Robert B. Nolen, Jr., President and Chief Executive Officer of Pinnacle Bancshares, Inc. (OTCBB: PCLB), today announced Pinnacle’s results of operations for the fourth quarter and year ended December 31, 2022:
- For the year ended December 31, 2022, net income was $4,504,000, which resulted in basic/diluted earnings per share to be $4.79. Net income for the year ended December 31, 2021 was $4,692,00, which resulted in basic/diluted earnings per share of $4.83. Excluding significant unusual items, net income for the years-ended December 31, 2022 and 2021, was approximately $4,327,000 and $3,879,000, respectively and basic/diluted earnings per share was $4.61 and $3.99 for 2022 and 2021, respectively.
- For the three months ended December 31, 2022, net income was $1,016,000 which resulted in basic/diluted earnings per share to be $1.12. Net income for the three months ended December 31, 2021 was $972,000, which resulted in basic/diluted earnings per share of $1.00 per share. Excluding significant unusual items, net income for the three months ended December 31, 2022 and 2021, was approximately $1,016,000 and $791,000, respectively and basic/diluted earnings per share was $1.12 and $.82.
- Provision for loan losses was $125,000 for the three months and year ended for December 31, 2022 and $200,000 for the three months and year ended for 2021.
Company’s net interest margin was 3.48% and 3.35%, respectively for the three months and year ended December 31, 2022, respectively, compared to 3.48% and 3.49% for both the three months and year ended December 31, 2021, respectively.
At December 31, 2022, Pinnacle’s allowance for loan losses as a percent of total loans was 2.16%, compared to 2.02% at December 31, 2021. Net charge-offs were $102,000 during 2022 as compared to net recoveries was $45,000 in the prior year. There were no nonperforming assets at December 31, 2022, compared to $130,000 at December 31, 2021. The ratio of nonperforming assets to total loans was .00% at December 31, 2022, compared to .01% at December 31, 2021.
Pinnacle was classified as “well capitalized” at the end of 2022. All capital ratios are significantly higher than the requirements for a well-capitalized institution.
Dividends of $.25 and $1.00 per share were paid to shareholders during the three months and year ended for December 31, 2022, as compared to $.22 and $.88 per share during the three months and year ended December 31, 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 million as compared to recording other comprehensive income in the amount of $1.5 million as of December 31, 2021. 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 December 31, 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 December 31, |
||||||||
2022 |
2021 |
|||||||
Net income |
$ |
1,016,000 |
$ |
972,000 |
||||
Basic and diluted earnings per share |
$ |
1.12 |
$ |
1.00 |
||||
Performance ratios (annualized): |
||||||||
Return on average assets |
1.29 |
% |
1.17 |
% |
||||
Return on average equity |
11.45 |
% |
11.44 |
% |
||||
Interest rate spread |
3.35 |
% |
3.39 |
% |
||||
Net interest margin |
3.48 |
% |
3.48 |
% |
||||
Operating cost to assets |
2.57 |
% |
2.13 |
% |
||||
Weighted average basic and diluted shares outstanding |
909,534 |
970,791 |
||||||
Dividends per share |
$ |
0.25 |
$ |
0.22 |
||||
Provision for loan losses |
$ |
125,000 |
$ |
200,000 |
||||
Years Ended December 31, |
||||||||
2022 |
2021 |
|||||||
Net income |
$ |
4,504,000 |
$ |
4,692,000 |
||||
Basic and diluted earnings per share |
$ |
4.79 |
$ |
4.83 |
||||
Performance ratios (annualized): |
||||||||
Return on average assets |
1.35 |
% |
1.48 |
% |
||||
Return on average equity |
12.88 |
% |
14.49 |
% |
||||
Interest rate spread |
3.25 |
% |
3.40 |
% |
||||
Net interest margin |
3.35 |
% |
3.49 |
% |
||||
Operating cost to assets |
2.22 |
% |
2.26 |
% |
||||
Weighted average basic and diluted shares outstanding |
939,575 |
972,248 |
||||||
Dividends per share |
$ |
1.00 |
$ |
0.88 |
||||
Provision for loan losses |
$ |
125,000 |
$ |
200,000 |
||||
(Audited) |
||||||||
December 31, 2022 |
December 31, 2021 |
|||||||
Total assets |
$ |
332,905,000 |
$ |
339,710,000 |
||||
Loans receivable, net |
$ |
115,956,000 |
$ |
122,659,000 |
||||
Deposits |
$ |
322,260,000 |
$ |
298,693,000 |
||||
Brokered CD’s included in deposits |
$ |
11,756,000 |
$ |
24,937,000 |
||||
Total stockholders’ equity |
$ |
5,738,000 |
$ |
35,659,000 |
||||
Book value per share (excluding OCI) |
$ |
39.17 |
$ |
35.15 |
||||
Average Stockholders’ equity to assets ratio (excluding OCI) |
10.47 |
% |
10.19 |
% |
||||
Asset quality ratios: |
||||||||
Nonperforming loans as a percent of total loans |
.00 |
% |
.01 |
% |
||||
Nonperforming assets as a percent of total loans |
.00 |
% |
.01 |
% |
||||
Allowance for loan losses as a percent of total loans |
2.16 |
% |
2.02 |
% |
||||
FINANCIAL INFORMATION PINNACLE BANCSHARES, INC. CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION |
|||||||
(Unaudited) |
(Audited) |
||||||
December 31, |
December 31, |
||||||
2022 |
2021 |
||||||
Assets |
|||||||
Cash and cash equivalents |
$ |
2,054,034 |
1,730,327 |
||||
Interest bearing deposits in banks |
11,874,886 |
11,146,497 |
|||||
Securities available for sale |
170,580,649 |
183,516,514 |
|||||
Restricted equity securities |
773,600 |
741,600 |
|||||
Loans |
118,516,666 |
125,196,462 |
|||||
Less Allowance for loan losses |
2,561,078 |
2,537,948 |
|||||
Loans, net |
115,955,588 |
122,658,514 |
|||||
Premises and equipment, net |
6,926,632 |
7,015,537 |
|||||
Right-of-use lease assets – operating |
398,364 |
493,627 |
|||||
Goodwill |
306,488 |
306,488 |
|||||
Bank owned life insurance |
10,206,334 |
9,822,441 |
|||||
Accrued interest receivable |
2,070,896 |
1,917,598 |
|||||
Other assets |
11,757,553 |
361,228 |
|||||
Total assets |
$ |
332,905,024 |
339,710,371 |
||||
Liabilities and Stockholders’ Equity |
|||||||
Deposits |
|||||||
Noninterest-bearing |
$ |
94,783,406 |
88,430,320 |
||||
Interest-bearing |
227,476,411 |
210,262,213 |
|||||
Total deposits |
322,259,817 |
298,692,533 |
|||||
Subordinated debentures |
3,093,000 |
3,093,000 |
|||||
Accrued interest payable |
111,652 |
77,843 |
|||||
Operating lease liabilities |
398,364 |
493,627 |
|||||
Other liabilities |
1,304,275 |
1,694,225 |
|||||
Total liabilities |
327,167,108 |
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 |
42,274,372 |
38,710,339 |
|||||
Accumulated other comprehensive income (loss), net of tax |
(29,889,603 |
) |
1,540,479 |
||||
Total stockholders’ equity |
5,737,916 |
35,659,143 |
|||||
Total liabilities and stockholders’ equity |
$ |
332,905,024 |
$ |
339,710,371 |
|||
PINNACLE BANCSHARES, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME |
||||||||||||||||||
Three Months Ended |
Years Ended |
|||||||||||||||||
December 31, |
December 31, |
|||||||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||||
Interest income |
||||||||||||||||||
Loans, including fees |
$ |
1,666,711 |
$ |
1,669,927 |
$ |
6,512,150 |
$ |
6,453,336 |
||||||||||
Securities available for sale |
1,431,684 |
1,187,083 |
5,419,511 |
4,332,287 |
||||||||||||||
Other interest |
72,494 |
4,196 |
170,912 |
31,000 |
||||||||||||||
Total interest income |
3,170,889 |
2,861,206 |
12,102,573 |
10,816,623 |
||||||||||||||
Interest expense |
||||||||||||||||||
Deposits |
184,218 |
103,069 |
570,926 |
386,593 |
||||||||||||||
Borrowings |
935 |
1,934 |
1,745 |
2,729 |
||||||||||||||
Subordinated debentures |
38,600 |
37,550 |
152,510 |
151,150 |
||||||||||||||
Total interest expense |
223,753 |
142,553 |
725,181 |
540,472 |
||||||||||||||
Net interest income |
2,947,136 |
2,718,653 |
11,377,392 |
10,276,151 |
||||||||||||||
Provision for loan losses |
125,000 |
200,000 |
125,000 |
200,000 |
||||||||||||||
Net interest income after provision for loan losses |
2,822,136 |
2,518,653 |
11,252,392 |
10,076,151 |
||||||||||||||
Other income |
||||||||||||||||||
Fees and service charges on deposit accounts |
384,999 |
397,276 |
1,504,850 |
1,490,449 |
||||||||||||||
Service fee income, net |
758 |
911 |
3,292 |
3,962 |
||||||||||||||
Bank owned life insurance |
95,975 |
90,625 |
383,894 |
1,106,105 |
||||||||||||||
Mortgage fee income |
2,700 |
8,263 |
30,457 |
37,901 |
||||||||||||||
Net gain on securities available for sale |
- |
- |
- |
227,237 |
||||||||||||||
Total other income |
484,432 |
497,075 |
1,922,493 |
2,865,654 |
||||||||||||||
Other expense: |
||||||||||||||||||
Salaries and employee benefits |
1,095,981 |
973,561 |
4,165,501 |
3,970,530 |
||||||||||||||
Occupancy expense |
230,977 |
236,014 |
891,240 |
900,124 |
||||||||||||||
Marketing and professional expense |
88,407 |
64,551 |
289,975 |
262,672 |
||||||||||||||
Other operating expenses |
609,725 |
504,497 |
2,057,305 |
2,034,747 |
||||||||||||||
Total other expenses |
2,025,090 |
1,778,623 |
7,404,021 |
7,168,073 |
||||||||||||||
Income before income taxes |
1,281,478 |
1,237,105 |
5,770,864 |
5,773,732 |
||||||||||||||
Income tax expense |
265,692 |
265,425 |
1,266,668 |
1,081,975 |
||||||||||||||
Net income |
$ |
1,015,786 |
$ |
971,680 |
$ |
4,504,196 |
$ |
4,691,757 |
||||||||||
Cash dividend per share |
$ |
0.25 |
$ |
0.22 |
$ |
1.00 |
$ |
0.88 |
||||||||||
Basic and diluted earnings per share |
$ |
1.12 |
$ |
1.00 |
$ |
4.79 |
$ |
4.83 |
||||||||||
Weighted –average basic and diluted shares outstanding |
909,534 |
970,791 |
939,575 |
972,248 |
||||||||||||||
PINNACLE BANCSHARES, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY Years Ended December 31, 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 |
- |
- |
- |
4,691,757 |
- |
4,691,757 |
|||||||||||||||||
Cash dividends declared |
|||||||||||||||||||||||
($.88 per share) |
- |
- |
- |
- |
(855,490 |
) |
- |
(855,490 |
) |
||||||||||||||
Purchase of treasury stock |
- |
- |
- |
(92,276 |
) |
- |
- |
(92,276 |
) |
||||||||||||||
Other comprehensive loss |
- |
- |
- |
- |
- |
(2,416,714 |
) |
(2,416,714 |
) |
||||||||||||||
Balance December 31, 2021 |
1,872,313 |
$ |
18,723 |
$ |
8,923,223 |
$ |
(13,533,621 |
) |
$ |
38,710,339 |
$ |
1,540,479 |
$ |
35,659,143 |
|||||||||
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 |
- |
- |
- |
4,504,196 |
- |
4,504,196 |
|||||||||||||||||
Cash dividends declared |
|||||||||||||||||||||||
($1.00 per share) |
- |
- |
- |
- |
(940,163 |
) |
- |
(940,163 |
) |
||||||||||||||
Purchase of treasury stock |
- |
- |
- |
(2,055,178 |
) |
- |
- |
(2,055,178 |
) |
||||||||||||||
Other comprehensive loss |
- |
- |
- |
- |
- |
(31,430,082 |
) |
(31,430,082 |
) |
||||||||||||||
Balance December 31, 2022 |
1,872,313 |
$ |
18,723 |
$ |
8,923,223 |
$ |
(15,588,799 |
) |
$ |
42,274,372 |
$ |
(29,889,603 |
) |
$ |
5,737,916 |
||||||||
PINNACLE BANCSHARES, INC, UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||||
For the Years Ended |
|||||||
December 31, |
|||||||
2022 |
2021 |
||||||
OPERATING ACTIVITIES: |
|||||||
Net income |
$ |
4,504,196 |
$ |
4,691,757 |
|||
Adjustments to reconcile net income to net cash provided by operating activities: |
|||||||
Depreciation |
424,648 |
446,694 |
|||||
Provision for loan losses |
125,000 |
200,000 |
|||||
Net investment amortization expense |
208,429 |
318,421 |
|||||
Net increase in bank owned life insurance |
(383,893 |
) |
(1,106,105 |
) |
|||
Gain on sale of securities available for sale |
- |
(227,237 |
) |
||||
Decrease in accrued interest receivable |
(153,298 |
) |
(426,572 |
) |
|||
Increase (decrease) in accrued interest payable |
33,809 |
(67,983 |
) |
||||
Net other operating activities |
(96,419 |
) |
332,950 |
||||
Net cash provided by operating activities |
4,662,472 |
4,161,925 |
|||||
INVESTING ACTIVITIES: |
|||||||
Net (increase) decrease in loans |
6,577,926 |
(13,429,427 |
) |
||||
Net increase in interest bearing deposits in other banks |
(728,389 |
) |
(7,039,836 |
) |
|||
Purchase of securities available for sale |
(41,170,098 |
) |
(68,497,441 |
) |
|||
Proceeds from sale of securities available for sale |
- |
7,752,740 |
|||||
Proceeds from maturing, calls, and payments received on securities available for sale |
10,777,596 |
13,348,008 |
|||||
Net (purchase) redemption of restricted equity securities |
(32,000 |
) |
43,900 |
||||
Proceeds from bank owned life insurance |
- |
1,580,540 |
|||||
Purchase of premises and equipment |
(335,743 |
) |
(906,785 |
) |
|||
Net cash used in investing activities |
(24,910,708 |
) |
(67,148,301 |
) |
|||
FINANCING ACTIVITIES: |
|||||||
Net increase in deposits |
23,567,284 |
63,583,802 |
|||||
Purchase of treasury stock |
(2,055,178 |
) |
(92,276 |
) |
|||
Payments of cash dividends |
(940,163 |
) |
(855,490 |
) |
|||
Net cash provided by financing activities |
20,571,943 |
62,636,078 |
|||||
Net increase (decrease) in cash and cash equivalents |
323,707 |
(350,340 |
) |
||||
Cash and cash equivalents at beginning of period |
1,730,327 |
2,080,667 |
|||||
Cash and cash equivalents at end of period |
$ |
2,054,034 |
$ |
1,730,327 |
|||
SUPPLEMENTAL DISCLOSURES: |
|||||||
Cash paid during the period for: |
|||||||
Interest |
$ |
691,372 |
$ |
608,455 |
|||
Taxes |
$ |
1,330,568 |
$ |
1,025,679 |
|||
OTHER NONCASH TRANSACTIONS |
|||||||
Real estate acquired through foreclosure |
$ |
- |
$ |
- |
|||
Internally financed sales of other real estate owned |
$ |
- |
$ |
- |
|||
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