Pinnacle Bancshares Announces Results for Third Quarter Ended September 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 third quarter results of operations. For the three months ended September 30, 2022, Pinnacle reported net income of $1,168,000 compared to $1,829,000 for the three months ended September 30, 2021. For the nine months ended September 30, 2022, Pinnacle reported net income of $3,488,000 compared to $3,720,000 for the nine months ended September 30, 2021. Included in net interest income for each of the three months ended September 30, 2022 and 2021 are Paycheck Protection Program (“PPP”) amortized loan fees of approximately $36,000 and $240,000, respectively. Included in net interest income for each of the nine months ended September 30, 2022 and 2021 are PPP amortized loan fees of approximately $226,000 and $431,000, respectively. Bank-owned life insurance income, which is included in non-interest income, was approximately $96,000 and $288,000 for the three months and nine months ended September 30, 2022 as compared to $820,000 and $1,015,000 for the three months and nine months ended September 30, 2021. Gain on sale of available for sales of securities in the amount of approximately $227,000 was recorded during both the three and nine months ended September 30, 2021. There were no gains on sale of available for sales of securities recorded during the three months and nine months ended September 30, 2022. Basic and diluted earnings per share for the three and nine months ended September 30, 2022 were $1.28 and $3.67 per share, respectively, compared to $1.88 and $3.82 per share, respectively, for the same periods last year. For the three and nine months ended September 30, 2022, return on average assets was 1.42%, and 1.37%, respectively, compared to 2.19% and 1.59%, respectively, in the comparable 2021 period. Pinnacle’s net interest margin was 3.37% and 3.31% for the three and nine months ended September 30, 2022, respectively, compared to 3.52% and 3.49% for the three and nine months ended September 30, 2021, respectively. At September 30, 2022, Pinnacle’s allowance for loan losses as a percent of total loans was 2.12%, compared to 2.02% at December 31, 2021. Nonperforming assets were $46,000 at September 30, 2022, compared to $30,000 at December 31, 2021. The ratio of nonperforming assets to total loans was .04% and .01% at September 30, 2022 and December 31, 2021, respectively. All capital ratios are higher than the requirements for a well-capitalized institution. Dividends of $.25 and $.75 per share were paid to shareholders during the three and nine months ended for September 30, 2022 as compared to $.22 and $.66 per share paid during the three and nine months ended for September 30, 2021. Effects of Inflation Inflation has caused a substantial rise in interest rates during 2022 which has had a negative effect in the securities market. As a result of rising interest rates, the Company has recorded an accumulated other comprehensive loss on securities available for sale of approximately $30.4 million as compared to recording other comprehensive income in the amount of $1.5 million as of December 31, 2022. Thus, this has caused the decrease in total equity during 2022 even though net earnings has been strong. Although these unrealized losses recorded as of September 30, 2022 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. 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,       2022       2021   Net income   $ 1,168,000     $ 1,829,000   Basic and diluted earnings per share   $ 1.28     $ 1.88             Performance ratios (annualized):         Return on average assets     1.42 %     2.19 % Return on average equity     14.18 %     22.21 % Interest rate spread     3.26 %     3.42 % Net interest margin     3.37 %     3.52 % Operating cost to assets     2.23 %     2.42 %           Weighted average basic and diluted shares outstanding     909,534       971,234   Dividends per share   $ 0.25     $ 0.22   Provision for loan losses   $ -     $ -             Nine Months Ended September 30,       2022       2021   Net income   $ 3,488,000     $ 3,720,000   Basic and diluted earnings per share   $ 3.67     $ 3.82             Performance ratios (annualized):         Return on average assets     1.37 %     1.59 % Return on average equity     13.36 %     15.58 % Interest rate spread     3.22 %     3.40 % Net interest margin     3.31 %     3.49 % Operating cost to assets     2.11 %     2.30 %           Weighted average basic and diluted shares outstanding     949,699       972,740   Dividends per share   $ 0.75     $ 0.66   Provision for loan losses   $ -     $ -           (Audited)     September 30, 2022   December 31, 2021 Total assets   $ 326,478,000     $ 339,710,000   Loans receivable, net   $ 114,443,000     $ 122,659,000   Deposits   $ 317,216,000     $ 298,693,000   Brokered CD’s included in deposits   $ 11,752,000     $ 24,937,000   Total stockholders’ equity   $ 4,375,000     $ 35,659,000   Book value per share (excluding OCI)   $ 38.30     $ 35.15   Average Stockholders’ equity to assets ratio (excluding OCI)     10.22 %     10.19 %           Asset quality ratios:         Nonperforming loans as a percent of total loans     .04 %     .01 % Nonperforming assets as a percent of total loans     .04 %     .01 % Allowance for loan losses as a percent of total loans     2.12 %     2.02 % Allowance for loan losses as a percent of nonperforming loans     5,631.82 %     8,460.00 % FINANCIAL INFORMATION   PINNACLE BANCSHARES, INC. CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION     (Unaudited)   (Audited)   September 30,   December 31,     2022       2021           Assets       Cash and cash equivalents $ 1,909,869       1,730,327   Interest bearing deposits in banks   7,040,876       11,146,497   Securities available for sale   170,890,286       183,516,514   Restricted equity securities   773,600       741,600           Loans   116,921,751       125,196,462   Less Allowance for loan losses   2,478,124       2,537,948   Loans, net   114,443,627       122,658,514           Premises and equipment, net   7,044,058       7,015,537   Right-of-use lease assets – operating   422,266       493,627   Goodwill   306,488       306,488   Bank owned life insurance   10,110,360       9,822,441   Accrued interest receivable   1,523,989       1,917,598   Other assets   12,012,997       361,228   Total assets $ 326,478,416       339,710,371           Liabilities and Stockholders’ Equity       Deposits       Noninterest-bearing $ 92,922,609       88,430,320   Interest-bearing   224,292,897     210,262,213   Total deposits   317,215,506       298,692,533           Subordinated debentures   3,093,000       3,093,000   Accrued interest payable   127,749       77,843   Operating lease liabilities   422,266       493,627   Other liabilities   1,244,783       1,694,225   Total liabilities   322,103,304       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   41,485,970       38,710,339   Accumulated other comprehensive income (loss), net of tax   (30,464,005 )     1,540,479           Total stockholders’ equity   4,375,112       35,659,143           Total liabilities and stockholders’ equity $ 326,478,416 $  339,710,371  PINNACLE BANCSHARES, INC.   UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME           Three Months Ended   Nine Months Ended   September 30,   September 30,     2022     2021     2022     2021 Interest income               Loans, including fees $ 1,600,000   $ 1,718,950   $ 4,845,439   $ 4,783,409 Securities available for sale   1,405,805     1,113,658     3,987,827     3,145,204 Other interest   52,659     15,752     98,418     26,804 Total interest income   3,058,464     2,848,360     8,931,684     7,955,417                 Interest expense               Deposits   155,403     94,842     386,708     283,524 Borrowings   810     -     810     795 Subordinated debentures   38,600     37,550     113,910     113,600 Total interest expense   194,813     132,392     501,428     397,919                 Net interest income   2,863,651     2,715,968     8,430,256     7,557,498 Provision for loan losses   -     -     -     - Net interest income after provision for loan losses   2,863,651     2,715,968     8,430,256     7,557,498                 Other income               Fees and service charges on deposit accounts   379,232     393,121     1,119,851     1,093,172 Service fee income, net   837     992     2,534     3,051 Bank owned life insurance   95,973     819,545     287,919     1,015,480 Mortgage fee income   509     12,164     27,757     29,638 Net gain on securities available for sale   -     227,238     -     227,238 Total other income   476,551     1,453,060     1,438,061     2,368,579                 Other expense:               Salaries and employee benefits   1,017,682     1,072,154     3,069,520     2,996,969 Occupancy expense   226,707     229,893     660,263     664,200 Marketing and professional expense   72,903     65,957     201,568     198,121 Other operating expenses   518,116     651,548     1,447,580     1,530,160 Total other expenses   1,835,408     2,019,552     5,378,931     5,389,450                 Income before income taxes   1,504,794     2,149,476     4,489,386     4,536,627                 Income tax expense   336,763     320,111     1,000,976     816,550                 Net income $ 1,168,031   $ 1,829,365   $ 3,488,410   $ 3,720,077                 Cash dividend per share $ 0.25   $ 0.22   $ 0.75   $ 0.66                 Basic and diluted earnings per share $ 1.28   $ 1.88   $ 3.67   $ 3.82                 Weighted –average basic and diluted shares outstanding   909,534     971,234     949,699     997,740 PINNACLE BANCSHARES, INC.   UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY Nine Months Ended September 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, 2010 1,872,313   $ 18,723   $ 8,923,223   $ (13,441,345 )   $ 34,874,072     $ 3,957,193     $ 34,331,866   Net income -     -     -         3,720,077       -       3,720,077   Cash dividends declared ($.66 per share) -     -     -     -       (641,916 )     -       (641,916 ) Purchase of treasury stock -     -     -     (92,276 )     -       -       (92,276 ) Other comprehensive loss -     -     -     -       -       (1,512,090 )     (1,512,090 ) Balance September 30, 2021 1,872,313   $ 18,723   $ 8,923,223   $ (13,533,621 )   $ 37,952,233     $ 2,445,103     $ 35,805,661                         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 -     -     -         3,488,410       -       3,488,410   Cash dividends declared ($.75 per share) -     -     -     -       (712,779 )     -       (712,779 ) Purchase of treasury stock -     -     -     (2,055,178 )     -       -       (2,055,178 ) Other comprehensive loss -     -     -     -       -       (32,004,484 )     (32,004,484 ) Balance September 30, 2022 1,872,313   $ 18,723   $ 8,923,223   $ (15,588,799 )   $ 41,485,970     $ (30,464,005 )   $ 4,375,112   PINNACLE BANCSHARES, INC,   UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS       For the Nine Months Ended   September 30,     2022       2021   OPERATING ACTIVITIES:       Net income $ 3,488,410     $ 3,720,077   Adjustments to reconcile net income to net cash provided by operating activities:       Depreciation   322,633       332,075   Net investment amortization expense   163,944       239,487   Net (increase) decrease in bank owned life insurance   (287,919 )     565,062   Gain on sale of securities available for sale   -       (227,238 ) Decrease in accrued interest receivable   393,609       90,082   Increase (decrease) in accrued interest payable   49,906       (55,607 ) Net other operating activities   (197,719 )     915,738   Net cash provided by operating activities   3,932,864       5,579,676           INVESTING ACTIVITIES:       Net (increase) decrease in loans   8,214,887       (14,698,376 ) Net (increase) decrease in interest bearing deposits in other banks   4,105,621       (1,537,109 ) Purchase of securities available for sale   (40,160,098 )     (68,497,440 ) Proceeds from sale of securities available for sale   -       7,752,740   Proceeds from maturing, calls, and payments received on securities available for sale   8,714,406       12,328,077   Net (purchase) redemption of restricted equity securities   (32,000 )     69,500   Purchase of premises and equipment   (351,154 )     (841,123 ) Net cash used in investing activities   (19,508,338 )     (65,423,731 )         FINANCING ACTIVITIES:       Net increase in deposits   18,522,973       60,601,325   Purchase of treasury stock   (2,055,178 )     (92,276 ) Payments of cash dividends   (712,779 )     (641,916 ) Net cash provided by financing activities   15,755,016       59,867,133           Net increase in cash and cash equivalents   179,542       23,078           Cash and cash equivalents at beginning of period   1,730,327       2,080,667           Cash and cash equivalents at end of period $ 1,909,869     $ 2,103,745           SUPPLEMENTAL DISCLOSURES:       Cash paid during the period for:       Interest $ 451,522     $ 453,526   Taxes $ 1,008,568     $ 713,000           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/20221026006054/en/

View stock analysis, news, and events for Pinnacle Bancshares, Inc.