Pinnacle Bancshares Announces Results for First Quarter Ended March 31, 2022

About this update from Pinnacle Bancshares, Inc.

Robert B. Nolen, Jr., President and Chief Executive Officer of Pinnacle Bancshares, Inc. (OTCBB: PCLB), today announced Pinnacle’s results of operations for the first quarter ended March 31, 2022: For the three months ended March 31, 2022, Pinnacle reported net income of $1,111,000, compared to $907,000 for the three months ended March 31, 2021. Net interest income after the provision for loan losses for the three months ended March 31, 2022, was $2,735,000, compared with $2,379,000 in the same period last year. Included in net interest income for the three months ended March 31, 2022 are Paycheck Protection Program (“PPP”) amortized loan fees of approximately $120,000 as compared to $141,000 for the three months ended March 31, 2021. For the three months ended March 31, 2022, basic and diluted earnings per share were each $1.14. For the same period in 2021 basic and diluted earnings per share were each $0.93. For the three months ended March 31, 2022, return on average assets was 1.29%, compared to 1.26% in the comparable 2021 period. The Company’s net interest margin was 4.06% for the three months March 31, 2022, compared to 3.61% for the three months ended March 31, 2021. At March 31, 2022, Pinnacle’s allowance for loan losses as a percent of total loans was 2.05%, compared to 2.02% at December 31, 2021. Excluding PPP loans of $2.2 million dollars and $4.3 million dollars, the allowance for loan losses as a percent of total loans as of March 31, 2022 and December 31, 2021, was both 2.09%. Nonperforming assets were $11,000 at March 31, 2022, compared to $30,000 at December 31, 2021. The ratio of nonperforming assets to total loans was .01% at March 31, 2022, and .01% at December 31, 2021. Pinnacle was classified as “well capitalized” at March 31, 2022. All capital ratios are significantly higher than the requirements for a well-capitalized institution. Dividends of $.25 per share were paid to shareholders during the first quarter of 2022 and $.22 per share during the first quarter 2021. Impact of COVID-19 on Our Business As a result of the spread of the COVID-19 coronavirus, economic uncertainties have arisen which are likely to negatively impact the Company. The extent of COVID-19’s impact on the Company’s operational and financial performance will depend on certain developments, including the duration and spread of the outbreak, the virus’ impact on the Company’s customers, employees and vendors, and vaccination supply and delivery. At this point, the extent to which COVID-19 may impact the Company’s financial condition or results of operations remains uncertain. Effects of Inflation We do not believe that inflation has had a material effect on our results of operations for the three-month period ended March 31, 2022 and March 31, 2021; however, our business could be affected by inflation in the future which we plan to mitigate through a combination of pricing actions and operating efficiencies, although these actions could have an adverse impact on demand. 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. AND SUBSIDIARY   UNAUDITED FINANCIAL HIGHLIGHTS       Three Months Ended March 31,     2022   2021 Net Income   $ 1,110,760     $ 907,000   Weighted average basic shares outstanding     970,791       973,505   Weighted average diluted shares outstanding     970,791       973,505   Dividend per share   $ .25     $ .22   Provision for loan losses   $ -     $ -   Basic and diluted earnings per share   $ 1.14     $ 0.93   Performance Ratios: (annualized)             Return on average assets     1.29 %     1.26 % Return on average equity     12.96 %     11.90 % Interest rate spread     4.01 %     3.51 % Net interest margin     4.06 %     3.61 % Operating cost to assets     2.06 %     2.33 %                         (Audited)     March 31, 2022   December 31, 2021 Total assets   $ 349,351,000     $ 339,710,000   Loans receivable, net   $ 120,432,000     $ 122,659,000   Deposits   $ 320,414,000     $ 298,693,000   Brokered CD’s included in deposits   $ 19,944,000     $ 24,937,000   Total stockholders’ equity   $ 23,851,000     $ 35,659,000   Weighted average book value per share (excluding OCI)   $ 36.04     $ 35.15   Total average stockholders' equity to asset ratio     9.92 %     10.19 % Asset Quality Ratios:             Nonperforming loans as a percent of total loans     .01 %     .01 % Nonperforming assets as a percent of total loans     .01 %     .01 % Allowance for loan losses as a percent of total loans     2.05 %     2.02 % Allowance for loan losses as a percent of nonperforming loans     22936.36 %     8460.00 %   PINNACLE BANCSHARES, INC. AND SUBSIDIARY   CONDENSED CONSOLIDATED STATEMENTS OF CONDITION     (Unaudited)   (Audited)   March 31,   December 31,   2022   2021 Assets           Cash and cash equivalents $ 2,069,123     $ 1,730,327   Interest bearing deposits in banks   17,111,285       11,146,497   Securities available for sale   185,344,095       183,516,514   Restricted equity securities   773,600       741,600               Loans   122,954,984       125,196,462   Less allowance for loan losses   2,522,536       2,537,948   Loans, net   120,432,448       122,658,514               Premises and equipment, net   6,929,559       7,015,537   Operating right-of-use lease assets   469,697       493,627   Goodwill   306,488       306,488   Bank owned life insurance   9,918,414       9,822,441   Accrued interest receivable   1,458,577       1,917,598   Other assets   4,537,826       361,228               Total assets $ 349,351,112     $ 339,710,371               Liabilities and Stockholders’ Equity           Deposits:           Noninterest-bearing $ 91,773,265     $ 88,430,320   Interest-bearing   228,640,848       210,262,213   Total deposits   320,414,113       298,692,533               Subordinated debentures   3,093,000       3,093,000   Accrued interest payable   92,745       77,843   Operating lease liabilities   469,697       493,627   Other liabilities   1,430,708       1,694,225   Total liabilities   325,500,263       304,051,228               Stockholders’ equity           Common stock, $.01 par value, 2,400,000 shares authorized;           1,872,313 shares issued; 970,791 shares outstanding   18,723       18,723   Additional paid-in capital   8,923,223       8,923,223   Treasury stock, at cost (901,522 shares)   (13,533,621 )     (13,533,621 ) Retained earnings   39,578,402       38,710,339   Accumulated other comprehensive income (loss), net of tax   (11,135,878 )     1,540,479   Total stockholders’ equity   23,850,849       35,659,143               Total liabilities and stockholders’ equity $ 349,351,112     $ 339,710,371     PINNACLE BANCSHARES, INC. AND SUBSIDIARY   UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME Three Months Ended March 31, 2022 and 2021     2022   2021 Interest income           Loans, including fees $ 1,654,949   $ 1,538,243 Taxable securities   1,179,914       912,113   Nontaxable securities   34,384       58,493   Other interest   10,321       5,632   Total interest income   2,879,568       2,514,481               Interest expense           Deposits   106,235       97,172   Subordinated debentures   38,600       38,500   Total interest expense   144,835       135,672               Net interest income   2,734,733       2,378,809   Provision for loan losses   -       -   Net interest income after provision for loan losses   2,734,733       2,378,809               Other income           Fees and service charges on deposit accounts   357,833       346,188   Servicing fee income, net   886       1,059   Bank owned life insurance   95,973       97,967   Mortgage fee income   14,361       2,487   Total other income   469,053       447,701               Other expenses           Salaries and employee benefits   1,025,583       958,973   Occupancy expenses   229,622       222,144   Marketing and professional expenses   64,901       64,637   Other operating expenses   461,841       432,901   Total other expenses   1,781,947       1,678,655               Income before income taxes   1,421,839       1,147,855               Income tax expense   311,079       240,903               Net income $ 1,110,760     $ 906,952               Basic and diluted earnings per share $ 1.14     $ 0.93               Cash dividends per share $ 0.25     $ 0.22   Weighted-average basic and diluted shares outstanding   970,791       973,505     PINNACLE BANCSHARES, INC. AND SUBSIDIARY   UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY Three Months Ended March 31, 2022 and 2021                               Accumulated                   Additional               Other   Total   Common Stock   Paid-in   Treasury   Retained   Comprehensive   Stockholders’   Shares   Par Value   Capital   Stock   Earnings   Income (Loss)   Equity                                         Balance, December 31, 2012 1,872,313   $ 18,723   $ 8,923,223   $ (13,441,345 )   $ 34,874,072     $ 3,957,193     $ 34,331,866   Net income -       -       -       -       906,952       -       906,952   Cash dividends declared,                                       $0.22 per share -       -       -       -       (214,171 )     -       (214,171 ) Other comprehensive loss -       -       -       -       -       (2,924,470 )     (2,924,470 ) Balance, March 31, 2021 1,872,313     $ 18,723     $ 8,923,223     $ (13,441,345 )   $ 35,566,853     $ 1,032,723     $ 32,100,177                                           Balance, December 31, 2021 1,872,313     $ 18,723     $ 8,923,223     $ (13,533,621 )   $ 38,710,339     $ 1,540,479     $ 35,659,143   Net income -       -       -       -       1,110,760       -       1,110,760   Cash dividends declared,                                       $0.25 per share -       -       -       -       (242,697 )     -       (242,697 ) Other comprehensive loss -       -       -       -       -       (12,676,357 )     (12,676,357 ) Balance, March 31, 2022 1,872,313     $ 18,723     $ 8,923,223     $ (13,533,621 )   $ 39,578,402     $ (11,135,878 )   $ 23,850,849     PINNACLE BANCSHARES, INC. AND SUBSIDIARY   UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Three Months Ended March 31, 2022 and 2021         2022   2021 OPERATING ACTIVITIES             Net income   $ 1,110,760     $ 906,952   Adjustments to reconcile net income to net cash             provided by operating activities:             Depreciation     115,917       103,599   Net amortization of securities     71,700       81,760   Bank owned life insurance     (95,973 )     (97,967 ) Decrease in accrued interest receivable     459,021       307,664   Increase (decrease) in accrued interest payable     14,902       (22,632 ) Net other operating activities     265,363       539,307   Net cash provided by operating activities     1,941,690       1,818,683   INVESTING ACTIVITIES             Net (increase) decrease in loans     2,226,066       (10,896,412 ) Net increase in interest-bearing deposits in banks     (5,964,788 )     (10,902,836 ) Purchase of securities available for sale     (20,435,341 )     (19,626,046 ) Proceeds from maturing or callable securities available for sale     1,154,225       6,103,652   Net (purchase) redemption of restricted equity securities     (32,000 )     69,500   Purchase of premises and equipment     (29,939 )     (469,528 ) Net cash used in investing activities     (23,081,777 )     (35,721,670 )               FINANCING ACTIVITIES             Net increase in deposits     21,721,580       34,077,734   Payments of cash dividends     (242,697 )     (214,171 ) Net cash provided by financing activities     21,478,883       33,863,563                 Net increase (decrease) in cash and cash equivalents     338,796       (39,424 )               Cash and cash equivalents at beginning of year     1,730,327       2,080,667                 Cash and cash equivalents at end of year   $ 2,069,123     $ 2,041,243                 SUPPLEMENTAL DISCLOSURE             Cash paid during the year for:             Interest   $ 129,933     $ 158,304   Taxes   $ -     $ -   OTHER NONCASH TRANSACTIONS             Real estate acquired through foreclosure   $ -     $ -     View source version on businesswire.com: https://www.businesswire.com/news/home/20220427006107/en/

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