Credit union tried to buy Cornerstone Community in California
Plumas Bancorp in Reno, Nev., prevailed against an unnamed Pacific Northwest credit union to strike a deal to buy Cornerstone Community Bancorp in Red Bluff, Calif.
The $1.6 billion-asset Plumas agreed in late January to buy the $658 million-asset Cornerstone for $64.6 million in a deal expected to close in the second half of this year.
The relationship between Plumas and Cornerstone began informally in July 2024, when Cornerstone CEO Matthew Moseley and Plumas CEO Andrew Ryback connected during an outdoor social outing, according to a regulatory filing tied to the pending deal.
Cornerstone, on Aug. 1, disclosed a $9.4 million chargeoff tied to agricultural lending—an event that represented more than a fifth of its total equity. Though it was considered a “material event” it did not dampen Plumas’ interest.
Cornerstone and Plumas signed a confidentiality agreement on Sept. 23 to begin exchanging preliminary financial data and continue discussions about a merger. Plumas submitted a letter of intent on Nov. 8
In early October, a credit union reached out to Cornerstone to discuss its ambitions in California. After being informed that Cornerstone would evaluate any letter of intent, the credit union submitted a proposal in mid-November.
Cornerstone’s board reviewed both offers during a Nov. 19 meeting, evaluating deal terms, tax implications, and the likelihood of regulatory approval. The board opted to proceed with Plumas; a letter of intent was signed the same day.
Cornerstone’s board formally approved the merger on Jan. 27. Plumas’ board gave its approval the next day. The deal, announced on Jan. 29, priced Cornerstone at 146% of its tangible book value.
“Our companies share a connection to the people and businesses who have built their livelihoods throughout northern California,” Andrew Ryback, Plumas’ president and CEO, said in the press release announcing the merger. “Bringing together the team of local experts at Cornerstone … with Plumas Bank’s technology and small business expertise offers even greater services for the markets we serve.”
Matthew Moseley, Cornerstone’s president and CEO, will remain with Plumas after the deal closes. A Cornerstone director will join Plumas’ board.
The deal is expected to be 9% accretive to 2025 earnings per share and 23% accretive the next year. It should take less than three years for Plumas to earn back an estimated 13% dilution to its tangible book value.
Plumas plans to cut about a quarter of Cornerstone’s annual noninterest expense. It expects to incur $8.2 million of merger-related expenses.