##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 (Mark One)
 þ
    
    QUARTERLY REPORT UNDER SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
 FOR THE QUARTERLY PERIOD ENDED June 30, 2005
 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
  California
    
    75-2987096(State or Other Jurisdiction of Incorporation or
    
    (I.R.S. Employer Identification No.)Organization)35 S. Lindan Avenue, Quincy, California
    
    95971(Address of Principal Executive Offices)
    
    (Zip Code)
 (530) 283-7305
 
 þ o
 
 o þ




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TABLE OF CONTENTS  PART I  FINANCIAL INFORMATIONITEM 1. FINANCIAL STATEMENTSPART I  FINANCIAL INFORMATIONITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKITEM 4. CONTROLS AND PROCEDURESPART II  OTHER INFORMATIONITEM 1. LEGAL PROCEEDINGSITEM 2. UNREGISTERD SALES OF EQUITY SECURITIES AND USE OF PROCEEDSITEM 3. DEFAULTS UPON SENIOR SECURITIESITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERSITEM 5. OTHER INFORMATIONITEM 6. EXHIBITSSIGNATURESEXHIBIT 31.1EXHIBIT 31.2EXHIBIT 31.3EXHIBIT 32.1EXHIBIT 32.2EXHIBIT 32.3    Table of Contents  
 PART I  FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS
 PLUMAS BANCORP
 CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)
 June 30,
    
    December 31,2005
    
    2004AssetsCash and due from banks
    
    $
    17,440
    
    
    $
    11,444Federal funds sold
    
    
    385
    
    
    
    Investment securities (fair value of $98,510 at June 30,
2005 and $113,390 at December 31, 2004)
    
    
    98,275
    
    
    
    113,252Loans, less allowance for loan losses of $3,107 at June
30, 2005 and $2,762 at December 31, 2004 (Notes 3 and 4)
    
    
    306,039
    
    
    
    263,891Premises and equipment, net
    
    
    10,338
    
    
    
    9,793Intangible assets, net
    
    
    1,789
    
    
    
    1,939Company owned life insurance
    
    
    8,507
    
    
    
    8,362Accrued interest receivable and other assets
    
    
    8,574
    
    
    
    8,665Total assets
    
    $
    451,347
    
    
    $
    417,346Liabilities and Shareholders EquityDeposits:Non-interest bearing
    
    $
    123,632
    
    
    $
    108,556Interest bearing
    
    
    270,239
    
    
    
    270,011Total deposits
    
    
    393,871
    
    
    
    378,567Federal Home Loan Bank advances
    
    
    17,500
    
    
    
    1,035Accrued interest payable and other liabilities
    
    
    4,385
    
    
    
    3,667Junior subordinated deferrable interest debentures
    
    
    6,186
    
    
    
    6,186Total liabilities
    
    
    421,942
    
    
    
    389,455Commitments and contingencies (Note 4)
    
    
    
    
    
    
    Shareholders equity (Notes 5 and 8):Serial preferred stock, no par value; 10,000,000
shares authorized, none issued
    
    
    
    
    
    
    Common stock, no par value; 15,000,000 shares
authorized; issued and outstanding  3,300,320 shares
at June 30, 2005 and 3,267,465 shares at December 31,
2004
    
    
    4,236
    
    
    
    4,013Retained earnings
    
    
    25,823
    
    
    
    24,370Accumulated other comprehensive loss (Note 6)
    
    
    (654
    )
    
    
    (492
    )Total shareholders equity
    
    
    29,405
    
    
    
    27,891Total liabilities and shareholders equity
    
    $
    451,347
    
    
    $
    417,346
  2




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##### Table of Contents



PLUMAS BANCORP
 CONDENSED CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
 For the Three Months
    
    For the Six MonthsEnded June 30
    
    Ended June 302005
    
    2004
    
    2005
    
    2004Interest Income:Interest and fees on loans
    
    $
    5,349
    
    
    $
    3,798
    
    
    $
    10,155
    
    
    $
    7,675Interest on investment securities:Taxable
    
    
    678
    
    
    
    796
    
    
    
    1,390
    
    
    
    1,540Exempt from Federal income taxes
    
    
    134
    
    
    
    110
    
    
    
    272
    
    
    
    182Interest on Federal funds sold
    
    
    3
    
    
    
    24
    
    
    
    4
    
    
    
    57Interest on loans held for sale
    
    
    5
    
    
    
    7
    
    
    
    8
    
    
    
    17Total interest income
    
    
    6,169
    
    
    
    4,735
    
    
    
    11,829
    
    
    
    9,471Interest Expense:Interest on deposits
    
    
    915
    
    
    
    619
    
    
    
    1,710
    
    
    
    1,253Interest on junior subordinated deferrable interest
debentures
    
    
    96
    
    
    
    69
    
    
    
    184
    
    
    
    138Other
    
    
    131
    
    
    
    2
    
    
    
    171
    
    
    
    6Total interest expense
    
    
    1,142
    
    
    
    690
    
    
    
    2,065
    
    
    
    1,397Net interest income before provision for loan
losses
    
    
    5,027
    
    
    
    4,045
    
    
    
    9,764
    
    
    
    8,074Provision for Loan Losses
    
    
    300
    
    
    
    150
    
    
    
    600
    
    
    
    300Net interest income after provision for loan losses
    
    
    4,727
    
    
    
    3,895
    
    
    
    9,164
    
    
    
    7,774Non-Interest Income:Service charges
    
    
    748
    
    
    
    801
    
    
    
    1,483
    
    
    
    1,416Gain on sale of loans
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    49Gain (loss) on sale of available-for-sale investment
securities, net
    
    
    
    
    
    
    56
    
    
    
    (8
    )
    
    
    147(Loss) gain on sale of other real estate and vehicles, net
    
    
    (29
    )
    
    
    143
    
    
    
    (45
    )
    
    
    90Earnings on company owned life insurance policies
    
    
    87
    
    
    
    100
    
    
    
    179
    
    
    
    207Other
    
    
    304
    
    
    
    237
    
    
    
    610
    
    
    
    448Total non-interest income
    
    
    1,110
    
    
    
    1,337
    
    
    
    2,219
    
    
    
    2,357Non-Interest Expenses:Salaries and employee benefits
    
    
    2,263
    
    
    
    2,219
    
    
    
    4,666
    
    
    
    4,429Occupancy and equipment
    
    
    737
    
    
    
    678
    
    
    
    1,493
    
    
    
    1,352Other
    
    
    1,125
    
    
    
    1,016
    
    
    
    2,167
    
    
    
    1,893Total non-interest expenses
    
    
    4,125
    
    
    
    3,913
    
    
    
    8,326
    
    
    
    7,674Income before provision for income taxes
    
    
    1,712
    
    
    
    1,319
    
    
    
    3,057
    
    
    
    2,457Provision for Income Taxes
    
    
    629
    
    
    
    469
    
    
    
    1,077
    
    
    
    881Net income
    
    $
    1,083
    
    
    $
    850
    
    
    $
    1,980
    
    
    $
    1,576Basic earnings per share (Notes 5 and 8)
    
    $
    0.33
    
    
    $
    0.26
    
    
    $
    0.60
    
    
    $
    0.48Diluted earnings per share (Notes 5 and 8)
    
    $
    0.32
    
    
    $
    0.25
    
    
    $
    0.59
    
    
    $
    0.47
  3




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PLUMAS BANCORP
 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
 For the Six MonthsEnded June 30,2005
    
    2004Cash Flows from Operating Activities:Net income
    
    $
    1,980
    
    
    $
    1,576Adjustments to reconcile net income to net cash provided by operating
activities:Provision for loan losses
    
    
    600
    
    
    
    300Decrease in deferred loan origination fees, net
    
    
    (614
    )
    
    
    (41
    )Depreciation and amortization
    
    
    836
    
    
    
    809Net loss (gain) on sale of available-for-sale investment securities
    
    
    8
    
    
    
    (147
    )Amortization of investment security premiums
    
    
    371
    
    
    
    504Accretion of investment security discounts
    
    
    (38
    )
    
    
    (37
    )Net loss on sale of premises and equipment
    
    
    4
    
    
    
    2Net loss (gain) on sale of other real estate and vehicles
    
    
    45
    
    
    
    (90
    )Net decrease in loans held for sale
    
    
    
    
    
    
    106Increase in cash surrender value of life insurance policies
    
    
    (145
    )
    
    
    (173
    )Decrease in accrued interest receivable and other assets
    
    
    115
    
    
    
    237Increase in accrued interest payable and other liabilities
    
    
    718
    
    
    
    458Benefit for deferred taxes
    
    
    (21
    )
    
    
    Net cash provided by operating activities
    
    
    3,859
    
    
    
    3,504Cash Flows from Investing Activities:Proceeds from matured and called available-for-sale investment securities
    
    
    9,500
    
    
    
    9,220Proceeds from matured and called held-to-maturity investment securities
    
    
    1,097
    
    
    
    1,275Proceeds from sales of available-for-sale investment securities
    
    
    1,992
    
    
    
    16,536Purchases of available-for-sale investment securities
    
    
    
    
    
    
    (23,103
    )Purchases of held-to-maturity investment securities
    
    
    
    
    
    
    (6,031
    )Proceeds from principal repayments from available-for-sale
government-guaranteed mortgage-backed securities
    
    
    1,722
    
    
    
    1,171Proceeds from principal repayments from held-to-maturity
government-guaranteed mortgage-backed securities
    
    
    51
    
    
    
    86Net increase in loans
    
    
    (42,224
    )
    
    
    (13,300
    )Proceeds from sale of other real estate and vehicles
    
    
    154
    
    
    
    710Purchase of premises and equipment
    
    
    (1,235
    )
    
    
    (413
    )Net cash used in investing activities
    
    
    (28,943
    )
    
    
    (13,849
    )
  4




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PLUMAS BANCORP
 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
 For the Six MonthsEnded June 30,2005
    
    2004Cash Flows from Financing Activities:Net increase in demand, interest bearing and savings deposits
    
    $
    10,765
    
    
    $
    15,151Net increase (decrease) in time deposits
    
    
    4,539
    
    
    
    (1,364
    )Proceeds from Federal Home Loan Bank advances
    
    
    16,465Proceeds from exercise of stock options
    
    
    223
    
    
    
    45Payment of cash dividends
    
    
    (527
    )
    
    
    (456
    )Net cash provided by financing activities
    
    
    31,465
    
    
    
    13,376Increase in cash and cash equivalents
    
    
    6,381
    
    
    
    3,031Cash and Cash Equivalents at Beginning of Year
    
    
    11,444
    
    
    
    30,012Cash and Cash Equivalents at End of Period
    
    $
    17,825
    
    
    $
    33,043Supplemental Disclosure of Cash Flow Information:Cash paid during the period for:Interest expense
    
    $
    1,914
    
    
    $
    1,369Income taxes
    
    $
    555
    
    
    $
    335Non-Cash Investing Activities:Real estate and vehicles acquired through foreclosure
    
    $
    90
    
    
    $
    145Net change in unrealized gain on available-for-sale securities
    
    $
    (162
    )
    
    $
    (1,422
    )Non-Cash Financing Activities:Common stock retired in connection with the exercise of stock options
    
    $
    80
    
    
    $
    133
  5




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PLUMAS BANCORP
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 1. GENERAL
   2. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    6




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##### Table of Contents



3. LOANS
  June 30,
    
    December 31,2005
    
    2004Commercial
    
    $
    45,899
    
    
    $
    42,689Agricultural
    
    
    33,380
    
    
    
    31,067Real estate  mortgage
    
    
    111,505
    
    
    
    102,125Real estate  construction and land development
    
    
    44,387
    
    
    
    31,964Consumer
    
    
    73,621
    
    
    
    59,068308,792
    
    
    
    266,913Deferred loan costs (fees), net
    
    
    354
    
    
    
    (260
    )Allowance for loan losses
    
    
    (3,107
    )
    
    
    (2,762
    )$
    306,039
    
    
    $
    263,891
 4. COMMITMENTS AND CONTINGENCIES
     7




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5. EARNINGS PER SHARE
  For the Three Months
    
    For the Six MonthsEnded June 30,
    
    Ended June 30,2005
    
    2004
    
    2005
    
    2004Earnings Per Share:Basic earnings per share
    
    $
    0.33
    
    
    $
    0.26
    
    
    $
    0.60
    
    
    $
    0.48Diluted earnings per share
    
    $
    0.32
    
    
    $
    0.25
    
    
    $
    0.59
    
    
    $
    0.47Weighted Average Number of
Shares Outstanding:Basic shares
    
    
    3,296,708
    
    
    
    3,259,356
    
    
    
    3,288,596
    
    
    
    3,254,872Diluted shares
    
    
    3,570,734
    
    
    
    3,344,598
    
    
    
    3,572,051
    
    
    
    3,339,813
  6. COMPREHENSIVE INCOME
    7. ACCOUNTING PRONOUCEMENTS
 Share-Based
Payments
 8. STOCK-BASED COMPENSATION
  8




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Accounting for Stock Issued to Employees
 Accounting for Stock-Based Compensation
 For the Three Months
    
    For the Six MonthsEnded June 30,
    
    Ended June 30,2005
    
    2004
    
    2005
    
    2004Net income as reported
    
    $
    1,083
    
    
    $
    850
    
    
    $
    1,980
    
    
    $
    1,576Deduct: Total stock-based compensation
expense determined under the fair value
based method for all awards, net of
related tax effects
    
    
    43
    
    
    
    22
    
    
    
    87
    
    
    
    45Pro forma net income
    
    $
    1,040
    
    
    $
    759
    
    
    $
    1,893
    
    
    $
    1,531Basic earnings per share  as reported
    
    $
    0.33
    
    
    $
    0.26
    
    
    $
    0.60
    
    
    $
    0.48Basic earnings per share  pro forma
    
    $
    0.32
    
    
    $
    0.25
    
    
    $
    0.58
    
    
    $
    0.46Diluted earnings per share  as reported
    
    $
    0.32
    
    
    $
    0.25
    
    
    $
    0.59
    
    
    $
    0.47Diluted earnings per share  pro forma
    
    $
    0.31
    
    
    $
    0.25
    
    
    $
    0.56
    
    
    $
    0.46
  For the Three Months EndedJune 30, 2005
    
    June 30, 2004Weighted average fair value of options granted
    
    
    N/A
    
    
    $
    4.32Dividend yield
    
    
    N/A
    
    
    
    1.5
    %Expected volatility
    
    
    N/A
    
    
    
    15.5
    %Risk-free interest rate
    
    
    N/A
    
    
    
    2.8
    %Expected option life in years
    
    
    N/A
    
    
    
    5.0
  For the Six Months EndedJune 30, 2005
    
    June 30, 2004Weighted average fair value of options granted
    
    
    N/A
    
    
    $
    4.32Dividend yield
    
    
    N/A
    
    
    
    1.5
    %Expected volatility
    
    
    N/A
    
    
    
    15.5
    %Risk-free interest rate
    
    
    N/A
    
    
    
    2.8
    %Expected option life in years
    
    
    N/A
    
    
    
    5.0
  9




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PART I  FINANCIAL INFORMATION
 
 ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
   INTRODUCTION
   OVERVIEW
   10




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RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2005
 Net interest income before provision for loan losses.
    11




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For the Six Months Ended June 30, 2005
    
    For the Six Months Ended June 30, 2004Average Balance
    
    Interest
    
    Yield/
    
    Average Balance
    
    Interest
    
    Yield/(in thousands)
    
    (in thousands)
    
    Rate
    
    (in thousands)
    
    (in thousands)
    
    RateInterest-earning assets:Loans (1) (2)
    
    $
    287,257
    
    
    $
    10,163
    
    
    
    7.13
    %
    
    $
    218,344
    
    
    $
    7,692
    
    
    
    7.10
    %Investment securities (1)
    
    
    104,328
    
    
    
    1,662
    
    
    
    3.21
    %
    
    
    114,631
    
    
    
    1,722
    
    
    
    3.03
    %Federal funds sold
    
    
    280
    
    
    
    4
    
    
    
    2.88
    %
    
    
    12,088
    
    
    
    57
    
    
    
    0.95
    %Total earning assets
    
    
    391,865
    
    
    
    11,829
    
    
    
    6.09
    %
    
    
    345,063
    
    
    
    9,471
    
    
    
    5.53
    %Cash and due from banks
    
    
    15,565
    
    
    
    
    
    
    
    
    
    
    
    25,077Other assets
    
    
    26,386
    
    
    
    
    
    
    
    
    
    
    
    25,342Total assets
    
    $
    433,816
    
    
    
    
    
    
    
    
    
    
    $
    395,482Interest-bearing liabilities:NOW deposits
    
    $
    43,793
    
    
    
    33
    
    
    
    0.15
    %
    
    $
    42,977
    
    
    
    30
    
    
    
    0.14
    %Money market deposits
    
    
    63,035
    
    
    
    324
    
    
    
    1.04
    %
    
    
    65,598
    
    
    
    242
    
    
    
    0.74
    %Savings deposits
    
    
    67,417
    
    
    
    200
    
    
    
    0.60
    %
    
    
    61,819
    
    
    
    138
    
    
    
    0.45
    %Time deposits
    
    
    95,877
    
    
    
    1,153
    
    
    
    2.43
    %
    
    
    93,189
    
    
    
    843
    
    
    
    1.82
    %Federal Home Loan Bank advances
    
    
    11,449
    
    
    
    166
    
    
    
    2.92
    %
    
    
    
    
    
    
    
    
    
    
    Other interest-bearing liabilities
    
    
    232
    
    
    
    5
    
    
    
    4.35
    %
    
    
    206
    
    
    
    6
    
    
    
    5.87
    %Junior subordinated debentures
    
    
    6,186
    
    
    
    184
    
    
    
    6.00
    %
    
    
    6,186
    
    
    
    138
    
    
    
    4.50
    %Total interest-bearing liabilities
    
    
    287,989
    
    
    
    2,065
    
    
    
    1.45
    %
    
    
    269,975
    
    
    
    1,397
    
    
    
    1.04
    %Non-interest bearing deposits
    
    
    113,018
    
    
    
    
    
    
    
    
    
    
    
    96,154Other liabilities
    
    
    3,834
    
    
    
    
    
    
    
    
    
    
    
    2,594Shareholders equity
    
    
    28,975
    
    
    
    
    
    
    
    
    
    
    
    26,759Total liabilities & equity
    
    $
    433,816
    
    
    
    
    
    
    
    
    
    
    $
    395,482Cost of funding interest-earning assets (3)
    
    
    
    
    
    
    
    
    
    
    1.06
    %
    
    
    
    
    
    
    
    
    
    
    0.82
    %Net interest income and margin (4)
    
    
    
    
    
    $
    9,764
    
    
    
    5.02
    %
    
    
    
    
    
    $
    8,074
    
    
    
    4.72
    %
 
 (1)
    
    Not computed on a tax-equivalent basis.(2)
    
    Loan fees included in loan interest income for the six-month periods ended June 30, 2005 and
2004 were $100 and $244, respectively.(3)
    
    Total interest expense divided by the average balance of total earning assets.(4)
    
    Net interest income divided by the average balance of total earning assets. 12




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2005 over 2004 change in net interest incomefor the six months ended June 30(in thousands)Volume (1)
    
    Rate (2)
    
    Mix (3)
    
    TotalInterest-earning assets:Loans
    
    $
    2,431
    
    
    $
    30
    
    
    $
    10
    
    
    $
    2,471Investment securities
    
    
    (155
    )
    
    
    104
    
    
    
    (9
    )
    
    
    (60
    )Federal funds sold
    
    
    (56
    )
    
    
    116
    
    
    
    (113
    )
    
    
    (53
    )Total interest income
    
    
    2,220
    
    
    
    250
    
    
    
    (112
    )
    
    
    2,358Interest-bearing liabilities:NOW deposits
    
    
    1
    
    
    
    2
    
    
    
    
    
    
    
    3Money market deposits
    
    
    (9
    )
    
    
    95
    
    
    
    (4
    )
    
    
    82Savings deposits
    
    
    12
    
    
    
    46
    
    
    
    4
    
    
    
    62Time deposits
    
    
    24
    
    
    
    278
    
    
    
    8
    
    
    
    310FHLB advances
    
    
    
    
    
    
    
    
    
    
    166
    
    
    
    166Other interest-bearing liabilities
    
    
    1
    
    
    
    (2
    )
    
    
    
    
    
    
    (1
    )Junior subordinated debentures
    
    
    
    
    
    
    46
    
    
    
    
    
    
    
    46Total interest expense
    
    
    29
    
    
    
    465
    
    
    
    174
    
    
    
    668Net interest income
    
    $
    2,191
    
    
    $
    (215
    )
    
    $
    (286
    )
    
    $
    1,690
 
 (1)
    
    The volume change in net interest income represents the change in average balance divided by
the previous years rate.(2)
    
    The rate change in net interest income represents the change in rate divided by the previous
years average balance.(3)
    
    The mix change in net interest income represents the change in average balance multiplied by
the change in rate. Provision for loan losses.
 Non-interest income.
  13




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##### Table of Contents



Non-interest expenses.
      For the Six MonthsEnded June 30,(in thousands)2005
    
    2004Salaries and employee benefits
    
    $
    4,666
    
    
    $
    4,429Occupancy and equipment
    
    
    1,493
    
    
    
    1,352Professional and other fees
    
    
    362
    
    
    
    240Business development
    
    
    238
    
    
    
    197Advertising and promotion
    
    
    224
    
    
    
    159Armored car and courier
    
    
    188
    
    
    
    182Stationery and supplies
    
    
    160
    
    
    
    149Director compensation
    
    
    159
    
    
    
    142Telephone and data communication
    
    
    157
    
    
    
    167Deposit premium amortization
    
    
    150
    
    
    
    148Outside service fees
    
    
    143
    
    
    
    122Postage
    
    
    124
    
    
    
    125Insurance
    
    
    117
    
    
    
    116Loan and collection expenses
    
    
    45
    
    
    
    73Other expense
    
    
    100
    
    
    
    73Total non-interest expense
    
    $
    8,326
    
    
    $
    7,674
 14




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##### Table of Contents



RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 2005
 Net interest income before provision for loan losses.
    15




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##### Table of Contents



For the Three Months Ended June 30, 2005
    
    For the Three Months Ended June 30, 2004Average Balance
    
    Interest
    
    Yield/
    
    Average Balance
    
    Interest
    
    Yield/(in thousands)
    
    (in thousands)
    
    Rate
    
    (in thousands)
    
    (in thousands)
    
    RateInterest-earning assets:Loans (1) (2)
    
    $
    299,895
    
    
    $
    5,354
    
    
    
    7.16
    %
    
    $
    219,417
    
    
    $
    3,805
    
    
    
    6.96
    %Investment securities (1)
    
    
    100,581
    
    
    
    812
    
    
    
    3.24
    %
    
    
    118,542
    
    
    
    906
    
    
    
    3.07
    %Federal funds sold
    
    
    322
    
    
    
    3
    
    
    
    3.74
    %
    
    
    9,551
    
    
    
    24
    
    
    
    1.01
    %Total earning assets
    
    
    400,797
    
    
    
    6,169
    
    
    
    6.17
    %
    
    
    347,510
    
    
    
    4,735
    
    
    
    5.47
    %Cash and due from banks
    
    
    16,397
    
    
    
    
    
    
    
    
    
    
    
    25,459Other assets
    
    
    26,787
    
    
    
    
    
    
    
    
    
    
    
    25,994Total assets
    
    $
    443,980
    
    
    
    
    
    
    
    
    
    
    $
    398,962Interest-bearing liabilities:NOW deposits
    
    $
    43,250
    
    
    
    19
    
    
    
    0.18
    %
    
    $
    43,079
    
    
    
    14
    
    
    
    0.13
    %Money market deposits
    
    
    62,285
    
    
    
    169
    
    
    
    1.09
    %
    
    
    65,203
    
    
    
    118
    
    
    
    0.73
    %Savings deposits
    
    
    67,614
    
    
    
    108
    
    
    
    0.64
    %
    
    
    62,660
    
    
    
    70
    
    
    
    0.45
    %Time deposits
    
    
    96,381
    
    
    
    619
    
    
    
    2.58
    %
    
    
    93,436
    
    
    
    417
    
    
    
    1.79
    %Federal Home Loan Bank advances
    
    
    17,396
    
    
    
    131
    
    
    
    3.02
    %
    
    
    
    
    
    
    
    
    
    
    Other interest-bearing liabilities
    
    
    237
    
    
    
    3
    
    
    
    5.08
    %
    
    
    207
    
    
    
    3
    
    
    
    5.81
    %Junior subordinated debentures
    
    
    6,186
    
    
    
    93
    
    
    
    6.03
    %
    
    
    6,186
    
    
    
    68
    
    
    
    4.41
    %Total interest-bearing liabilities
    
    
    293,349
    
    
    
    1,142
    
    
    
    1.56
    %
    
    
    270,771
    
    
    
    690
    
    
    
    1.02
    %Non-interest bearing deposits
    
    
    117,361
    
    
    
    
    
    
    
    
    
    
    
    99,078Other liabilities
    
    
    3,982
    
    
    
    
    
    
    
    
    
    
    
    2,687Shareholders equity
    
    
    29,287
    
    
    
    
    
    
    
    
    
    
    
    26,426Total liabilities & equity
    
    $
    443,980
    
    
    
    
    
    
    
    
    
    
    $
    398,962Cost of funding interest-earning assets (3)
    
    
    
    
    
    
    
    
    
    
    1.14
    %
    
    
    
    
    
    
    
    
    
    
    0.80
    %Net interest income and margin (4)
    
    
    
    
    
    $
    5,027
    
    
    
    5.03
    %
    
    
    
    
    
    $
    4,045
    
    
    
    4.67
    %
 
 (1)
    
    Not computed on a tax-equivalent basis.(2)
    
    Loan fees included in loan interest income for the three-month periods ended June 30, 2005
and 2004 were $51 and $108, respectively.(3)
    
    Total interest expense divided by the average balance of total earning assets.(4)
    
    Net interest income divided by the average balance of total earning assets. 16




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##### Table of Contents



2005 over 2004 change in net interest incomefor the three months ended June 30(in thousands)Volume (1)
    
    Rate (2)
    
    Mix (3)
    
    TotalInterest-earning assets:Loans
    
    $
    1,396
    
    
    $
    112
    
    
    $
    41
    
    
    $
    1,549Investment securities
    
    
    (137
    )
    
    
    51
    
    
    
    (8
    )
    
    
    (94
    )Federal funds sold
    
    
    (23
    )
    
    
    65
    
    
    
    (63
    )
    
    
    (21
    )Total interest income
    
    
    1,236
    
    
    
    228
    
    
    
    (30
    )
    
    
    1,434Interest-bearing liabilities:NOW deposits
    
    
    
    
    
    
    5
    
    
    
    
    
    
    
    5Money market deposits
    
    
    (5
    )
    
    
    59
    
    
    
    (3
    )
    
    
    51Savings deposits
    
    
    6
    
    
    
    30
    
    
    
    2
    
    
    
    38Time deposits
    
    
    13
    
    
    
    183
    
    
    
    6
    
    
    
    202FHLB advances
    
    
    
    
    
    
    
    
    
    
    131
    
    
    
    131Other interest-bearing liabilities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Junior subordinated debentures
    
    
    
    
    
    
    25
    
    
    
    
    
    
    
    25Total interest expense
    
    
    14
    
    
    
    302
    
    
    
    136
    
    
    
    452Net interest income
    
    $
    1,222
    
    
    $
    (74
    )
    
    $
    (166
    )
    
    $
    982
 
 (1)
    
    The volume change in net interest income represents the change in average balance divided by
the previous years rate.(2)
    
    The rate change in net interest income represents the change in rate divided by the previous
years average balance.(3)
    
    The mix change in net interest income represents the change in average balance multiplied by
the change in rate. Provision for loan losses.
 Non-interest income.
  17




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##### Table of Contents



Non-interest expenses.
      For the Three MonthsEnded June 30,(in thousands)2005
    
    2004Salaries and employee benefits
    
    $
    2,263
    
    
    $
    2,219Occupancy and equipment
    
    
    737
    
    
    
    678Professional and other fees
    
    
    176
    
    
    
    111Advertising and promotion
    
    
    117
    
    
    
    103Business development
    
    
    138
    
    
    
    105Armored car and courier
    
    
    95
    
    
    
    93Director compensation
    
    
    81
    
    
    
    69Outside service fees
    
    
    67
    
    
    
    65Telephone and data communication
    
    
    82
    
    
    
    92Deposit premium amortization
    
    
    75
    
    
    
    77Stationery and supplies
    
    
    86
    
    
    
    76Postage
    
    
    62
    
    
    
    60Insurance
    
    
    63
    
    
    
    61Loan and collection expenses
    
    
    30
    
    
    
    48Other expense
    
    
    53
    
    
    
    56Total non-interest expense
    
    $
    4,125
    
    
    $
    3,913
 18




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##### Table of Contents



FINANCIAL CONDITION
 Loan portfolio composition.
 Nonperforming assets.
   Analysis of allowance for loan losses.
 19




---



##### Table of Contents



For the Six MonthsEnded June 30,(in thousands)2005
    
    2004Balance at January 1,
    
    $
    2,762
    
    
    $
    2,564Charge-offs:Commercial and agricultural
    
    
    (111
    )
    
    
    (16
    )Real estate mortgage
    
    
    
    
    
    
    Real estate construction
    
    
    
    
    
    
    Consumer
    
    
    (233
    )
    
    
    (312
    )Total charge-offs
    
    
    (344
    )
    
    
    (328
    )Recoveries:Commercial and agricultural
    
    
    19
    
    
    
    4Real estate mortgage
    
    
    
    
    
    
    1Real estate construction
    
    
    
    
    
    
    Consumer
    
    
    70
    
    
    
    86Total recoveries
    
    
    89
    
    
    
    91Net charge-offs
    
    
    (255
    )
    
    
    (237
    )Provision for loan losses
    
    
    600
    
    
    
    300Balance at June 30,
    
    $
    3,107
    
    
    $
    2,627Net charge-offs during the six-month period to average loans
    
    
    0.09
    %
    
    
    0.10
    %Allowance for loan losses to total loans
    
    
    1.01
    %
    
    
    1.14
    %
 Investment securities.
 Premises and equipment.
 Accrued interest receivable and other assets.
 Deposits.
 20




---



##### Table of Contents



Federal Home Loan Bank advances.
 CAPITAL RESOURCES
    Plumas BancorpActualCapital
    
    
    
    
    
    Minimum Capital(in thousands)
    
    Ratio
    
    RequirementLeverage
    
    $
    34,270
    
    
    
    7.7
    %
    
    
    4.0
    %Tier 1 Risk-Based
    
    
    34,270
    
    
    
    9.4
    %
    
    
    4.0
    %Total Risk-Based
    
    
    37,377
    
    
    
    10.3
    %
    
    
    8.0
    %
 21




---



##### Table of Contents



Plumas BankActualTo beConsideredWellCapitalizedUnderPromptCapital
    
    
    
    
    
    Corrective(in thousands)
    
    Ratio
    
    ActionLeverage
    
    $
    33,542
    
    
    
    7.6
    %
    
    
    5.0
    %Tier 1 Risk-Based
    
    
    33,542
    
    
    
    9.2
    %
    
    
    6.0
    %Total Risk-Based
    
    
    36,649
    
    
    
    10.1
    %
    
    
    10.0
    %
 LIQUIDITY
     
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK
  22




---



##### Table of Contents



ITEM 4. CONTROLS AND PROCEDURES
   23




---



##### Table of Contents



PART II  OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
  
 ITEM 2. UNREGISTERD SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  
 ITEM 3. DEFAULTS UPON SENIOR SECURITIES
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  Proposal #1: Election of Directors
  VotesWithheld orVotes For
    
    Against
    
    
    
    
    
    BrokerNominee
    
    Nominee
    
    Nominee
    
    Abstentions
    
    Non-VotesAlvin G. Blickenstaff
    
    
    2,671,674
    
    
    
    0
    
    
    
    4,057
    
    
    
    0Jerry V. Kehr
    
    
    2,669,674
    
    
    
    0
    
    
    
    6,057
    
    
    
    0William E. Elliott
    
    
    2,671,349
    
    
    
    0
    
    
    
    4,382
    
    
    
    0Gerald W. Fletcher
    
    
    2,671,674
    
    
    
    0
    
    
    
    4,057
    
    
    
    0John Flournoy
    
    
    2,671,674
    
    
    
    0
    
    
    
    4,057
    
    
    
    0Arthur C. Grohs
    
    
    2,671,674
    
    
    
    0
    
    
    
    4,057
    
    
    
    0Christine McArthur
    
    
    2,670,137
    
    
    
    0
    
    
    
    5,594
    
    
    
    0Terrance J. Reeson
    
    
    2,671,224
    
    
    
    0
    
    
    
    4,507
    
    
    
    0Thomas Watson
    
    
    2,671,574
    
    
    
    0
    
    
    
    4,157
    
    
    
    0Daniel E. West
    
    
    2,671,674
    
    
    
    0
    
    
    
    4,057
    
    
    
    0
 Proposal #2: Amendment to the 1991 & 2001 Stock Option Plans
  VotesWithheld orVotes For
    
    Against
    
    
    
    
    
    BrokerProposal
    
    Amendment
    
    Amendment
    
    Abstentions
    
    Non-VotesAmendment to the
1991 & 2001 Stock
Option Plans
    
    
    1,481,341
    
    
    
    9,294
    
    
    
    29,102
    
    
    
    1,155,994
 24




---



##### Table of Contents



ITEM 5. OTHER INFORMATION
  
 ITEM 6. EXHIBITS
  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.10.3
    
    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.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.10.6
    
    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.10.9
    
    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
    
    First Amendment to Executive Salary Continuation Agreement of Robert T. Herr dated
September 15, 2004, is included as Exhibit 10.11 to the Registrants 8-K filed on
September 17, 2004, 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.10.18
    
    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
    
    Split Dollar Agreements of Robert T. Herr dated September 15, 2004, is included as
Exhibit 10.20 to the Registrants 8-K filed on September 17, 2004, which is
incorporated by this reference herein.
 25




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##### Table of Contents



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.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.10.27
    
    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.10.30
    
    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.10.33
    
    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.10.39
    
    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. 333-9695710.42
    
    1991 Stock Option Plan on Form S-8 filed August 19, 2002, File No. 333-9831910.43
    
    Plumas Bank 401(k) Profit Sharing Plan as amended is included as exhibit 99.1 of
the Form S-8 filed February 14, 2003, File No. 333-10322910.44
    
    Executive Salary Continuation Agreement of Robert T. Herr dated June 4, 2002, is
included as Exhibit 10.44 to the Registrants 10-Q for March 31, 2003, which is
incorporated by this reference herein.10.46
    
    1991 Stock Option Plan as amended.10.47
    
    Specimen form of Incentive Stock Option Agreement under the 1991 Stock Option Plan.10.48
    
    Specimen form of Non-Qualified Stock Option Agreement under the 1991 Stock Option
Plan.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.10.62
    
    Deferred Fee Agreement of Thomas Watson dated December 23, 2004, is included as
Exhibit 10.62 to the Registrants 8-K filed on January 6, 2005, which is
incorporated by this reference herein.
 26




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##### Table of Contents



10.63
    
    Deferred Fee Agreement of Jerry V. Kehr dated December 24, 2004, is included as
Exhibit 10.63 to the Registrants 8-K filed on January 6, 2005, which is
incorporated by this reference herein.11
    
    Computation of per share earnings appears in the attached 10-Q under Plumas
Bancorp and Subsidiary Notes to Consolidated Financial Statements as Footnote 5 
Earnings Per Share Computation.31.1
    
    Rule 13a-14(a) [Section 302] Certification of Principal Financial Officer dated
August 11, 2005.31.2
    
    Rule 13a-14(a) [Section 302] Certification of Principal Operating Officer dated
August 11, 2005.31.3
    
    Rule 13a-14(a) [Section 302] Certification of Principal Executive Officer dated
August 11, 2005.32.1
    
    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 August
11, 2005.32.2
    
    Certification of Principal Operating Officer pursuant to 18 U.S.C. Section 1350,
As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 dated August
11, 2005.32.3
    
    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 August
11, 2005.
 27




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##### Table of Contents



SIGNATURES
  PLUMAS BANCORP
  /s/ William E. ElliottWilliam E. ElliottPresident/Chief Executive Officer/s/ Douglas N. BiddleDouglas N. BiddleExecutive Vice President Chief Operating Officer/s/ Andrew J. RybackAndrew J. RybackExecutive Vice President Chief Financial Officer
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