Pinnacle Bancshares Announces Results for Second Quarter Ended June 30, 2024

About this update from Pinnacle Bancshares, Inc.

Robert B. Nolen, Jr., President and Chief Executive Officer of Pinnacle Bancshares, Inc. (OTCBB: PCLB), today announced the Company’s second quarter results of operations. For the three months ended June 30, 2024, Pinnacle’s basic/diluted earnings per share was $1.11 as compared to $1.26 per share for the three months ended June 30, 2023. Net income for the three months ended June 30, 2024 was $1,007,000 as compared to $1,145,000 for the three months ended June 30, 2023 and $981,000 for the three months ended December 31, 2023. For the six months ended June 30, 2024, Pinnacle’s basic/diluted earnings per share was $2.17 as compared to $2.56 per share for the six months ended June 30, 2023. Net income for the six months ended June 30, 2024 was $1,970,000 as compared to $2,325,000 for the six months ended June 30, 2023. For the three and six months ended June 30, 2024, return on average assets was 1.18%, and 1.15%, respectively, compared to 1.36% and 1.38%, respectively, in the comparable 2023 period. The Company’s net interest margin was 3.22% and 3.15% for the three and six months ended June 30, 2024, respectively, as compared to 3.35% and 3.43% for the three and six months ended June 30, 2023. The Company anticipates that interest expense relating to its funding will continue to increase during the remainder of the year as a result of several factors such as increased deposit exception pricing and increased deposit migration to higher yielding deposit products. At June 30, 2024, the Company’s allowance for loan losses as a percent of total loans was 1.92%, compared to 1.96% at December 31, 2023. There were no nonperforming assets as of June 30, 2024 as well as December 31, 2023. Pinnacle Bank was classified as “well capitalized” at June 30, 2024. All capital ratios are significantly higher than the requirements for a well-capitalized institution. As of June 30, 2024, the Bank’s common equity Tier 1 capital and Tier 1 risk-based capital ratios were each 18.58%. As of June 30, 2024, its total capital ratio was 19.71%, and its Tier 1 leverage ratio was 11.62%. Dividends of $.27 and $.54 per share were paid to shareholders during the three and six months ended for both June 30, 2024 and 2023. Management believes that the Company has sufficient liquidity through its low loan to deposit ratio at June 30, 2024, as well as available funding from outside sources. Our net funding availability, as a percentage of our franchise funding, is 104.46% as compared to our established minimal limit of 25%. In addition, the Bank provides access to additional FDIC insurance coverage for accounts that would otherwise exceed deposit insurance coverage. The Company’s total deposits at June 30, 2024 decreased approximately $1 million, or less than 1%, as compared to December 31, 2023. As mentioned previously, pricing of deposits is anticipated to become more competitive during the remainder of the year, and thus deposits could continue to decrease as they did during the first half of 2024. Effects of Inflation Inflation caused a substantial rise in interest rates during 2023 which has had a negative effect in the securities market. As a result of rising interest rates, the Company recorded an accumulated other comprehensive loss on securities available for sale of approximately $26.9 million as of June 30, 2024 as compared to $26.7 million as of December 31, 2023. Although these unrealized losses recorded as of June 30, 2024 and December 31, 2023 were significant, management does not anticipate these losses to be other than temporary as these unrealized losses do not currently appear related to any credit deterioration within the portfolio but from higher interest rates. In addition, these losses do not impact our regulatory capital ratios. 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,       2024       2023   Net income   $ 1,007,000     $ 1,145,000   Basic and diluted earnings per share   $ 1.11     $ 1.26             Performance ratios (annualized):         Return on average assets     1.18 %     1.36 % Return on average equity (excluding OCI)     9.96 %     12.30 % Interest rate spread     2.69 %     3.04 % Net interest margin     3.22 %     3.35 % Operating cost to assets     2.42 %     2.25 %           Weighted average basic and diluted shares outstanding     909,347       909,534   Dividends per share   $ 0.27     $ 0.27   Provision for loan losses   $ -     $ -             Six Months Ended June 30,       2024       2023   Net income   $ 1,970,000     $ 2,325,000   Basic and diluted earnings per share   $ 2.17     $ 2.56             Performance ratios (annualized):         Return on average assets     1.15 %     1.38 % Return on average equity (excluding OCI)     9.84 %     12.64 % Interest rate spread     2.62 %     3.20 % Net interest margin     3.15 %     3.43 % Operating cost to assets     2.38 %     2.31 %           Weighted average basic and diluted shares outstanding     909,441       909,534   Dividends per share   $ 0.54     $ 0.54   Provision for loan losses   $ -     $ -                     (Audited)     June 30, 2024   December 31, 2023 Total assets   $ 346,463,000     $ 342,578,000   Loans receivable, net   $ 122,713,000     $ 122,973,000   Deposits   $ 310,309,000     $ 311,339,000   Brokered CD’s included in deposits   $ 11,958,000     $ 11,907,000   Total stockholders’ equity   $ 14,074,000     $ 12,787,000   Book value per share   $ 15.49     $ 14.06   Book value per share (excluding OCI)   $ 44.66     $ 43.02   Total average stockholders’ equity to assets ratio (excluding OCI)     11.68 %     11.25 %           Asset quality ratios:         Nonperforming loans as a percent of total loans     .00 %     .00 % Nonperforming assets as a percent of total loans     .00 %     .00 % Allowance for loan losses as a percent of total loans     1.92 %     1.96 %         FINANCIAL INFORMATION   PINNACLE BANCSHARES, INC. CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION       (Unaudited)   (Audited)   June 30,   December 31,     2024       2023           Assets       Cash and cash equivalents $ 1,804,554     $ 2,190,793   Interest bearing deposits in banks   26,909,971       19,518,942   Securities available for sale   162,147,426       165,520,025   Restricted equity securities   954,300       836,200           Loans   125,119,762       125,433,112   Less Allowance for loan losses   2,406,847       2,459,372   Loans, net   122,712,915       122,973,740           Premises and equipment, net   8,451,263       8,421,289   Right-of-use lease assets – operating   281,291       302,171   Goodwill   306,488       306,488   Bank owned life insurance   10,812,011       10,601,839   Accrued interest receivable   2,026,137       2,107,189   Deferred tax assets, net   9,158,960       8,951,799   Other assets   898,016       847,912   Total assets $ 346,463,332     $ 342,578,387           Liabilities and Stockholders’ Equity       Deposits       Noninterest-bearing $ 92,189,466     $ 89,518,619   Interest-bearing   218,119,770     221,820,527   Total deposits   310,309,236       311,339,146           Subordinated debentures   3,093,000       3,093,000   Other borrowings   16,500,000       12,500,000   Accrued interest payable   863,883       1,392,273   Operating lease liabilities   281,291       302,171   Other liabilities   1,342,397       1,165,256   Total liabilities   332,389,807       329,791,846           Stockholders’ equity       Common stock, par value $.01 per share; 2,400,000 authorized; 1,872,313 issued; 908,534 and 909,534 shares outstanding, respectively.   18,723       18,723   Additional paid‑in capital   8,923,223       8,923,223   Treasury stock (963,779 and 962,779 shares, respectively)   (15,619,799 )     (15,588,799 ) Retained earnings   47,251,484       45,772,256   Accumulated other comprehensive loss, net of tax   (26,500,106 )     (26,338,862 )         Total stockholders’ equity   14,073,525       12,786,541           Total liabilities and stockholders’ equity $ 346,463,332 $ 342,578,387                   PINNACLE BANCSHARES, INC.     UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME       Three Months Ended   Six Months Ended   June 30,   June 30,   2024   2023   2024   2023 Interest income                       Loans, including fees $ 2,136,245     $ 1,853,182     $ 4,162,616     $ 3,583,300   Securities available for sale   1,326,707       1,382,618       2,662,995       2,795,107   Other interest   340,093       194,438       648,917       338,294   Total interest income   3,803,045       3,430,238       7,474,528       6,716,701                           Interest expense                       Deposits   757,324       382,578       1,518,271       609,629   Borrowings and repurchase agreements   190,262       138,121       369,065       140,330   Subordinated debentures   39,050       39,050       78,100       78,100   Total interest expense   986,636       559,749       1,965,436       828,059                           Net interest income   2,816,409       2,870,489       5,509,092       5,888,642   Provision for loan losses   -       -       -       -   Net interest income after provision for loan losses   2,816,409       2,870,489       5,509,092       5,888,642                           Other income                       Fees and service charges on deposit accounts   423,780       389,931       848,623       752,226   Service fee income, net   -       716       743       1,487   Bank owned life insurance   106,500       97,806       210,172       196,612   Mortgage fee income   2,522       5,065       4,653       10,768   Total other income   532,802       493,518       1,064,191       961,093                           Other expense:                       Salaries and employee benefits   1,158,295       1,100,851       2,295,710       2,236,649   Occupancy expense   320,432       216,178       633,103       456,339   Marketing and professional expense   72,425       67,772       147,288       136,591   Other operating expenses   519,858       506,441       999,681       1,049,113   Total other expenses   2,071,010       1,891,242       4,075,782       3,878,692                           Income before income taxes   1,278,201       1,472,765       2,497,501       2,971,043                           Income tax expense   271,395       327,829       527,125       645,934                           Net income $ 1,006,806     $ 1,144,936     $ 1,970,376     $ 2,325,109                           Cash dividend per share $ 0.27     $ 0.27     $ 0.54     $ 0.54                           Basic and diluted earnings per share $ 1.11     $ 1.26     $ 2.17     $ 2.56                           Weighted –average basic and diluted shares outstanding 909,347     909,534     909,441     909,534           PINNACLE BANCSHARES, INC.     UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY Six Months Ended June 30, 2024 and 2023                         Accumulated             Additional           Other   Total   Common Stock   Paid-in   Treasury   Retained   Comprehensive   Stockholders’   Shares   Amount   Capital   Stock   Earnings   Loss   Equity Balance December 31, 2022 1,872,313   $ 18,723   $ 8,923,223   $ (15,588,799 )   $ 42,274,372     $ (29,889,603 )   $ 5,737,916   Net income -     -     -     -       2,325,109       -       2,325,109   Cash dividends declared ($.54 per share) -     -     -     -       (491,147 )     -       (491,147 ) Other comprehensive income -     -     -     -       -       2,413,976       2,413,976   Balance June 30, 2023 1,872,313   $ 18,723   $ 8,923,223   $ (15,588,799 )   $ 44,108,334     $ (27,465,627 )   $ 9,985,854                       Accumulated             Additional           Other   Total   Common Stock   Paid-in   Treasury   Retained   Comprehensive   Stockholders’   Shares   Amount   Capital   Stock   Earnings   Loss   Equity Balance December 31, 2023 1,872,313   $ 18,723   $ 8,923,223   $ (15,588,799 )   $ 45,772,256     $ (26,338,862 )   $ 12,786,541   Net income -     -     -     -       1,970,376       -       1,970,376   Cash dividends declared ($.54 per share) -     -     -     -       (491,148 )     -       (491,148 ) Purchase of treasury stock -     -     -     (31,000 )     -       -       (31,000 ) Other comprehensive loss -     -     -     -       -       (161,244 )     (161,244 ) Balance June 30, 2024 1,872,313   $ 18,723   $ 8,923,223   $ (15,619,799 )   $ 47,251,484     $ (26,500,106 )   $ 14,073,525           PINNACLE BANCSHARES, INC.     UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS       For the Six Months Ended   June 30,     2024       2023   OPERATING ACTIVITIES:       Net income $ 1,970,376     $ 2,325,109   Adjustments to reconcile net income to net cash provided by operating activities:       Depreciation   261,892       199,301   Net investment amortization expense   101,905       85,736   Bank owned life insurance   (210,172 )     (196,612 ) Decrease in accrued interest receivable   81,052       71,241   (Increase) decrease in accrued interest payable   (528,390 )     363,105   Net other operating activities   58,211       (9,928 ) Net cash provided by operating activities   1,734,874       2,837,952           INVESTING ACTIVITIES:       Net (increase) decrease in loans   260,825       (241,853 ) Net increase in interest bearing deposits in other banks   (7,391,029 )     (7,237,446 ) Proceeds from maturing, sale and payments received on securities available for sale   2,971,115       6,094,227   Net (purchase) redemption of restricted equity securities   (118,100 )     3,800   Purchase of premises and equipment   (291,866 )     (1,244,094 ) Net cash used in investing activities   (4,569,055 )     (2,625,366 )         FINANCING ACTIVITIES:       Net decrease in deposits   (1,029,910 )     (11,720,282 ) Proceeds from other borrowings   16,500,000       16,100,000   Repayments of other borrowings   (12,500,000 )     (3,600,000 ) Purchase of treasury stock   (31,000 )     -   Payments of cash dividends   (491,148 )     (491,147 ) Net cash provided by financing activities   2,477,942       288,571           Net increase (decrease) in cash and cash equivalents   (386,239 )     501,157           Cash and cash equivalents at beginning of period   2,190,793       1,742,938           Cash and cash equivalents at end of period $ 1,804,554     $ 2,244,095           SUPPLEMENTAL DISCLOSURES:       Cash paid during the period for:       Interest $ 2,493,826     $ 464,954   Taxes $ 387,747     $ 604,928           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/20240730177646/en/

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