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Pinnacle Bancshares Announces Results for Third Quarter Ended September 30, 2017

JASPER, Ala.--(BUSINESS WIRE)-- Robert B. Nolen, Jr., President and Chief Executive Officer of Pinnacle Bancshares, Inc. (OTC Pink: PCLB), today announced Pinnacle’s third quarter results of operations.

  • For the three months ended September 30, 2017, Pinnacle reported net income of $601,000 compared to $578,000 for the three months ended September 30, 2016. There was no sale of securities included during these periods.
  • For the nine months ended September 30, 2017, Pinnacle reported net income of $1,699,000 compared to $1,772,000 for the nine months ended September 30, 2016. There was no sale of securities included during the nine months ended September 30, 2017 while net income for the nine months ended September 30, 2016 included $192,000 in gains from sale of securities.
  • Basic and diluted earnings per share for the three and nine months ended September 30, 2017 were $0.58 and $1.63 per share, respectively, compared to $0.50 and $1.53 per share, respectively, for the same periods last year. The basic and diluted earnings per share for the nine months ended September 30, 2016 would have been $1.40 if the net of tax effect of the gain on sales of securities were excluded from earnings.
  • For the three and nine months ended September 30, 2017, return on average assets was 1.06%, and 1.01%, respectively, compared to 1.02% and 1.06%, respectively, in the comparable 2016 period.

Pinnacle’s net interest margin was 3.61% and 3.50% for the three and nine months ended September 30, 2017, respectively, compared to 3.46% and 3.43% for the three and nine months ended September 30, 2016, respectively.

At September 30, 2017, Pinnacle’s allowance for loan losses as a percent of total loans was 1.74%, compared to 1.77% at December 31, 2016. At September 30, 2017, the allowance for loan losses as a percent of nonperforming loans was 834.02%, compared to 471.72% at December 31, 2016. Nonperforming assets were $163,000 at September 30, 2017, compared to $344,000 at December 31, 2016. The ratio of nonperforming assets to total loans was .28% at September 30, 2017, compared to .38% at December 31, 2016. In addition, all capital ratios are significantly higher than the requirements for a well-capitalized institution.

Dividends of $.11 and $.33 per share were paid to shareholders during the three and nine months ended for both September 30, 2017, and 2016.

Despite the Company’s good financial performance during the last several years, Mr. Nolen cautioned investors that any negative changes to economic conditions could have an adverse effect on Pinnacle’s borrowers and their customers, which could adversely affect Pinnacle’s financial condition and results of operations.

Mr. Nolen stated: “Pinnacle continues to maintain strong regulatory capital. We are pleased with our net income and credit quality improvements which reflect the continued efforts of our Board and associates. We remain focused on our current strategies which are intended to provide superior services to customers in our market and enhance shareholder value.”

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,
2017 2016
Net income $ 601,000 $ 578,000
Basic and diluted earnings per share $ 0.58 $ 0.50
Performance ratios (annualized):
Return on average assets 1.06 % 1.02 %
Return on average equity 9.59 % 8.94 %
Interest rate spread 3.48 % 3.32 %
Net interest margin 3.61 % 3.46 %
Operating cost to assets 2.66 % 2.61 %
Weighted average basic and diluted shares outstanding 1,043,505 1,149,278
Dividends per share $ 0.11 $ 0.11
Provision for loan losses $ - $ -
Nine Months Ended September 30,
2017 2016
Net income $ 1,699,000 $ 1,772,000
Basic and diluted earnings per share $ 1.63 $ 1.53
Performance ratios (annualized):
Return on average assets 1.01 % 1.06 %
Return on average equity 9.59 % 9.25 %
Interest rate spread 3.39 % 3.31 %
Net interest margin 3.50 % 3.43 %
Operating cost to assets 2.66 % 2.66 %
Weighted average basic and diluted shares outstanding 1,043,505 1,156,974
Dividends per share $ 0.33 $ 0.33
Provision for loan losses $ - $ -
(Audited)
September 30, 2017 December 31, 2016
Total assets $ 219,495,000 $ 216,561,000
Loans receivable, net $ 91,236,000 $ 89,561,000
Deposits $ 189,567,000 $ 189,525,000
Other borrowings $ - $ -
Total stockholders’ equity $ 26,148,000 $ 23,758,000
Weighted average book value per share $ 24.20 $ 22.90
Average Stockholders’ equity to assets ratio (excluding OCI) 11.00 % 11.44 %
Asset quality ratios:
Nonperforming loans as a percent of total loans .21 % .38 %
Nonperforming assets as a percent of total loans .28 % .38 %
Allowance for loan losses as a percent of total loans 1.74 % 1.77 %
Allowance for loan losses as a percent of nonperforming loans 834.02 % 471.72 %

FINANCIAL INFORMATION

PINNACLE BANCSHARES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(Unaudited)
September 30, December 31,
2017 2016

Assets

Cash and cash equivalents $ 1,746,871 $ 1,698,936
Interest bearing deposits in banks 6,204,715 3,035,346
Securities available for sale 102,802,266 105,551,083
Restricted equity securities 805,500 722,100
Loans 92,854,067 91,268,924
Less Allowance for loan losses 1,617,815 1,617,620
Loans, net 91,236,252 89,651,304
Other real estate owned 41,171 -
Premises and equipment, net 5,819,966 5,222,947
Goodwill 306,488 306,488
Bank owned life insurance 9,136,975 8,887,416
Accrued interest receivable 1,065,920 1,197,974
Other assets 329,123 287,692
Total assets $ 219,495,247 $ 216,561,286

Liabilities and Stockholders’ Equity

Deposits
Noninterest-bearing $ 55,728,156 $ 53,279,880
Interest-bearing 133,839,146 136,244,690
Total deposits 189,567,302 189,524,570
Subordinated debentures 3,093,000 3,093,000
Accrued interest payable 76,186 81,024
Other liabilities 610,288 104,335
Total liabilities 193,346,776 192,802,929
Stockholders’ equity
Common stock, par value $.01 per share; 2,400,000 authorized; 1,872,313 issued; 1,043,505 shares outstanding 18,723 18,723
Additional paid-in capital 8,923,223 8,923,223
Treasury stock (828,028 shares) (11,464,104 ) (11,464,104 )
Retained earnings 27,772,309 26,417,216
Accumulated other comprehensive income (loss), net of tax 898,320 (136,701 )
Total stockholders’ equity 26,148,471 23,758,357
Total liabilities and stockholders’ equity $ 219,495,247 $ 216,561,286

PINNACLE BANCSHARES, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME

Three Months Ended Nine Months Ended
September 30, September 30,
2017 2016 2017 2016
Interest income
Loans, including fees $ 1,196,071 $ 1,125,322 $ 3,454,090 $ 3,292,608
Securities available for sale 757,946 767,604 2,300,964 2,336,514
Other interest 45,564 25,102 100,607 54,727
Total interest income 1,999,581 1,918,028 5,855,661 5,683,849
Interest expense
Deposits 101,042 103,580 314,819 324,013
Borrowings and repurchase agreements - - 2,883 7,103
Subordinated debentures 37,333 28,700 99,133 84,000
Total interest expense 138,375 132,280 416,835 415,116
Net interest income 1,861,206 1,785,748 5,438,826 5,268,733
Provision for loan losses - - - -
Net interest income after provision

for loan losses

1,861,206 1,785,748 5,438,826 5,268,733
Other income
Fees and service charges on deposit accounts 319,829 310,814 931,151 904,044
Service fee income, net 2,480 4,149 8,940 12,697
Bank owned life insurance 83,186 91,315 249,558 273,945
Mortgage fee income 10,303 12,964 15,531 36,732
Net gain on securities available for sale - - - 191,546
Total other income 415,798 419,242 1,205,180 1,418,964
Other expense:
Salaries and employee benefits 823,161 798,233 2,483,099 2,373,577
Occupancy expense 244,445 242,706 704,077 704,030
Marketing and professional expense 46,894 64,135 140,257 226,247
Net loss on sale of real estate owned - - - 4,167
Other operating expenses 375,071 368,573 1,146,822 1,148,966
Total other expenses 1,489,571 1,473,647 4,474,255 4,456,987
Income before income taxes 787,433 731,343 2,169,751 2,230,710
Income tax expense 186,617 153,341 470,301 458,403
Net income $ 600,816 $ 578,002 $ 1,699,450 $ 1,772,307
Cash dividend per share $ 0.11 $ 0.11 $ 0.33 $ 0.33
Basic and diluted earnings per share $ 0.58 $ 0.50 $ 1.63 $ 1.53

Weighted–average basic and diluted shares outstanding

1,043,505 1,149,278 1,043,505 1,156,974

PINNACLE BANCSHARES, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Nine Months Ended September 30, 2017 and 2016

Accumulated
Additional Other Total
Common Stock Paid-in Treasury Retained Comprehensive Stockholders’
Shares Amount Capital Stock Earnings Income Equity
Balance December 31, 2015 1,872,313 $ 18,723 $ 8,923,223 $ (8,532,831 ) $ 24,640,492 $ 788,330 $ 25,837,937
Net income - - - 1,772,307 - 1,772,307
Cash dividends declared

($.33 per share)

- - - - (380,923 ) - (380,923 )
Purchase of treasury stock (472,045 ) (472,045 )
Other comprehensive income - - - - - 1,168,955 1,168,955
Balance September 30, 2016 1,872,313 $ 18,723 $ 8,923,223 $ (9,004,876 ) $ 26,031,876 $ 1,957,285 $ 27,926,231
Accumulated
Additional Other Total
Common Stock Paid-in Treasury Retained Comprehensive Stockholders’
Shares Amount Capital Stock Earnings Income (Loss) Equity
Balance December 31, 2016 1,872,313 $ 18,723 $ 8,923,223 $ (11,464,104 ) $ 26,417,216 $ (136,701 ) $ 23,758,357
Net income - - - 1,699,450 - 1,699,450
Cash dividends declared

($.33 per share)

- - - - (344,357 ) - (344,357 )
Other comprehensive income - - - - - 1,035,021 1,035,021
Balance September 30, 2017 1,872,313 $ 18,723 $ 8,923,223 $ (11,464,104 ) $ 27,772,309 $ 898,320 $ 26,148,471

PINNACLE BANCSHARES, INC,

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Nine Months Ended
September 30,
2017 2016
OPERATING ACTIVITIES:
Net income $ 1,669,450 $ 1,772,307
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation 261,920 281,764
Provision for loan losses - -
Net investment amortization expense 386,460 367,276
Bank owned life insurance (249,558 ) (273,945 )
Gain on sale of securities available for sale - (191,546 )
Loss on sale of or write-down of real estate owned - 4,167
Decrease in accrued interest receivable 132,054 83,014
Decrease in accrued interest payable (4,837 ) (19,321 )
Net other operating activities (169,847 ) 71,580
Net cash provided by operating activities 2,055,642 2,095,296
INVESTING ACTIVITIES:
Net increase in loans (1,626,119 ) (5,251,728 )
Net increase in interest bearing deposits in other banks (3,169,369 ) (5,867,048 )
Purchase of securities available for sale (6,136,280 ) (13,723,206 )
Proceeds from sale of securities available for sale - 7,867,285
Proceeds from maturing, sale and payments received on securities available for sale 10,168,025 12,277,179
Net (purchase) redemption of restricted equity securities (83,400 ) 212,000
Purchase of premises and equipment (858,939 ) (162,528 )
Proceeds from sales of real estate owned - 64,017
Net cash used in investing activities (1,706,082 ) (4,584,029 )
FINANCING ACTIVITIES:
Net increase in deposits 42,732 8,286,034
Net decrease in other borrowings - (5,000,000 )
Purchase of treasury stock - (472,045 )
Payments of cash dividends (344,357 ) (380,923 )
Net cash provided by (used in) financing activities (301,625 ) 2,433,066
Net increase (decrease) in cash and cash equivalents 47,935 (55,667 )
Cash and cash equivalents at beginning of period 1,698,936 1,718,147
Cash and cash equivalents at end of period $ 1,746,871 $ 1,662,480
SUPPLEMENTAL DISCLOSURES:
Cash paid during the period for:
Interest $ 421,672 $ 435,286
Taxes $ 469,569 $ 442,134
OTHER NONCASH TRANSACTIONS
Real estate acquired through foreclosure $ 41,171 $ -
Internally financed sales of other real estate owned $ - $ -

View source version on businesswire.com: http://www.businesswire.com/news/home/20171011005759/en/

Pinnacle Bancshares, Inc.
Joe B. Adams, III
Chief Financial Officer
(205) 221-8866

Source: Pinnacle Bancshares, Inc.