Pinnacle Bancshares Announces Results for Third Quarter Ended September 30, 2018

JASPER, Ala.–(BUSINESS WIRE)–Robert B. Nolen, Jr., President and Chief Executive Officer of Pinnacle
Bancshares, Inc. (OTC Pink: PCLB), today announced Pinnacle’s third
quarter results of operations.

  • For the three months ended September 30, 2018, Pinnacle reported net
    income of $650,000 compared to $601,000 for the three months ended
    September 30, 2017. Pre-tax income for the three months ended
    September 30, 2018 was approximately the same from the three months
    ended September 30, 2017.
  • For the nine months ended September 30, 2018, Pinnacle reported net
    income of $1,906,000 compared to $1,699,000 for the nine months ended
    September 30, 2017. Pre-tax income for the nine months ended September
    30, 2018 increased 5.6% from the nine months ended September 30, 2017.
  • Basic and diluted earnings per share for the three and nine months
    ended September 30, 2018 were $0.62 and $1.83 per share, respectively,
    compared to $0.58 and $1.63 per share, respectively, for the same
    periods last year.
  • For the three and nine months ended September 30, 2018, return on
    average assets was 1.18%, and 1.14%, respectively, compared to 1.06%
    and 1.01%, respectively, in the comparable 2017 period.

Pinnacle’s net interest margin was 3.85% and 3.72% for the three and
nine months ended September 30, 2018, respectively, compared to 3.61%
and 3.50% for the three and nine months ended September 30, 2017,
respectively.

At September 30, 2018, Pinnacle’s allowance for loan losses as a percent
of total loans was 1.54%, compared to 1.68% at December 31, 2017. At
September 30, 2018, the allowance for loan losses as a percent of
nonperforming loans was 470.71%, compared to 670.42% at December 31,
2017. Nonperforming assets were $338,000 at September 30, 2018, compared
to $281,000 at December 31, 2017. The ratio of nonperforming assets to
total loans was .33% at September 30, 2018, compared to .29% at December
31, 2017. In addition, all capital ratios are significantly higher than
the requirements for a well-capitalized institution.

Dividends of $.11 and $.33 per share were paid to shareholders during
the three and nine months ended for both September 30, 2018, and 2017.

Forward-Looking Statements

Information contained in this press release, other than historical
information, may be considered forward-looking in nature and is subject
to various risks, uncertainties and assumptions. Should one or more of
these risks or uncertainties materialize, or should underlying
assumptions prove incorrect, actual results may vary materially from
those anticipated, estimated or expected. Pinnacle undertakes no duty to
update any forward-looking statement to conform the statement to actual
results or changes in Pinnacle’s expectations. Certain tabular
presentations may not reconcile because of rounding.

Pinnacle Bancshares, Inc.’s wholly owned subsidiary Pinnacle Bank has
seven offices located in central and northwest Alabama.

 
PINNACLE BANCSHARES, INC.
Unaudited Financial Highlights

(In Thousands, except share and per share data)

 
 
      Three Months Ended September 30,
2018     2017
Net income $ 650,000 $ 601,000
Basic and diluted earnings per share $ 0.62 $ 0.58
 
Performance ratios (annualized):
Return on average assets 1.18 % 1.06 %
Return on average equity 9.59 % 9.59 %
Interest rate spread 3.69 % 3.48 %
Net interest margin 3.85 % 3.61 %
Operating cost to assets 2.95 % 2.66 %
 
Weighted average basic and diluted shares outstanding 1,043,505 1,043,505
Dividends per share $ 0.11 $ 0.11
Provision for loan losses $ $
 
Nine Months Ended September 30,
2018 2017
Net income $ 1,906,000 $ 1,699,000
Basic and diluted earnings per share $ 1.83 $ 1.63
 
Performance ratios (annualized):
Return on average assets 1.14 % 1.01 %
Return on average equity 9.49 % 9.59 %
Interest rate spread 3.58 % 3.39 %
Net interest margin 3.72 % 3.50 %
Operating cost to assets 2.86 % 2.66 %
 
Weighted average basic and diluted shares outstanding 1,043,505 1,043,505
Dividends per share $ 0.33 $ 0.33
Provision for loan losses $ $
(Audited)
September 30, 2018 December 31, 2017
Total assets $ 220,824,000 $ 217,836,000
Loans receivable, net $ 102,057,000 $ 94,204,000
Deposits $ 190,800,000 $ 186,327,000
Brokered CD’s included in deposits $ $
Other borrowings $ $ 1,500,000
Total stockholders’ equity $ 25,804,000 $ 26,013,000
Weighted average book value per share $ 24.73 $ 24.93
Average Stockholders’ equity to assets ratio (excluding OCI) 12.04 % 11.16 %
 
Asset quality ratios:
Nonperforming loans as a percent of total loans .33 % .29 %
Nonperforming assets as a percent of total loans .33 % .29 %
Allowance for loan losses as a percent of total loans 1.54 % 1.68 %
Allowance for loan losses as a percent of nonperforming loans 470.71 % 670.42 %
 
 

FINANCIAL INFORMATION

 

PINNACLE BANCSHARES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

         
(Unaudited) (Audited)
September 30, December 31,
2018 2017
 

Assets

Cash and cash equivalents $ 1,477,942 $ 1,871,452
Interest bearing deposits in banks 4,357,937 2,266,004
Securities available for sale 93,535,889 100,881,539
Restricted equity securities 721,000 805,500
 
Loans 103,647,907 95,812,552
Less Allowance for loan losses   1,591,017     1,608,804  
Loans, net   102,056,890     94,203,748  
 
Premises and equipment, net 6,329,152 6,236,854
Goodwill 306,488 306,488
Bank owned life insurance 9,470,946 9,220,161
Accrued interest receivable 1,115,551 1,228,374
Other assets   1,451,921     816,288  
Total assets $ 220,823,716   $ 217,836,408  
 

Liabilities and Stockholders’ Equity

Deposits
Noninterest-bearing $ 56,054,830 $ 55,154,929
Interest-bearing   134,744,679     131,172,551  
Total deposits 190,799,509 186,327,480
 
Other borrowings 1,500,000
Federal funds purchased 100,000
Subordinated debentures 3,093,000 3,093,000
Accrued interest payable 124,525 79,893
Other liabilities   1,002,656     722,887  
Total liabilities   195,019,690     191,823,260  
 
Stockholders’ equity

Common stock, par value $.01 per share; 2,400,000 authorized;
1,872,313 issued; 1,043,505 shares outstanding

18,723 18,723
Additional paid-in capital 8,923,223 8,923,223
Treasury stock (828,028 shares) (11,464,104 ) (11,464,104 )
Retained earnings 29,768,798 28,206,925
Accumulated other comprehensive income (loss), net of tax   (1,442,614 )   328,381  
 
Total stockholders’ equity   25,804,026     26,013,148  
 
Total liabilities and stockholders’ equity $ 220,823,716   $ 217,836,408  
 
 
PINNACLE BANCSHARES, INC.
 
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
         
 
Three Months Ended Nine Months Ended
September 30, September 30,
2018     2017 2018     2017
Interest income
Loans, including fees $ 1,393,951 $ 1,196,071 $ 3,972,651 $ 3,454,090
Securities available for sale 710,827 757,946 2,153,852 2,300,964
Other interest   24,845     45,564   83,491   100,607
Total interest income   2,129,623     1,999,581   6,209,994   5,855,661
 
Interest expense
Deposits 116,239 101,042 304,824 314,819
Borrowings and repurchase agreements 5,602 35,657 2,883
Subordinated debentures   42,600     37,333   118,900   99,133
Total interest expense   164,441     138,375   459,381   416,835
 
Net interest income 1,965,182 1,861,206 5,750,613 5,438,826
Provision for loan losses          

Net interest income after provision for loan losses

  1,965,182     1,861,206   5,750,613   5,438,826
 
Other income
Fees and service charges on deposit accounts 353,661 319,829 1,020,773 931,151
Service fee income, net 1,969 2,480 6,258 8,940
Bank owned life insurance 83,595 83,186 250,785 249,558
Mortgage fee income 8,355 10,303 23,659 15,531
Net gain (loss) on sale of other real estate (75 ) 522
Net gain on securities available for sale         1,689  
Total other income   447,505     415,798   1,303,686   1,205,180
 
Other expense:
Salaries and employee benefits 941,303 823,161 2,748,178 2,483,099
Occupancy expense 222,657 244,445 664,623 704,077
Marketing and professional expense 52,928 46,894 138,712 140,257
Other operating expenses   408,752     375,071   1,211,683   1,146,822
Total other expenses   1,625,640     1,489,571   4,763,196   4,474,255
 
Income before income taxes 787,047 787,433 2,291,103 2,169,751
 
Income tax expense   136,911     186,617   384,872   470,301
 
Net income $ 650,136   $ 600,816 $ 1,906,231 $ 1,699,450
 
Cash dividend per share $ 0.11   $ 0.11 $ 0.33 $ 0.33
 
Basic and diluted earnings per share $ 0.62   $ 0.58 $ 1.83 $ 1.63
 

Weighted –average basic and diluted shares outstanding

  1,043,505     1,043,505   1,043,505   1,043,505
 

PINNACLE BANCSHARES, INC.

 

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’
EQUITY

Nine Months Ended September 30, 2018 and 2017

 
 
 
                          Accumulated    
Additional Other Total
Common Stock Paid-in Treasury Retained Comprehensive Stockholders’
Shares Amount Capital Stock Earnings Income (Loss) Equity
Balance December 31, 2016 1,872,313 $ 18,723 $ 8,923,223 $ (11,464,104 ) $ 26,417,216 $ (136,701 ) $ 23,758,357
Net income 1,699,450 1,699,450

Cash dividends declared ($.33 per share)

(344,357 ) (344,357 )
Other comprehensive income               1,035,021     1,035,021  
Balance September 30, 2017 1,872,313 $ 18,723 $ 8,923,223 $ (11,464,104 ) $ 27,772,309   $ 898,320   $ 26,148,471  
 
 
Accumulated
Additional Other Total
Common Stock Paid-in Treasury Retained Comprehensive Stockholders’
Shares Amount Capital Stock Earnings Income (Loss) Equity
Balance December 31, 2017 1,872,313 $ 18,723 $ 8,923,223 $ (11,464,104 ) $ 28,206,925 $ 328,381 $ 26,013,148
Net income 1,906,231 1,906,231

Cash dividends declared ($.33 per share)

(344,358 ) (344,358 )
Other comprehensive loss               (1,770,995 )   (1,770,995 )
Balance September 30, 2018 1,872,313 $ 18,723 $ 8,923,223 $ (11,464,104 ) $ 29,768,798   $ (1,442,614 ) $ 25,804,026  
 
 

PINNACLE BANCSHARES, INC,

 

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 
 
      For the Nine Months Ended
September 30,
2018     2017
OPERATING ACTIVITIES:
Net income $ 1,906,231 $ 1,669,450

Adjustments to reconcile net income to net cash provided by
operating activities:

Depreciation 282,514 261,920
Provision for loan losses
Net investment amortization expense 324,544 386,460
Bank owned life insurance (250,785 ) (249,558 )
Gain on sale of securities available for sale (1,689 )
Net gain on sale of real estate owned (522 )
Decrease in accrued interest receivable 112,823 132,054
Increase (decrease) in accrued interest payable 44,632 (4,837 )
Net other operating activities   225,207     (169,847 )
Net cash provided by operating activities   2,642,955     2,055,642  
 
INVESTING ACTIVITIES:
Net increase in loans (7,880,546 ) (1,626,119 )
Net increase in interest bearing deposits in other banks (2,091,933 ) (3,169,369 )
Purchase of securities available for sale (5,107,692 ) (6,136,280 )
Proceeds from sale of securities available for sale 501,689

Proceeds from maturing, sale and payments received on securities
available for sale

9,235,561 10,168,025
Net (purchase) redemption of restricted equity securities 84,500 (83,400 )
Purchase of premises and equipment (374,812 ) (858,939 )
Proceeds from sales of real estate owned   69,097      
Net cash used in investing activities   (5,564,136 )   (1,706,082 )
 
FINANCING ACTIVITIES:
Net increase in deposits 4,472,029 42,732
Net decrease in other borrowings (1,500,000 )
Net decrease in federal funds purchased (100,000 )
Payments of cash dividends   (344,358 )   (344,357 )
Net cash provided by (used in) financing activities   2,527,671     (301,625 )
 
Net increase (decrease) in cash and cash equivalents (393,510 ) 47,935
 
Cash and cash equivalents at beginning of period   1,871,452     1,698,936  
 
Cash and cash equivalents at end of period $ 1,477,942   $ 1,746,871  
 
SUPPLEMENTAL DISCLOSURES:
Cash paid during the period for:
Interest $ 414,749 $ 421,672
Taxes $ 236,436 $ 469,569
 
OTHER NONCASH TRANSACTIONS
Real estate acquired through foreclosure $ 27,404 $ 41,171
Internally financed sales of other real estate owned $ $
 

Contacts

Pinnacle Bancshares, Inc.
Joe B. Adams, III
Chief Financial
Officer
(205) 221-8866

leverton

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