Plumas Bancorp (PLBC) has officially announced a definitive merger agreement with Cornerstone Community Bancorp. Under this agreement, Plumas will acquire Cornerstone in a stock-and-cash transaction, valued at approximately $64.6 million, based on Plumas' closing share price of $47.76 as of January 28, 2025.
Upon finalizing this acquisition, the merged entity will possess approximately $2.3 billion in total assets, $2.0 billion in deposits, and a loan portfolio worth $1.5 billion, operating 19 branches across Northern California and Western Nevada.
According to the agreed terms, each share of Cornerstone will be exchanged for 0.6608 shares of Plumas stock, along with $9.75 in cash, subject to certain conditions.
Taking into account Plumas' share price of $47.76 on January 28, 2025, the deal is valued at around $64.6 million, inclusive of the value assigned to holders of Cornerstone stock options. This translates to a valuation of $41.31 for each Cornerstone share.
Post-merger, Cornerstone's shareholders are expected to collectively own approximately 14 percent of the outstanding common stock of Plumas, based on figures as of December 31, 2024. Additionally, a member from Cornerstone's current board will be appointed to Plumas' board subsequent to the merger.
Plumas anticipates the acquisition to enhance earnings per share by 9 percent in 2025 and 23 percent in 2026. The bank forecasts a 13 percent reduction in tangible book value per share at the time of closing, with an earn-back period projected to be under three years. The boards of both Plumas and Cornerstone have given their approval for the merger, which is slated to be finalized in the latter half of 2025, pending the necessary shareholder and regulatory endorsements.
Currently, PLBC shares are trading at $46.70, reflecting a decrease of 2.22% on the Nasdaq Capital Market.
