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Note 11- Leases | 12 Months Ended
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Dec. 31, 2025
Notes to Financial Statements |
Lessee, Operating Leases [Text Block] |
11. | LEASES
On January 19, 2024, Plumas Bank entered into an agreement for the purchase and sale of real property (the “Sale Agreement”). The Sale Agreement provided for the sale to MountainSeed of nine properties owned and operated by Plumas Bank as branches for an aggregate cash purchase price of approximately $25.7 million. The sale was completed on February 14, 2024 resulting in a net gain on sale of $19.9 million, recording of right-of-use assets totaling $22.3 million and recording a lease liability of $22.3 million. Concurrently with the closing of the sale of the branch properties, we entered into triple net lease agreements (the “Lease Agreements”) pursuant to which Plumas Bank leased back each of the properties sold. Each Lease Agreement has an initial term of fifteen years with one 15-year renewal option. The Lease Agreements provide for an annual rent of approximately $2.4 million in the aggregate for the nine properties increased by two percent (2%) per annum for each year during the initial Term. During the renewal term, the initial rent will be the basic rent during the last year of the initial term, increased by two percent (2%) per annum for each year during the renewal term. On March 28, 2025, Plumas Bank entered into an agreement for the purchase and sale of real property (the “Purchase Agreement”). The Purchase Agreement as amended provided for the sale to BBS Branch III, LLC, a Delaware limited liability company, two administrative buildings located in Quincy California for an aggregate cash purchase price of $5.5 million. The sale was completed on November 19, 2025, resulting in a net gain on sale of $5.5 million, recording of right-of-use assets totaling $5.3 million and recording a lease liability of $4.7 million. Concurrent with the closing of the sale, Plumas Bank and Plumas Investor, LLC, a Delaware limited liability company and Plumas Quincy, LLC, a Delaware limited liability company entered into triple net lease agreements (the “Lease Agreements”) pursuant to which the Bank will lease back the Properties sold. The Lease Agreements have an initial term of 15 years with three five-year renewal options. The Lease Agreements provide for annual rent of approximately $463,000 in the aggregate for both Properties, increasing by three percent per annum each year. The Company leases two lending offices, eleven branch offices including the nine branches sold and leased back in 2024, the land under our Yuba City branch, five administrative offices and three standalone ATM locations. The branch office leases, the administrative office leases described above, and the land lease have options to renew. The exercise of lease renewal options is at our sole discretion; therefore, they are not included in our Right of Use (ROU) assets and lease liabilities as they are not reasonably certain of exercise. We regularly evaluate the renewal options and when they are reasonably certain of exercise, we include the renewal period in our lease term. We have elected the practical expedient to exclude short-term leases from our ROU assets and lease liabilities. The branch leases, the administrative office leases, the land lease and one of the lending office leases are classified as operating leases while the remaining leases are all short-term leases. Right of use assets totaling $28,860,000 and $24,334,000 at December 31, 2025 and 2024, respectively were included on the consolidated balance sheets. Lease liabilities totaling $29,029,000 and $24,759,000 at December 31, 2025 and 2024, respectively were included on the consolidated balance sheets. For all leases, other than the leases entered into on November 19, 2025, described above, we use our incremental borrowing rate based on the information available at the lease commencement date in determining the present value of the lease payments. For the two office building leases entered into on November 19, 2025, we used the implicit rate provided by the lessor in determining the present value of the lease payments. The Company’s weighted average rate used in the calculation of the right-of-use assets and lease liabilities was estimated at 8.3% for the years ending December 31, 2025, and 2024. The following table presents a maturity analysis of the operating lease liability at December 31, 2025:
|  | Maturities of |
|  | Lease Liabilities |
Year ended December 31, 2026 |  | $ | 3,630,000 |
Year ended December 31, 2027 |  |  | 3,410,000 |
Year ended December 31, 2028 |  |  | 3,235,000 |
Year ended December 31, 2029 |  |  | 3,272,000 |
Year ended December 31, 2030 |  |  | 3,343,000 |
Thereafter |  |  | 32,370,000 |
|  |  | 49,260,000 |
Less: Present value discount |  |  | (20,231,000 | )
Lease Liability December 31, 2025 |  | $ | 29,029,000 |
The weighted-average remaining lease term was 13.5 years and 14.3 years for the years ended December 31, 2025, and 2024, respectively. Total lease costs for the year ended December 31, 2025 were $3,584,000 consisting of $3,469,000 related to operating leases, $54,000 related to short-term leases and variable lease expense of $61,000. Total lease costs for the year ended December 31, 2024 were $3,064,000 consisting of $3,004,000 related to operating leases, $29,000 related to short-term leases and variable lease expense of $31,000. Cash paid on operating leases was $3,095,000 and $2,655,000 for the years ended December 31, 2025 and 2024, respectively. Rental expense included in occupancy and equipment expense totaled $3,523,000, $3,033,000 and $599,000 for the years ended December 31, 2025, 2024 and 2023, respectively.

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- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 842 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/842-20/tableOfContent + Details
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