Stonegate Capital Partners Initiates Coverage on Plumas Bancorp (NasdaqCM: PLBC)

DALLAS, TX / ACCESSWIRE / December 3, 2019 / Plumas Bancorp (NasdaqCM:PLBC):

The full report can be accessed by clicking on the following link: http://stonegateinc.com/reports/PLBC%20Initation%2012.3.19-1.pdf

COMPANY DESCRIPTION

Plumas Bancorp (the Company or Plumas) was incorporated in California in 1980 and is the bank holdings company of Plumas Bank; The Company owns all outstanding shares of Plumas Bank. Plumas Bank provides various banking products and services for small and middle market businesses and individuals in Northeastern California and Northwestern Nevada with a focus on personal service. Plumas offers an array of deposit products such as checking, savings, and retirement accounts in addition to its loan portfolio consisting of consumer, home equity, and auto loans. Plumas also provides commercial, industrial, agricultural, and construction loans. Plumas currently operates 13 branches including eleven in California and two in Nevada. Plumas also operates 3 lending offices located in Northern California and Southern Oregon.

SUMMARY

• Strong leadership - The management team is comprised of industry veterans, each possessing decades of experience in banking as well as expertise in the various aspects of retail and commercial lending, giving them the capability to compete with the larger banks in their areas on deals of almost any size. Company insiders own ~11% of outstanding PLBC shares and are thus truly invested in the success of the business.
• Strong Core Deposits - Plumas has a strong history of increasing their demand, savings, and money market deposits from local businesses and individuals. These non-brokered core deposits have grown at a CAGR of 11.64% since 2014 with an average interest-bearing deposit rate at 0.18%.
• Diversified Loan Portfolio - PLBC provides a range of lending services including retail consumer, automobile, home equity, commercial real estate, commercial and industrial term loans, as well as SBA government-guaranteed loans, agricultural loans and credit lines. The breadth of loan diversification helps Plumas to avoid becoming overly concentrated to a single industry.
• Non-Interest Earnings Income Growth- In addition to the Company's primary source of revenue, interest income, Plumas also derives roughly 20% of their revenue from a variety of noninterest income items including loan servicing fees, service charges on deposit accounts, interchange revenue and gains on sales of SBA loans. Plumas has grown non-interest income ~21% since 2014.
• Successful growth strategy - The Company has continued to expand its branch operations into targeted growth markets of Northern California and Northwestern Nevada over the years with great success including the purchase of Mutual of Omaha Bank's Carson City Branch in October 2018.
• Valuation - Combining our thoughts on PLBC versus current regional comps, as well as 3-year historical trading multiples for its comp set, we believe PLBC should trade in a P/E range of 10x to 12x with a mid-point of 11x. Using this range on our FY19 EPS estimate results in a valuation range of $29.59 to $35.51 with a midpoint at $32.55. Also, considering current and 3-year historical trading ranges of PLBC and comps, we believe using a P/TBV multiple range of 1.4x to 1.7x is reasonable. Using this range on our FY19 EPS estimate, we arrive at a valuation range of ~$22.19 to ~$26.95 with a mid-point of ~$24.57.

About Stonegate Capital Partners

Stonegate Capital Partners is a Dallas-based corporate advisory firm dedicated to serving the specialized needs of small-cap public companies. Since our inception, our mission has been to find innovative, undervalued public companies for our network of leading institutional investors who seek high-quality investment opportunities.

CONTACT:

214-987-4121
Shane Martin, CFA

SOURCE: Stonegate Capital Partners