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

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

$

-

 

 

$

-

 

 

Contacts

Joe B. Adams, III

Chief Financial Officer

(205) 221-8866

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