##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-QSB

(Mark One)

|  |  |                                                                                                                                               
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------
|x |  | QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THESECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED September 30, 2002            
| 
|o |  | TRANSITION REPORT UNDER SECTION 13 OR 15 (D) OF THESECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ____________ TO ____________

COMMISSION FILE NUMBER: 000-49883

PLUMAS BANCORP(Name of small business issuer in its charter)

|                                                                                 |  |                                                
|-------------------------------------------------------------------------------- |  | -----------------------------------------------
|California
(State or other jurisdiction of
incorporation ororganization)         |  | 75-2987096
(I.R.S. Employer Identification No.)
|                                                                                
|35 S. Lindan Avenue, Quincy, California
(Address of principal executive offices) |  | 95971
(Zip code)                               

Issuers telephone number (530) 283-7305

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15 (d) of the Exchange Act during the past 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 xNoo

State the number of shares outstanding of each of the issuers classes of
common equity, as of November 6, 2002; 2,139,427 shares

Transitional Small business Disclosure Format (check one)
Yes oNox





---

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
|                               | ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|PART II  OTHER INFORMATION   
|                               | ITEM 1. LEGAL PROCEEDINGS                                                                    
|                               | ITEM 2. CHANGES IN SECURITIES                                                                
|                               | 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                    



---



##### Table of Contents









PART I  FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENT




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

|                                                                                                       |                      |                                                                                                                                                                           |                            |                                            |         |               |         |              |         |        |         | 
|------------------------------------------------------------------------------------------------------ | -------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------- | ------------------------------------------ | ------- | ------------- | ------- | ------------ | ------- | ------ | ------- | 
|                                                                                                       |                      |                                                                                                                                                                           |                            |                                            |         | September 30, |         | December 31,
|                                                                                                       |                      |                                                                                                                                                                           |                            |                                            |         | 2002          |         | 2001        
|                                                                                                       |                      |                                                                                                                                                                           |                            |                                            |         |               |         |             
|                                                                                                       |                      |                                                                                                                                                                           |                            |                                            |         | (Unaudited)   |         | (Audited)   
|Assets                                                                                                 |                      |                                                                                                                                                                           |                            |                                            |         |               |         |             
|Cash and due from banks                                                                                |                      | $                                                                                                                                                                         | 19,379                     |                                            |         | $             | 10,088  |             
|Federal funds sold                                                                                     |                      |                                                                                                                                                                           | 20,000                     |                                            |         |               | 20,000  |             
|Loans held for sale                                                                                    |                      |                                                                                                                                                                           | 459                        |                                            |         |               | 649     |             
|Investment securities (market value of $48,920 at
September 30, 2002 and $46,275 at December 31, 2001) |                      |                                                                                                                                                                           | 48,777                     |                                            |         |               | 45,843  |             
|Loans less allowance for loan losses of $2,488 at
September 30, 2002 and $2,153 at December 31, 2001   |                      |                                                                                                                                                                           | 202,336                    |                                            |         |               | 180,775 |             
|Bank premises and equipment, net                                                                       |                      |                                                                                                                                                                           | 9,219                      |                                            |         |               | 8,133   |             
|Intangible assets, net                                                                                 |                      |                                                                                                                                                                           | 725                        |                                            |         |               | 825     |             
|Accrued interest receivable and other assets                                                           |                      |                                                                                                                                                                           | 9,641                      |                                            |         |               | 8,777   |             
|                                                                                                       |                      |                                                                                                                                                                           |                            |                                            |         |               |         |             
|                                                                                                       |                      |                                                                                                                                                                           |                            | Total assets                               |         | $             | 310,536 |              |         | $      | 275,090 | 
|                                                                                                       |                      |                                                                                                                                                                           |                            |                                            |         |               |         |             
|Liabilities and Shareholders Equity                                                                   |                      |                                                                                                                                                                           |                            |                                            |         |               |         |             
|Deposits:                                                                                              |                      |                                                                                                                                                                           |                            |                                            |         |               |         |             
|                                                                                                       | Non-interest bearing |                                                                                                                                                                           | $                          | 67,394                                     |         |               | $       | 53,543       |        
|                                                                                                       | Interest bearing     |                                                                                                                                                                           |                            | 212,362                                    |         |               |         | 198,663      |        
|                                                                                                       |                      |                                                                                                                                                                           |                            |                                            |         |               |         |             
|                                                                                                       |                      | Total deposits                                                                                                                                                            |                            |                                            | 279,756 |               |         |              | 252,206 |       
|Accrued interest payable and other liabilities                                                         |                      |                                                                                                                                                                           | 2,276                      |                                            |         |               | 2,267   |             
|                                                                                                       |                      |                                                                                                                                                                           |                            |                                            |         |               |         |             
|                                                                                                       |                      | Total liabilities                                                                                                                                                         |                            |                                            | 282,032 |               |         |              | 254,473 |       
|                                                                                                       |                      |                                                                                                                                                                           |                            |                                            |         |               |         |             
|Mandatorily redeemable cumulative trust preferred
securities of subsidiary grantor trust               |                      |                                                                                                                                                                           | 6,000                      |                                            |         |               |        |             
|Shareholders equity:                                                                                  |                      |                                                                                                                                                                           |                            |                                            |         |               |         |             
|                                                                                                       |                      | Preferred stock, no par value; 10,000,000 shares
authorized, no shares issued or outstanding                                                                              |                            |                                            |        |               |         |              |        |       
|                                                                                                       |                      | Common stock, no par value; 20,000,000 shares
authorized, 2,136,427 and 2,128,223 shares
issued and outstanding at September 30, 2002 and
December 31, 2001, respectively |                            |                                            | 2,398   |               |         |              | 2,347   |       
|                                                                                                       |                      | Additional paid-in capital                                                                                                                                                |                            |                                            | 1,313   |               |         |              | 1,276   |       
|                                                                                                       |                      | Retained earnings                                                                                                                                                         |                            |                                            | 18,382  |               |         |              | 16,846  |       
|                                                                                                       |                      | Accumulated other comprehensive income                                                                                                                                    |                            |                                            | 411     |               |         |              | 148     |       
|                                                                                                       |                      |                                                                                                                                                                           |                            |                                            |         |               |         |             
|                                                                                                       |                      |                                                                                                                                                                           | Total shareholders equity |                                            |         | 22,504        |         |              |         | 20,617 |        
|                                                                                                       |                      |                                                                                                                                                                           |                            |                                            |         |               |         |             
|                                                                                                       |                      |                                                                                                                                                                           |                            | Total liabilities and shareholders equity |         | $             | 310,536 |              |         | $      | 275,090 | 
|                                                                                                       |                      |                                                                                                                                                                           |                            |                                            |         |               |         |             

See notes to consolidated financial statements.

2



---



##### Table of Contents






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

|                           |                                                               |                                  |                                                      |                       |     |                      |       |                     |     |       |       |        |       |        |        |        |       |       |        | 
|-------------------------- | ------------------------------------------------------------- | -------------------------------- | ---------------------------------------------------- | --------------------- | --- | -------------------- | ----- | ------------------- | --- | ----- | ----- | ------ | ----- | ------ | ------ | ------ | ----- | ----- | ------ | 
|                           |                                                               |                                  |                                                      |                       |     | For the Three Months |       | For the Nine Months
|                           |                                                               |                                  |                                                      |                       |     | Ended September 30   |       | Ended September 30 
|                           |                                                               |                                  |                                                      |                       |     |                      |       |                    
|                           |                                                               |                                  |                                                      |                       |     | 2002                 |       | 2001                |     | 2002  |       | 2001  
|                           |                                                               |                                  |                                                      |                       |     |                      |       |                     |     |       |       |       
|                           |                                                               |                                  |                                                      |                       |     | (Unaudited)          |       | (Unaudited)        
|Interest Income:           |                                                               |                                  |                                                      |                       |     |                      |       |                     |     |       |       |        |       |        |        |       
|                           | Interest and fees on loans                                    |                                  | $                                                    | 4,125                 |     |                      | $     | 4,181               |     |       | $     | 11,930 |       |        | $      | 12,301 |      
|                           | Interest on investment securities:                            |                                  |                                                      |                       |     |                      |       |                     |     |       |       |        |       |        |        |        |      
|                           |                                                               | Taxable                          |                                                      |                       | 461 |                      |       |                     | 518 |       |       |        | 1,435 |        |        |        | 1,735 |      
|                           |                                                               | Exempt from Federal income taxes |                                                      |                       | 35  |                      |       |                     | 34  |       |       |        | 108   |        |        |        | 96    |      
|                           | Interest on Federal funds sold                                |                                  |                                                      | 90                    |     |                      |       | 139                 |     |       |       | 194    |       |        |        | 257    |      
|                           | Interest on loans held for sale                               |                                  |                                                      | 7                     |     |                      |       | 22                  |     |       |       | 26     |       |        |        | 55     |      
|                           |                                                               |                                  |                                                      |                       |     |                      |       |                     |     |       |       |        |       |        |        |       
|                           |                                                               |                                  |                                                      | Total interest income |     |                      | 4,718 |                     |     |       | 4,894 |        |       |        | 13,693 |        |       |       | 14,444 | 
|                           |                                                               |                                  |                                                      |                       |     |                      |       |                     |     |       |       |        |       |        |        |       
|Interest Expense:          |                                                               |                                  |                                                      |                       |     |                      |       |                     |     |       |       |        |       |        |        |       
|                           | Interest on deposits                                          |                                  |                                                      | 982                   |     |                      |       | 1,560               |     |       |       | 3,031  |       |        |        | 5,085  |      
|                           | Other                                                         |                                  |                                                      | 3                     |     |                      |       | 1                   |     |       |       | 5      |       |        |        | 3      |      
|                           |                                                               |                                  |                                                      |                       |     |                      |       |                     |     |       |       |        |       |        |        |       
|                           |                                                               |                                  | Total interest expense                               |                       |     | 985                  |       |                     |     | 1,561 |       |        |       | 3,036  |        |        |       | 5,088 |       
|                           |                                                               |                                  |                                                      |                       |     |                      |       |                     |     |       |       |        |       |        |        |       
|                           |                                                               |                                  | Net interest income before provision
for loan losses |                       |     | 3,733                |       |                     |     | 3,333 |       |        |       | 10,657 |        |        |       | 9,356 |       
|Provision for Loan Losses  |                                                               |                                  | 200                                                  |                       |     |                      | 175   |                     |     |       | 725   |        |       |        | 625    |       
|                           |                                                               |                                  |                                                      |                       |     |                      |       |                     |     |       |       |        |       |        |        |       
|                           |                                                               |                                  | Net interest income after provision
for loan losses  |                       |     | 3,533                |       |                     |     | 3,158 |       |        |       | 9,932  |        |        |       | 8,731 |       
|Non-Interest Income:       |                                                               |                                  |                                                      |                       |     |                      |       |                     |     |       |       |        |       |        |        |       
|                           | Service charges                                               |                                  |                                                      | 498                   |     |                      |       | 400                 |     |       |       | 1,417  |       |        |        | 1,184  |      
|                           | Gain on sale of loans, net                                    |                                  |                                                      | 11                    |     |                      |       | 14                  |     |       |       | 36     |       |        |        | 137    |      
|                           | Gain on sale of available-for-sale
investment securities, net |                                  |                                                      |                      |     |                      |       | 42                  |     |       |       | 62     |       |        |        | 12     |      
|                           | (Loss) gain on sale of other real estate                      |                                  |                                                      |                      |     |                      |       | (15                 | )   |       |       |       |       |        |        | 63     |      
|                           | Earnings on cash surrender value of life
insurance policies   |                                  |                                                      | 54                    |     |                      |       | 53                  |     |       |       | 162    |       |        |        | 160    |      
|                           | Other income                                                  |                                  |                                                      | 230                   |     |                      |       | 216                 |     |       |       | 628    |       |        |        | 531    |      
|                           |                                                               |                                  |                                                      |                       |     |                      |       |                     |     |       |       |        |       |        |        |       
|                           |                                                               |                                  | Total non-interest income                            |                       |     | 793                  |       |                     |     | 710   |       |        |       | 2,305  |        |        |       | 2,087 |       
|                           |                                                               |                                  |                                                      |                       |     |                      |       |                     |     |       |       |        |       |        |        |       
|Non-Interest Expense:      |                                                               |                                  |                                                      |                       |     |                      |       |                     |     |       |       |        |       |        |        |       
|                           | Salaries and employee benefits                                |                                  |                                                      | 1,554                 |     |                      |       | 1,496               |     |       |       | 4,593  |       |        |        | 4,338  |      
|                           | Occupancy and equipment                                       |                                  |                                                      | 479                   |     |                      |       | 403                 |     |       |       | 1,300  |       |        |        | 1,110  |      
|                           | Other expense                                                 |                                  |                                                      | 958                   |     |                      |       | 748                 |     |       |       | 2,674  |       |        |        | 2,241  |      
|                           |                                                               |                                  |                                                      |                       |     |                      |       |                     |     |       |       |        |       |        |        |       
|                           |                                                               |                                  | Total non-interest expense                           |                       |     | 2,991                |       |                     |     | 2,647 |       |        |       | 8,567  |        |        |       | 7,689 |       
|                           |                                                               |                                  |                                                      |                       |     |                      |       |                     |     |       |       |        |       |        |        |       
|                           |                                                               |                                  | Income before income taxes                           |                       |     | 1,335                |       |                     |     | 1,221 |       |        |       | 3,670  |        |        |       | 3,129 |       
|Income Tax Expense         |                                                               |                                  | 514                                                  |                       |     |                      | 460   |                     |     |       | 1,430 |        |       |        | 1,162  |       
|                           |                                                               |                                  |                                                      |                       |     |                      |       |                     |     |       |       |        |       |        |        |       
|                           |                                                               |                                  | Net income                                           |                       | $   | 821                  |       |                     | $   | 761   |       |        | $     | 2,240  |        |        | $     | 1,967 |       
|                           |                                                               |                                  |                                                      |                       |     |                      |       |                     |     |       |       |        |       |        |        |       
|Basic earnings per share   |                                                               | $                                | 0.39                                                 |                       |     | $                    | 0.36  |                     |     | $     | 1.05  |        |       | $      | 0.94   |       
|                           |                                                               |                                  |                                                      |                       |     |                      |       |                     |     |       |       |        |       |        |        |       
|Diluted earnings per share |                                                               | $                                | 0.38                                                 |                       |     | $                    | 0.34  |                     |     | $     | 1.03  |        |       | $      | 0.90   |       
|                           |                                                               |                                  |                                                      |                       |     |                      |       |                     |     |       |       |        |       |        |        |       

See notes to consolidated financial statements.

3



---



##### Table of Contents






PLUMAS BANCORP
CONSOLIDATED STATEMENT OF CASH FLOWS
(In thousands)

|                                      |                                                                                   |                                                                                                             |                                           |       |                     |         |             |       |         |         |  
|------------------------------------- | --------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------- | ----------------------------------------- | ----- | ------------------- | ------- | ----------- | ----- | ------- | ------- | -
|                                      |                                                                                   |                                                                                                             |                                           |       | For the Nine Months
|                                      |                                                                                   |                                                                                                             |                                           |       | Ended September 30 
|                                      |                                                                                   |                                                                                                             |                                           |       |                    
|                                      |                                                                                   |                                                                                                             |                                           |       | 2002                |         | 2001       
|                                      |                                                                                   |                                                                                                             |                                           |       |                     |         |            
|                                      |                                                                                   |                                                                                                             |                                           |       | (Unaudited)         |         | (Unaudited)
|Cash Flows from Operating Activities: |                                                                                   |                                                                                                             |                                           |       |                     |         |             |      
|                                      | Net income                                                                        |                                                                                                             | $                                         | 2,240 |                     |         | $           | 1,967 |        
|                                      | Adjustments to reconcile net income to net cash provided by operating
activities: |                                                                                                             |                                           |       |                     |         |             |       |        
|                                      |                                                                                   | Provision for loan losses                                                                                   |                                           |       | 725                 |         |             |       | 625     |        
|                                      |                                                                                   | Deferred loan origination fees, net                                                                         |                                           |       | (189                | )       |             |       | 59      |        
|                                      |                                                                                   | Depreciation, amortization and accretion, net                                                               |                                           |       | 768                 |         |             |       | 650     |        
|                                      |                                                                                   | Net realized gain on available-for-sale investment securities                                               |                                           |       | (62                 | )       |             |       | (30     | )      
|                                      |                                                                                   | Amortization of investment security premiums                                                                |                                           |       | 142                 |         |             |       | 50      |        
|                                      |                                                                                   | Accretion of investment security discounts                                                                  |                                           |       | (68                 | )       |             |       | (47     | )      
|                                      |                                                                                   | Net loss (gain) on sale of premises and equipment and other real estate                                     |                                           |       | 6                   |         |             |       | (73     | )      
|                                      |                                                                                   | Write down of held-to-maturity investment security                                                          |                                           |       |                    |         |             |       | 60      |        
|                                      |                                                                                   | Write down of other real estate to market value                                                             |                                           |       |                    |         |             |       | 9       |        
|                                      |                                                                                   | Net decrease in loans held for sale                                                                         |                                           |       | 190                 |         |             |       | 39      |        
|                                      |                                                                                   | Increase in cash surrender value of life insurance                                                          |                                           |       | (162                | )       |             |       | (160    | )      
|                                      |                                                                                   | Net (increase) decrease in accrued interest receivable and other assets                                     |                                           |       | (255                | )       |             |       | 287     |        
|                                      |                                                                                   | Net decrease in accrued interest payable and other liabilities                                              |                                           |       | 9                   |         |             |       | 442     |        
|                                      |                                                                                   | Deferred taxes, net                                                                                         |                                           |       | 24                  |         |             |       | (21     | )      
|                                      |                                                                                   |                                                                                                             |                                           |       |                     |         |             |      
|                                      |                                                                                   |                                                                                                             | Net cash provided by operating activities |       |                     | 3,368   |             |       |         | 3,857   |  
|                                      |                                                                                   |                                                                                                             |                                           |       |                     |         |             |      
|Cash Flows from Investing Activities: |                                                                                   |                                                                                                             |                                           |       |                     |         |             |      
|                                      |                                                                                   | Proceeds from matured and called available-for-sale investment
securities                                   |                                           |       | 16,996              |         |             |       | 6,450   |        
|                                      |                                                                                   | Proceeds from matured and called held-to-maturity investment securities                                     |                                           |       | 5,606               |         |             |       | 9,195   |        
|                                      |                                                                                   | Proceeds from sales of available-for-sale investment securities                                             |                                           |       | 530                 |         |             |       | 4,937   |        
|                                      |                                                                                   | Purchases of available-for-sale investment securities                                                       |                                           |       | (26,355             | )       |             |       | (15,082 | )      
|                                      |                                                                                   | Purchases of held-to-maturity investment securities                                                         |                                           |       | (687                | )       |             |       | (103    | )      
|                                      |                                                                                   | Proceeds from principal repayments from available-for-sale
government-guaranteed mortgage-backed securities |                                           |       | 585                 |         |             |       | 640     |        
|                                      |                                                                                   | Proceeds from principal repayments from held-to-maturity
government-guaranteed mortgage-backed securities   |                                           |       | 726                 |         |             |       | 188     |        
|                                      |                                                                                   | Net increase in loans                                                                                       |                                           |       | (22,143             | )       |             |       | (19,605 | )      
|                                      |                                                                                   | Proceeds from sale of other real estate                                                                     |                                           |       |                    |         |             |       | 147     |        
|                                      |                                                                                   | Purchase of premises and equipment                                                                          |                                           |       | (1,760              | )       |             |       | (1,166  | )      
|                                      |                                                                                   | Proceeds from sale of equipment                                                                             |                                           |       |                    |         |             |       | 8       |        
|                                      |                                                                                   | Deposits on single premium cash surrender value life insurance policies                                     |                                           |       | (510                | )       |             |       |        |        
|                                      |                                                                                   |                                                                                                             |                                           |       |                     |         |             |      
|                                      |                                                                                   |                                                                                                             | Net cash used in investing activities     |       |                     | (27,012 | )           |       |         | (14,391 | )
|                                      |                                                                                   |                                                                                                             |                                           |       |                     |         |             |      

Continued on next page.

4



---



##### Table of Contents



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

|                                                  |                                                                       |                                                                                                                    |                                           |     |                     |        |        |     |        |        | 
|------------------------------------------------- | --------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------ | ----------------------------------------- | --- | ------------------- | ------ | ------ | --- | ------ | ------ | 
|                                                  |                                                                       |                                                                                                                    |                                           |     | Unaudited          
|                                                  |                                                                       |                                                                                                                    |                                           |     | For the Nine Months
|                                                  |                                                                       |                                                                                                                    |                                           |     | Ended September 30 
|                                                  |                                                                       |                                                                                                                    |                                           |     |                    
|                                                  |                                                                       |                                                                                                                    |                                           |     | 2002                |        | 2001  
|                                                  |                                                                       |                                                                                                                    |                                           |     |                     |        |       
|Cash Flows from Financing Activities:             |                                                                       |                                                                                                                    |                                           |     |                     |        |        |    
|                                                  |                                                                       | Net increase in demand, interest bearing and savings deposits                                                      |                                           | $   | 31,071              |        |        | $   | 22,229 |       
|                                                  |                                                                       | Net (decrease) increase in time deposits                                                                           |                                           |     | (3,521              | )      |        |     | 3,586  |       
|                                                  |                                                                       | Proceeds from exercise of stock options                                                                            |                                           |     | 88                  |        |        |     | 138    |       
|                                                  |                                                                       | Proceeds from issuance of mandatorily redeemable cumulative
trust preferred securities of subsidiary grantor trust |                                           |     | 6,000               |        |        |     |       |       
|                                                  |                                                                       | Cash dividends paid                                                                                                |                                           |     | (703                | )      |        |     | (635   | )     
|                                                  |                                                                       |                                                                                                                    |                                           |     |                     |        |        |    
|                                                  |                                                                       |                                                                                                                    | Net cash provided by financing activities |     |                     | 32,935 |        |     |        | 25,318 | 
|                                                  |                                                                       |                                                                                                                    |                                           |     |                     |        |        |    
|                                                  |                                                                       |                                                                                                                    | Increase in cash and cash equivalents     |     |                     | 9,291  |        |     |        | 14,784 | 
|Cash and Cash Equivalents at Beginning of Year    |                                                                       |                                                                                                                    | 30,088                                    |     |                     |        | 13,563 |    
|                                                  |                                                                       |                                                                                                                    |                                           |     |                     |        |        |    
|Cash and Cash Equivalents at End of Period        |                                                                       | $                                                                                                                  | 39,379                                    |     |                     | $      | 28,347 |    
|                                                  |                                                                       |                                                                                                                    |                                           |     |                     |        |        |    
|Supplemental Disclosure of Cash Flow Information: |                                                                       |                                                                                                                    |                                           |     |                     |        |        |    
|                                                  | Cash paid during the period for:                                      |                                                                                                                    |                                           |     |                     |        |        |     |       
|                                                  |                                                                       | Interest expense                                                                                                   |                                           | $   | 3,088               |        |        | $   | 4,952  |       
|                                                  |                                                                       | Income taxes                                                                                                       |                                           | $   | 1,681               |        |        | $   | 1,127  |       
|Non-Cash Investing Activities:                    |                                                                       |                                                                                                                    |                                           |     |                     |        |        |    
|                                                  | Real estate acquired through foreclosure                              |                                                                                                                    | $                                         | 46  |                     |        | $      | 40  |       
|                                                  | Net change in unrealized gain on available-for-sale securities        |                                                                                                                    | $                                         | 488 |                     |        | $      | 315 |       
|Non-Cash Financing Activities:                    |                                                                       |                                                                                                                    |                                           |     |                     |        |        |    
|                                                  | Common stock retired in connection with the exercise of stock options |                                                                                                                    | $                                         |    |                     |        | $      | 162 |       

See notes to consolidated financial statements.

5



---



##### Table of Contents






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 its acquisition 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.

2. CONSOLIDATED FINANCIAL STATEMENTS

In the opinion of management, the unaudited financial statements contain all
adjustments (consisting of only normal recurring adjustments) necessary to
present fairly the Companys financial position at September 30, 2002 and
December 31, 2001, the results of operations and cash flows for the nine months
ended September 30, 2002 and 2001 and the results of operations for the three
and nine months ended September 30, 2002 and 2001. Certain reclassifications
have been made to prior years balances to conform to classifications used in
2002.

Certain disclosures normally presented in the notes to the financial statements
prepared in accordance with generally accepted accounting principles have been
omitted. These interim financial statements should be read in conjunction with
the financial statements and notes thereto included in the Banks 2001 Annual
Report to Shareholders. The results of operations for the three and nine-month
periods ended September 30, 2002 and 2001 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. 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 approximately $45,151,000 and $35,753,000 and letters of
credit of $207,000 and $279,000 at September 30, 2002 and December 31, 2001,
respectively.

Approximately $7,487,000 of the loan commitments outstanding at September 30,
2002 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.

6



---



##### Table of Contents



4. EARNINGS PER SHARE COMPUTATION

|                           |  |                    |      |      |  |   |      | 
|-------------------------- |  | ------------------ | ---- | ---- |  | - | ---- | 
|                           |  | For Quarters Ended
|                           |  | September 30      
|                           |  |                   
|Earnings Per Share         |  | 2002               |      | 2001
|                           |  |                    |      |     
|Basic earnings per share   |  | $                  | 0.39 |      |  | $ | 0.36 | 
|Diluted earnings per share |  | $                  | 0.38 |      |  | $ | 0.34 | 

|                                              |  |                    |           |      |  |  |           | 
|--------------------------------------------- |  | ------------------ | --------- | ---- |  |  | --------- | 
|                                              |  | For Quarters Ended
|                                              |  | September 30      
|                                              |  |                   
|Weighted Average Number of Shares Outstanding |  | 2002               |           | 2001
|                                              |  |                    |           |     
|Basic Shares                                  |  |                    | 2,133,213 |      |  |  | 2,123,532 | 
|Diluted Shares                                |  |                    | 2,188,752 |      |  |  | 2,233,999 | 

|                           |  |                 |      |      |  |   |      | 
|-------------------------- |  | --------------- | ---- | ---- |  | - | ---- | 
|                           |  | For Nine Months
|                           |  | Ended          
|                           |  | September 30   
|                           |  |                
|Earnings Per Share         |  | 2002            |      | 2001
|                           |  |                 |      |     
|Basic earnings per share   |  | $               | 1.05 |      |  | $ | 0.94 | 
|Diluted earnings per share |  | $               | 1.03 |      |  | $ | 0.90 | 

|                                              |  |                 |           |      |  |  |           | 
|--------------------------------------------- |  | --------------- | --------- | ---- |  |  | --------- | 
|                                              |  | For Nine Months
|                                              |  | Ended          
|                                              |  | September 30   
|                                              |  |                
|Weighted Average Number of Shares Outstanding |  | 2002            |           | 2001
|                                              |  |                 |           |     
|Basic Shares                                  |  |                 | 2,130,771 |      |  |  | 2,102,092 | 
|Diluted Shares                                |  |                 | 2,175,967 |      |  |  | 2,189,916 | 

5. COMPREHENSIVE INCOME

Total comprehensive income for the three months ended September 30, 2002 and
2001 totaled $969,000 and $849,000, respectively. Comprehensive income is
comprised of net unrealized gains, net of taxes, on available-for-sale
investment securities, which were $148,000 and $88,000 for the three months
ended September 30, 2002 and 2001, respectively.

Total comprehensive income for the nine months ended September 30, 2002 and
2001 totaled $2,503,000 and $2,166,000, respectively. Comprehensive income is
comprised of net unrealized gains, net of taxes, on available-for-sale
investment securities, which were $263,000 and $199,000 for the nine months
ended September 30, 2002 and 2001, respectively, and net income. At September
30, 2002 and 2001, accumulated other comprehensive income totaled $411,000 and
$185,000, respectively.

6. TRUST PREFERRED SECURITIES

On September 26, 2002, the Company formed a wholly owned Connecticut statutory
business trust, Plumas Statutory Trust I (the Trust). On that same day, the
Company issued to the Trust floating rate junior subordinated deferrable
interest debentures due September 26, 2032 (the debentures) in the aggregate
principal amount of $6,000,000. These debentures qualify as Tier I capital
under Federal Reserve Board guidelines. In exchange for these debentures, the
Trust paid the Company $6,000,000. The Trust funded its purchase of the
debentures by issuing $6,000,000 in floating rate capital securities, which
were then pooled and sold. The debentures are the only asset of the Trust.
The terms and interest rate, computed on actual days divided by 360 times the
rate, on both instruments are the same. The rate is the three-month LIBOR
(London Interbank Offered Rate) plus 3.40%, not to exceed 11.9%, adjustable
quarterly.

7



---



##### Table of Contents



The debentures and capital securities accrue and pay distributions quarterly
based on the floating rate described above on the stated liquidation value of
$1,000 per security. The Company has entered into contractual agreements
which, taken collectively, fully and unconditionally guarantee payment of: (1)
accrued and unpaid distributions required to be paid on the capital securities;
(2) the redemption price with respect to any capital securities called for
redemption by the Trust, and (3) payments due upon voluntary or involuntary
dissolution, winding up, or liquidation of the Trust.

These capital securities are mandatorily redeemable upon maturity of the
subordinated debentures on September 26, 2032, or upon earlier redemption as
provided in the indenture.

7. SUBSEQUENT EVENT

On October 28, 2002, the company announced a three-for-two common stock split and a special cash dividend. The split will be
paid on November 26, 2002 to shareholders of record as of the
close of business on November 12, 2002. The Company also
announced a special cash dividend of $0.05 per share to be paid on
November 26, 2002. The special cash dividend will be paid to
shareholders of record as of the close of business on November 12, 2002 on shares
outstanding after the three-for-two common stock split.

8



---



##### Table of Contents



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, 2002 and
December 31, 2001 and for the three and nine months ended September 30, 2002
and September 30, 2001. This discussion should be read in conjunction with the
financial statements and related notes included elsewhere in this Quarterly
Report on Form 10-QSB and the financial statements and notes thereto included
in Plumas Banks Annual Report filed on Form 10-KSB for the year ended December
31, 2001. 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 $273,000, or 13.9%, to $2,240,000 for the
nine months ended September 30, 2002 from $1,967,000 for the same period in
2001. The primary contributors to the increase in net income for the first
nine months of 2002 were a $1.3 million increase in net interest income before
provision for loan losses and a $218 thousand increase in non-interest income,
partially offset by a $878 thousand increase in non-interest expenses, a $268
thousand increase in income tax expense and a $100 thousand increase in the
provision for loan losses.

Total assets at September 30, 2002 increased $35.4 million, or 12.9%, to $310.5
million from $275.1 million at December 31, 2001. Growth in total assets was
primarily concentrated in the loan portfolio, which grew $21.7 million, or
11.8%, to $205.4 million during the same period. Additional asset growth was
the result of proceeds from the Companys issuance of $6 million in trust
preferred securities in September 2002. The growth in the Companys loans was
primarily funded by growth in the Companys deposits. Deposits grew $27.6
million, or 10.9%, to $279.8 million at September 30, 2002 from $252.2 million
at December 31, 2001.

9



---



##### Table of Contents



The return on average assets was 1.05% for the nine months ended September 30,
2002 compared to 1.04% for the same period in 2001. The return on average
equity was 13.9% for the nine months ended September 30, 2002 compared to 13.7%
for the same period in 2001. The Companys earnings increased during this
period resulting in improvement in the return on average asset and equity
ratios, the positive affect of improved earnings was slightly offset by the
Companys overall growth.

RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2002

Net interest income before provision for loan losses.Net interest income
before provision for loan losses is the difference between interest earned on
assets and interest paid on liabilities. Net interest income, on a
nontax-equivalent basis, was $10.7 million for the nine months ended September
30, 2002, an increase of $1.3 million, or 13.9%, from $9.4 million for the same
period in 2001. The increase in net interest income was attributed to declines
in rates paid on the Companys deposits combined with volume increases in the
Companys average loan balances, partially offset by declines in the yields on
the Companys interest-earning assets. The Companys average loan balances
were $194.9 million for the nine months ended September 30, 2002, up $22.3
million, or 12.9%, from the $172.6 million for the same period in 2001.
Offsetting the benefits of the increased loan volume was the impact of the 2001
falling interest rate environment on the Companys loan portfolio. The
Companys average loan yield was 8.20% for the nine months ending September 30,
2002, down 137 basis points, or 14.3%, from the 9.57% for the same period in
2001.

Interest expense decreased $2.1 million, or 40.3%, to $3.0 million for the nine
months ended September 30, 2002, down from $5.1 million for the same period in
2001. The decrease in interest expense was primarily attributed to rate
decreases for both time and money market deposits, slightly offset by volume
increases in money market deposits. The Companys average rate paid on time
deposits was 3.23% for the nine months ending September 30, 2002, down 210
basis points, or 39.4%, from the 5.33% paid for the same period in 2001. The
Companys average rate paid on money market deposits was 1.56% for the nine
months ending September 30, 2002, down 189 basis points, or 54.8%, from the
3.45% paid for the same period in 2001. The Companys average money market
deposit balances were $49.5 million for the nine months ended September 30,
2002, up $8.6 million, or 20.9%, from the $40.9 million for the same period in
2001.

Net interest margin is net interest income expressed as a percentage of average
interest-earning assets. The net interest margin for the nine months ended
September 30, 2002 increased 2 basis points to 5.62%, up from 5.60% for the
same period in 2001. The Companys declining cost of funds and increasing loan
volumes offset the adverse effects of the 2001 falling interest rate
environment on the Companys interest-earning assets and resulted in the
overall increase in the net interest margin when comparing the periods of 2002
and 2001.

Provision for loan losses.The Company recorded $725,000 in provision for loan
losses for the nine months ended September 30, 2002, versus $625,000 during the
same period in 2001. The increase in the provision for loan losses during this
period is reflective of the increasing loan volumes. 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.

Non-interest income.During the nine months ended September 30, 2002, total
non-interest income increased $218,000, or 10.4%, to $2.3 million, up from $2.1
million for the comparable period in 2001. The increase in non-interest income
is primarily due to increases in the number of fee generating accounts opened,
growth in merchant processing income, growth in alternative investment fee
income, gains on the sale of available-for-sale investment securities and
restructuring of the Banks service charge fee schedule in February 2002,
partially offset by reduced gains on the sale of loans and other real estate.

10



---



##### Table of Contents



Non-interest expense.During the nine months ended September 30, 2002,
non-interest expense increased $878,000, or 11.4%, to $8.6 million, up from
$7.7 million for the comparable period in 2001. The increase in non-interest
expense is primarily due to increased salary and benefit costs resulting from
staffing additions to manage the overall growth of the Company, higher employee
health-care costs, additional depreciation expense resulting from installation
of an automated teller platform system and enhancing the Companys data
processing systems, increased professional service fees related to enhancing
the systems securing customer and company information and costs incurred to
complete the merger and reorganization of the Bank under the Company.

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2002

Net interest income before provision for loan losses.Net interest income, on
a nontax-equivalent basis, was $3.7 million for the three months ended
September 30, 2002, an increase of $400,000, or 12.0%, from $3.3 million for
the same period in 2001. The increase in net interest income was attributed to
declines in rates paid on the Companys deposits combined with volume increases
in the Companys average loan balances, partially offset by declines in the
yield on the Companys interest-earning assets. The Companys average loan
balances were $203.2 million for the three months ended September 30, 2002, up
$22.4 million, or 12.4%, from the $180.8 million for the same period in 2001.
Offsetting the benefits of the increased loan volume was the impact of the 2001
falling interest rate environment on the Companys loan portfolio. The
Companys average loan yield was 8.07% for the three months ending September
30, 2002, down 115 basis points, or 12.5%, from the 9.22% for the same period
in 2001.

Interest expense decreased $576,000, or 36.9%, to $985 thousand for the three
months ended September 30, 2002, down from $1.6 million for the same period in
2001. The decrease in interest expense was primarily attributed to rate
decreases for both time and money market deposits. The Companys average rate
paid on time deposits was 2.96% for the three months ending September 30, 2002,
down 186 basis points, or 38.6%, from the 4.82% paid for the same period in
2001. The Companys average rate paid on money market deposits was 1.63% for
the three months ending September 30, 2002, down 128 basis points, or 44.0%,
from the 2.91% paid for the same period in 2001.

The net interest margin for the three months ended September 30, 2002 decreased
3 basis points to 5.55%, down from 5.58% for the same period in 2001. The
Companys declining cost of funds and increasing loan volumes offset the
adverse effects of the 2001 falling interest rate environment on the Companys
interest-earning assets and resulted in only slight declines in the net
interest margin when comparing the periods of 2002 and 2001.

Provision for loan losses.The Company recorded $200,000 in provision for loan
losses for the three months ended September 30, 2002, versus $175,000 during
the same period in 2001. The provision for loan losses during these periods is
reflective of the increasing loan volumes. 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.

Non-interest income.During the three months ended September 30, 2002, total
non-interest income increased $83,000, or 11.7%, to $793,000, up from $710,000
for the comparable period in 2001. The increase in non-interest income is
primarily due to increases in the number of fee generating accounts, growth in
merchant processing income and the restructuring of the Banks service charge
fee schedule in February 2002 partially offset by reduced gains on the sales of
available-for-sale investment securities.

Non-interest expenses.During the three months ended September 30, 2002,
non-interest expenses increased $344,000, or 13.0%, to $3.0 million, up from
$2.6 million for the comparable period in 2001. The increase in non-interest
expense is primarily due to increased salary and benefit costs resulting from
staffing additions to manage the overall growth of the Company, increased
professional service fees related to enhancing the systems securing customer
and company information, additional depreciation expense resulting from
installation of an automated teller platform system and professional service
fees related to legal and collection efforts on non-performing loans and
operational losses.

11



---



##### Table of Contents



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 commercial businesses. These 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,
2002, commercial loans grew to 36.9% of the loan portfolio versus 27.2% at
December 31, 2001. Real estate loans declined to 29.4% of the portfolio as of
September 30, 2002 as compared to 35.2% at December 31, 2001. Agricultural
loans decreased slightly to 9.4% of the loan portfolio versus 11.9% at December
31, 2001. Consumer loans also decreased slightly to 24.3% of the loan
portfolio at September 30, 2002 compared to 25.7% at December 31, 2001.

Nonperforming assets.Nonperforming loans as a percent of total loans were
0.83% as of September 30, 2002, up slightly from 0.65% at December 31, 2001.
Nonperforming assets as a percent of total assets were 0.60% as of September
30, 2002 up slightly from 0.48% at December 31, 2001. The increases in these
ratios was the result of increases in nonaccrual loans, which increased
$495,000 to $1.7 million at September 30, 2002 from $1.2 million at December
31, 2001.

Analysis of allowance for loan losses.Net charge-offs during the nine months
ended September 30, 2002 totaled $390,000, or 0.19% of total loans, compared to
$370,000, or 0.20% of total loans, for the comparable period in 2001. The
allowance for loan losses stood at 1.21% of total loans as of September 30,
2002, versus 1.17% of total loans as of December 31, 2001. 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.

Investment securities and Federal funds sold.Total investment securities and
Federal funds sold increased $2.9 million, or 4.4%, to $68.8 million as of
September 30, 2002, up from $65.8 million at December 31, 2001. The increase
is attributable to the Companys deposit growth, which outpaced the Companys
loan growth. Federal funds sold and proceeds from maturing short-term U.S.
Treasuries, direct obligations of U.S. agencies and longer-term corporate bonds
were used to fund the Companys continued loan growth.

The Companys investment in U.S. Treasury securities and direct obligations of
U.S. agencies increased to 80.8% of the investment portfolio, excluding Federal
funds sold, as of September 30, 2002, versus 72.1% at December 31, 2001. The
Companys investment in corporate bonds declined to 11.8% of the investment
portfolio as of June 30, 2002, versus 21.2% at December 31, 2001. The
remainder of the Companys investment portfolio consists of municipal
obligations and interest-bearing deposits with other financial institutions.

Deposits.Total deposits were $279.8 million as of September 30, 2002, an
increase of $27.6 million, or 10.9%, from the December 31, 2001 balance of
$252.2 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. As of September 30, 2002, non-interest bearing demand deposits
and interest checking deposits increased slightly to 36.5% of total deposits
versus 34.1% at December 31, 2001. Money market and savings deposits also
increased slightly to 33.8% of total deposits as of September 30, 2002 compared
to 31.6% as of December 31, 2001. Time deposits decreased to 29.7% of total
deposits as of September 30, 2002 compared to 34.3% at December 31, 2001.

CAPITAL RESOURCES

Shareholders equity as of September 30, 2002 increased $1.9 million, or 9.2%,
to $22.5 million from $20.6 million as of December 31, 2001. This increase was
primarily due to the retention of current period earnings and an increase in
the unrealized gains on available-for-sale investment securities, partially
offset by a $703,000 cash dividend paid in the second quarter.

12



---



##### Table of Contents



The Companys leverage (Tier 1 capital to average total assets) ratios were
9.5% and 7.4% at September 30, 2002 and December 31, 2001, respectively. The
Companys Tier 1 risk-based capital ratios were 11.5% and 9.3% for September
30, 2002 and December 31, 2001, respectively. The Companys total risk-based
capital ratios were 12.6% and 10.3% for September 30, 2002 and December 31,
2001, respectively. Much of the increase in the capital ratios is due to the
new trust preferred securities (see note 6) totaling $6 million, which are
included for regulatory purposes as Tier 1 capital. The Companys capital
ratios well exceed the minimum required capital ratios for bank holding
companies.

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
changing competitive offering rates on deposits products and the use of
established lines of credit from other financial institutions and the Federal
Home Loan Bank.

Customer deposits are the Companys primary source of funds. Deposits grew
$27.6 million, or 10.9%, from the December 31, 2001 balance of $252.2 million.
Those funds are held in various forms with varying maturities. The Company
does not accept brokered deposits. The Companys 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.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

In managements opinion there has not been a
material change in the Company's market risk profile for the nine
months ended September 30, 2002 compared to December 31, 2001.

13



---



##### Table of Contents






PART II  OTHER INFORMATION




ITEM 1. LEGAL PROCEEDINGS

None.




ITEM 2. CHANGES IN SECURITIES

On February 6, 2002, 100 shares of the Companys common stock were issued to
William E. Elliott in exchange for $150 to initially capitalize the Company.
As of the date of this report the Company has repurchased all 100 shares of
common stock from William E. Elliott for $150. No dividends were paid on the
common stock.




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

Exhibits and Reports on Form 8-K

|    |  |  |      |  |  |                                                                                                                                                                                                                          
|--- |  |  | ---- |  |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  |  | 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.
|    |  |  | 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.                           

14



---



##### Table of Contents



| |  |  |       |  |  |                                                                                                                                                                                                                            
| |  |  | ----- |  |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  |  | 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.                                 

15



---



##### 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.                                  

16



---



##### Table of Contents



|    |  |  |       |  |  |                                                                                                                                                                                                                                                                                                              
|--- |  |  | ----- |  |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |  |  | 10.40 |  |  | 1991 Stock Option Plan as amended, is included as Exhibit 10.40
to the Registrants 10-QSB for June 30 2002, which is
incorporated by this reference herein.                                                                                                                                                 
|    |  |  | 10.41 |  |  | 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.                                                                                                                                                 
|    |  |  | 10.42 |  |  | 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                                                                                                                                                                                        
|   
|    |  |  | 11    |  |  | Computation of per share earnings appears in the attached 10-QSB
under Plumas Bancorp Notes to Consolidated Financial Statements
as Footnote 4  Earnings Per Share Computation.                                                                                                                             
|   
|(b) |  |  |       |  |  | On October 16, 2002, the Company filed a Current Report on Form
8-K under Item 5. The Current Report included as an exhibit,
the press release, dated October 16, 2002, filed by the Company
containing unaudited financial information and accompanying
discussion for the quarter ended September 30, 2002.
|   
|    |  |  |       |  |  | On
October 28, 2002, the Company filed a Current Report on
Form 8-K. The Current Report included as an exhibit,
the press release dated October 28, 2002, filed by the Company
containing unaudited financial information and announcement of a stock split and special cash dividend.                       

17



---



##### Table of Contents






SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.



| | Plumas Bancorp
(Registrant)
| | ---------------------------



|Date: November 7, 2002 | I certify that this periodic report containing the
issuers financial statements fully complies with
the requirements of section 13(a) or 15(d) of the
Securities Exchange Act of 1934 (15 U.S.C. 78m or
78o(d)) and that information contained in this
periodic report fairly presents, in all material
respects, the financial condition and results of
operations of the issuer.
|---------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | /s/ D. N. Biddle
Douglas N. Biddle, EVP & Chief Financial Officer
| | -----------------------------------------------------------------



|Date: November 7, 2002 | I certify that this periodic report containing the
issuers financial statements fully complies with
the requirements of section 13(a) or 15(d) of the
Securities Exchange Act of 1934 (15 U.S.C. 78m or
78o(d)) and that information contained in this
periodic report fairly presents, in all material
respects, the financial condition and results of
operations of the issuer.
|---------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | /s/ W. E. Elliott
William E. Elliott, President & CEO
| | -----------------------------------------------------

18



---



##### Table of Contents



I, Douglas N. Biddle, certify that:



| | 1. |  | I have reviewed this quarterly report on Form 10-QSB of Plumas
Bancorp;                                                                                                                                                                                                                                                       
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | 2. |  | Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;
|
| | 3. |  | Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly present
in all material respects the financial condition, results of operations
and cash flows of the registrant as of, and for, the periods presented
in this quarterly report;                   
|
| | 4. |  | The registrants other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
we have:                                                                                                      

|   |  |                                                                                                                                                                                                                                                                                                
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|a) |  | designed such disclosure controls and procedures to
ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in
which this quarterly report is being prepared;
|b) |  | evaluated the effectiveness of the registrants
disclosure controls and procedures as of a date within 90 days
prior to the filing date of this quarterly report (the
Evaluation Date); and                                                                                                  
|c) |  | presented in this quarterly report our conclusions
about the effectiveness of the disclosure controls and
procedures based on our evaluation as of the Evaluation Date;                                                                                                                        



| | 5. |  | The registrants other certifying officer and I have disclosed,
based on our most recent evaluation, to the registrants auditors and
the audit committee of registrants board of directors (or persons
performing the equivalent function):
| | -- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|   |  |                                                                                                                                                                                                                                                                                             
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|a) |  | all significant deficiencies in the design or
operation of internal controls which could adversely affect the
registrants ability to record, process, summarize and report
financial data and have identified for the registrants auditors
any material weakness in internal controls; and
|b) |  | any fraud, weather or not material, that involves
management or other employees who have a significant role in the
registrants internal controls; and                                                                                                                                      



| | 6. |  | The registrants other certifying officer and I have indicated in
this quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Date: | Nov. 7, 2002 | 
|----- | ------------ | 



|/s/ D. N. Biddle
Douglas N. Biddle, EVP & CFO | 
|--------------------------------------------- | 

19



---



##### Table of Contents



I, William E. Elliott, certify that:



| | 1. |  | I have reviewed this quarterly report on Form 10-QSB of Plumas
Bancorp;                                                                                                                                                                                                                                                       
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | 2. |  | Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;
|
| | 3. |  | Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly present
in all material respects the financial condition, results of operations
and cash flows of the registrant as of, and for, the periods presented
in this quarterly report;                   
|
| | 4. |  | The registrants other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
we have:                                                                                                      

|   |  |                                                                                                                                                                                                                                                                                                
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|a) |  | designed such disclosure controls and procedures to
ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in
which this quarterly report is being prepared;
|b) |  | evaluated the effectiveness of the registrants
disclosure controls and procedures as of a date within 90 days
prior to the filing date of this quarterly report (the
Evaluation Date); and                                                                                                  
|c) |  | presented in this quarterly report our conclusions
about the effectiveness of the disclosure controls and
procedures based on our evaluation as of the Evaluation Date;                                                                                                                        



| | 5. |  | The registrants other certifying officer and I have disclosed,
based on our most recent evaluation, to the registrants auditors and
the audit committee of registrants board of directors (or persons
performing the equivalent function):
| | -- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|   |  |                                                                                                                                                                                                                                                                                             
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|a) |  | all significant deficiencies in the design or
operation of internal controls which could adversely affect the
registrants ability to record, process, summarize and report
financial data and have identified for the registrants auditors
any material weakness in internal controls; and
|b) |  | any fraud, weather or not material, that involves
management or other employees who have a significant role in the
registrants internal controls; and                                                                                                                                      



| | 6. |  | The registrants other certifying officer and I have indicated in
this quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Date: | Nov. 7, 2002 | 
|----- | ------------ | 



|/s/ W. E. Elliott
William E. Elliott, President & CEO | 
|----------------------------------------------------- | 

20