Pinnacle Bancshares, Inc.OTC: PCLB

Pinnacle Bancshares Announces Results for Third Quarter Ended September 30, 2022

· Issued by Pinnacle Bancshares, Inc. via Business Wire
Watch Pinnacle Bancshares explain itPinnacle Bancshares Inc (PCLB) Q2 2026 Earnings Call · Replay · Jul 23

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 original source (Business Wire)