Pinnacle Bancshares Announces Results for First Quarter Ended March 31, 2017

JASPER, Ala.--()--Robert B. Nolen, Jr., President and Chief Executive Officer of Pinnacle Bancshares, Inc. (OTC Pink: PCLB), today announced Pinnacle’s results of operations for the first quarter ended March 31, 2017:

  • For the three months ended March 31, 2017, Pinnacle reported net income of $538,000, compared to $639,000 for the three months ended March 31, 2016. Included in net income for the three months ended March 31, 2016 was $149,980 in gains from sale of securities available for sale. There were no sales of securities during the three months ended March 31, 2017.
  • Net interest income after the provision for loan losses for the three months ended March 31, 2017, was $1,778,000, compared with $1,752,000 in the same period last year.
  • For the three months ended March 31, 2017, basic and diluted earnings per share were each $0.52. For the same period in 2016 basic and diluted earnings per share were each $0.55. The basic and diluted earnings per share would have been $.45 if the net-tax effect of the gain on sales were excluded for the three months ended March 31, 2016.
  • For the three months ended March 31, 2017, return on average assets was .99%, compared to 1.16% in the comparable 2016 period.

The Company’s net interest margin was 3.49% for the three months March 31, 2017, compared to 3.46% for the three months ended March 31, 2016.

At March 31, 2017, Pinnacle’s allowance for loan losses as a percent of total loans was 1.80%, compared to 1.77% at December 31, 2016. At March 31, 2017, the allowance for loan losses as a percent of nonperforming loans was 954.71%, compared to 471.72% at December 31, 2016. Nonperforming assets were $171,000 at March 31, 2017, compared to $344,000 at December 31, 2016. The ratio of nonperforming assets to total loans was .19% at March 31, 2017, compared to .38% at December 31, 2016.

Pinnacle was classified as “well capitalized” at March 31, 2017. Total risk-based capital was 19.26% for the subsidiary bank. Tier 1 risk-based capital and Tier 1 leverage capital ratios for the subsidiary bank were 18.09% and 11.37%, respectively. All capital ratios are significantly higher than the requirements for a well-capitalized institution.

Dividends of $.11 per share were paid to shareholders during the first quarter of 2017 as well as the first quarter of 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.

Deterioration in local economic conditions in Pinnacle’s markets could drive losses beyond those which are provided for in the allowance for loan losses and result in a number of adverse consequences, including increases in loan delinquencies; increases in nonperforming assets; decreases in demand for Pinnacle’s products and services, which could affect Pinnacle’s liquidity position; and decreases in the value of the collateral securing Pinnacle’s loans, which could reduce customers’ borrowing power.

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
 
Three Months Ended March 31,
  2017     2016  
Net Income $ 538,000 $ 639,000
Weighted average basic shares outstanding 1,043,505 1,165,647
Weighted average diluted shares outstanding 1,043,505 1,165,647
Dividend per share $ .11 $ .11
Provision for loan losses $ - $ -
Basic and diluted earnings per share $ 0.52 $ 0.55
Performance Ratios: (annualized)
Return on average assets .99 % 1.16 %
Return on average equity 8.90 % 10.10 %
Interest rate spread 3.41 % 3.35 %
Net interest margin 3.49 % 3.46 %
Operating cost to assets 2.74 % 2.67 %
 
(Audited)
March 31, 2017 December 31, 2016
Total assets $ 225,302,000 $ 216,561,000
Loans receivable, net $ 88,734,000 $ 89,651,000
Deposits $ 195,182,000 $ 189,525,000
Other borrowings $ 2,000,000 $ -
Total stockholders' equity $ 24,684,000 $ 23,758,000
Book value per share $ 23.65 $ 22.90
Total stockholders' equity to asset ratio 10.93 % 11.44 %
Asset Quality Ratios:
Nonperforming loans as a percent of total loans .19 % .38 %
Nonperforming assets as a percent of total Loans .19 % .38 %
Allowance for loan losses as a percent of total loans 1.80 % 1.77 %

Allowance for loan losses as a percent of nonperforming loans

954.71 % 471.72 %

 

       

PINNACLE BANCSHARES, INC.

AND SUBSIDIARY

 

CONDENSED CONSOLIDATED STATEMENTS OF CONDITION

2017 2016

Assets

Cash and cash equivalents $ 1,751,106 $ 1,698,936
Interest bearing deposits in banks 13,160,756 3,035,346
Securities available for sale 104,511,475 105,551,083
Restricted equity securities 805,500 722,100
 
Loans 90,356,872 91,268,924
Less allowance for loan losses   1,622,727   1,617,620
Loans, net   88,734,145   89,651,304
 
Premises and equipment, net 5,694,372 5,222,947
Goodwill 306,488 306,488
Bank owned life insurance 8,970,602 8,887,416
Accrued interest receivable 1,031,431 1,197,974
Other assets 336,172 287,692
       
Total assets $ 225,302,047 $ 216,561,286
 

Liabilities and Stockholders’ Equity

Deposits:
Noninterest-bearing $ 53,748,798 $ 53,279,880
Interest-bearing   141,432,720   136,244,690
Total deposits 195,181,518 189,524,570
 
Other borrowings 2,000,000 -
Subordinated debentures 3,093,000 3,093,000
Accrued interest payable 78,623 81,023
Other liabilities   265,279   104,336
Total liabilities   200,618,420   192,802,929
 
Stockholders’ equity

Common stock, $.01 par value, 2,400,000 shares authorized; 1,872,313 shares issued; 1,043,505 shares outstanding

18,723 18,723
Additional paid-in capital 8,923,223 8,923,223
Treasury stock, at cost (828,808 shares) (11,464,104) (11,464,104)
Retained earnings 26,840,840 26,417,216
Accumulated other comprehensive income (loss), net of tax   364,945   (136,701)
Total stockholders’ equity   24,683,627   23,758,357
 
Total liabilities and stockholders’ equity $ 225,302,047 $ 216,561,286
 
       
PINNACLE BANCSHARES, INC.
AND SUBSIDIARY
 
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended March 31, 2017 and 2016
 
2017 2016
Interest income
Loans, including fees $ 1,120,954 $ 1,099,073
Taxable securities 539,925 487,266
Nontaxable securities 239,277 290,361
Other interest   19,355   14,831
Total interest income   1,919,511   1,891,531
 
Interest expense
Deposits 104,144 108,997
Borrowings and repurchase agreements 6,348 4,497
Subordinated debentures   30,800   25,700
Total interest expense   141,292   139,194
 
Net interest income 1,778,219 1,752,337
Provision for loan losses   -   -
Net interest income after provision for loan losses   1,778,219   1,752,337
 
Other income
Fees and service charges on deposit accounts 301,986 286,730
Servicing fee income, net 3,325 4,345
Bank owned life insurance 83,186 91,315
Mortgage fee income - 8,408
Net gain on sale of securities available for sale   -   149,980
Total other income   388,497   540,778
 
Other expenses
Salaries and employee benefits 842,172 784,630
Occupancy expenses 221,515 228,307
Marketing and professional expenses 43,730 77,047
Net loss on sales of other real estate owned - 4,167
Other operating expenses   388,368   387,686
Total other expenses   1,495,785   1,481,837
 
Income before income taxes 670,931 811,278
 
Income tax expense   132,521   172,777
 
Net income $ 538,410 $ 638,501
 
Basic and diluted earnings per share $ 0.52 $ 0.55
 
Cash dividends per share $ 0.11 $ 0.11
Weighted-average basic and diluted shares outstanding   1,043,505   1,165,647
 
                         
PINNACLE BANCSHARES, INC.
AND SUBSIDIARY
 
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
Three Months Ended March 31, 2017 and 2016
Accumulated
Additional Other Total
Common Stock Paid-in Treasury Retained   Comprehensive   Stockholders’
Shares

Par Value

Capital Stock Earnings   Income (loss)   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 - - - - 638,501 - 638,501

Cash dividends declared, $0.11 per share

(128,082) (128,082)
Purchase of treasury stock

-

 

- - (165,419) - - (165,419)
Other comprehensive income   -   -   -     -   -     487,081   $ 487,081

Balance, March 31, 2016

1,872,313

18,723

$ 8,923,223

 

$

(8,698,250) $ 25,150,911 $ 1,275,411 $ 26,670,018
 
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 - - - - 538,410 - 538,410

Cash dividends declared, $0.11 per share

- - - - (114,786) - (114,786)
Other comprehensive income   -   -   -     -   -     501,646     501,646
Balance, March 31, 2017   1,872,313

 

18,723 $ 8,923,223

 

$

(11,464,104) $ 26,840,840   $ 364,945   $ 24,683,627
 
     
PINNACLE BANCSHARES, INC.
AND SUBSIDIARY
 
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended March 31, 2017 and 2016
 
2017 2016
OPERATING ACTIVITIES
Net income $ 538,410 $ 638,501

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

Depreciation 88,636 92,702
Net amortization of securities 125,311 169,977
Gain on sale of securities available for sale - (149,980)
Bank owned life insurance (83,186) (91,315)
Loss on sale and write down of real estate owned - 4,167
Decrease in accrued interest receivable 166,543 98,742
Decrease in accrued interest payable (2,400) (4,129)
Net other operating activities   (194,997)   (10,250)
Net cash provided by operating activities   638,317   748,415
INVESTING ACTIVITIES
Net decrease in loans 917,159 1,405,273
Net increase in interest-bearing deposits in banks (10,125,410)   (5,441,217)
Purchase of securities available for sale - (6,178,874)
Proceeds from sales of securities available for sale - 2,565,254
Proceeds from maturing or callable securities available for sale 1,723,403 3,851,250
Net purchase of restricted equity securities (83,400) (500)
Purchase of premises and equipment (560,061) (65,285)
Proceeds from sales of other real estate owned   -   64,017
Net cash used in investing activities   (8,128,309)   (3,800,082)
 
FINANCING ACTIVITIES
Net increase in deposits 5,656,948 3,590,315
Net increase in other borrowings 2,000,000 -
Purchase of treasury stock - (165,419)
Payments of cash dividends   (114,786)   (128,082)
Net cash provided by financing activities   7,542,162   3,296,814
 
Net increase in cash and cash equivalents 52,170 245,147
 
Cash and cash equivalents at beginning of year   1,698,936   1,718,147
 
Cash and cash equivalents at end of year $ 1,751,106 $ 1,963,294
 
SUPPLEMENTAL DISCLOSURE
Cash paid during the year for:
Interest $ 143,692 $ 143,323
Taxes $ - $ -
OTHER NONCASH TRANSACTIONS
Internally financed sales of other real estate owned $ - $ -

Contacts

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

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