, 2003

| |  |                                                                  
| |  | -----------------------------------------------------------------
| |  | /s/ William E. Elliott                                           
| |  |                                                                  
| |  | William E. ElliottPresident/Chief Executive Officer              
| |  |                                                                  
| |  | /s/ Douglas N. Biddle                                            
| |  |                                                                  
| |  | Douglas N. BiddleExecutive Vice President Chief Financial Officer
| |  |                                                                  
| |  | /s/ Andrew J. Ryback                                             
| |  |                                                                  
| |  | Andrew J. RybackSenior Vice President Controller                 

28