RENO, NV - Plumas Bancorp, a financial institution specializing in short-term business credit with a market capitalization of $273 million, has announced a new cash non-equity incentive plan for 2025, which aims to reward eligible employees based on the company's financial performance. According to InvestingPro analysis, the company appears slightly undervalued based on its Fair Value assessment, while maintaining a GOOD overall financial health score.
On Wednesday, December 18, 2024, the Board of Directors of Plumas Bancorp approved the incentive plan, which includes all employees of its subsidiary, Plumas Bank, who work at least 20 hours per week. The plan is structured with two bonus pools: one for officers, which constitutes 90.9% of the combined pools, and another for all other qualifying employees.
The incentives will be paid out if the Bank surpasses the median return on assets (ROA) within its peer group, which consists of commercial banks with total assets between $1 billion and $3 billion as of September 30, 2025. Currently, the bank maintains a solid ROA of 1.75% and a return on equity of 19%.
InvestingPro subscribers can access over 30 additional financial metrics and performance indicators to evaluate the company's competitive position. The bonus pool's size correlates with the percentile ranking of the Bank's ROA, with a maximum potential payout of 8.8% of the pre-tax, pre-bonus income by the end of 2025.
For the officers' pool, up to 12% could be allocated to the Chief Executive Officer (CEO) and President, while Executive Vice Presidents (EVPs) could each earn up to 4.65%. The CEO's cash incentive is based on a combination of the ROA percentile, performance goals, various metrics, and a performance evaluation by the Corporate Governance and Compensation Committee. EVPs' incentives follow a similar structure, with a portion based on the CEO's evaluation of their performance.
Performance goals for the CEO include increases in loans and deposits, asset quality benchmarks, and the achievement of strategic initiatives. Metrics involve exceeding a targeted return on equity percentile and surpassing budgeted net income, though InvestingPro data indicates net income is expected to decline this year. The company has demonstrated strong market performance with a 39.75% price return over the past six months. The plan's payouts are subject to approval by the Corporate Governance and Compensation Committee, and the Board reserves the right to modify or terminate the plan. It should be noted that the plan does not guarantee continued employment for any employee.
In other recent news, Plumas Bancorp has been active with several significant developments. The company recently announced a quarterly cash dividend of $0.27 per common share, payable to shareholders of record as of November 1, 2024.
The company also reported a change in its certifying accountant for the Plumas Bank 401(k) Profit Sharing Plan. The Audit & Risk Committee approved the decision to replace Eide Bailly LLP with Elliot Davis, LLC for the Plan's fiscal year ending December 31, 2024.
In board-related news, Plumas Bancorp announced the retirement of a long-serving director, Reeson, in compliance with the company's Corporate Governance Guidelines.
Lastly, Plumas Bancorp mutually agreed to terminate a property sale agreement with Mountainseed Real Estate Services, LLC, which involved the sale of three properties operated by Plumas Bank. It was clarified that this termination does not impact another transaction involving nine branch office properties.
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