PLUMAS BANCORP — Annual Report 2007

Jun 28, 2007

11-K 1 a31539e11vk.htm FORM 11-K Plumas Bancorp PAGEBREAK

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 11-K

þ ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

For the fiscal year ended December 31, 2006

o TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

For the transition period from to

COMMISSION FILE NUMBER: 000-49883

A. Full title of the plan and address of the plan, if different from that of issuer named below:

Plumas Bank 401 (k) Profit Sharing Plan

B. Name of issuer of the securities held pursuant to the plan and address of its principal executive office:

Plumas Bancorp

35 S. Lindan Avenue Quincy, CA 95971

REQUIRED INFORMATION

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,
2006, prepared in accordance with the financial reporting requirements of ERISA.

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PLUMAS BANK

401(k) PROFIT SHARING PLAN

FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2006 AND 2005

AND FOR THE YEARS THEN ENDED

AND

SUPPLEMENTAL SCHEDULE

AS OF DECEMBER 31, 2006

AND

REPORT OF INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM

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PLUMAS BANK 401(k) PROFIT SHARING PLAN

FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE

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Report of Independent Registered Public Accounting Firm	1
Financial Statements:
Statement of Net Assets Available for Benefits as of
December 31, 2006 and 2005	2
Statement of Changes in Net Assets Available for Benefits
for the Year Ended December 31, 2006 and 2005	3
Notes to Financial Statements	4-9
Supplemental Schedule:
Schedule H, Line 4i — Schedule of Assets (Held at End of Year)
as of December 31, 2006	10
EXHIBIT 23.1

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All other schedules required by Section 2520.103-10 of the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974 have been omitted because they are not applicable.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Trustees of

Plumas Bank 401(k) Profit Sharing Plan

We have audited the accompanying statement of net assets available for benefits and the related statement of changes in net assets available for benefits of the Plumas Bank 401(k) Profit Sharing Plan (the “Plan”) as of and for the years ended December 31, 2006 and 2005. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the Auditing Standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits and the changes in net assets available for benefits of the Plumas Bank 401(k) Profit Sharing Plan as of and for the years ended December 31, 2006 and 2005, in conformity with accounting principles generally accepted in the United States of America.

Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule of assets (held at end of year), as of December 31, 2006, is presented for the purpose of additional analysis and is not a required part of the basic financial statements, but is supplementary information required by the United States Department of Labor Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental schedule is the responsibility of the Plan’s management. The supplemental schedule has been subjected to the auditing procedures applied in the audit of the basic 2006 financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic 2006 financial statements taken as a whole.

/s/ Perry-Smith LLP

Sacramento, California June 26, 2007

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PLUMAS BANK 401(k) PROFIT SHARING PLAN

STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS

December 31, 2006 and 2005

	2006	2005
ASSETS
Investments:
Participant-directed investments at fair value (Note 3)	$ 7,770,733	$ 7,972,330
Participant loans	175,562	237,099
Total investments	7,946,295	8,209,429
Receivables:
Employer contributions		7,283
Participant contributions		25,847
Total receivables		33,130
Net assets available for benefits	$ 7,946,295	$ 8,242,559

The accompanying notes are an integral part of these financial statements.

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PLUMAS BANK 401(k) PROFIT SHARING PLAN

STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS

For the Years Ended December 31, 2006 and 2005

	2006		2005
ADDITIONS
Investment income:
Net (depreciation) appreciation in fair value of
investments (Note 3)	$ (60,781	)	$ 1,202,003
Interest and dividends	110,008		90,214
Total investment income	49,227		1,292,217
Contributions:
Participant	660,619		629,069
Employer	197,625		181,214
Total contributions	858,244		810,283
Total additions	907,471		2,102,500
DEDUCTIONS
Benefits paid to participants	1,203,735		492,870
Net (decrease) increase	(296,264	)	1,609,630
Net assets available for benefits:
Beginning of year	8,242,559		6,632,929
End of year	$ 7,946,295		$ 8,242,559

The accompanying notes are an integral part of these financial statements.

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PLUMAS BANK 401(k) PROFIT SHARING PLAN

NOTES TO FINANCIAL STATEMENTS

1.
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, that
provides 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 Trust Company (Prudential) 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
The Bank provides a 100% match on each participant’s elective deferral up to 3% of the
participant’s eligible compensation. 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 2005 and 2006 the Bank made no 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 %

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.

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PLUMAS BANK 401(k) PROFIT SHARING PLAN

NOTES TO FINANCIAL STATEMENTS (Continued)

1.
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 (Prudential). The investment options include a range of funds
that are invested in shares of thirteen registered investment companies (mutual funds) 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.
Participant Loans
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.
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, 2006 and
2005, there were no benefits payable to participants that have elected to withdraw from the
Plan but have not yet been paid.

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PLUMAS BANK 401(k) PROFIT SHARING PLAN

NOTES TO FINANCIAL STATEMENTS (Continued)

1.	DESCRIPTION OF PLAN (Continued)
	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 $5,844
and $8,009 were used to reduce employer contributions for the years ending December 31, 2006
and 2005, 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 in accordance with
accounting principles generally accepted in the United States of America.
	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. The Plan utilizes various investment instruments, including
mutual funds 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.
	Investment Valuation and Income Recognition
	The Plan’s investments are stated at fair value. Quoted market prices as of the last
business day of the Plan year are used to value investments in registered investment
companies (mutual funds) as well as in Plumas Bancorp’s common stock. Participant loans
receivable are valued at the outstanding loan balances.

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PLUMAS BANK 401(k) PROFIT SHARING PLAN

NOTES TO FINANCIAL STATEMENTS (Continued)

2.
Investment Valuation and Income Recognition (Continued)
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.
Payment of Benefits
Benefits are recorded when paid.
Impact of New Financial Accounting Standard
Fair Value Measurements
In September 2006, the Financial Accounting Standards Board (“FASB”) issued Statement of
Financial Accounting Standards No. 157, Fair Value Measurements (“SFAS 157”), which defines
fair value, establishes a framework for measuring fair value in generally accepted
accounting principles, and expands disclosures about fair value measurements. SFAS 157 does
not require new fair value measurements, but provides guidance on how to measure fair value
by establishing a fair value hierarchy used to classify the source of the information. SFAS
157 is effective for fiscal years beginning after November 15, 2007. The Plan’s management
does not expect the adoption of SFAS 157 to have a material impact on the Plan’s financial
position or results of operations.
Fair Value Accounting
In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets
and Financial Liabilities — Including an Amendment of FASB Statement No. 115 (“SFAS 159”).
This Statement permits entities to choose to measure many financial instruments and certain
other items at fair value. Unrealized gains and losses on items for which the fair value
option has been elected will be reported in earnings. The objective is to improve financial
reporting by providing entities with the opportunity to mitigate volatility in reported
earnings caused by measuring related assets and liabilities differently without having to
apply complex hedge accounting provisions. This Statement is expected to expand the use of
fair value measurement, which is consistent with the FASB’s long-term measurement objectives
for accounting for financial instruments. SFAS 159 is effective for fiscal years beginning
after November 15, 2007. Early adoption is permitted as of the beginning of the previous
fiscal year provided that the entity makes that choice in the first 120 days of that fiscal
year and also elects to apply the provisions of SFAS 157. The Plan’s management has not
chosen early adoptions of SFAS No. 159. The Plan’s management does not expect the adoption
of SFAS 159 to have a material impact on the Plan’s financial position or results of
operations.

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PLUMAS BANK 401(k) PROFIT SHARING PLAN

NOTES TO FINANCIAL STATEMENTS (Continued)

3.
The following table presents the fair value of the investments in the Plan. Investments
representing more than 5% of the Plan’s net assets as of December 31, 2006 and 2005 are
separately identified.

	December 31, — 2006	2005
Investments at quoted market prices:
Plumas Bancorp Common Stock	$ 1,534,242	$ 2,305,809
Davis NY Venture Fund	1,373,322	1,120,247
Euro Pacific Growth Fund	1,018,109	726,236
Stable Value Fund	657,969	636,921
Jennison Growth Fund	573,586	555,908
Goldman Sachs Mid Cap Fund	483,033	456,625
Van Kampen Equity Income Fund	478,058	499,641
PIMCO Total Return Fund	473,920	570,787
Other investments	1,178,494	1,100,156
	7,770,733	7,972,330
Other investments:
Loans to participants	175,562	237,099
Total investments	$ 7,946,295	$ 8,209,429

| | The Plan’s investments, including investments bought, sold and held during the year, (depreciated) appreciated in value by $(60,781) and $1,202,003 during 2006 and 2005, respectively. | | --- | --- | | 4. | CONCENTRATION OF INVESTMENTS | | | At December 31, 2006 and 2005, the Plan held investments in Plumas Bancorp common stock, representing approximately 19% and 28% of net assets available for benefits, respectively. A significant decline in the performance of Plumas Bancorp common stock could have a materially adverse impact on the Plan’s net assets available for benefits. | | 5. | RELATED-PARTY TRANSACTIONS | | | Certain Plan investments are shares of mutual funds managed by Prudential. Prudential 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. |

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PLUMAS BANK 401(k) PROFIT SHARING PLAN

NOTES TO FINANCIAL STATEMENTS (Continued)

5.
At December 31, 2006 and 2005, the Plan’s investments in Plumas Bancorp common stock (a
party-in-interest) are as follows:

	December 31, — 2006	2005
Number of shares	102,900	109,800
Fair value, based on quoted market values	$ 1,534,242	$ 2,305,809

| | The Plan’s investment in Plumas Bancorp’s common stock, including investments bought, sold and held during the year, (depreciated) appreciated in value by $(657,474) and $792,117 during 2006 and 2005, respectively, which is included in the total investment appreciation discussed in Note 3. | | --- | --- | | 6. | FEDERAL INCOME TAX STATUS | | | The Internal Revenue Service has determined, and informed the Bank by a letter dated November 20, 1992, 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. Therefore, no provision for income taxes has been included in the financial statements. |

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SUPPLEMENTAL SCHEDULE

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PLUMAS BANK 401(k) PROFIT SHARING PLAN

EMPLOYER IDENTIFICATION NUMBER: 95-3520374 PLAN NUMBER: 001

SCHEDULE H, LINE 4i — SCHEDULE OF ASSETS (HELD AT END OF YEAR)

December 31, 2006

			(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
		Davis NY Venture Fund	Mutual Fund	*	$ 1,373,322
		Euro Pacific Growth Fund	Mutual Fund	*	1,018,109
		Stable Value Fund	Common / Collective Trust	*	657,969
*	*	Jennison Growth Fund	Mutual Fund	*	573,586
		Goldman Sachs Mid Cap Fund	Mutual Fund	*	483,033
		Van Kampen Equity Income Fund	Mutual Fund	*	478,058
		PIMCO Total Return Fund	Mutual Fund	*	473,920
		Franklin Small Cap Fund	Mutual Fund	*	394,999
		Goldman Sachs Small Cap Fund	Mutual Fund	*	246,070
*	*	US Emerging Growth Fund	Mutual Fund	*	218,125
*	*	Dryden Stock Index Fund	Mutual Fund	*	171,428
		Growth Fund of America	Mutual Fund	*	122,955
		Fidelity Adv Small Cap Fund	Mutual Fund	*	24,917
*	*	Plumas Bancorp	Common Stock — 102,900 shares	*	1,534,242
*	*	Participant Loans	Maturing at various dates through
			December 2011 at interest rates
			ranging from 5.25% to 9.25%		175,562
					$ 7,946,295

| * | Information regarding the cost of investments at December 31, 2006 is not required as investments are participant directed. | | --- | --- | | ** | Party-in-interest to the Plan. |

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SIGNATURES

The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees or other persons who administer the Plan have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.

	Plumas Bank 401(k) Profit Sharing Plan (Name of Plan)
Date: June 28, 2007	/s/ Andrew J. Ryback Andrew J. Ryback
	EVP/Chief Financial Officer

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EXHIBIT INDEX

Exhibit	Description
23.1	Consent of Perry-Smith LLP, Independent Registered Public Accounting Firm

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