Pinnacle Bancshares Announces Results for Second Quarter Ended June 30, 2017

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

  • For the three months ended June 30, 2017, Pinnacle reported net income of $560,000 compared to $556,000 for the three months ended June 30, 2016. There were no sales of securities available for sale during the three months ended June 30, 2017 while net income for the three months ended June 30, 2016 included $42,000 in gains from sale of securities.
  • For the six months ended June 30, 2017, Pinnacle reported net income of $1,099,000 compared to $1,194,000 for the six months ended June 30, 2016. There were no sales of securities available for sale during the six months ended June 30, 2017 while net income for the six months ended June 30, 2016 included $192,000 in gains from sale of securities.
  • Net interest income after the provision for loan losses for the three and six months ended June 30, 2017, was $1,799,000 and $3,577,000, respectively, compared with $1,731,000 and $3,483,000 respectively, in the same periods last year.
  • Basic and diluted earnings per share for the three and six months ended June 30, 2017 were $0.54 and $1.05 per share, respectively, compared to $0.48 and $1.03 per share, respectively, for the same periods last year. The basic and diluted earnings per share for the three and six months ended June 30, 2016 would have been $.45 and $.90, respectively, if the net-tax effect of the gain on sales were excluded from earnings.
  • For the three and six months ended June 30, 2017, return on average assets was .99%, and .98%, respectively, compared to 1.00% and 1.07%, respectively, in the comparable 2016 period.

Pinnacle’s net interest margin was 3.45% and 3.46% for the three and six months ended June 30, 2017, respectively, compared to 3.39% and 3.42% for the three and six months ended June 30, 2016, respectively.

At June 30, 2017, Pinnacle’s allowance for loan losses as a percent of total loans was 1.77%, compared to 1.77% at December 31, 2016. At June 30, 2017, the allowance for loan losses as a percent of nonperforming loans was 516.99%, compared to 471.72% at December 31, 2016. Nonperforming assets were $312,000 at June 30, 2017, compared to $344,000 at December 31, 2016. The ratio of nonperforming assets to total loans was .34% at June 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 $.22 per share were paid to shareholders during the three and six months ended for both June 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 June 30,
2017     2016
Net income $ 560,000 $ 556,000
Basic and diluted earnings per share $ 0.54 $ 0.48
 
Performance ratios (annualized):
Return on average assets .99 % 1.00 %
Return on average equity 9.09 % 8.71 %
Interest rate spread 3.35 % 3.28 %
Net interest margin 3.45 % 3.39 %
Operating cost to assets 2.63 % 2.70 %
 
Weighted average basic and diluted shares outstanding 1,043,505 1,156,081
Dividends per share $ 0.11 $ 0.11
Provision for loan losses $ - $ -
 
Six Months Ended June 30,
2017 2016
Net income $ 1,099,000 $ 1,194,000
Basic and diluted earnings per share $ 1.05 $ 1.03
 
Performance ratios (annualized):
Return on average assets .98 % 1.07 %
Return on average equity 9.00 % 9.41 %
Interest rate spread 3.35 % 3.31 %
Net interest margin 3.46 % 3.42 %
Operating cost to assets 2.66 % 2.68 %
 
Weighted average basic and diluted shares outstanding 1,043,505 1,160,864
Dividends per share $ 0.22 $ 0.22
Provision for loan losses $ - $ -
 
(Audited)
June 30, 2017 December 31, 2016
Total assets $ 230,499,000 $ 216,561,000
Loans receivable, net $ 89,454,000 $ 89,561,000
Deposits $ 201,099,000 $ 189,525,000
Other borrowings $ - $ -
Total stockholders’ equity $ 25,738,000 $ 23,758,000
Weighted average book value per share $ 23.73 $ 22.90
Stockholders’ equity to assets ratio 10.90 % 11.44 %
 
Asset quality ratios:
Nonperforming loans as a percent of total loans .34 % .38 %
Nonperforming assets as a percent of total loans .34 % .38 %
Allowance for loan losses as a percent of total loans 1.77 % 1.77 %
Allowance for loan losses as a percent of nonperforming loans 516.99 % 471.72 %
 
 

FINANCIAL INFORMATION

 

PINNACLE BANCSHARES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

 
    (Unaudited)    
June 30, December 31,
2017 2016
 

Assets

Cash and cash equivalents $ 1,662,929 $ 1,698,936
Interest bearing deposits in banks 17,689,183 3,035,346
Securities available for sale 104,330,953 105,551,083
Restricted equity securities 805,500 722,100
 
Loans 91,067,118 91,268,924
Less Allowance for loan losses   1,612,674     1,617,620  
Loans, net   89,454,444     89,651,304  
 
Premises and equipment, net 5,708,412 5,222,947
Goodwill 306,488 306,488
Bank owned life insurance 9,053,788 8,887,416
Accrued interest receivable 1,163,370 1,197,974
Other assets   324,029     287,692  
Total assets $ 230,499,096   $ 216,561,286  
 

Liabilities and Stockholders’ Equity

Deposits
Noninterest-bearing $ 58,714,198 $ 53,279,880
Interest-bearing   142,384,598     136,244,690  
Total deposits 201,098,796 189,524,570
 
Subordinated debentures 3,093,000 3,093,000
Accrued interest payable 80,421 81,024
Other liabilities   489,184     104,336  
Total liabilities   204,761,401     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, respectively 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 27,286,278 26,417,216

Accumulated other comprehensive income (loss), net of tax

  973,575     (136,701 )
 
Total stockholders’ equity   25,737,695     23,758,357  
 
Total liabilities and stockholders’ equity $ 230,499,096   $ 216,561,286  
 
 

PINNACLE BANCSHARES, INC.

 

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME

 
    Three Months Ended     Six Months Ended
June 30, June 30,
2017     2016 2017     2016
Interest income
Loans, including fees $ 1,137,065 $ 1,068,213 $ 2,258,019 $ 2,167,286
Securities available for sale 763,816 791,283 1,543,018 1,568,910
Other interest   35,688   14,794   55,043   29,625
Total interest income   1,936,569   1,874,290   3,856,080   3,765,821
 
Interest expense
Deposits 106,168 111,436 213,777 220,433
Borrowings and repurchase agreements - 2,606 2,883 7,103
Subordinated debentures   31,000   29,600   61,800   55,300
Total interest expense   137,168   143,642   278,460   282,836
 
Net interest income 1,799,401 1,730,648 3,577,620 3,482,985
Provision for loan losses   -   -   -   -

Net interest income after provision for loan losses

  1,799,401   1,730,648   3,577,620   3,482,985
 
Other income
Fees and service charges on deposit accounts 309,336 306,500 611,322 593,230
Service fee income, net 3,135 4,203 6,460 8,548
Bank owned life insurance 83,186 91,315 166,372 182,630
Mortgage fee income 5,528 15,360 5,228 23,768
Net gain on securities available for sale   -   41,566   -   191,546
Total other income   401,185   458,944   789,382   999,722
 
Other expense:
Salaries and employee benefits 817,766 790,714 1,659,938 1,575,344
Occupancy expense 238,117 233,017 459,632 461,324
Marketing and professional expense 49,633 85,065 93,363 162,112
Net loss on sale of real estate owned - - - 4,167
Other operating expenses   383,683   392,707   771,751   780,393
Total other expenses   1,489,199   1,501,503   2,984,684   2,983,340
 
Income before income taxes 711,387 688,089 1,382,318 1,499,367
 
Income tax expense   151,163   132,285   283,684   305,062
 
Net income $ 560,224 $ 555,804 $ 1,098,634 $ 1,194,305
 
Cash dividend per share $ 0.11 $ 0.11 $ 0.22 $ 0.22
 
Basic and diluted earnings per share $ 0.54 $ 0.48 $ 1.05 $ 1.03
 

Weighted –average basic and diluted shares outstanding

  1,043,505   1,156,081   1,043,505   1,160,864
 
 

PINNACLE BANCSHARES, INC.

 

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Six Months Ended June 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 - - - 1,194,305 - 1,194,305

Cash dividends declared ($.22 per share)

- - - - (254,502 ) - (254,502 )
Purchase of treasury stock - - - (472,045 ) - - (472,045 )
Other comprehensive income -   -   -   -     -     1,266,923     1,266,923  
Balance June 30, 2016 1,872,313 $ 18,723 $ 8,923,223 $ (9,004,876 ) $ 25,580,295   $ 2,055,253   $ 27,572,618  
 
 
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 - - - 1,098,634 - 1,098,634

Cash dividends declared ($.22 per share)

- - - - (229,572 ) - (229,572 )
Other comprehensive income -   -   -   -     -     1,110,276     1,110,276  
Balance June 30, 2017 1,872,313 $ 18,723 $ 8,923,223 $ (11,464,104 ) $ 25,286,278   $ 973,575   $ 25,737,695  
 
 

PINNACLE BANCSHARES, INC.

 

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 
    For the Six Months Ended
June 30,
2017     2016
OPERATING ACTIVITIES:
Net income $ 1,098,634 $ 1,194,305
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation 175,341 187,063
Net investment amortization expense 257,001 316,471
Bank owned life insurance (166,372 ) (182,630 )
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 34,604 54,114
Increase (decrease) in accrued interest payable (602 ) 4,437
Net other operating activities   (331,980 )   (40,846 )
Net cash provided by operating activities   1,066,626     1,345,535  
 
INVESTING ACTIVITIES:
Net decrease in loans 196,860 2,977,091
Net increase in interest bearing deposits in other banks (14,653,837 ) (9,948,624 )
Purchase of securities available for sale (2,040,054 ) (11,992,587 )
Proceeds from sale of securities available for sale - 7,867,285
Proceeds from maturing, sale and payments received on securities available for sale 4,793,950 7,985,181
Net (purchase) redemption of restricted equity securities (83,400 ) 212,000
Purchase of premises and equipment (660,806 ) (119,060 )
Proceeds from sales of real estate owned   -     64,017  
Net cash used in investing activities   (12,447,287 )   (2,954,697 )
 
FINANCING ACTIVITIES:
Net increase in deposits 11,574,226 7,558,577
Net decrease in other borrowings - (5,000,000 )
Purchase of treasury stock - (472,045 )
Payments of cash dividends   (229,572 )   (254,502 )
Net cash provided by financing activities   11,344,654     1,832,030  
 
Net increase (decrease) in cash and cash equivalents (36,007 ) 222,868
 
Cash and cash equivalents at beginning of period   1,698,936     1,718,147  
 
Cash and cash equivalents at end of period $ 1,662,929   $ 1,941,015  
 
SUPPLEMENTAL DISCLOSURES:
Cash paid during the period for:
Interest $ 279,062 $ 278,399
Taxes $ 332,569 $ 309,134
 
OTHER NONCASH TRANSACTIONS
Real estate acquired through foreclosure $ - $ -
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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