Pinnacle Bancshares Announces Results for Third Quarter Ended September 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 Pinnacle’s third quarter results of operations. For the three months ended September 30, 2024, Pinnacle’s basic/diluted earnings per share was $1.16 as compared to $1.29 for the three months ended September 30, 2023. Net income for the three months ended September 30, 2024 was $1,057,000 as compared to $1,174,000 for the three months ended September 30, 2023 and $981,000 for the three months ended December 31, 2023. For the nine months ended September 30, 2024, Pinnacle’s basic/diluted earnings per share was $3.33 as compared to $3.85 for the nine months ended September 30, 2023. Net income for the nine months ended September 30, 2024 was $3,027,000 as compared to $3,499,000 for the nine months ended September 30, 2023. For the three and nine months ended September 30, 2024, return on average assets was 1.20%, and 1.17%, respectively, compared to 1.40% and 1.39%, respectively, in the comparable 2023 period. Pinnacle’s net interest margin was 3.24% and 3.18% for the three and nine months ended September 30, 2024, respectively, compared to 3.25% and 3.37% for the three and nine months ended September 30, 2023, respectively. At September 30, 2024, Pinnacle’s allowance for loan losses as a percent of total loans was 1.84%, compared to 1.96% at December 31, 2023. There were no nonperforming assets at September 30, 2024 as well as at December 31, 2023. Pinnacle Bank was classified as “well capitalized” at September 30, 2024. All capital ratios are higher than the requirements for a well-capitalized institution. As of September 30, 2024, the Bank’s common equity Tier 1 capital and Tier 1 risk-based capital ratios were each 18.78%. As of September 30, 2024, its total capital ratio was 19.90%, and its Tier 1 leverage ratio was 11.52%. Dividends of $.27 and $.81 per share were paid to shareholders during the three and nine months ended for both September 30, 2024 and September 30, 2023. Management believes that the Company has adequate liquidity through its low loan to deposit ratio at September 30, 2024, as well as available funding from outside sources. Our net funding availability, as a percentage of our franchise funding, is 105.48% 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 September 30, 2024 increased $3.3 million, or 1%, as compared to December 31, 2023. Effects of Inflation Inflation caused a substantial rise in interest rates during 2022 and 2023 which has had a negative effect in the securities market. As a result of the increase in interest rates since 2022, the Company has recorded an accumulated other comprehensive loss on securities available for sale of approximately $21.8 million as of September 30, 2024 as compared to recording other comprehensive loss in the amount of $26.7 million as of December 31, 2023. Although these unrealized losses recorded as of September 30, 2024 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,       2024       2023   Net income   $ 1,057,000     $ 1,174,000   Basic and diluted earnings per share   $ 1.16     $ 1.29             Performance ratios (annualized):         Return on average assets     1.20 %     1.40 % Return on average equity (excluding OCI)     10.32 %     12.30 % Interest rate spread     2.68 %     2.84 % Net interest margin     3.24 %     3.25 % Operating cost to assets     2.34 %     2.24 %           Weighted average basic and diluted shares outstanding     908,508       909,534   Dividends per share   $ 0.27     $ 0.27   Provision for loan losses   $ -     $ -             Nine Months Ended September 30,       2024       2023   Net income   $ 3,027,000     $ 3,499,000   Basic and diluted earnings per share   $ 3.33     $ 3.85             Performance ratios (annualized):         Return on average assets     1.17 %     1.39 % Return on average equity (excluding OCI)     10.00 %     12.52 % Interest rate spread     2.64 %     3.07 % Net interest margin     3.18 %     3.37 % Operating cost to assets     2.37 %     2.29 %           Weighted average basic and diluted shares outstanding     909,127       909,534   Dividends per share   $ 0.81     $ 0.81   Provision for loan losses   $ -     $ -           (Audited)     September 30, 2024   December 31, 2023 Total assets   $ 349,193,000     $ 342,578,000   Loans receivable, net   $ 128,862,000     $ 122,973,000   Deposits   $ 314,702,000     $ 311,339,000   Brokered CD’s included in deposits   $ 14,895,000     $ 11,907,000   Total stockholders’ equity   $ 19,951,000     $ 12,787,000   Book value per share   $ 21.97     $ 14.06   Book value per share (excluding OCI)   $ 45.56     $ 43.02   Average Stockholders’ equity to assets ratio (excluding OCI)     11.67 %     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     1.84 %     1.96 %           FINANCIAL INFORMATION   PINNACLE BANCSHARES, INC. CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION     (Unaudited)   (Audited)   September 30,   December 31,     2024       2023           Assets       Cash and cash equivalents $ 2,285,483     $ 2,190,793   Interest bearing deposits in banks   14,162,953       19,518,942   Securities available for sale   173,332,274       165,520,025   Restricted equity securities   954,300       836,200           Loans   131,279,465       125,433,112   Less Allowance for loan losses   2,417,390       2,459,372   Loans, net   128,862,075       122,973,740           Premises and equipment, net   8,319,522       8,421,289   Right-of-use lease assets – operating   270,944       302,171   Goodwill   306,488       306,488   Bank owned life insurance   10,918,511       10,601,839   Accrued interest receivable   1,608,138       2,107,189   Deferred tax assets, net   7,337,873       8,951,799   Other assets   834,435       847,912   Total assets $ 349,192,996     $ 342,578,387           Liabilities and Stockholders’ Equity       Deposits       Noninterest-bearing $ 86,434,945     $ 89,518,619   Interest-bearing   228,267,309     221,820,527   Total deposits   314,702,254       311,339,146           Subordinated debentures   3,093,000       3,093,000   Other borrowings   9,000,000       12,500,000   Accrued interest payable   769,491       1,392,273   Operating lease liabilities   270,944       302,171   Other liabilities   1,406,324       1,165,256   Total liabilities   329,242,013       329,791,846           Stockholders’ equity       Common stock, par value $.01 per share; 2,400,000 authorized; 1,872,313 issued; 908,134 and 909,534 shares outstanding, respectively   18,723       18,723   Additional paid‑in capital   8,923,223       8,923,223   Treasury stock, 964,179 and 962,779 shares at cost, respectively   (15,630,199 )     (15,588,799 ) Retained earnings   48,063,272       45,772,256   Accumulated other comprehensive loss, net (21,424,036 )   (26,338,862 )         Total stockholders’ equity   19,950,983       12,786,541           Total liabilities and stockholders’ equity $ 349,192,996 $ 342,578,387 PINNACLE BANCSHARES, INC.   UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME         Three Months Ended   Nine Months Ended     September 30,   September 30,     2024   2023   2024   2023   Interest income                 Loans, including fees $ 2,198,772   $ 1,941,342   $ 6,361,388   $ 5,524,642   Securities available for sale   1,327,160     1,361,835     3,990,155     4,156,942   Other interest   395,345     235,620     1,044,262     573,914   Total interest income   3,921,277     3,538,797     11,395,805     10,255,498                     Interest expense                 Deposits   811,310     556,599     2,329,581     1,166,228   Borrowings   201,884     148,848     570,949     289,178   Subordinated debentures   39,050     39,050     117,150     117,150   Total interest expense   1,052,244     744,497     3,017,680     1,572,556                     Net interest income   2,869,033     2,794,300     8,378,125     8,682,942   Provision for loan losses   -     -     -     -   Net interest income after provision for loan losses   2,869,033     2,794,300     8,378,125     8,682,942                     Other income                 Fees and service charges on deposit accounts   429,651     503,147     1,278,274     1,255,373   Service fee income, net   -     677     743     2,164   Bank owned life insurance   106,500     97,806     316,672     294,418   Mortgage fee income   1,514     1,345     6,167     12,113   Total other income   537,665     602,975     1,601,856     1,564,068                     Other expense:                 Salaries and employee benefits   1,172,413     1,104,360     3,468,123     3,341,009   Occupancy expense   303,811     215,091     936,914     671,430   Marketing and professional expense   76,575     70,122     223,863     206,713   Other operating expenses   508,549     495,168     1,508,230     1,544,281   Total other expenses   2,061,348     1,884,741     6,137,130     5,763,433                     Income before income taxes   1,345,350     1,512,534     3,842,851     4,483,577                     Income tax expense   288,258     338,607     815,383     984,541                     Net income $ 1,057,092 $ 1,173,927 $ 3,027,468 $ 3,499,036                     Cash dividend per share $ 0.27   $ 0.27   $ 0.81   $ 0.81                     Basic and diluted earnings per share $ 1.16   $ 1.29   $ 3.33   $ 3.85                     Weighted –average basic and diluted shares outstanding   908,508     909,534     909,127     909,534   PINNACLE BANCSHARES, INC.   UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY Nine Months Ended September 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 -     -     -         3,499,036       -       3,499,036   Cash dividends declared ($.81 per share) -     -     -     -       (736,715 )     -       (736,715 ) Other comprehensive loss -     -     -     -       -       (4,650,949 )     (4,650,949 ) Balance September 30, 2023 1,872,313   $ 18,723   $ 8,923,223   $ (15,588,799 )   $ 45,036,693     $ (34,540,552 )   $ 3,849,288                       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 -     -     -         3,027,468       -       3,027,468   Cash dividends declared ($.81 per share) -     -     -     -       (736,452 )     -       (736,452 ) Purchase of treasury stock -     -     -     (41,400 )     -       -       (41,400 ) Other comprehensive income -     -     -     -       -       4,914,826       4,914,826   Balance September 30, 2024 1,872,313   $ 18,723   $ 8,923,223   $ (15,630,199 )   $ 48,063,272     $ (21,424,036 )   $ 19,950,983   PINNACLE BANCSHARES, INC.   UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS     For the Nine Months Ended   September 30,     2024       2023   OPERATING ACTIVITIES:       Net income $ 3,027,468     $ 3,499,036   Adjustments to reconcile net income to net cash provided by operating activities:       Depreciation   393,633       296,162   Net investment amortization expense   147,629       130,812   Net increase in bank owned life insurance   (316,672 )     (294,418 ) Decrease in accrued interest receivable   499,051       540,306   Increase (decrease) in accrued interest payable   (622,782 )     841,497   Net other operating activities   80,801       201,969   Net cash provided by operating activities   3,209,128       5,215,364           INVESTING ACTIVITIES:       Net increase in loans   (5,888,335 )     (3,300,429 ) Net (increase) decrease in interest bearing deposits in other banks   5,355,989       (11,285,255 ) Purchase of securities available for sale   (6,323,402 )     -   Proceeds from maturing, calls, and payments received on securities available for sale   5,066,020       8,295,689   Net purchase of restricted equity securities   (118,100 )     (62,600 ) Purchase of premises and equipment   (291,866 )     (1,725,739 ) Net cash used in investing activities   (2,199,694 )     (8,078,334 )         FINANCING ACTIVITIES:       Net increase (decrease) in deposits   3,363,108       (8,904,782 ) Proceeds from other borrowings   16,500,000       16,100,000   Repayments of other borrowings   (20,000,000 )     (3,600,000 ) Purchase of treasury stock   (41,400 )     -   Payments of cash dividends   (736,452 )     (736,715 ) Net cash provided by (used in) financing activities   (914,744 )     2,858,503           Net increase (decrease) in cash and cash equivalents   94,690       (4,467 )         Cash and cash equivalents at beginning of period   2,190,793       1,742,938           Cash and cash equivalents at end of period $ 2,285,483     $ 1,738,471           SUPPLEMENTAL DISCLOSURES:       Cash paid during the period for:       Interest $ 3,640,462     $ 731,059   Taxes $ 700,747     $ 945,928           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/20241030595801/en/

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