Plumas Bancorp

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q



(Mark One)
x		QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE
		SECURITIES EXCHANGE ACT OF 1934
		FOR THE QUARTERLY PERIOD ENDED March 31, 2004

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

COMMISSION FILE NUMBER: 000-49883

PLUMAS BANCORP

(Exact Name of Registrant as Specified in Its Charter)


California (State or Other Jurisdiction of Incorporation or Organization)		75-2987096 (I.R.S. Employer Identification No.)


35 S. Lindan Avenue, Quincy, California (Address of Principal Executive Offices)		95971 (Zip Code)

Registrant’s Telephone Number, Including Area Code (530) 283-7307

Indicated by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No o

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

Yes o No x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of May 10, 2004; 3,259,742 shares

TABLE OF CONTENTS


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

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENT

PLUMAS BANCORP

CONSOLIDATED BALANCE SHEET

(In thousands, except share data)


	Unaudited		Audited
	March 31,		December 31,
	2004		2003
Assets
Cash and due from banks	$	23,183	$	24,717
Federal funds sold		19,390		5,295
Loans held for sale		—		276
Investment securities (market value of $116,094 at March 31, 2004 and $116,102 at December 31, 2003)		115,792		115,883
Loans, less allowance for loan losses of $2,643 at March 31, 2004 and $2,564 at December 31, 2003 (Notes 3 and 4)		211,700		214,863
Bank premises and equipment, net		10,181		10,306
Intangible assets, net		2,167		2,238
Accrued interest receivable and other assets		14,503		16,684

Total assets	$	396,916	$	390,262

Liabilities and Shareholders’ Equity
Deposits:
Non-interest bearing	$	96,391	$	96,830
Interest bearing		264,149		259,012

Total deposits		360,540		355,842
Accrued interest payable and other liabilities		3,092		2,485
Junior subordinated deferrable interest debentures		6,186		6,186

Total liabilities		369,818		364,513

Commitments and contingencies (Note 4)		—		—
Shareholders’ equity (Notes 5 and 8):
Serial preferred stock, no par value; 10,000,000 shares authorized, no shares issued or outstanding		—		—
Common stock, no par value; 15,000,000 shares authorized; issued and outstanding – 3,258,728 shares at March 31, 2004 and 3,242,027 shares at December 31, 2003		3,989		3,945
Retained earnings		22,364		21,638
Accumulated other comprehensive income (Note 6)		745		166

Total shareholders’ equity		27,098		25,749

Total liabilities and shareholders’ equity	$	396,916	$	390,262

See notes to consolidated financial statements.

PLUMAS BANCORP

CONSOLIDATED STATEMENT OF INCOME

(In thousands, except per share data)


	Unaudited
	For the Three Months
	Ended March 31,
	2004			2003
Interest Income:
Interest and fees on loans	$	3,886		$	3,968
Interest on investment securities:
Taxable		745			509
Exempt from Federal income taxes		71			33
Interest on Federal funds sold		33			32
Interest on loans held for sale		1			10

Total interest income		4,736			4,552

Interest Expense:
Interest on deposits		634			789
Other		73			77

Total interest expense		707			866

Net interest income before provision for loan losses		4,029			3,686
Provision for Loan Losses		150			225

Net interest income after provision for loan losses		3,879			3,461
Non-Interest Income:
Service charges		611			469
Gain on sale of loans, net		49			29
Gain on sale of available-for-sale investment securities, net		90			62
Loss on sale of other real estate and write-off of judgment receivable		(53	)		(5	)
Earnings on cash surrender value of life insurance policies		107			54
Other income		216			194

Total non-interest income		1,020			803

Non-Interest Expense:
Salaries and employee benefits		2,210			1,772
Occupancy and equipment		674			517
Other expense		877			797

Total non-interest expense		3,761			3,086

Income before income taxes		1,138			1,178
Income Tax Expense		412			462

Net income	$	726		$	716

Basic earnings per share (Notes 5 and 8)	$	0.22		$	0.22

Diluted earnings per share (Notes 5 and 8)	$	0.22		$	0.22

See notes to consolidated financial statements.

PLUMAS BANCORP

CONSOLIDATED STATEMENT OF CASH FLOWS

(In thousands)


	Unaudited
	For the Three Months
	Ended March 31,
	2004			2003
Cash Flows from Operating Activities:
Net income	$	726		$	716
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses		150			225
Deferred loan origination fees, net		(122	)		10
Depreciation, amortization and accretion, net		460			305
Net realized gain on available-for-sale investment securities		(90	)		(62	)
Amortization of investment security premiums		271			163
Accretion of investment security discounts		(15	)		(4	)
Net loss on sale of premises and equipment		2			—
Net loss on sale of other real estate and write-off of judgment receivable		53			5
Net decrease in loans held for sale		276			857
Increase in cash surrender value of life insurance		(90	)		(46	)
Net decrease (increase) in accrued interest receivable and other assets		1,819			(187	)
Net decrease in accrued interest payable and other liabilities		607			216
Deferred taxes, net		—			—

Net cash provided by operating activities		4,047			2,198

Cash Flows from Investing Activities:
Proceeds from matured and called available-for-sale investment securities		5,500			1,500
Proceeds from matured and called held-to-maturity investment securities		775			2,000
Proceeds from sales of available-for-sale investment securities		9,293			3,648
Purchases of available-for-sale investment securities		(13,827	)		(9,346	)
Purchases of held-to-maturity investment securities		(1,197	)		—
Proceeds from principal repayments from available-for-sale government-guaranteed mortgage-backed securities		338			266
Proceeds from principal repayments from held-to-maturity government-guaranteed mortgage-backed securities		28			134
Net decrease (increase) in loans		3,135			(2,907	)
Proceeds from sale of other real estate		—			40
Purchase of premises and equipment		(273	)		(131	)
Deposits on single premium cash surrender value life insurance policies		—			(220	)

Net cash provided by (used in) investing activities		3,772			(5,016	)

Continued on next page.

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


	Unaudited
	For the Three Months
	Ended March 31,
	2004			2003
Cash Flows from Financing Activities:
Net increase (decrease) in demand, interest bearing and savings deposits	$	3,700		$	(3,076	)
Net increase (decrease) in time deposits		998			(1,412	)
Proceeds from exercise of stock options		44			110

Net cash provided by (used in) financing activities		4,742			(4,378	)

Increase (decrease) in cash and cash equivalents		12,561			(7,196	)
Cash and Cash Equivalents at Beginning of Year		30,012			37,930

Cash and Cash Equivalents at End of Period	$	42,573		$	30,734

Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for:
Interest expense	$	707		$	838
Income taxes	$	—		$	302
Non-Cash Investing Activities:
Real estate acquired through foreclosure	$	—		$	—
Net change in unrealized gain on available-for-sale securities	$	(985	)	$	141
Non-Cash Financing Activities:
Common stock retired in connection with the exercise of stock options	$	122		$	52

See notes to consolidated financial statements.

PLUMAS BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. GENERAL

Plumas Bancorp (the “Company”) was incorporated on January 17, 2002 and subsequently obtained approval from various state and federal agencies to be a bank holding company in connection with the merger of Plumas Bank (the “Bank”). The Company became the sole shareholder of the Bank on June 21, 2002 pursuant to a Plan of Reorganization and Merger Agreement dated April 3, 2002. Pursuant to that plan, on June 21, 2002 each outstanding share of the Bank’s common stock was exchanged for one share of common stock of the Company. The Company formed Plumas Statutory Trust I for the sole purpose of issuing trust preferred securities on September 26, 2002.

The Bank operates twelve branches in California, including branches in Alturas, Chester, Fall River Mills, Greenville, Kings Beach, Loyalton, Portola, Quincy, Susanville, Tahoe City, Truckee and Westwood. The Bank’s deposits are insured by the Federal Deposit Insurance Corporation (FDIC) up to applicable legal limits. The Bank’s primary source of revenue is generated from providing loans to customers who are predominately small and middle market businesses and individuals residing in the surrounding areas.

2. CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements include the accounts of the Company and the accounts of its wholly-owned subsidiary, Plumas Bank. Plumas Statutory Trust I is not consolidated into the Company’s consolidated financial statements and, accordingly, is accounted for under the equity method. In the opinion of management, the unaudited consolidated financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the Company’s financial position at March 31, 2004 and December 31, 2003 and the results of operations and cash flows for the three months ended March 31, 2004 and 2003. Certain reclassifications have been made to prior years’ balances to conform to classifications used in 2004.

Certain disclosures normally presented in the notes to the consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted. These interim financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s 2003 Annual Report to Shareholders on Form 10-K. The results of operations for the three-month period ended March 31, 2004 and 2003 may not necessarily be indicative of future operating results.

In preparing such financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and revenues and expenses for the periods reported. Actual results could differ significantly from those estimates.

3. LOANS

Outstanding loans are summarized below:


	March 31,			December 31,
	2004			2003
Commercial	$	48,639		$	51,073
Agricultural		26,550			26,537
Real estate – mortgage		67,170			67,532
Real estate – construction and land development		25,489			26,194
Consumer		46,903			46,621

		214,751			217,957
Deferred loans fees, net		(408	)		(530	)
Allowance for loan losses		(2,643	)		(2,564	)

	$	211,700		$	214,863

4. COMMITMENTS AND CONTINGENCIES

In the normal course of business, there are various outstanding commitments to extend credit which are not reflected in the financial statements, including loan commitments of $63,017,000 and $60,203,000 and letters of credit of $1,745,000 and $1,802,000 at March 31, 2004 and December 31, 2003, respectively.

Of the loan commitments outstanding at March 31, 2004, $13,446,000 are real estate construction loan commitments that are expected to fund within the next twelve months. The remaining commitments primarily relate to revolving lines of credit or other commercial loans, and many of these are expected to expire without being drawn upon. Therefore, the total commitments do not necessarily represent future cash requirements. Each loan commitment and the amount and type of collateral obtained, if any, are evaluated on an individual basis. Collateral held varies, but may include real property, bank deposits, debt or equity securities or business assets.

Stand-by letters of credit are conditional commitments written to guarantee the performance of a customer to a third party. These guarantees are primarily related to the purchases of inventory by commercial customers and are typically short-term in nature. Credit risk is similar to that involved in extending loan commitments to customers and accordingly, evaluation and collateral requirements similar to those for loan commitments are used.

5. EARNINGS PER SHARE COMPUTATION

Basic earnings per share are computed by dividing net income by the weighted average common shares outstanding for the period. Diluted earnings per share reflect the potential dilution that could occur if outstanding stock options were exercised. Diluted earnings per share are computed by dividing net income by the weighted average common shares outstanding for the period plus the dilutive effect of options.


	For the Three Months
	Ended March 31,
	2004		2003
Earnings Per Share:
Basic earnings per share	$	0.22	$	0.22
Diluted earnings per share	$	0.22	$	0.22
Weighted Average Number of Shares Outstanding:
Basic shares		3,250,087		3,217,940
Diluted shares		3,357,326		3,300,254

6. COMPREHENSIVE INCOME

Total comprehensive income for the three months ended March 31, 2004 and 2003 totaled $1,305,000 and $633,000, respectively. Comprehensive income is comprised of net unrealized gains (losses), net of taxes, on available-for-sale investment securities, which were $579,000 and $(83,000) for the three months ended March 31, 2004 and 2003, respectively, together with net income.

At March 31, 2004 and December 31, 2003, accumulated other comprehensive income totaled $745,000 and $166,000, respectively, and is reflected as a component of shareholders’ equity.

7. ACCOUNTING PRONOUCEMENTS

For a description of significant accounting policies, see Note 2 to the consolidated financial statements included in the Company’s 2003 Annual Report on Form 10-K.

8. STOCK-BASED COMPENSATION

At March 31, 2004, the Company had two stock-based compensation plans, the Plumas Bank 2001 and 1991 Stock Option Plans. The Company accounts for these plans under the recognition and measurement principles of APB Opinion No. 25, Accounting for Stock Issued to Employees, and related Interpretations. No stock-based compensation cost is reflected in net income, as all options granted under these plans had an exercise price equal to the market value of the underlying common stock on the date of grant.

Pro forma adjustments to the Company’s consolidated net earnings and earnings per share are disclosed during the years in which the options become vested. The following table illustrates the effect on net income and earnings per share if the Company had applied the fair value recognition provisions of FASB Statements No. 123, Accounting for Stock-Based Compensation, to stock-based compensation:


	For the Three Months
	Ended March 31,
	2004		2003

Net income as reported	$	726	$	716
Deduct: Total stock-based compensation expense determined under the fair value based method for all awards, net of related tax effects		32		21

Pro forma net income	$	694	$	695

Basic earnings per share – as reported	$	0.22	$	0.22

Basic earnings per share – pro forma	$	0.21	$	0.22

Diluted earnings per share – as reported	$	0.22	$	0.22

Diluted earnings per share – pro forma	$	0.21	$	0.21

The fair value of each option grant is estimated on the date of grant using an option-pricing model with the following assumptions:


	For the Three Months Ended
	March 31, 2004		March 31, 2003
Weighted average fair value of options granted		N/A	$	3.91
Dividend yield		N/A		1.4	%
Expected volatility		N/A		17.3	%
Risk-free interest rate		N/A		2.6	%
Expected option life in years		N/A		5.0

There were no option grants made during the three-month period ended March 31, 2004.

PART I – FINANCIAL INFORMATION

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

Certain matters discussed in this Quarterly Report are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those projected in the forward-looking statements. Such risks and uncertainties include, among others, (1) significant increases in competitive pressures in the financial services industry; (2) changes in the interest rate environment resulting in reduced margins; (3) general economic conditions, either nationally or regionally, maybe less favorable than expected, resulting in, among other things, a deterioration in credit quality; (4) changes in regulatory environment; (5) loss of key personnel; (6) fluctuations in the real estate market; (7) changes in business conditions and inflation; (8) operational risks including data processing systems failures or fraud; and (9) changes in securities markets. Therefore, the information set forth herein should be carefully considered when evaluating the business prospects of Plumas Bancorp.

When the Company uses in this Quarterly Report the words “anticipate”, “estimate”, “expect”, “project”, “intend”, “commit”, “believe” and similar expressions, the Company intends to identify forward-looking statements. Such statements are not guarantees of performance and are subject to certain risks, uncertainties and assumptions, including those described in this Quarterly Report. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated, expected, projected, intended, committed or believed. The future results and stockholder values of the Company may differ materially from those expressed in these forward-looking statements. Many of the factors that will determine these results and values are beyond the Company’s ability to control or predict. For those statements, the Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

INTRODUCTION

Plumas Bancorp (the “Company”) is traded on the OTC Bulletin Board under the ticker symbol “PLBC”. The following discussion and analysis sets forth certain statistical information relating to the Company as of March 31, 2004 and December 31, 2003 and for the three months ended March 31, 2004 and 2003. This discussion should be read in conjunction with the financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and the financial statements and notes thereto included in Plumas Bancorp’s Annual Report filed on Form 10-K for the year ended December 31, 2003.

OVERVIEW

The Company’s net income increased $10,000, or 1.4%, to $726,000 for the three months ended March 31, 2004 from $716,000 for the same period in 2003. The primary contributors to the increase in net income for the first three months of 2003 were a $343 thousand increase in net interest income, a $75 thousand decrease in the provision for loan losses, a $217 thousand increase in non-interest income and a $50 thousand decrease in the provision for income taxes, mostly offset by a $675 thousand increase in non-interest expenses.

Total assets at March 31, 2004 were $397 million, an increase of $6.7 million, or 1.7%, from the $390 million at December 31, 2003. The growth in assets was funded by growth in the Company’s deposits. Deposits grew $4.7 million, or 1.3%, to $361 million at March 31, 2004 from the $356 million at December 31, 2003.

The return on average assets was 0.74% for the three months ended March 31, 2004 compared to 0.89% for the same period in 2003. The return on average equity was 10.7% for the three months ended March 31, 2004 compared to 11.9% for the same period in 2003. Although the Company’s earnings increased during the first three months of 2004 when compared to the same period in 2003, the continued growth in assets combined with a declining rate environment have resulted in declines in the return on average asset and

equity ratios. Total average assets for the three months ended March 31, 2004 increased $69 million, or 21%, from the same period in 2003. Total average equity for the three months ended March 31, 2004 increased $3 million, or 12%, from the same period in 2003.

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2004

Net interest income before provision for loan losses. Net interest income, on a nontax-equivalent basis, was $4.0 million for the three months ended March 31, 2004, an increase of $343,000, or 9%, from $3.7 million for the same period in 2003. The increase in net interest income was primarily attributed to volume increases in the Company’s average investment balances combined with declines in rates paid on the Company’s deposits, somewhat offset by declines in the yield on the Company’s interest-earning assets.

Interest income increased $184,000 or 4%, to $4.7 million for the three months ended March 31, 2004, up from $4.5 million for the same period in 2003. The increase in interest income was primarily attributed to volume increases in investment balances partially offset by falling yields on loan and investment balances. The Company’s average investment balances were $111 million for the three months ended March 31, 2004, up $46 million, or 71%, from the $65 million for the same period in 2003. The Company’s average loan yield was 7.10% for the three months ended March 31, 2004, down 45 basis points, or 6%, from the 7.55% yield for the same period in 2003. In addition, the Company’s average investment yield was 2.93% for the three months ended March 31, 2004, down 39 basis points, or 12%, from the 3.32% yield for the same period in 2003.

Interest expense decreased $159,000, or 18%, to $707,000 for the three months ended March 31, 2004, down from $866,000 for the same period in 2003. The decrease in interest expense was primarily attributed to rate decreases for time deposits partially offset by volume increases in all of the Company’s deposit products. The Company’s average rate paid on time deposits was 1.82% for the three months ended March 31, 2004, down 61 basis points, or 25%, from the 2.43% paid for the same period in 2003.

The net interest margin for the three months ended March 31, 2004 decreased 46 basis points, or 9%, to 4.67%, down from 5.13% for the same period in 2003.

The following table presents for the three-month periods indicated the distribution of consolidated average assets, liabilities and shareholders’ equity. It also presents the amounts of interest income from interest-earning assets and the resultant yields expressed in both dollars and yield percentages, as well as, the amounts of interest expense on interest-bearing liabilities and the resultant cost expressed in both dollars and rate percentages. Nonaccrual loans are included in the calculation of average loans while nonaccrued interest thereon is excluded from the computation of yields earned:


	For the Three Months Ended March 31, 2004							For the Three Months Ended March 31, 2003
					Yield							Yield
	Average Balance		Interest		/			Average Balance		Interest		/
	(in thousands)		(in thousands)		Rate			(in thousands)		(in thousands)		Rate
Interest-earning assets:
Loans (1) (2)	$	217,201	$	3,887		7.10	%	$	208,868	$	3,977		7.55	%
Investment securities (1)		110,677		816		2.93	%		64,676		542		3.32	%
Federal funds sold		14,653		33		0.89	%		11,627		33		1.13	%

Total earning assets		342,531		4,736		5.49	%		285,171		4,552		6.33	%

Cash and demand deposits with banks		24,691							19,181
Other assets		24,716							18,236

Total assets	$	391,938						$	322,588

Interest-bearing liabilities:
NOW deposits	$	42,874		16		0.15	%	$	33,400		25		0.30	%
Money market deposits		65,997		124		0.75	%		59,458		159		1.06	%
Savings deposits		60,969		68		0.44	%		45,241		98		0.86	%
Time deposits		92,939		426		1.82	%		82,639		507		2.43	%
Other borrowings (3)		6,391		73		4.53	%		6,368		77		4.80	%

Total interest-bearing liabilities		269,170		707		1.04	%		227,106		866		1.51	%

Non-interest bearing deposits		93,210							69,138
Other liabilities		2,500							2,287
Shareholders’ equity		27,058							24,057

Total liabilities & equity	$	391,938						$	322,588

Cost of funding interest-earning assets (4)						0.82	%						1.20	%
Net interest income and margin (5)			$	4,029		4.67	%			$	3,686		5.13	%

(1)		Not computed on a tax-equivalent basis.

(2)		Loan fees included in loan interest income for the three-month periods ended March 31, 2004 and 2003 amounted to $136 and $153, respectively.

(3)		For the purpose of this schedule the interest expense related to the Company’s junior subordinated debentures is included in other borrowings.

(4)		Total interest expense divided by the average balance of total earning assets.

(5)		Net interest income divided by the average balance of total earning assets.

The following table sets forth changes in interest income and interest expense, for the three-month periods indicated and the amount of change attributable to variances in volume, rates and the combination of volume and rates based on the relative changes of volume and rates:


	2004 over 2003 change in net interest income
	(in thousands)
	Volume (1)		Rate (2)			Mix (3)			Total
Interest-earning assets:
Loans	$	159	$	(239	)	$	(10	)	$	(90	)
Investment securities		385		(65	)		(46	)		274
Federal funds sold		9		(7	)		(2	)		—

Total interest income		553		(311	)		(58	)		184

Interest-bearing liabilities:
NOW deposits		7		(13	)		(3	)		(9	)
Money market deposits		17		(47	)		(5	)		(35	)
Savings deposits		35		(48	)		(17	)		(30	)
Time deposits		63		(128	)		(16	)		(81	)
Other borrowings		—		(4	)		—			(4	)

Total interest expense		122		(240	)		(41	)		(159	)

Net interest income	$	431	$	(71	)	$	(17	)	$	343

(1)		The volume change in net interest income represents the change in average balance divided by the previous year’s rate.

(2)		The rate change in net interest income represents the change in rate divided by the previous year’s average balance.

(3)		The mix change in net interest income represents the change in average balance multiplied by the change in rate.

Provision for loan losses. The Company recorded $150,000 in provision for loan losses for the three months ended March 31, 2004, down $75,000, or 33%, from the $225,000 provision for the same period in 2003. Management assesses its loan quality monthly to maintain an adequate allowance for loan losses. Based on information currently available, management believes that the allowance for loan losses is adequate to absorb potential risks in the portfolio. However, no assurance can be given that the Company may not sustain charge-offs which are in excess of the allowance in any given period. The Company’s loan portfolio composition and non-performing assets are further discussed under the financial condition section below.

Non-interest income. During the three months ended March 31, 2004, total non-interest income increased $217,000, or 27%, to $1,020,000, up from $803,000 for the comparable period in 2003. The increase in non-interest income was primarily the result of increases in service charge revenue, earnings on bank-owned life insurance policies (“BOLI”) and gains on the sale of investment securities. The large portion of the growth in service charge revenue resulted from an increase in the Bank’s overall number of fee generating accounts. As a result of the acquisition in mid-November 2003 of five branches from a competitor, the Bank began servicing over 7,300 new deposit accounts.

During the last half of 2003, the Bank increased its holding in BOLI by $3.2 million to provide additional coverage for an executive officer of the Company. As a result, the tax-exempt earnings from these policies increased by $53 thousand to $107 thousand for the three months ended March 31, 2003 from $54 thousand for the same period in 2003.

Lastly, the Company continued to take advantage of opportunities to record gains in the investment portfolio, recording $90 thousand in gains on the sale of $9.3 million in available-for-sale U.S. agency securities.

Non-interest expenses. Non-interest expenses consist of salaries and related employee benefits, occupancy and equipment expenses, professional fees, business development expenses, telephone expense, stationery and supplies expense, armored car and courier expense, advertising and promotion expense, loan expenses, directors’ fees, and other operating expenses. For the three months ended March 31, 2004, non-interest expense increased $675,000, or 22%, to $3.8 million, up from $3.1 million for the comparable period in 2003.

Salaries and employee benefits increased $438,000, or 25%, over the same three-month period last year. This increase was due primarily to the staffing additions related to the Bank’s three new branch offices, expansion of the Company’s centralized lending function, staffing additions to manage the overall growth and increased employee benefit costs related to health-care and salary continuation plans.

Occupancy and equipment increased $157,000, or 30%, over the same three-month period last year. This increase was due primarily to additional depreciation and operating costs associated with three new branches. These new branches began serving the communities of Tahoe City, Kings Beach and Loyalton in November 2003. Other increases in occupancy and equipment relate to depreciation on capitalized upgrades to the Company’s network security and monitoring systems, network operating system, item processing system and remodeling costs associated with the administrative building.

The following table describes the components of non-interest expense for the three-month periods ending March 31, 2004 and 2003.


	Unaudited
	For the Three Months
	Ended March 31
	2004		2003
Salaries and employee benefits	$	2,210	$	1,772
Occupancy and equipment		674		517
Professional fees		186		138
Business development		93		81
Armored car and courier		89		79
Telephone and data communication		76		89
Stationery and supplies		73		61
Director compensation		72		63
Deposit premium amortization		71		34
Postage		65		66
Advertising and promotion		56		45
Insurance		56		52
Loan and collection expenses		25		61
Other expense		15		28

Total non-interest expense	$	3,761	$	3,086

FINANCIAL CONDITION

Loan portfolio composition. The Company continues to manage the mix of its loan portfolio consistent with its identity as a community bank serving the financing needs of all sectors of Northeastern California. Although the Company offers a broad array of financing options, it continues to concentrate its focus on small- to medium-sized commercial businesses. These commercial loans are diversified as to the industries and types of businesses, thus limiting material exposure from any one industry concentration. The Company offers both fixed and floating rate loans and obtains collateral in the form of real property, business assets and deposit accounts, but looks to business and personal cash flows as its primary source of

repayment. As of March 31, 2004, consumer loans increased to 21.8% of the loan portfolio compared to 21.4% at December 31, 2003. Both real estate and agricultural loan balances increased slightly to 43.1% and 12.4% of total loans, respectively, as of March 31, 2004 versus 43.0% and 12.2%, respectively, at December 31, 2003. Commercial loans decreased to 22.7% of the loan portfolio as of March 31, 2004 as compared to 23.4% at December 31, 2003.

Nonperforming assets. Nonperforming loan balances at March 31, 2004 were $889,000, an increase of $42,000, or 5%, over the $847,000 balance at December 31, 2003.

As a result of the slight increase in the non-performing loan balances, nonperforming loans as a percent of total loans increased to 0.41% as of March 31, 2004 up from the 0.39% as of December 31, 2003. However, nonperforming assets as a percent of total assets remained at 0.22% for both March 31, 2004 and December 31, 2003.

Analysis of allowance for loan losses. Net charge-offs during the three months ended March 31, 2004 totaled $71,000, or 0.03% of total loans, compared to $141,000, or 0.07% of total loans, for the comparable period in 2003. Net charge-offs during the first quarter of 2004 were comprised of $115,000 of charge-offs less $44,000 recoveries, compared to $179,000 of charge-offs less $38,000 for the comparable period in 2003. The allowance for loan losses stood at 1.23% of total loans as of March 31, 2004, versus 1.18% of total loans as of December 31, 2003. Based on an evaluation of the credit quality of the loan portfolio and delinquency trends and charge-offs, management believes the allowance for loan losses to be adequate.

The following table provides certain information for the three-month period indicated with respect to the Company’s allowance for loan losses as well as charge-off and recovery activity.


	Unaudited
	For the Three Months
	Ended March 31
	2004			2003
Balance at January 1,	$	2,564		$	2,471

Charge-offs:
Commercial and agricultural		—			(19	)
Real estate mortgage		—			(26	)
Real estate construction		—			—
Consumer		(115	)		(134	)

Total charge-offs		(115	)		(179	)

Recoveries:
Commercial and agricultural		2			10
Real estate mortgage		—			—
Real estate construction		—			—
Consumer		42			28

Total recoveries		44			38

Net charge-offs		(71	)		(141	)

Provision for loan losses		150			225

Balance at March 31,	$	2,643		$	2,555

Net charge-offs during the three-month period to average loans		0.03	%		0.07	%
Allowance for loan losses to total Loans		1.23	%		1.21	%

Investment securities and Federal funds sold. While the balance of investment securities remained consistent at $116 million, Federal funds sold increased by $14 million or 266.2% to $19 million at March 31, 2004 from $5 million at December 31, 2003.

The Company’s investment in U.S. Treasury securities and direct obligations of U.S. agencies decreased to 81.7% of the investment portfolio at March 31, 2004, versus 82.6% at December 31, 2003. The Company’s investment in corporate bonds slightly increased to 11.0% of the investment portfolio at March 31, 2004, versus 10.8% at December 31, 2003. Tax-exempt municipal obligation bonds increased to 7.3% at March 31, 2004, up from 6.6% at December 31, 2003.

Accrued interest receivable and other assets. Accrued interest receivable and other assets decreased $2.1 million, or 13%, to $14.5 million as of March 31, 2004, down from $16.7 million at December 31, 2003. This decrease related primarily to a decline in other assets from a payment on a $1.4 million receivable balance in the first quarter of 2004. This receivable recorded at the end of 2003 related to a court judgment on loans previously considered impaired.

Deposits. Total deposits were $361 million as of March 31, 2004, an increase of $4.7 million, or 1%, from the December 31, 2003 balance of $356 million. The Company continues to manage the mix of its deposits consistent with its identity as a community bank serving the financial needs of its customers. Non-interest bearing demand deposits and interest checking deposits decreased to 38.2% of total deposits as of March 31, 2004, down slightly from 38.9% of total deposits as of December 31, 2003. Money market and savings deposits increased to 35.6% of total deposits as of March 31, 2004 compared to 34.9% as of December 31, 2003. Time deposits remained at 26.2% of total deposits for both March 31, 2004 and December 31, 2003.

CAPITAL RESOURCES

Shareholders’ equity as of March 31, 2004 increased $1.3 million, or 5%, to $27.1 million from $25.7 million as of December 31, 2003. This increase was primarily due to the retention of first quarter 2004 earnings and a $579 thousand increase in accumulated comprehensive income.

The Company and the Bank are subject to certain regulatory capital requirements administered by the Board of Governors of the Federal Reserve System and the Federal Deposit Insurance Corporation (FDIC). Failure to meet these minimum capital requirements can initiate certain mandatory, and possibly additional discretionary, actions by regulators that, if undertaken, could have a direct material effect on the Company’s consolidated financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank’s assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices. The Company’s and the Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

Quantitative measures established by regulation to ensure capital adequacy require the Company and the Bank to maintain minimum amounts and ratios of total and Tier 1 capital to risk-weighted assets and of Tier 1 capital to average assets. Each of these components is defined in the regulations. Management believes that the Company and the Bank met all their capital adequacy requirements as of March 31, 2004.


	Plumas Bancorp
	Actual					Minimum Capital
	Capital		Ratio			Requirement
Leverage	$	30,186		7.8	%		4.0	%
Tier 1 Risk-Based		30,186		10.9	%		4.0	%
Total Risk-Based		32,829		11.9	%		8.0	%


	Plumas Bank
	Actual					Minimum Capital
	Capital		Ratio			Requirement
Leverage	$	29,696		7.6	%		4.0	%
Tier 1 Risk-Based		29,696		10.7	%		4.0	%
Total Risk-Based		32,339		11.7	%		8.0	%

LIQUIDITY

The Company manages its liquidity to provide the ability to generate funds to support asset growth, meet deposit withdrawals (both anticipated and unanticipated), fund customers’ borrowing needs, satisfy maturity of short-term borrowings and maintain reserve requirements. The Company’s liquidity needs are managed using assets or liabilities, or both. On the asset side, in addition to Federal Funds sold, the Company maintains an investment portfolio containing U.S. government securities and agency securities that are classified as available-for-sale. On the liability side, liquidity needs are managed by charging competitive offering rates on deposit products and the use of established lines of credit from correspondent financial institutions and the Federal Home Loan Bank.

The Company has unsecured short-term borrowing agreements with two of its correspondent banks in the amounts of $10 million and $5 million. In addition, the Company can borrow up to $9.6 million from the Federal Home Loan Bank secured by residential mortgage loans. There were no short-term borrowings outstanding at March 31, 2004.

Customer deposits are the Company’s primary source of funds. Those funds are held in various types of accounts with varying maturities. The Company does not accept brokered deposits. During the first quarter of 2004, deposits increased $4.7 million, or 1%, from the December 31, 2003 balance of $356 million. The Company has historically experienced a seasonal trend in regards to deposits; whereas the majority of the Company’s annual deposit growth occurs in the summer and fall months.

The Company’s available-for-sale securities portfolio, Federal funds sold, and cash and due from banks serve as the primary sources of liquidity, providing adequate funding for loans during periods of high loan demand. During periods of decreased lending activity, proceeds from the maturity or sale of investment securities, loan payments, and new deposits are invested in short-term earning assets, such as Federal funds sold and investment securities, to serve as a source of funding for future loan growth. Management believes that the Company’s available sources of funds, including short-term borrowings, will provide adequate liquidity for its operations in the foreseeable future.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK

Market risk is the risk of loss in a financial instrument arising from adverse changes in market rates and prices such as interest rates, commodity prices and equity prices. As a financial institution, the Company’s market risk arises primarily from interest rate risk exposure. Fluctuation in interest rates will ultimately impact both the level of income and expense recorded on a large portion of the Company’s assets and liabilities, and the market value of all interest earning assets and interest bearing liabilities, dependent upon the stated or estimated maturity date. Since virtually all of the Company’s interest earning assets and all of the Company’s interest bearing liabilities, with the exception of the junior subordinated debentures, are located at the Bank level, virtually all of the Company’s interest rate risk exposure lies at the Bank level. As a result, all significant interest rate risk management procedures are performed at the Bank level. Based upon the nature of its operations, the Bank is not subject to foreign currency exchange or commodity price risk. The Bank’s real estate loan portfolio, concentrated primarily within northeastern California, is subject to risks associated with the local economies.

The fundamental objective of the Bank’s management of its assets and liabilities is to maximize the economic value of the Company while maintaining adequate liquidity and an exposure to interest rate risk deemed by management to be acceptable. Management believes an acceptable degree of exposure to interest rate risk results from the management of assets and liabilities through maturities, pricing and mix to attempt to neutralize the potential impact of changes in market interest rates. The Bank’s profitability is dependent to a large extent upon its net interest income which is the difference between its interest income on interest-earning assets, such as loans and securities, and its interest expense on interest-bearing liabilities, such as deposits and borrowings. The Bank, like other financial institutions, is subject to interest rate risk to the degree that its interest-earning assets reprice differently than its interest-bearing liabilities. The Bank manages its mix of assets and liabilities with the goals of limiting its exposure to interest rate risk, ensuring adequate liquidity, and coordinating its sources and uses of funds.

The Bank seeks to control its interest rate risk exposure in a manner that will allow for adequate levels of earnings and capital over a range of possible interest rate environments. The Bank has adopted formal policies and practices to monitor and manage interest rate risk exposure. As part of this effort, the Bank measures interest rate risk utilizing both an internal asset liability management system as well as employing independent third party reviews to confirm the reasonableness of the assumptions used to measure and report the Bank’s interest rate risk, enabling management to make any adjustments necessary.

Interest rate risk is managed by the Bank’s Asset Liability Committee (“ALCO”), which includes members of senior management. The ALCO monitors interest rate risk by analyzing the potential impact on the net interest income from potential changes in interest rates and considers the impact of alternative strategies or changes in balance sheet structure. The ALCO manages the Bank’s balance sheet in part to maintain the potential impact on net interest income within acceptable ranges despite changes in interest rates. The Bank’s exposure to interest rate risk is reviewed on at least a quarterly basis by ALCO.

In management’s opinion there has not been a material change in the Company’s market risk or interest rate risk profile for the three months ended March 31, 2004 compared to December 31, 2003 as discussed in the Company’s 2003 annual report on Form 10-K.

ITEM 4. CONTROLS AND PROCEDURES

The Company’s Chief Executive Officer, Chief Financial Officer and Controller, based on their evaluation within 90 days prior to the date of this report of the Company’s disclosure controls and procedures (as defined in Exchange Act Rule 13a—15(e), have concluded that the Company’s disclosure controls and procedures are adequate and effective for purposes of Rule 13a—15(e) in timely alerting them to material information relating to the Company required to be included in the Company’s filings with the SEC under the Securities Exchange Act of 1934.

There were no significant changes in the Company’s internal controls or in other factors that could significantly affect internal controls subsequent to the date of their evaluation.

PART II — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, the Company and/or its subsidiaries are a party to claims and legal proceedings arising in the ordinary course of business. In the opinion of the Company’s management, the amount of ultimate liability with respect to such proceedings will not have a material adverse effect on the financial condition or results of operations of the Company taken as a whole.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

The following documents are included or incorporated by reference in this Quarterly Report on Form 10Q:


3.1		Articles of Incorporation as amended of Registrant included as exhibit 3.1 to the Registrant’s Form S-4, File No. 333-84534, which is incorporated by reference herein.

3.2		Bylaws of Registrant included as exhibit 3.2 to the Registrant’s Form S-4, File No. 333-84534, which is incorporated by reference herein.

4		Specimen form of certificate for Plumas Bancorp included as exhibit 4 to the Registrant’s Form S-4, File No. 333-84534, which is incorporated by reference herein.

10.1		Employment Agreement of William E. Elliott dated May 16, 2001, is included as Exhibit 10.1 to the Registrant’s 10-QSB for June 30, 2002, which is incorporated by this reference herein.

10.2		Incentive Stock Option Agreement as amended of William E. Elliott dated November 18, 1998, is included as Exhibit 10.2 to the Registrant’s 10-QSB for June 30, 2002, which is incorporated by this reference herein.

10.3		Executive Salary Continuation Agreement as amended of William E. Elliott dated October 13, 1993, is included as Exhibit 10.3 to the Registrant’s 10-QSB for June 30, 2002, which


		is incorporated by this reference herein.

10.4		Split Dollar Agreements of William E. Elliott dated January 23, 2002, is included as Exhibit 10.4 to the Registrant’s 10-QSB for June 30, 2002, which is incorporated by this reference herein.

10.5		Incentive Stock Option Agreement as amended of Douglas N. Biddle dated November 18, 1998, is included as Exhibit 10.5 to the Registrant’s 10-QSB for June 30, 2002, which is incorporated by this reference herein.

10.6		Executive Salary Continuation Agreement as amended of Douglas N. Biddle dated June 2, 1994, is included as Exhibit 10.6 to the Registrant’s 10-QSB for June 30, 2002, which is incorporated by this reference herein.

10.7		Split Dollar Agreements of Douglas N. Biddle dated January 24, 2002, is included as Exhibit 10.7 to the Registrant’s 10-QSB for June 30, 2002, which is incorporated by this reference herein.

10.8		Incentive Stock Option Agreement as amended of Dennis C. Irvine dated November 18, 1998, is included as Exhibit 10.8 to the Registrant’s 10-QSB for June 30, 2002, which is incorporated by this reference herein.

10.9		Executive Salary Continuation Agreement as amended of Dennis C. Irvine dated June 2, 1994, is included as Exhibit 10.9 to the Registrant’s 10-QSB for June 30, 2002, which is incorporated by this reference herein.

10.10		Split Dollar Agreements of Dennis C. Irvine dated January 24, 2002, is included as Exhibit 10.10 to the Registrant’s 10-QSB for June 30, 2002, which is incorporated by this reference herein.

10.11		Incentive Stock Option Agreement as amended of Robert T. Herr dated July 19, 2000, is included as Exhibit 10.11 to the Registrant’s 10-QSB for June 30, 2002, which is incorporated by this reference herein.

10.12		Non-Qualified Stock Option Agreement as amended of Jerry V. Kehr dated November 18, 1998, is included as Exhibit 10.12 to the Registrant’s 10-QSB for June 30, 2002, which is incorporated by this reference herein.

10.13		Deferred Fee Agreement as amended of Jerry V. Kehr dated August 19, 1998, is included as Exhibit 10.13 to the Registrant’s 10-QSB for June 30, 2002, which is incorporated by this reference herein.

10.14		Amended and Restated Director Retirement Agreement of Jerry V. Kehr dated April 28, 2000, is included as Exhibit 10.14 to the Registrant’s 10-QSB for June 30, 2002, which is incorporated by this reference herein.

10.15		Consulting Agreement of Jerry V. Kehr dated May 10, 2000, is included as Exhibit 10.15 to the Registrant’s 10-QSB for June 30, 2002, which is incorporated by this reference herein.

10.16		Non-Qualified Stock Option Agreement as amended of Daniel E. West dated November 19, 1997, is included as Exhibit 10.16 to the Registrant’s 10-QSB for June 30, 2002, which is incorporated by this reference herein.

10.17		Non-Qualified Stock Option Agreement as amended of Daniel E. West dated November 18, 1998, is included as Exhibit 10.17 to the Registrant’s 10-QSB for June 30, 2002, which is incorporated by this reference herein.

10.18		Amended and Restated Director Retirement Agreement of Daniel E. West dated May 10, 2000, is included as Exhibit 10.18 to the Registrant’s 10-QSB for June 30, 2002, which is incorporated by this reference herein.

10.19		Consulting Agreement of Daniel E. West dated May 10, 2000, is included as Exhibit 10.19 to the Registrant’s 10-QSB for June 30, 2002, which is incorporated by this reference herein.

10.20		Non-Qualified Stock Option Agreement as amended of Alvin G. Blickenstaff dated November 18, 1998, is included as Exhibit 10.20 to the Registrant’s 10-QSB for June 30, 2002, which is incorporated by this reference herein.

10.21		Amended and Restated Director Retirement Agreement of Alvin G. Blickenstaff dated April 19, 2000, is included as Exhibit 10.21 to the Registrant’s 10-QSB for June 30, 2002, which is incorporated by this reference herein.

10.22		Consulting Agreement of Alvin G. Blickenstaff dated May 8, 2000, is included as Exhibit


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

10.23		Non-Qualified Stock Option Agreement as amended of Gerald W. Fletcher dated November 18, 1998, is included as Exhibit 10.23 to the Registrant’s 10-QSB for June 30, 2002, which is incorporated by this reference herein.

10.24		Amended and Restated Director Retirement Agreement of Gerald W. Fletcher dated May 10, 2000, is included as Exhibit 10.24 to the Registrant’s 10-QSB for June 30, 2002, which is incorporated by this reference herein.

10.25		Consulting Agreement of Gerald W. Fletcher dated May 10, 2000, is included as Exhibit 10.25 to the Registrant’s 10-QSB for June 30, 2002, which is incorporated by this reference herein.

10.26		Non-Qualified Stock Option Agreement as amended of Arthur C. Grohs dated November 18, 1998, is included as Exhibit 10.26 to the Registrant’s 10-QSB for June 30, 2002, which is incorporated by this reference herein.

10.27		Amended and Restated Director Retirement Agreement of Arthur C. Grohs dated May 9, 2000, is included as Exhibit 10.27 to the Registrant’s 10-QSB for June 30, 2002, which is incorporated by this reference herein.

10.28		Consulting Agreement of Arthur C. Grohs dated May 9, 2000, is included as Exhibit 10.28 to the Registrant’s 10-QSB for June 30, 2002, which is incorporated by this reference herein.

10.29		Non-Qualified Stock Option Agreement as amended of Christine McArthur dated August 16, 2000, is included as Exhibit 10.29 to the Registrant’s 10-QSB for June 30, 2002, which is incorporated by this reference herein.

10.30		Amended and Restated Director Retirement Agreement of Christine McArthur dated May 12, 2000, is included as Exhibit 10.30 to the Registrant’s 10-QSB for June 30, 2002, which is incorporated by this reference herein.

10.31		Consulting Agreement of Christine McArthur dated May 12, 2000, is included as Exhibit 10.31 to the Registrant’s 10-QSB for June 30, 2002, which is incorporated by this reference herein.

10.32		Non-Qualified Stock Option Agreement as amended of Terrance J. Reeson dated November 18, 1998, is included as Exhibit 10.32 to the Registrant’s 10-QSB for June 30, 2002, which is incorporated by this reference herein.

10.33		Amended and Restated Director Retirement Agreement of Terrance J. Reeson dated April 19, 2000, is included as Exhibit 10.33 to the Registrant’s 10-QSB for June 30, 2002, which is incorporated by this reference herein.

10.34		Consulting Agreement of Terrance J. Reeson dated May 10, 2000, is included as Exhibit 10.34 to the Registrant’s 10-QSB for June 30, 2002, which is incorporated by this reference herein.

10.35		Non-Qualified Stock Option Agreement as amended of Walter Sphar dated November 18, 1998, is included as Exhibit 10.35 to the Registrant’s 10-QSB for June 30, 2002, which is incorporated by this reference herein.

10.36		Amended and Restated Director Retirement Agreement of Walter Sphar dated April 20, 2000, is included as Exhibit 10.36 to the Registrant’s 10-QSB for June 30, 2002, which is incorporated by this reference herein.

10.37		Consulting Agreement of Walter Sphar dated May 9, 2000, is included as Exhibit 10.37 to the Registrant’s 10-QSB for June 30, 2002, which is incorporated by this reference herein.

10.38		Non-Qualified Stock Option Agreement as amended of Thomas Watson dated November 21, 2001, is included as Exhibit 10.38 to the Registrant’s 10-QSB for June 30, 2002, which is incorporated by this reference herein.

10.39		Deferred Fee Agreement of Thomas Watson dated March 3, 2001, is included as Exhibit 10.39 to the Registrant’s 10-QSB for June 30, 2002, which is incorporated by this reference herein.

10.40		Form of Indemnification Agreement, is included as Exhibit 10.41 to the Registrant’s 10-QSB for June 30, 2002, which is incorporated by this reference herein.

10.41		2001 Stock Option Plan as amended is included as exhibit 99.1 of the Form S-8 filed July


		23, 2002, File No. 333-96957

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

10.43		Plumas Bank 401(k) Profit Sharing Plan as amended is included as exhibit 99.1 of the Form S-8 filed February 14, 2003, File No. 333-103229

10.44		Executive Salary Continuation Agreement of Robert T. Herr dated June 4, 2002, is included as Exhibit 10.44 to the Registrant’s 10-Q for March 31, 2003, which is incorporated by this reference herein.

10.45		Branch Purchase and Assumption Agreement dated April 25, 2003, is included as Exhibit 10.45 to the Registrant’s 10-Q for March 31, 2003, which is incorporated by this reference herein.

10.46		Incentive Stock Option Agreement of William E. Elliott dated December 18, 2002, is included as Exhibit 10.46 to the Registrant’s 10-Q for June 30, 2003, which is incorporated by this reference herein.

10.47		Incentive Stock Option Agreement of Douglas N. Biddle dated December 18, 2002, is included as Exhibit 10.47 to the Registrant’s 10-Q for June 30, 2003, which is incorporated by this reference herein.

10.48		Incentive Stock Option Agreement of Dennis C. Irvine dated December 18, 2002, is included as Exhibit 10.48 to the Registrant’s 10-Q for June 30, 2003, which is incorporated by this reference herein.

10.49		Incentive Stock Option Agreement of Robert T. Herr dated December 18, 2002, is included as Exhibit 10.49 to the Registrant’s 10-Q for June 30, 2003, which is incorporated by this reference herein.

10.50		Non-Qualified Stock Option Agreement of Jerry V. Kehr dated December 18, 2002, is included as Exhibit 10.50 to the Registrant’s 10-Q for June 30, 2003, which is incorporated by this reference herein.

10.51		Non-Qualified Stock Option Agreement of Daniel E. West dated December 18, 2002, is included as Exhibit 10.51 to the Registrant’s 10-Q for June 30, 2003, which is incorporated by this reference herein.

10.52		Non-Qualified Stock Option Agreement of Alvin G. Blickenstaff dated December 18, 2002, is included as Exhibit 10.52 to the Registrant’s 10-Q for June 30, 2003, which is incorporated by this reference herein.

10.53		Non-Qualified Stock Option Agreement of Gerald W. Fletcher dated December 18, 2002, is included as Exhibit 10.53 to the Registrant’s 10-Q for June 30, 2003, which is incorporated by this reference herein.

10.54		Non-Qualified Stock Option Agreement of Arthur C. Grohs dated December 18, 2002, is included as Exhibit 10.54 to the Registrant’s 10-Q for June 30, 2003, which is incorporated by this reference herein.

10.55		Non-Qualified Stock Option Agreement of Christine McArthur dated December 18, 2002, is included as Exhibit 10.55 to the Registrant’s 10-Q for June 30, 2003, which is incorporated by this reference herein.

10.56		Non-Qualified Stock Option Agreement of Terrance J. Reeson dated December 18, 2002, is included as Exhibit 10.56 to the Registrant’s 10-Q for June 30, 2003, which is incorporated by this reference herein.

10.57		Non-Qualified Stock Option Agreement of Walter Sphar dated December 18, 2002, is included as Exhibit 10.57 to the Registrant’s 10-Q for June 30, 2003, which is incorporated by this reference herein.

10.58		Non-Qualified Stock Option Agreement of Thomas Watson dated December 18, 2002, is included as Exhibit 10.58 to the Registrant’s 10-Q for June 30, 2003, which is incorporated by this reference herein.

10.59		Director Retirement Agreement of Thomas Watson dated May 1, 2003, is included as Exhibit 10.59 to the Registrant’s 10-Q for June 30, 2003, which is incorporated by this reference herein.

10.60		Consulting Agreement of Thomas Watson dated May 1, 2003, is included as Exhibit 10.60 to the Registrant’s 10-Q for June 30, 2003, which is incorporated by this reference herein.


10.61		Third Amendment to Executive Salary Continuation Agreement of William E. Elliott dated November 12, 2003, is included as Exhibit 10.61 to the Registrant’s 10-K for December 31, 2003, which is incorporated by this reference herein.

11		Computation of per share earnings appears in the attached 10-Q under Plumas Bancorp Notes to Consolidated Financial Statements as Footnote 5 – Earnings Per Share Computation.

31.1		Rule 13a-14(a) [Section 302] Certification of Principal Accounting Officer dated May 14, 2004.

31.2		Rule 13a-14(a) [Section 302] Certification of Principal Financial Officer dated May 14, 2004.

31.3		Rule 13a-14(a) [Section 302] Certification of Principal Executive Officer dated May 14, 2004.

32.1		Certification of Principal Accounting Officer pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 dated May 14, 2004.

32.2		Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 dated May 14, 2004.

32.3		Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 dated May 14, 2004.

(b) Reports on Form 8-K

On January 22, 2004, the Company filed a Current Report on Form 8-K. The Current Report included as an exhibit, the press release dated January 21, 2004, filed by the Company containing unaudited financial information, forth quarter earnings and 2003 earnings.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


PLUMAS BANCORP (Registrant)

Date: May 13, 2004

		/s/ William E. Elliott
		William E. Elliott
		President/Chief Executive Officer

		/s/ Douglas N. Biddle
		Douglas N. Biddle
		Executive Vice President Chief Financial Officer

		/s/ Andrew J. Ryback
		Andrew J. Ryback
		Senior Vice President Controller

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