Pinnacle Bancshares Announces Results for Third Quarter Ended September 30, 2019

Robert B. Nolen, Jr., President and Chief Executive Officer of Pinnacle Bancshares, Inc. (OTC Pink: PCLB), today announced Pinnacles third quarter results of operations.

  • For the three months ended September 30, 2019, Pinnacle reported net income of $792,000 compared to $650,000 for the three months ended September 30, 2018.
  • For the nine months ended September 30, 2019, Pinnacle reported net income of $2,203,000 compared to $1,906,000 for the nine months ended September 30, 2018.
  • Basic and diluted earnings per share for the three and nine months ended September 30, 2019 were $0.77 and $2.13 per share, respectively, compared to $0.62 and $1.83 per share, respectively, for the same periods last year.
  • For the three and nine months ended September 30, 2019, return on average assets was 1.36%, and 1.28%, respectively, compared to 1.18% and 1.14%, respectively, in the comparable 2018 period.

Pinnacles net interest margin was 4.00% and 3.87% for the three and nine months ended September 30, 2019, respectively, compared to 3.85% and 3.72% for the three and nine months ended September 30, 2018, respectively.

At September 30, 2019, Pinnacles allowance for loan losses as a percent of total loans was 1.43%, compared to 1.53% at December 31, 2018. At September 30, 2019, the allowance for loan losses as a percent of nonperforming loans was 887.93%, compared to 596.28% at December 31, 2018. Nonperforming assets were $174,000 at September 30, 2019, compared to $269,000 at December 31, 2018. The ratio of nonperforming assets to total loans was .16% at September 30, 2019, compared to .26% at December 31, 2018. In addition, all capital ratios are significantly higher than the requirements for a well-capitalized institution.

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Dividends of $.19 and $.57 per share were paid to shareholders during the three and nine months ended for both September 30, 2019, as compared to $.11 and $.33 per share during the three and nine months ended September 30, 2018.

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 Pinnacles 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,

 

 

 

2019

 

 

 

2018

 

Net income

 

$

792,000

 

 

$

650,000

 

Basic and diluted earnings per share

 

$

0.77

 

 

$

0.62

 

 

 

 

 

 

Performance ratios (annualized):

 

 

 

 

Return on average assets

 

 

1.36

%

 

 

1.18

%

Return on average equity

 

 

10.92

%

 

 

9.59

%

Interest rate spread

 

 

3.74

%

 

 

3.69

%

Net interest margin

 

 

4.00

%

 

 

3.85

%

Operating cost to assets

 

 

2.75

%

 

 

2.95

%

 

 

 

 

 

Weighted average basic and diluted shares outstanding

 

 

1,032,905

 

 

 

1,043,505

 

Dividends per share

 

$

0.19

 

 

$

0.11

 

Provision for loan losses

 

$

 

 

$

 

 

 

 

 

 

Nine Months Ended September 30,

 

 

 

2019

 

 

 

2018

 

Net income

 

$

2,203,000

 

 

$

1,906,000

 

Basic and diluted earnings per share

 

$

2.13

 

 

$

1.83

 

 

 

 

 

 

Performance ratios (annualized):

 

 

 

 

Return on average assets

 

 

1.28

%

 

 

1.14

%

Return on average equity

 

 

10.29

%

 

 

9.49

%

Interest rate spread

 

 

3.64

%

 

 

3.58

%

Net interest margin

 

 

3.87

%

 

 

3.72

%

Operating cost to assets

 

 

2.78

%

 

 

2.86

%

 

 

 

 

 

Weighted average basic and diluted shares outstanding

 

 

1,035,897

 

 

 

1,043,505

 

Dividends per share

 

$

0.57

 

 

$

0.33

 

Provision for loan losses

 

$

 

 

$

 

 

 

 

 

(Audited)

 

 

September 30, 2019

 

December 31, 2018

Total assets

 

$

235,445,000

 

 

$

221,755,000

 

Loans receivable, net

 

$

106,486,000

 

 

$

103,282,000

 

Deposits

 

$

198,684,000

 

 

$

185,329,000

 

Brokered CDs included in deposits

 

$

4,919,000

 

 

$

2,999,000

 

Other borrowings

 

$

 

 

$

4,500,000

 

Total stockholders equity

 

$

31,125,000

 

 

$

27,207,000

 

Weighted average book value per share

 

$

27.54

 

 

$

26.07

 

Average Stockholders equity to assets ratio (excluding OCI)

 

 

12.47

%

 

 

12.17

%

 

 

 

 

 

Asset quality ratios:

 

 

 

 

Nonperforming loans as a percent of total loans

 

 

.16

%

 

 

.26

%

Nonperforming assets as a percent of total loans

 

 

.16

%

 

 

.26

%

Allowance for loan losses as a percent of total loans

 

 

1.43

%

 

 

1.53

%

Allowance for loan losses as a percent of nonperforming loans

 

 

887.93

%

 

 

596.28

%

 

 

 

 

 

FINANCIAL INFORMATION

 

PINNACLE BANCSHARES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

 

(Unaudited)

 

(Audited)

 

September 30,

 

December 31,

 

 

2019

 

 

 

2018

 

 

 

 

 

Assets

 

 

 

Cash and cash equivalents

$

1,825,960

 

 

$

1,611,283

 

Interest bearing deposits in banks

 

9,818,278

 

 

 

1,704,572

 

Securities available for sale

 

97,810,119

 

 

 

95,246,509

 

Restricted equity securities

 

723,800

 

 

 

912,300

 

 

 

 

 

Loans

 

108,031,158

 

 

 

104,885,961

 

Less Allowance for loan losses

 

1,544,764

 

 

 

1,604,052

 

Loans, net

 

106,486,394

 

 

 

103,281,909

 

 

 

 

 

Premises and equipment, net

 

6,506,887

 

 

 

6,375,898

 

Right-of-use lease assets “ operating

 

704,619

 

 

 

773,944

 

Goodwill

 

306,488

 

 

 

306,488

 

Bank owned life insurance

 

9,830,121

 

 

 

9,560,097

 

Accrued interest receivable

 

1,066,006

 

 

 

1,285,517

 

Other assets

 

366,714

 

 

 

696,784

 

Total assets

$

235,445,386

 

 

$

221,755,301

 

 

 

 

 

Liabilities and Stockholders Equity

 

 

 

Deposits

 

 

 

Noninterest-bearing

$

59,709,891

 

 

$

52,221,831

 

Interest-bearing

 

138,973,679

 

 

 

133,107,273

 

Total deposits

 

198,683,570

 

 

 

185,329,104

 

 

 

 

 

Other borrowings

 

 

 

 

4,500,000

 

Long term lease obligations “ operating

 

704,619

 

 

 

773,944

 

Subordinated debentures

 

3,093,000

 

 

 

3,093,000

 

Accrued interest payable

 

202,450

 

 

 

146,848

 

Other liabilities

 

1,636,968

 

 

 

705,806

 

Total liabilities

 

204,320,607

 

 

 

191,548,702

 

 

 

 

 

Stockholders equity

 

 

 

Common stock, par value $.01 per share; 2,400,000 authorized; 1,872,313 issued; 1,032,905 and 1,043,505 shares outstanding, respectively

 

18,723

 

 

 

18,723

 

Additional paid‘in capital

 

8,923,223

 

 

 

8,923,223

 

Treasury stock (839,408 and 828,028 shares, respectively)

 

(11,730,888

)

 

 

(11,464,104

)

Retained earnings

 

31,956,540

 

 

 

30,343,475

 

Accumulated other comprehensive income (loss), net of tax

 

1,957,181

 

 

 

(614,718

)

 

 

 

 

Total stockholders equity

 

31,124,779

 

 

 

27,206,599

 

 

 

 

 

Total liabilities and stockholders equity

$

235,445,386

 

 

221,755,301

 

 

PINNACLE BANCSHARES, INC.

 

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME

 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

September 30,

 

 

2019

 

 

2018

 

 

 

2019

 

 

2018

Interest income

 

 

 

 

 

 

 

Loans, including fees

$

1,572,414

 

$

1,393,951

 

 

$

4,503,961

 

$

3,972,651

Securities available for sale

 

748,543

 

 

710,827

 

 

 

2,181,891

 

 

2,153,852

Other interest

 

51,628

 

 

24,845

 

 

 

152,442

 

 

83,491

Total interest income

 

2,372,585

 

 

2,129,623

 

 

 

6,838,294

 

 

6,209,994

 

 

 

 

 

 

 

 

Interest expense

 

 

 

 

 

 

 

Deposits

 

221,988

 

 

116,239

 

 

 

617,292

 

 

304,824

Borrowings and repurchase agreements

 

 

 

5,602

 

 

 

17,312

 

 

35,657

Subordinated debentures

 

41,000

 

 

42,600

 

 

 

128,690

 

 

118,900

Total interest expense

 

262,988

 

 

164,441

 

 

 

763,294

 

 

459,381

 

 

 

 

 

 

 

 

Net interest income

 

2,109,597

 

 

1,965,182

 

 

 

6,075,000

 

 

5,750,613

Provision for loan losses

 

 

 

 

 

 

 

 

Net interest income after provision for loan losses

 

2,109,597

 

 

1,965,182

 

 

 

6,075,000

 

 

5,750,613

 

 

 

 

 

 

 

 

Other income

 

 

 

 

 

 

 

Fees and service charges on deposit accounts

 

378,259

 

 

353,661

 

 

 

1,075,322

 

 

1,020,773

Service fee income, net

 

1,615

 

 

1,969

 

 

 

5,048

 

 

6,258

Bank owned life insurance

 

90,009

 

 

83,595

 

 

 

270,024

 

 

250,785

Mortgage fee income

 

5,938

 

 

8,355

 

 

 

24,310

 

 

23,659

Net gain (loss) on sale of other real estate

 

 

 

(75

)

 

 

967

 

 

522

Net gain on securities available for sale

 

 

 

 

 

 

39,207

 

 

1,689

Total other income

 

475,821

 

 

447,505

 

 

 

1,414,878

 

 

1,303,686

 

 

 

 

 

 

 

 

Other expense:

 

 

 

 

 

 

 

Salaries and employee benefits

 

906,121

 

 

941,303

 

 

 

2,731,609

 

 

2,748,178

Occupancy expense

 

209,310

 

 

222,657

 

 

 

605,289

 

 

664,623

Marketing and professional expense

 

66,121

 

 

52,928

 

 

 

196,806

 

 

138,712

Other operating expenses

 

413,099

 

 

408,752

 

 

 

1,231,970

 

 

1,211,683

Total other expenses

 

1,594,651

 

 

1,625,640

 

 

 

4,765,674

 

 

4,763,196

 

 

 

 

 

 

 

 

Income before income taxes

 

990,767

 

 

787,047

 

 

 

2,724,204

 

 

2,291,103

 

 

 

 

 

 

 

 

Income tax expense

 

198,294

 

 

136,911

 

 

 

521,299

 

 

384,872

 

 

 

 

 

 

 

 

Net income

$

792,473

 

$

650,136

 

 

$

2,202,905

 

$

1,906,231

 

 

 

 

 

 

 

 

Cash dividend per share

$

0.19

 

$

0.11

 

 

$

0.57

 

$

0.33

 

 

 

 

 

 

 

 

Basic and diluted earnings per share

$

0.77

 

$

0.62

 

 

$

2.13

 

$

1.83

 

 

 

 

 

 

 

 

Weighted “average basic and diluted shares outstanding

 

1,032,905

 

 

1,043,505

 

 

 

1,035,897

 

 

1,043,505

PINNACLE BANCSHARES, INC.

 

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY

Nine Months Ended September 30, 2019 and 2018

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

Additional

 

 

 

 

 

Other

 

Total

 

Common Stock

 

Paid-in

 

Treasury

 

Retained

 

Comprehensive

 

Stockholders

 

Shares

 

Amount

 

Capital

 

Stock

 

Earnings

 

Income (Loss)

 

Equity

Balance December 31, 2017

1,872,313

 

$

18,723

 

$

8,923,223

 

$

(11,464,104

)

 

$

28,206,925

 

 

$

328,381

 

 

$

26,013,148

 

Net income

 

 

 

 

 

 

 

 

1,906,231

 

 

 

 

 

 

1,906,231

 

Cash dividends declared

($.33 per share)

 

 

 

 

 

 

 

 

 

(344,358

)

 

 

 

 

 

(344,358

)

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

(1,770,995

)

 

 

(1,770,995

)

Balance September 30, 2018

1,872,313

 

$

18,723

 

$

8,923,223

 

$

(11,464,104

)

 

$

29,768,798

 

 

$

(1,442,614

)

 

$

25,804,026

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

Additional

 

 

 

 

 

Other

 

Total

 

Common Stock

 

Paid-in

 

Treasury

 

Retained

 

Comprehensive

 

Stockholders

 

Shares

 

Amount

 

Capital

 

Stock

 

Earnings

 

Income (Loss)

 

Equity

Balance December 31, 2018

1,872,313

 

$

18,723

 

$

8,923,223

 

$

(11,464,104

)

 

$

30,343,475

 

 

$

(614,718

)

 

$

27,206,599

 

Net income

 

 

 

 

 

 

 

 

2,202,905

 

 

 

 

 

 

2,202,905

 

Cash dividends declared

($.57 per share)

 

 

 

 

 

 

 

 

 

(589,840

)

 

 

 

 

 

(589,840

)

Purchase of treasury stock

 

 

 

 

 

 

(266,784

)

 

 

 

 

 

 

 

 

(266,784

)

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

2,571,899

 

 

 

2,571,899

 

Balance September 30, 2019

1,872,313

 

$

18,723

 

$

8,923,223

 

$

(11,730,888

)

 

$

31,956,540

 

 

$

1,957,181

 

 

$

31,124,779

 

PINNACLE BANCSHARES, INC,

 

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

For the Nine Months Ended

 

September 30,

 

 

2019

 

 

 

2018

 

OPERATING ACTIVITIES:

 

 

 

Net income

$

2,202,905

 

 

$

1,906,231

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

Depreciation

 

274,506

 

 

 

282,514

 

Provision for loan losses

 

 

 

 

 

Net investment amortization expense

 

240,189

 

 

 

324,544

 

Bank owned life insurance

 

(270,024

)

 

 

(250,785

)

Gain on sale of securities available for sale

 

(39,207

)

 

 

(1,689

)

Net gain on sale of real estate owned

 

(967

)

 

 

(522

)

Decrease in accrued interest receivable

 

219,511

 

 

 

112,823

 

Increase in accrued interest payable

 

55,602

 

 

 

44,632

 

Net other operating activities

 

357,592

 

 

 

225,207

 

Net cash provided by operating activities

 

3,040,107

 

 

 

2,642,955

 

 

 

 

 

INVESTING ACTIVITIES:

 

 

 

Net increase in loans

 

(3,213,517

)

 

 

(7,880,546

)

Net increase in interest bearing deposits in other banks

 

(8,113,706

)

 

 

(2,091,933

)

Purchase of securities available for sale

 

(12,820,892

)

 

 

(5,107,692

)

Proceeds from sale of securities available for sale

 

7,466,732

 

 

 

501,689

 

Proceeds from maturing, sale and payments received on securities available for sale

 

6,065,107

 

 

 

9,235,561

 

Net redemption of restricted equity securities

 

188,500

 

 

 

84,500

 

Purchase of premises and equipment

 

(405,495

)

 

 

(374,812

)

Proceeds from sales of real estate owned

 

9,999

 

 

 

69,097

 

Net cash used in investing activities

 

(10,823,272

)

 

 

(5,564,136

)

 

 

 

 

FINANCING ACTIVITIES:

 

 

 

Net increase in deposits

 

13,354,466

 

 

 

4,472,029

 

Net decrease in other borrowings

 

(4,500,000

)

 

 

(1,500,000

)

Net decrease in federal funds purchased

 

 

 

 

(100,000

)

Purchase of treasury stock

 

(266,784

)

 

 

 

Payments of cash dividends

 

(589,840

)

 

 

(344,358

)

Net cash provided by financing activities

 

7,997,842

 

 

 

2,527,671

 

 

 

 

 

Net increase (decrease) in cash and cash equivalents

 

214,677

 

 

 

(393,510

)

 

 

 

 

Cash and cash equivalents at beginning of period

 

1,611,283

 

 

 

1,871,452

 

 

 

 

 

Cash and cash equivalents at end of period

$

1,825,960

 

 

$

1,477,942

 

 

 

 

 

SUPPLEMENTAL DISCLOSURES:

 

 

 

Cash paid during the period for:

 

 

 

Interest

$

707,692

 

 

$

414,749

 

Taxes

$

219,195

 

 

$

236,436

 

 

 

 

 

OTHER NONCASH TRANSACTIONS

 

 

 

Real estate acquired through foreclosure

$

9,032

 

 

$

27,404

 

Internally financed sales of other real estate owned

$

 

 

$

 

 

Joe B. Adams, III

Chief Financial Officer

(205) 221-8866