PLBC Plumas Bancorp Inc

Exhibit 99.1

PLUMAS BANCORP REPORTS RECORD 2023 EARNINGS

Reno, Nevada, July 19, 2023 – Plumas Bancorp (Nasdaq:PLBC), the parent company of Plumas Bank, today announced earnings during the second quarter of 2023 of $6.7 million or $1.14 per share, an increase of $1.0 million from $5.7 million or $0.97 per share during the second quarter of 2022. Diluted earnings per share increased to $1.12 per share during the three months ended June 30, 2023 up from $0.96 per share during the quarter ended June 30, 2022.

For the six months ended June 30, 2023, the Company reported net income of $14.3 million or $2.44 per share, an increase of $2.9 million from $11.4 million or $1.95 per share earned during the six months ended June 30, 2022. Earnings per diluted share increased to $2.41 during the six months ended June 30, 2023 up $0.48 from $1.93 during the first six months of 2022. Earnings during 2023 set a record for any six month period ending June 30^th in the Company’s history.

Return on average assets was 1.70% during the current quarter, up from 1.40% during the second quarter of 2022. Return on average equity increased to 20.5% for the three months ended June 30, 2023, up from 19.0% during the second quarter of 2022. Return on average assets was 1.81% during the six months ended June 30, 2023, up from 1.41% during the first half of 2022. Return on average equity increased to 22.7% for the six months ended June 30, 2023, up from 18.3% during the first half of 2022.

Balance Sheet Highlights

June 30, 2023 compared to June 30, 2022

President’s Comments

“Plumas Bancorp achieved record earnings for the first six months and second quarter of 2023,” Andrew J. Ryback, director, president and chief executive officer of Plumas Bancorp and Plumas Bank, announced.

“The ongoing performance was driven by net interest income and net interest margin. Additionally, our ability to maintain a low cost of funds has been and persists as a significant factor in driving profitability.

We continue to evaluate lending opportunities while prioritizing liquidity and assess portfolio performance, allocating resources accordingly with a long-term perspective on performance. Enhancing technology and operational efficiency further will equip us to navigate the evolving landscape effectively,” Ryback explained.

“The opening of the Chico branch in the second quarter expanded Plumas Bank’s services in Butte County from a loan production office to a full-service branch which has been well-received in the community. Additionally, we continue exploring avenues for strategic opportunities that align with our long-term growth objectives,” Ryback concluded.

Loans, Deposits, Investments and Cash

Gross loans increased by $74 million, or 9%, from $862 million at June 30, 2022, to $935 million at June 30, 2023. Increases in loans included, $69 million in commercial real estate loans, $15 million in automobile loans, $1 million in equity lines of credit, $1 million in agricultural loans and $1 million in other loans; these items were partially offset by a decrease of $9 million in commercial loans, $4 million in construction loans and $1 million in residential loans. The decrease in commercial loans included a decline in PPP loans from $8.0 million at June 30, 2022 to $265,000 at June 30, 2023.

On June 30, 2023, approximately 79% of the Company's loan portfolio was comprised of variable rate loans. The rates of interest charged on variable rate loans are set at specific increments in relation to the Company's lending rate or other indexes such as the published prime interest rate or U.S. Treasury rates and vary with changes in these indexes. The frequency at which variable rate loans reprice can vary from one day to several years. Most of our commercial real estate portfolio reprices every five years. Loans indexed to the prime interest rate were approximately 21% of the Company’s loan portfolio; these loans reprice within one day to three months of a change in the prime rate.

Total deposits decreased by $77 million to $1.4 billion at June 30, 2023. The decrease in deposits includes decreases of $48 million in demand deposits, $33 million in money market accounts, and $27 million in savings deposits. Partially offsetting these decreases was an increase in time deposit of $31 million. We attribute much of the decrease to the current interest rate environment as we have seen some deposits leave for higher rates and some customers reluctant to borrow to fund operating expense and instead have drawn down their excess deposit balances. Beginning in April 2023 we began offering a time deposit promotion offering for a limited time 7-month and 11-month time deposits at an interest rate of 4%. We discontinued this promotion, which generated $46 million in deposits, on June 30, 2023. At June 30, 2023, 51% of the Company’s deposits were in the form of non-interest bearing demand deposits. The Company has no brokered deposits.

Total investment securities increased by $104 million from $365 million at June 30, 2022, to $469 million at June 30, 2023. The Bank’s investment security portfolio consists of debt securities issued by the US Government, US Government agencies, US Government sponsored agencies and municipalities. Cash and due from banks decreased by $226 million from $318 million at June 30, 2022, to $92 million at June 30, 2023.

Asset Quality and CECL

Nonperforming assets (which are comprised of nonperforming loans, other real estate owned (“OREO”) and repossessed vehicle holdings) at June 30, 2023 were $9.6 million, up from $2.0 million at June 30, 2022. Included in the $9.6 million were $5 million in loans to one customer which were over 90 days past due but not nonaccrual. These loans, which were modified during June, were brought current in July. Nonperforming assets as a percentage of total assets increased to 0.61% at June 30, 2023 up from 0.12% at June 30, 2022. OREO decreased by $286,000 from $369,000 at June 30, 2022 to $83,000 at June 30, 2023. Nonperforming loans were $9.5 million at June 30, 2023 and $1.6 million at June 30, 2022. Much of the increase in nonperforming loans were loans to walnut growers including the $5 million in loans past due over 90 days but not nonaccrual. Walnuts prices have declined significantly from 2022 levels. Nonperforming loans as a percentage of total loans increased to 1.02% at June 30, 2023, up from 0.18% at June 30, 2022.

Upon adoption of CECL we recorded an increase in the allowance for credit losses of $529,000 and an increase in the reserve for unfunded commitments of $258,000. The decline in equity, net of tax, related to these two adjustments totaled $554,000. During the first half of 2023 we recorded a provision for credit losses of $2,875,000 consisting of a provision for loan losses of $2,550,000 and an increase in the reserve for unfunded commitments of $325,000. The increase in the reserves was principally related to an increase in qualitative reserves related to the continuation of increases in market interest rates, a reduction in economic activity and $837,000 in specific reserves on two loans to one borrower. As time progresses the results of economic conditions will require CECL model assumption inputs to change and further refinements to the estimation process may also be identified.

Net charge-offs totaled $411,000 and $133,000 during the six months ended June 30, 2023 and 2022, respectively. The allowance for credit losses totaled $13.4 million at June 30, 2023 and $10.9 million at June 30, 2022. The allowance for credit losses as a percentage of total loans increased from 1.27% at June 30, 2022 to 1.43% at June 30, 2023.

The following tables present the activity in the allowance for credit losses and the reserve for unfunded commitments during the six months ended June 30, 2023 and 2022 (in thousands).

Shareholders’ Equity

Total shareholders’ equity increased by $12.4 million from $116.2 million at June 30, 2022, to $128.6 million at June 30, 2023. The $12.4 million includes earnings during the twelve-month period totaling $29.3 million and stock option and restricted stock activity totaling $606,000. These items were partially offset by the payment of cash dividends totaling $4.8 million, an increase in accumulated other comprehensive loss of $12.2 million and the adjustment recorded on the adoption of CECL, net of tax, of $554,000.

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 and satisfy maturity of short-term borrowings. The Company’s liquidity needs are managed using assets or liabilities, or both. On the asset side, in addition to cash and due from banks, the Company maintains an investment portfolio which includes unpledged U.S. Government-sponsored agency securities that are classified as available-for-sale. On the liability side, liquidity needs are managed by offering competitive offering rates on deposit products and the use of established lines of credit.

The Company is a member of the FHLB and can borrow up to $231 million from the FHLB secured by commercial and residential mortgage loans with carrying values totaling $397 million. The Company is also eligible to participate in the Bank Term Lending Program. The Federal Reserve Board, on March 12, 2023, announced the creation of a new Bank Term Funding Program (BTFP). The BTFP offers loans of up to one year in length to banks, savings associations, credit unions, and other eligible depository institutions pledging U.S. Treasuries, agency debt and mortgage-backed securities, and other qualifying assets as collateral. These assets will be valued at par. The Company has pledged as collateral under the BTFP securities with a par value of $96 million at June 30, 2023. In addition to its FHLB borrowing line and the BTFP, the Company has unsecured short-term borrowing agreements with two of its correspondent banks in the amounts of $50 million and $20 million. There were no outstanding borrowings to the FHLB, FRB or the correspondent banks at June 30, 2023 and June 30, 2022.

The Company estimates that it has approximately $460 million in uninsured deposits. Of this amount, $101 million represents deposits that are collateralized such as deposits of states, municipalities and tribal accounts.

Management believes that the Company’s available sources of funds, including borrowings, will provide adequate liquidity for its operations for the foreseeable future.

Net Interest Income and Net Interest Margin

Net interest income was $17.2 million for the three months ended June 30, 2023, an increase of $3.8 million from the same period in 2022. The increase in net interest income includes an increase of $4.5 million in interest income partially offset by an increase of $0.7 million in interest expense. Interest and fees on loans, including loans held for sale, increased by $2.3 million related to growth in the loan portfolio and an increase in yield on the portfolio. Net loan fees/costs declined from net fees of $200,000 during the 2022 quarter to net costs of $231,000 during the three months ended June 30, 2023. This decline is mostly related to a decline in fees earned on PPP loans.

Including loans held for sale, average loan balances increased by $65 million, while the average yield on these loans increased by 62 basis points from 5.21% during the second quarter of 2022 to 5.84% during the current quarter. The increase in loan yield includes the effect of an increase in market rates during 2023 partially offset by a decline in PPP fee income as described above. The average prime interest rate increased from 3.94% during the second quarter of 2022 to 8.16% during the current quarter.

Interest on investment securities increased by $1.9 million from the second quarter of 2022, related to an increase in average investment securities of $141 million to $478 million and an increase in yield on the investment portfolio from 2.31% during the second quarter of 2022 to 3.24% during the current quarter. Interest on interest-earning cash balances increased by $304,000 related to an increase in the rate earned on these balances partially offset by a decrease in average interest-earning cash balances. The rate paid on interest-earning cash balances increased from 0.84% during the second quarter of 2022 to 5.14% during the current quarter mostly related to an increase in the rate paid on balances held at the Federal Reserve Bank. The average rate paid on Federal Reserve balances was 0.84% during the second quarter of 2022 and 5.06% during the current quarter. Average interest-earning cash balances declined from $314 million during the second quarter of 2022 to $75 million in the current quarter related to a decline in average deposits and increases in loans and investments.

Average interest earning assets during the three months ended June 30, 2023 totaled $1.5 billion, a decrease of $33 million from the same period in 2022. The average yield on interest earning assets increased 131 basis points to 4.96%, up from 3.65% for the same period in 2022. Net interest margin for the three months ended June 30, 2023 increased 112 basis points to 4.69%, up from 3.57% for the same period in 2022.

Net interest income for the six months ended June 30, 2023 was $34.4 million, an increase of $9.0 million from the $25.4 million earned during the same period in 2022. The increase in net interest income includes an increase of $10.0 million in interest income partially offset by an increase of $1.0 million in interest expense. Interest and fees on loans, including loans held for sale, increased by $4.4 million related to growth in the loan portfolio and an increase in yield on the portfolio. Net loan fees/costs declined from net fees of $511,000 during the 2022 period to net costs of $581,000 during the six months ended June 30, 2023. This decline is mostly related to a decline in fees earned on PPP loans. The average yield on loans, including loans held for sale, increased by 60 basis points from 5.13% during the first six months of 2022 to 5.73% during the current period.

Average interest earning assets during the current six month period totaled $1.5 billion, a decrease of $26 million from the same period in 2022. This decrease in average interest earning assets resulted from a decline in average interest-earning cash balances of $237 million, mostly offset by increases of $63 million in average loan balances and $148 million in average investment securities. The average yield on interest earning assets increased by 141 basis points to 4.88%, related to increases in market rates. Net interest margin for the six months ended June 30, 2023 increased 127 basis points to 4.66%, up from 3.39% for the same period in 2022.

Non-Interest Income/Expense

Non-interest income decreased by $521,000 to $2.1 million during the current quarter from $2.7 million during the three months ended June 30, 2022. The largest component of this decrease was a decline in gains on sale of SBA loans of $645,000. During the current quarter we sold one loan totaling $652,000. This compares to sales of $14.1 million during the second quarter of 2022. The SBA 7(a) loan product that is salable in the open market is variable rate tied to prime and we have seen a significant decline in interest in this product given the recent increases in the prime rate. While we continue to produce SBA 7(a) loans for sale at a much lower volume, we have started funding fixed rate SBA 7(a) loans which we portfolio. Additionally during the fourth quarter of 2022 and continuing into 2023 we experienced a significant decline in premiums received on the sale of SBA loans; in response during the three months ended March 30, 2023 and six months ended June 30, 2023 we chose to portfolio $4.1 million in salable SBA 7(a) loans which did not meet a minimum premium on sale.

During the six months ended June 30, 2023, non-interest income totaled $6.1 million, a decrease of $246,000 from $6.3 million during the six months ended June 30, 2022. The largest component of this decrease was a decline in gain on sale of loans of $2.1 million from $2.3 million during the six months ended June 30, 2022 to $219,000 during the current period. We did not sell SBA 7(a) loans during the second and third quarters of 2021 resulting in an inventory of loans held for sale of $31.3 million at December 31, 2021. During the first half of 2022 we sold $38.2 million in guaranteed portions of SBA 7(a) loans. This compares to $4.9 million in sales during the current period. Mostly offsetting the decline in SBA gains was a gain of $1.7 million on termination of our interest rate swaps during the first quarter of 2023.

During the three months ended June 30, 2023, total non-interest expense increased by $1.1 million from $8.0 million during the second quarter of 2022 to $9.1 million during the current quarter. The largest components of this increase were an increase in salary and benefit expense of $628,000, an increase in outside service fees of $159,000 and an increase in occupancy and equipment costs of $142,000. The increase in salary and benefit expense primarily relates to an increase in salary expense and a reduction in the deferral of loan origination costs. Salary expense increased by $440,000 which we attribute primarily to merit and promotional salary increases. In addition, our full time equivalent employee count has increased from 172 at June 30, 2022 to 176 at June 30, 2023. The deferral of loan origination costs declined by $366,000 from the second quarter of 2022 as we have seen a reduction in loan demand given the current economic environment. The increase in outside service fees was spread among several different categories, the largest of which were network administration, investment management fees, and interchange expense. Occupancy and equipment costs increased by $142,000, much of which relates to snow removal and other costs attributable to an unusually harsh winter in our service area and the opening of our new Chico, California branch during the second quarter of 2023.

During the six months ended June 30, 2023 non-interest expense increased by $2.6 million to $18.3 million. The largest components of this increase were $1.6 million in salary and benefit expenses, $345,000 in occupancy and equipment costs and $245,000 in outside service fees. The largest increases in salary and benefit expense were $728,000 in salary expense and $866,000 in the deferral of loan origination costs.

Plumas Bancorp is headquartered in Reno, Nevada. Plumas Bancorp’s principal subsidiary is Plumas Bank, which was founded in 1980. Plumas Bank is a full-service community bank headquartered in Quincy, California. The bank operates fifteen branches: thirteen located in the California counties of Butte, Lassen, Modoc, Nevada, Placer, Plumas, Shasta and Sutter and two branches located in Nevada in the counties of Carson City and Washoe. The bank also operates two loan production offices located in Auburn, California and Klamath Falls, Oregon. Plumas Bank offers a wide range of financial and investment services to consumers and businesses and has received nationwide Preferred Lender status with the United States Small Business Administration. For more information on Plumas Bancorp and Plumas Bank, please visit our website at www.plumasbank.com.

This news release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act of 1934, as amended and Plumas Bancorp intends for such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Future events are difficult to predict, and the expectations described above are necessarily subject to risk and uncertainty that may cause actual results to differ materially and adversely.

Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include the words "believe," "expect," "anticipate," "intend," "plan," "estimate," or words of similar meaning, or future or conditional verbs such as "will," "would," "should," "could," or "may." These forward-looking statements are not guarantees of future performance, nor should they be relied upon as representing management's views as of any subsequent date. Forward-looking statements involve significant risks and uncertainties, and actual results may differ materially from those presented, either expressed or implied, in this news release. Factors that might cause such differences include, but are not limited to: the Company's ability to successfully execute its business plans and achieve its objectives; changes in general economic and financial market conditions, either nationally or locally in areas in which the Company conducts its operations; changes in interest rates; continuing consolidation in the financial services industry; new litigation or changes in existing litigation; increased competitive challenges and expanding product and pricing pressures among financial institutions; legislation or regulatory changes which adversely affect the Company's operations or business; loss of key personnel; and changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or other regulatory agencies.

Contact: Jamie Huynh

Investor Relations

Plumas Bancorp

5525 Kietzke Lane Ste. 100

Reno, NV 89511

775.786.0907 x8908

investorrelations@plumasbank.com

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