Plumas Bancorp in Quincy, Calif., has agreed to buy Feather River Bancorp in Yuba City, Calif.
The $1.1 billion-asset Plumas said in a press release Thursday that it will pay $21.3 million in cash and stock for the $182 million-asset Feather River. The deal, which is expected to close in the third quarter, priced Feather River at 122% of its tangible book value.
Yuba City is the county seat of Sutter County, where big banks control about 60% of the markets $2.3 billion of deposits.
The deal's logic is simple. The combination would pair Feather River’s deep knowledge of the local marketplace with the “superior products, services and support” of a larger institution, Feather River CEO Julie Morehead said in the release.
“Gaining access to Plumas’ network of offices and extensive product lines allows us to expand our footprint and offerings beyond the Yuba-Sutter communities we have served for the past 13 years,” said Morehead, who is expected to join Plumas after the merger closes.
Morehead is a lifelong Yuba City resident with 42 years of local banking experience. She joined Feather River in 2008, the year it was founded.
“Bringing together the team of local experts at Bank of Feather River with Plumas Bank’s technology and small-business expertise offers even greater services for the Yuba City marketplace,” Plumas CEO Andrew Ryback said in the release.
Plumas is making a practice of expanding by small, measured steps. Over the past five years, it has purchased branches in Redding, Calif., and Carson City, Nev. Plumas has also opened a branch in Reno, Nev., and a loan production office in Klamath Falls, Ore.
The combined company would have 14 branches in northeastern California and western Nevada.
Plumas, which reported a $14.5 million profit in 2020, said acquiring Feather River would be 8.1% accretive to its 2022 earnings per share. It should take less than two years for Plumas to earn back the estimated 3% dilution to its tangible book value.
Plumas said it plans to cut about 30% of Feather River's annual noninterest expenses. The company said it will likely incur $4.7 million in merger-related expenses.
Feather River earned $2.1 million in 2020 and reported zero net charge-offs or nonperforming loans at Dec. 31.
One Feather River director will join the Plumas board.
