| þ | ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED) |
| o | TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED) |
| 1. | Not Applicable |
|
| 2. | Not Applicable |
|
| 3. | Not Applicable |
|
| 4. | The Plumas Bank 401(k) Profit Sharing Plan, (the “Plan”) is subject to the requirements of
the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). Furnished herewith
are the financial statements and schedules of the Plan for the fiscal year ended December 31,
2010, prepared in accordance with the financial reporting requirements of ERISA. |
| Page | ||||||||
| 1 | ||||||||
Financial Statements: |
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| 2 | ||||||||
| 3 | ||||||||
| 4-14 | ||||||||
| 15 | ||||||||
| Exhibit 23.1 | ||||||||
| 2010 | 2009 | |||||||
ASSETS |
||||||||
Investments (Notes 3, 4 and 5): |
||||||||
Participant-directed investments at fair value |
$ | 7,436,189 | $ | 7,211,512 | ||||
Receivables: |
||||||||
Notes receivable from participants |
223,918 | 182,469 | ||||||
Net assets available for benefits at fair value |
7,660,107 | 7,393,981 | ||||||
Adjustment from fair value to contract value for
common/ collective trust |
(34,265 | ) | (2,787 | ) | ||||
Net assets available for benefits |
$ | 7,625,842 | $ | 7,391,194 | ||||
2
| 2010 | 2009 | |||||||
ADDITIONS |
||||||||
Investment income (Notes 3 and 6): |
||||||||
Net appreciation in fair value of investments |
$ | 615,694 | $ | 900,396 | ||||
Interest and dividends |
60,950 | 79,748 | ||||||
Net investment income |
676,644 | 980,144 | ||||||
Interest income on notes to participants |
10,702 | 13,829 | ||||||
Contributions: |
||||||||
Participant |
488,892 | 617,666 | ||||||
Employer |
40,388 | 194,044 | ||||||
Total contributions |
529,280 | 811,710 | ||||||
Total additions |
1,216,626 | 1,805,683 | ||||||
DEDUCTIONS |
||||||||
Benefits paid to participants |
981,978 | 910,061 | ||||||
Net increase |
234,648 | 895,622 | ||||||
Net assets available for benefits: |
||||||||
Beginning of year |
7,391,194 | 6,495,572 | ||||||
End of year |
$ | 7,625,842 | $ | 7,391,194 | ||||
3
| 1. | DESCRIPTION OF PLAN |
The following description of the Plumas Bank (the “Bank”) 401(k) Profit Sharing Plan (the
“Plan”) provides only general information. Participants should refer to the Summary Plan
Description or the Plan Document for a more complete description of the Plan’s provisions. |
General |
Plumas Bank, the Plan Sponsor, established the Plan effective on April 1, 1988, to provide
all Bank employees, not otherwise excluded, who have completed 90 days of service and are
eighteen years of age with the opportunity to defer a portion of their eligible compensation
on a pre-tax basis. All investments in the Plan are participant directed. Prudential
Insurance Company of America is the Trustee of the Plan. The Plan is subject to the
provisions of the Employee Retirement Income Security Act of 1974 (ERISA). |
Participant Contributions |
Each year, participants may make salary deferral contributions in any percentage of their
pretax annual compensation, as defined in the Plan, subject to certain Internal Revenue Code
(IRC) limitations. All participant contributions and earnings thereon are 100% vested. |
Employer Contributions |
From January 1 to March 31, 2010, the Bank provided a 100% match on each participant’s
elective deferral up to 3% of the participant’s eligible compensation. Effective April 1,
2010, the Plan was amended to change the matching formula from fixed to discretionary and
the Bank provided no match on participant’s elective deferrals for the remainder of the plan
year. At the discretion of the Bank, the Bank may also make a non-elective contribution to
the Plan. Bank contributions are subject to certain IRC limitations. During 2010 and 2009
the Bank did not make any discretionary contributions. Both the matching contribution and
any non-elective contribution vest over a five-year period as follows: |
| Percentage | ||||
| Service | Vested | |||
2 years but less than 3 years |
25 | % | ||
3 years but less than 4 years |
50 | % | ||
4 years but less than 5 years |
75 | % | ||
5 years or more |
100 | % | ||
4
| 1. | DESCRIPTION OF PLAN (Continued) |
Participant Accounts |
Individual accounts are maintained for each Plan participant. Each participant’s account is
credited with the participant’s contribution and allocations of the Bank’s matching and
discretionary contributions and Plan earnings and charged with withdrawals and an allocation
of Plan losses. Allocations are based on participant earnings or account balances as
defined. The benefit to which a participant is entitled is the benefit that can be provided
from the participant’s vested account. |
Participant’s Investment Options |
Participants direct all of their voluntary contributions and their portion of the employer
matching contributions among any or all of the investment options offered by Prudential
Insurance Company of America. The investment options include a range of funds that are
invested in shares of twelve registered investment companies (mutual funds) and a common/
collective trust that invest mainly in common stocks and bonds. |
In addition, participants have the option of investing in Plumas Bancorp common stock, up to
50% of the participant’s total elective deferrals. These investments are also maintained by
the Plan’s Trustee. |
Participants may change their investment options without restriction. |
Notes Receivable from Participants |
Participants may borrow from their accounts a minimum of $1,000 up to a maximum equal to the
lesser of $50,000 or 50% of their vested account balance. Loan transactions are treated as
a transfer (from) to the investment fund (to) from the Participant Loans fund. Loan terms
range from one to five years, or longer if used to purchase the primary residence of the
participant. The loans are secured by the balance in the participant’s account and bear
interest at prevailing market rates at the time of borrowing. Principal and interest is
paid ratably through semi-monthly payroll deductions. |
5
| 1. | DESCRIPTION OF PLAN (Continued) |
Payment of Benefits |
Upon termination of employment or other reasons specified by the Plan, a participant with a
vested account balance that exceeds $5,000 may elect to receive: (1) a lump sum payment, (2)
a part lump sum payment and part installment payments as described in (3), or (3)
installment payments (annually, quarterly or monthly) over a specified period of time, not
exceeding the participant’s life expectancy or the joint life expectancy of the participant
or participant’s beneficiary. For a participant with a vested account balance of $5,000 or
less, a lump sum payment is distributed to the participant. Distributions between $1,000
and $5,000 may be made automatically to a participant without requiring the participant’s
consent. If the participant does not elect to have such distribution paid directly to an
“eligible retirement plan” in a direct rollover or to receive the distribution directly,
then the Plan’s Sponsor automatically pays the distribution through a direct rollover to an
individual retirement plan designated by the Plan’s Sponsor. As of December 31, 2010 and
2009, there were no benefits payable to participants that have elected to withdraw from the
Plan but have not yet been paid. |
Forfeitures |
Forfeitures from the nonvested portion of terminated employees’ account balances can be used
to reduce employer contributions in the following plan year. Forfeitures totaling $12,423
and $19,057 were used to reduce employer contributions for the years ending December 31,
2010 and 2009, respectively. |
Administrative Costs |
The Bank pays the administrative costs of the Plan. Investment management fees are paid by
the Plan. |
Plan Termination |
Although it has not expressed any intent to do so, the Bank has the right under the Plan to
discontinue its contributions at any time and to terminate the Plan subject to the
provisions of ERISA. In the event that the Plan is terminated, participants would become
100% vested in their accounts. |
| 2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
Basis of Accounting |
The accompanying financial statements of the Plan have been prepared on the accrual basis of
accounting in accordance with accounting principles generally accepted in the United States
of America. |
6
| 2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
Basis of Accounting (Continued) |
Investment contracts held by a defined-contribution plan are required to be reported at fair
value. However, contract value is the relevant measurement attribute for that portion of
the net assets available for benefits of a defined-contribution plan attributable to fully
benefit-responsive investment contracts because contract value is the amount participants
would receive if they were to initiate permitted transactions under the terms of the Plan.
The Statement of Net Assets Available for Benefits presents the fair value of the investment
contracts as well as the adjustment of the fully benefit-responsive investment contracts
from fair value to contract value. The Statement of Changes in Net Assets Available for
Benefits is prepared on a contract value basis. |
Use of Estimates |
The preparation of financial statements in conformity with accounting principles generally
accepted in the United States of America requires the Plan’s management to make estimates
and assumptions that affect certain reported amounts of net assets available for benefits
and changes therein and disclosure of contingent assets and liabilities. Actual results may
differ from those estimates. |
Reclassifications |
Certain reclassifications have been made to prior year balances to conform to
classifications used in the current year. |
Investment Valuation and Income Recognition |
Investments are stated at fair value. Fair value is the price that would be received to
sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date. See Note 4 for discussion of fair value measurements. |
Purchases and sales of securities are recorded on a trade date basis. Interest income is
recorded on the accrual basis. Dividends are recorded on the ex-dividend date. Net
appreciation (depreciation) in fair value of investments includes net unrealized market
appreciation and (depreciation) of investments and net realized gains and (losses) on the
sale of investments during the period. |
Notes Receivable from Participants |
Notes receivable from participants are measured at their unpaid principal balance plus any
accrued but unpaid interest. Delinquent participant loans are reclassified as distributions
based upon the terms of the plan document. |
7
| 2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
Risks and Uncertainties |
The Plan utilizes various investment instruments, including mutual funds, a common/
collective trust and the common stock of the Plan Sponsor. Investment securities, in
general, are exposed to various risks, such as interest rate, credit, and overall market
volatility. Due to the level of risk associated with certain investment securities, it is
reasonably possible that changes in the values of investment securities will occur in the
near term and that such changes could materially affect the amounts reported in the
financial statements. |
Payment of Benefits |
Benefits are recorded when paid. |
Adoption of New Accounting Standards |
||
Fair Value Measurements |
In January 2010, the FASB issued FASB ASU 2010-06, Improving Disclosures about Fair Value
Measurements, which amends and clarifies existing standards to require additional
disclosures regarding fair value measurements. Specifically, the standard requires
disclosure of the amounts of significant transfers between Level 1 and Level 2 of the fair
value hierarchy and the reasons for these transfers, the reasons for any transfers in or out
of Level 3, and information in the reconciliation of recurring Level 3 measurements about
purchases, sales, issuances and settlements on a gross basis. This standard clarifies that
reporting entities are required to provide fair value measurement disclosures for each class
of assets and liabilities—previously separate fair value disclosures were required for each
major category of assets and liabilities. This standard also clarifies the requirement to
disclose information about both the valuation techniques and inputs used in estimating Level
2 and Level 3 fair value measurements. Except for the requirement to disclose information
about purchases, sales, issuances, and settlements in the reconciliation of recurring Level
3 measurements on a gross basis, these disclosures are effective for the year ended December
31, 2010. The requirement to separately disclose purchases, sales, issuances, and
settlements of recurring Level 3 measurements becomes effective for the Plan for the year
beginning on January 1, 2011. The Plan adopted this new accounting standard as of January
1, 2010 and the impact of adoption was not material to the Plan’s financial position or
results of operations. See Note 4 to the financial statements. |
8
| 2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
Adoption of New Accounting Standards (Continued) |
||
Reporting for Participant Loans |
In September 2010, the Financial Accounting Standards Board (FASB) issued FASB Accounting
Standards Update (ASU) 2010-25, Plan Accounting — Defined Contribution Pension Plans (Topic
962): Reporting Loans to Participants by Defined Contribution Pension Plans. This ASU
applies to any defined contribution pension plan that allows participant loans. The
amendments in this ASU require that participant loans be classified as notes receivable from
participants, which are segregated from plan investments and measured at their unpaid
principal balance plus any accrued but unpaid interest. The amendments in this ASU are
effective for fiscal years ending after December 15, 2010, and should be applied
retrospectively to all prior periods presented. The Plan adopted this new accounting
standard as of January 1, 2010 and retrospectively applied to December 31, 2009. |
Prior year amounts and disclosures have been revised to reflect the retrospective
application of adopting this new amendment. The adoption resulted in a reclassification of
participant loans totaling $223,918 and $182,469 from investments to notes receivable as of
December 31, 2010 and 2009, respectively. This also resulted in a decrease to 2010 and 2009
investment income of approximately $10,702 and $13,829, respectively. There was no impact
to the net assets available for benefits as of December 31, 2010 or 2009, as a result of the
adoption. |
Subsequent Events |
We have reviewed all events occurring from December 31, 2010 through June 20, 2011, the date
the Plan’s financial statements were available to be issued, and no subsequent events
occurred requiring disclosure. |
9
| 3. | INVESTMENTS |
The following table presents the fair value of the investments in the Plan, except for the
Stable Value Fund which is presented at contract value. Investments representing more than
5% of the Plan’s net assets as of December 31, 2010 and 2009 are separately identified. |
| December 31, | ||||||||
| 2010 | 2009 | |||||||
Investments at quoted market prices: |
||||||||
Stable Value Fund |
$ | 1,557,515 | $ | 1,393,501 | ||||
Davis NY Venture Fund |
1,047,034 | 1,091,863 | ||||||
American Funds EuroPacific Growth Fund A |
930,585 | 979,895 | ||||||
PIMCO Total Return Fund |
731,874 | 704,769 | ||||||
Prudential Jennison Growth Fund |
677,110 | 664,877 | ||||||
Prudential Jennison Mid Cap Growth Fund |
625,214 | 616,139 | ||||||
Goldman Sachs Mid Cap Fund |
496,632 | 396,911 | ||||||
Other investments |
1,335,960 | 1,360,770 | ||||||
| $ | 7,401,924 | $ | 7,208,725 | |||||
The Plan’s investments (including gains and losses on investments bought, sold, as well as
held during the year) appreciated in value by $615,694 and $900,396 during 2010 and 2009,
respectively, as follows: |
| 2010 | 2009 | |||||||
Mutual funds |
$ | 680,297 | $ | 1,356,867 | ||||
Common stock |
(64,603 | ) | (456,471 | ) | ||||
| $ | 615,694 | $ | 900,396 | |||||
| 4. | FAIR VALUE MEASUREMENTS |
Fair Value Hierarchy |
The Plan groups its assets and liabilities measured at fair value within three levels, based
on the markets in which the assets and liabilities are traded and the reliability of the
assumptions used to determine fair value. Valuations within these levels are based upon: |
Level 1 — Quoted market prices for identical instruments traded in active exchange markets. |
Level 2 — Quoted prices for similar instruments in active markets, quoted prices for
identical or similar instruments in markets that are not active, and model-based valuation
techniques for which all significant assumptions are observable or can be corroborated by
observable market data. |
10
| 4. | FAIR VALUE MEASUREMENTS (Continued) |
Fair Value Hierarchy (Continued) |
Level 3 — Model-based techniques that use at least one significant assumption not
observable in the market. These unobservable assumptions reflect the Plan’s estimates of
assumptions that market participants would use on pricing the asset or liability. Valuation
techniques include management judgment and estimation which may be significant. |
In certain cases, the inputs used to measure fair value may fall into different levels of
the fair value hierarchy. In such cases, the level in the fair value hierarchy within which
the fair value measurement in its entirety falls has been determined based on the lowest
level input that is significant to the fair value measurement in its entirety. The Plan’s
assessment of the significance of a particular input to the fair value measurement in its
entirety requires judgment, and considers factors specific to the asset or liability. |
Assets Recorded at Fair Value |
The following tables present information about the Plan’s assets and liabilities measured at
fair value on a recurring basis as of December 31, 2010 and 2009: |
The Plan is required or permitted to record the following assets at fair value on a
recurring basis under other accounting pronouncements: |
| December 31, 2010 | ||||||||||||||||
| Total | ||||||||||||||||
| Description | Fair Value | Level 1 | Level 2 | Level 3 | ||||||||||||
Mutual funds: |
||||||||||||||||
Growth funds |
$ | 2,524,206 | $ | 2,524,206 | ||||||||||||
Venture funds |
1,047,034 | 1,047,034 | ||||||||||||||
Total return fund |
731,874 | 731,874 | ||||||||||||||
Other funds |
1,327,428 | 1,327,428 | ||||||||||||||
Total mutual funds |
5,630,542 | 5,630,542 | ||||||||||||||
Common/ collective trust |
1,591,780 | $ | 1,591,780 | |||||||||||||
Common stock of
Plan Sponsor |
213,867 | 213,867 | ||||||||||||||
| $ | 7,436,189 | $ | 5,844,409 | $ | 1,591,780 | $ | — | |||||||||
11
| 4. | FAIR VALUE MEASUREMENTS (Continued) |
Assets Recorded at Fair Value (Continued) |
| December 31, 2009 | ||||||||||||||||
| Total | ||||||||||||||||
| Description | Fair Value | Level 1 | Level 2 | Level 3 | ||||||||||||
Mutual funds: |
||||||||||||||||
Growth funds |
$ | 2,528,326 | $ | 2,528,326 | ||||||||||||
Venture funds |
1,091,863 | 1,091,863 | ||||||||||||||
Total return fund |
704,769 | 704,769 | ||||||||||||||
Other funds |
1,179,762 | 1,179,762 | ||||||||||||||
Total mutual funds |
5,504,720 | 5,504,720 | ||||||||||||||
Common/ collective trust |
1,396,288 | $ | 1,396,288 | |||||||||||||
Common stock of
Plan Sponsor |
310,504 | 310,504 | ||||||||||||||
| $ | 7,211,512 | $ | 5,815,224 | $ | 1,396,288 | $ | — | |||||||||
Fair values for mutual funds are based on quoted market prices in active markets for
identical assets that the Plan has the ability to access at the measurement date. |
Fair value of the common/ collective trust is based on the fair value of the amount the Plan
Sponsor would receive if it terminated the contract at the reporting date. |
Fair value of the common stock of the Plan Sponsor is based on the quoted market price of
the common stock at the measurement date. |
There were no changes in the valuation techniques used at December 31, 2010 and 2009. There
were no recurring assets transferred in or out of Level 1 or 2 during the years ended
December 31, 2010 or 2009. |
The preceding methods described may produce a fair value calculation that may not be
indicative of net realizable value or reflective of future fair values. Furthermore,
although the Plan Trustees believe their valuation methods are appropriate and consistent
with other market participants, the use of different methodologies or assumptions to
determine the fair value of certain financial instruments could result in a different fair
value measurement at the reporting date. |
The Plan did not have any assets or liabilities measured at fair value on a non-recurring
basis at December 31, 2010 or 2009. |
12
| 5. | CONCENTRATION OF INVESTMENTS |
At December 31, 2010 and 2009, the Plan held investments in Plumas Bancorp common stock,
representing approximately 3% and 4% of net assets available for benefits, respectively. |
| 6. | RELATED-PARTY TRANSACTIONS |
Certain Plan investments are shares of mutual funds managed by Prudential Insurance Company
of America. Prudential Insurance Company of America is the Trustee as defined by the Plan
and, therefore, these transactions qualify as party-in-interest transactions. Fees paid by
the Plan for investment management services were included as a reduction of the return
earned on each fund. |
At December 31, 2010 and 2009, the Plan’s investments in Plumas Bancorp common stock (a
party-in-interest) are as follows: |
| December 31, | ||||||||
| 2010 | 2009 | |||||||
Number of shares |
91,396 | 103,501 | ||||||
Fair value, based on quoted market values |
$ | 213,867 | $ | 310,504 | ||||
The Plan’s investment in Plumas Bancorp’s common stock, including investments bought, sold
and held during the year, depreciated in value by $64,603 and $456,471 during 2010 and 2009,
respectively, which is included in the total investment appreciation discussed in Note 3. |
| 7. | FEDERAL INCOME TAX STATUS |
The Internal Revenue Service has determined, and informed the Bank by a letter dated March
31, 2008, that the Plan and related trust are designed in accordance with applicable
regulations of the Internal Revenue Code (IRC). The Plan has been amended since receiving
the determination letter. However, the Plan Administrator believes that the Plan is
designed and is currently being operated in compliance with the applicable requirements of
the IRC and the Plan continues to be tax exempt. |
Accounting principles generally accepted in the United States of America require plan
management to evaluate tax positions taken by the Plan. Management evaluated the Plan’s tax
positions and concluded that the Plan had maintained its tax exempt status and had taken no
uncertain tax positions that require recognition or disclosure in the financial statements.
Therefore, no provision or liability for income taxes has been included in the financial
statements. With few exceptions, the Plan is no longer subject to income tax examinations
by the U.S. federal, state, or local tax authorities for years before 2007. |
13
| 8. | RECONCILIATION FROM THE FINANCIAL STATEMENTS TO FORM 5500 |
The following is a reconciliation of total investments per the Plan financial statements at
December 31, 2010 and 2009 to Form 5500: |
| 2010 | 2009 | |||||||
Total investments at fair value per the financial
statements |
$ | 7,401,924 | $ | 7,208,725 | ||||
Add: Notes receivable from participants |
223,918 | 182,469 | ||||||
Total investments at fair value per Form 5500 |
$ | 7,625,842 | $ | 7,391,194 | ||||
The following is a reconciliation of total receivables per the Plan financial statements at
December 31, 2010 and 2009 to Form 5500: |
| 2010 | 2009 | |||||||
Total receivables per the financials statements |
$ | 223,918 | $ | 182,469 | ||||
Less: Notes receivable from participants |
(223,918 | ) | (182,469 | ) | ||||
Total receivables per Form 5500 |
$ | — | $ | — | ||||
| 9. | PLAN AMENDMENTS |
The Plan was amended effective April 1, 2010 to change employer contributions from fixed to
discretionary. |
The Plan was amended effective December 9, 2010 to allow forfeitures to be utilized to pay
for Plan expenses. |
14
| (c) | ||||||||||
| (b) | Description of Investment, | |||||||||
| Identity | Including Maturity Date, | |||||||||
| of Issuer, Borrower, | Rate of Interest, Collateral, | (d) | (e) | |||||||
| (a) | Lessor or Similar Party | Par or Maturity Value | Cost | Value | ||||||
Stable Value Fund |
Common / Collective Trust | * | $ | 1,557,515 | ||||||
Davis NY Venture Fund |
Mutual Fund | * | 1,047,034 | |||||||
American Funds EuroPacific
Growth Fund A |
Mutual Fund | * | 930,585 | |||||||
PIMCO Total Return Fund |
Mutual Fund | * | 731,874 | |||||||
| ** | Prudential Jennison Growth Fund |
Mutual Fund | * | 677,110 | ||||||
| ** | Prudential Jennison Mid Cap
Growth Fund |
Mutual Fund | * | 625,214 | ||||||
Goldman Sachs Mid Cap Fund |
Mutual Fund | * | 496,632 | |||||||
Allianz NFJ Small Cap Fund |
Mutual Fund | * | 361,806 | |||||||
Invesco Van Kampen Equity and
Income Fund A |
Mutual Fund | * | 315,541 | |||||||
American Funds Growth Fund
of America |
Mutual Fund | * | 291,297 | |||||||
| ** | Prudential Stock Index Fund Z |
Mutual Fund | * | 102,244 | ||||||
Fidelity Advisor Small Cap Fund |
Mutual Fund | * | 51,205 | |||||||
| ** | Plumas Bancorp |
Common Stock — 91,396 shares | * | 213,867 | ||||||
| ** | Notes receivable to participants |
Maturing at various dates through January 15, 2016 at interest rates ranging from 4.25% to 9.25% | 223,918 | |||||||
| $ | 7,625,842 | |||||||||
| * | Information regarding the cost of investments at December 31, 2010 is not required as
investments are participant directed. |
|
| ** | Party-in-interest to the Plan. |
15
| Plumas Bank 401(k) Profit Sharing Plan (Name of Plan) |
||||
| Date: June 20, 2011 | /s/ Richard L. Belstock | |||
| Richard L. Belstock | ||||
| Interim Chief Financial Officer | ||||
| Exhibit | Description | |||
| 23.1 | Consent of Perry-Smith LLP, Independent Registered Public Accounting Firm |
|||