Pinnacle Bancshares Announces Results for Second Quarter Ended June 30, 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 second quarter results of operations. For the three months ended June 30, 2022, Pinnacle reported net income of $1,210,000 compared to $984,000 for the three months ended June 30, 2021. For the six months ended June 30, 2022, Pinnacle reported net income of $2,320,000 compared to $1,891,000 for the six months ended June 30, 2021. PPP loan fees recognized during the six months ended June 30, 2022 and 2021 were $190,000 and $191,000, respectively. Net interest income for the three and six months ended June 30, 2022, was $2,832,000 and $5,567,000, respectively, compared with $2,463,000 and $4,842,000 respectively, in the same periods last year. Basic and diluted earnings per share for the three and six months ended June 30, 2022 were $1.25 and $2.39 per share, respectively, compared to $1.01 and $1.94 per share, respectively, for the same periods last year. For the three and six months ended June 30, 2022, return on average assets was 1.39%, and 1.33%, respectively, compared to 1.26% and 1.25%, respectively, in the comparable 2021 period. Pinnacle’s net interest margin was 3.28% for both the three and six months ended June 30, 2022, respectively, compared to 3.41% and 3.48% for the three and six months ended June 30, 2021, respectively. At June 30, 2022, Pinnacle’s allowance for loan losses as a percent of total loans was 2.08%, compared to 2.02% at December 31, 2021. Excluding PPP loans of $376,000 and $4.3 million dollars, the allowance for loan losses as a percent of total loans as of June 30, 2022 and December 31, 2021, was 2.08% and 2.09%, respectively. Nonperforming assets were $60,000 at June 30, 2022, compared to $30,000 at December 31, 2021. The ratio of nonperforming assets to total loans was .05% and .01% at June 30, 2022 and December 31, 2021, respectively. All capital ratios are higher than the requirements for a well-capitalized institution. Dividends of $.25 and $.50 were paid to shareholders during the three and six months ended for June 30, 2022, respectively as compared to $.22 and $.44 per share dividends that were paid to shareholders during the three and six months ended June 30, 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- and six-months period ended June 30, 2022 and June 30, 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. Unaudited Financial Highlights (In Thousands, except share and per share data)       Three Months Ended June 30,       2022       2021   Net income   $ 1,210,000     $ 984,000   Basic and diluted earnings per share   $ 1.25     $ 1.01             Performance ratios (annualized):         Return on average assets     1.39 %     1.26 % Return on average equity (excluding OCI)     13.82 %     12.44 % Interest rate spread     3.19 %     3.31 % Net interest margin     3.28 %     3.41 % Operating cost to assets     2.02 %     2.17 %           Weighted average basic and diluted shares outstanding     969,445       973,505   Dividends per share   $ 0.25     $ 0.22   Provision for loan losses   $ -     $ -             Six Months Ended June 30,       2022       2021   Net income   $ 2,320,000     $ 1,891,000   Basic and diluted earnings per share   $ 2.39     $ 1.94             Performance ratios (annualized):         Return on average assets     1.33 %     1.25 % Return on average equity (excluding OCI)     13.30 %     12.09 % Interest rate spread     3.20 %     3.38 % Net interest margin     3.28 %     3.48 % Operating cost to assets     2.03 %     2.24 %           Weighted average basic and diluted shares outstanding     970,114       973,505   Dividends per share   $ 0.50     $ 0.44   Provision for loan losses   $ -     $ -                     (Audited)     June 30, 2022   December 31, 2021 Total assets   $ 339,113,000     $ 339,710,000   Loans receivable, net (includes $376k and $4.3M PPP loans, respectively)   $ 118,893,000     $ 122,659,000   Deposits   $ 323,835,000     $ 298,693,000   Brokered CD’s included in deposits   $ 11,748,000     $ 24,937,000   Total stockholders’ equity   $ 10,614,000     $ 35,659,000   Book value per share (excluding OCI)   $ 35.28     $ 35.15   Total average stockholders’ equity to assets ratio (excluding OCI)     9.98 %     10.19 %           Asset quality ratios:         Nonperforming loans as a percent of total loans     .05 %     .01 % Nonperforming assets as a percent of total loans     .05 %     .01 % Allowance for loan losses as a percent of total loans     2.08 %     2.02 % Allowance for loan losses as a percent of nonperforming loans     4,210.00 %     8,460.00 %   FINANCIAL INFORMATION   PINNACLE BANCSHARES, INC. CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION     (Unaudited)   (Audited)   June 30,   December 31,     2022       2021           Assets       Cash and cash equivalents $ 2,025,947       1,730,327   Interest bearing deposits in banks   10,943,513       11,146,497   Securities available for sale   177,731,521       183,516,514   Restricted equity securities   773,600       741,600           Loans   121,419,789       125,196,462   Less Allowance for loan losses   2,526,489       2,537,948   Loans, net   118,893,300       122,658,514           Premises and equipment, net   7,001,270       7,015,537   Right-of-use lease assets – operating   445,911       493,627   Goodwill   306,488       306,488   Bank owned life insurance   10,014,387       9,822,441   Accrued interest receivable   1,969,592       1,917,598   Other assets   9,007,475       361,228   Total assets $ 339,113,004       339,710,371           Liabilities and Stockholders’ Equity       Deposits       Noninterest-bearing $ 92,010,352       88,430,320   Interest-bearing   231,824,569     210,262,213   Total deposits   323,834,921       298,692,533           Subordinated debentures   3,093,000       3,093,000   Accrued interest payable   92,702       77,843   Operating lease liabilities   445,911       493,627   Other liabilities   1,032,550       1,694,225   Total liabilities   328,499,084       304,051,228           Stockholders’ equity       Common stock, par value $.01 per share; 2,400,000 authorized; 1,872,313 issued; 909,534 and 970,791 shares outstanding, respectively.   18,723       18,723   Additional paid‑in capital   8,923,223       8,923,223   Treasury stock (962,779 and 901,522 shares, respectively)   (15,588,799 )     (13,533,621 ) Retained earnings   40,545,323       38,710,339   Accumulated other comprehensive income (loss), net of tax   (23,284,550 )     1,540,479           Total stockholders’ equity   10,613,920       35,659,143           Total liabilities and stockholders’ equity $ 339,113,004   $ 339,710,371 PINNACLE BANCSHARES, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME     Three Months Ended   Six Months Ended   June 30,   June 30,     2022     2021     2022     2021 Interest income               Loans, including fees $ 1,590,490   $ 1,526,216   $ 3,245,439   $ 3,064,459 Securities available for sale   1,367,724     1,060,940     2,582,022     2,031,546 Other interest   35,438     5,420     45,759     11,052 Total interest income   2,993,652     2,592,576     5,873,220     5,107,057                 Interest expense               Deposits   125,070     91,510     231,305     188,682 Borrowings and repurchase agreements   -     795     -     795 Subordinated debentures   36,710     37,550     75,310     76,050 Total interest expense   161,780     129,855     306,615     265,527                 Net interest income   2,831,872     2,462,721     5,566,605     4,841,530 Provision for loan losses   -     -     -     - Net interest income after provision for loan losses   2,831,872     2,462,721     5,566,605     4,841,530                 Other income               Fees and service charges on deposit accounts   382,786     353,863     740,619     700,051 Service fee income, net   811     1,001     1,697     2,059 Bank owned life insurance   95,973     97,967     191,946     195,935 Mortgage fee income   12,887     14,987     27,248     17,474 Total other income   492,457     467,818     961,510     915,519                 Other expense:               Salaries and employee benefits   1,026,255     965,842     2,051,838     1,924,815 Occupancy expense   203,934     212,163     433,556     434,307 Marketing and professional expense   63,764     67,527     128,665     132,164 Other operating expenses   467,623     445,711     929,464     878,612 Total other expenses   1,761,576     1,691,243     3,543,523     3,369,898                 Income before income taxes   1,562,753     1,239,296     2,984,592     2,387,151                 Income tax expense   353,134     255,536     664,213     496,439                 Net income $ 1,209,619   $ 983,760   $ 2,320,379   $ 1,890,712                 Cash dividend per share $ 0.25   $ 0.22   $ 0.50   $ 0.44                 Basic and diluted earnings per share $ 1.25   $ 1.01   $ 2.39   $ 1.94                 Weighted –average basic and diluted shares outstanding   969,445     973,505     970,114     973,505 PINNACLE BANCSHARES, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY Six Months Ended June 30, 2022 and 2021                                               Accumulated             Additional           Other   Total   Common Stock   Paid-in   Treasury   Retained   Comprehensive   Stockholders’   Shares   Amount   Capital   Stock   Earnings   Income   Equity Balance December 31, 2020 1,872,313   $ 18,723   $ 8,923,223   $ (13,441,345 )   $ 34,874,072     $ 3,957,193     $ 34,331,866   Net income -     -     -     -       1,572,615       -       1,572,615   Cash dividends declared ($.44 per share) -     -     -     -       (428,343 )     -       (428,343 ) Other comprehensive loss -     -     -     -       -       (1,448,820 )     (1,448,820 ) Balance June 30, 2021 1,872,313   $ 18,723   $ 8,923,223   $ (13,441,345 )   $ 36,336,441     $ 2,508,373     $ 34,345,415                       Accumulated             Additional           Other   Total   Common Stock   Paid-in   Treasury   Retained   Comprehensive   Stockholders’   Shares   Amount   Capital   Stock   Earnings   Income (Loss)   Equity 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 -   -   -   -   2,320,379   -   2,320,379 Cash dividends declared ($.50 per share) -   -   -   -   (485,395)   -   (485,395) Purchase of treasury stock -   -   -   (2,055,178)   -   -   (2,055,178) Other comprehensive loss -   -   -   -   -   (24,825,029)   (24,825,029) Balance June 30, 2022 1,872,313   $ 18,723   $ 8,923,223   $ (15,588,799)   $ 40,545,323   $ (23,284,550)   $ 10,613,920 PINNACLE BANCSHARES, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS     For the Six Months Ended   June 30,     2022       2021   OPERATING ACTIVITIES:       Net income $ 2,320,379     $ 1,890,712   Adjustments to reconcile net income to net cash provided by operating activities:       Depreciation   220,219       214,258   Net investment amortization expense   121,027       161,957   Bank owned life insurance   (191,946 )     (195,935 ) Increase in accrued interest receivable   (51,994 )     (241,911 ) Increase (decrease) in accrued interest payable   14,859       (45,535 ) Net other operating activities   (128,162 )     727,798   Net cash provided by operating activities   2,304,382       2,511,344           INVESTING ACTIVITIES:       Net (increase) decrease in loans   3,765,214       (11,483,330 ) Net (increase) decrease in interest bearing deposits in other banks   202,984       (9,562,744 ) Purchase of securities available for sale   (32,299,292 )     (37,014,405 ) Proceeds from maturing, sale and payments received on securities available for sale   3,958,469       10,460,206   Net (purchase) redemption of restricted equity securities   (32,000 )     69,500   Purchase of premises and equipment   (205,952 )     (774,655 ) Net cash used in investing activities   (24,610,577 )     (48,305,428 )         FINANCING ACTIVITIES:       Net increase in deposits   25,142,388       46,112,054   Purchase of treasury stock   (2,055,178 )     -   Payments of cash dividends   (485,395 )     (428,343 ) Net cash provided by financing activities   22,601,815       45,683,711           Net increase (decrease) in cash and cash equivalents   295,620       (110,373 )         Cash and cash equivalents at beginning of period   1,730,327       2,080,667           Cash and cash equivalents at end of period $ 2,025,947     $ 1,970,294           SUPPLEMENTAL DISCLOSURES:       Cash paid during the period for:       Interest $ 291,756     $ 311,062   Taxes $ 677,568     $ 415,000           OTHER NONCASH TRANSACTIONS       Real estate acquired through foreclosure $ -     $ -   Internally financed sales of other real estate owned $ -     $ -     View source version on businesswire.com: https://www.businesswire.com/news/home/20220726006135/en/

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