JASPER, Ala.--(EON: Enhanced Online News)--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, 2013, net income was $494,000, compared with net income of $551,000 for the three months ended September 30, 2012.
For the nine months ended September 30, 2013, net income was $1,458,000, compared with net income of $1,448,000 for the nine months ended September 30, 2012.
Basic and diluted earnings per share for the three and nine month periods ended September 30, 2013, were $0.41 and $1.21 per share, respectively, compared to $0.46 and $1.17 per share, respectively, for the same periods last year.
For the three and nine months ended September 30, 2013, return on average assets was 0.89%, and 0.91%, respectively, compared to 1.08% and 0.94%, respectively, in the comparable 2012 periods.
Net interest margin was 3.42% and 3.51% for the three months and nine months ended September 30, 2013, respectively, compared to 3.98% and 3.96% for the three months and nine months ended September 30, 2012, respectively.
In the three and nine months ended September 30, 2013, Pinnacle’s net interest margin declined primarily due to lower loan volumes. Lower provision for loan losses and operating expenses helped offset the decline in net interest income.
Mr. Nolen commented: “Our strategy is to continue to provide high quality products and services to, and relationship banking with, our customers who live and conduct businesses in our market area. We focus on loan quality and closely monitor our expenses. Although loan growth continues to be challenged, our core deposits, asset quality and regulatory capital ratios remain strong. We conservatively manage our investments, which we expect will provide significant flexibility if and when loan volumes begin to increase in an improving economy.”
At September 30, 2013, the Company’s allowance for loan losses as a percent of total loans was 1.62%, compared to 1.90% at September 30, 2012. At September 30, 2013, the Company’s allowance for loan losses as a percent of non-performing loans was 255.25%, compared to 240.37%, at September 30, 2012. Based on current real estate valuations, Pinnacle believes its allowance for loan losses is adequate.
Charge-offs, net of recoveries, were $177,000 and $630,000 for the three and nine months ended September 30, 2013, respectively, compared to $165,000 and $619,000 for the three and nine months ended September 30, 2012, respectively. The ratio of non-performing loans to total loans was 0.63% at September 30, 2013, compared to .76% at September 30, 2012 and .20% at December 31, 2012.
The decrease in provision for loan losses during the first nine months of 2013 was primarily due to the reduced amount of classified loans as well as the shrinking of the overall loan portfolio.
Pinnacle was classified as “well capitalized” at the end of the third quarter of 2013. At September 30, 2013, total risk-based capital was 18.83% for the subsidiary bank. Tier 1 risk-based capital and Tier 1 leverage capital ratios for the subsidiary bank were 17.73% and 11.03%, respectively. All capital ratios are significantly higher than the requirements for a well capitalized institution.
Mr. Nolen again reminded investors that, although Pinnacle remains well capitalized and has been able to avoid liquidity issues, economic conditions and financial stresses including job losses, have had and could continue to have an adverse affect 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 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,|
|Basic and diluted earnings per share||$||0.41||$||0.46|
|Performance ratios (annualized):|
|Return on average assets||.89||%||1.08||%|
|Return on average equity||9.72||%||9.71||%|
|Interest rate spread||3.40||%||3.97||%|
|Net interest margin||3.42||%||3.98||%|
|Operating cost to assets||2.70||%||2.99||%|
|Weighted average basic and diluted shares outstanding||1,205,128||1,205,128|
|Dividends per share||$||0.11||$||0.11|
|Provision for loan losses||$||25,000||$||0|
|Nine Months Ended September 30,|
|Basic and diluted earnings per share||$||1.21||$||1.17|
|Performance ratios (annualized):|
|Return on average assets||0.91||%||0.94||%|
|Return on average equity||10.44||%||8.57||%|
|Interest rate spread||3.50||%||3.94||%|
|Net interest margin||3.51||%||3.96||%|
|Operating cost to assets||2.71||%||2.94||%|
Weighted average basic and diluted shares outstanding
|Dividends per share||$||0.22||$||0.33|
|Provision for loan losses||$||100,000||$||200,000|
|September 30, 2013||December 31, 2012|
|Loans receivable, net||$||92,991,000||$||95,963,000|
|Total stockholders’ equity||$||21,896,000||$||22,770,000|
|Book value per share||$||18.17||$||18.54|
|Stockholders’ equity to assets ratio||9.77||%||10.93||%|
|Asset quality ratios:|
|Non-performing loans as a percent of total loans||0.63||%||0.20||%|
|Non-performing assets as a percent of total assets||0.51||%||0.56||%|
|Allowance for loan losses as a percent of total loans||1.62||%||2.07||%|
Allowance for loan losses as a percent of Non-performing loans
PINNACLE BANCSHARES, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
|September 30, 2013||December 31, 2013|
|Cash and cash equivalents||$||1,444,680||$||1,332,968|
|Interest bearing deposits in banks||12,754,548||2,234,882|
|Securities available for sale||100,062,098||91,693,374|
|Restricted equity securities||855,900||994,800|
|Loans held for sale||0||395,801|
|Less Allowance for loan Losses||1,506,355||2,036,110|
|Other real estate owned||480,258||347,824|
|Premises and equipment, net||5,731,489||6,039,211|
|Bank owned life insurance||7,723,201||7,463,963|
|Accrued interest receivable||896,848||901,784|
Liabilities and Stockholders’ Equity
|Accrued interest payable||112,164||110,311|
|Common stock, par value $.01 per share; 2,400,000 authorized; 1,872,313 issued at September 30, 2013 and December 31, 2012; 1,205,128 outstanding at September 30, 2013 and December 31, 2012||18,723||18,723|
|Additional paid-in capital||8,923,223||8,923,223|
|Treasury stock, at cost (667,185 shares outstanding at September 30, 2013 and December 31, 2012)||
|Accumulated other comprehensive income (loss), net of tax||(157,812||)||1,908,903|
|Total stockholders’ equity||21,896,366||22,770,225|
|Total liabilities and stockholders’ equity||$||224,131,370||$||208,390,768|
PINNACLE BANCSHARES, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|Three Months Ended||Nine Months Ended|
|September 30,||September 30|
|Interest & fee income on loans||$||1,208,592||$||1,417,472||$||3,707,738||$||4,381,122|
|Interest and dividends on securities||667,297||615,610||1,964,337||1,829,374|
|Interest on deposits||137,517||167,143||423,550||577,577|
|Interest on subordinated debt||24,877||26,624||74,986||80,306|
|Interest on borrowed funds||1||89||1,653||463|
NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES
|PROVISION FOR LOAN LOSSES||25,000||0||100,000||200,000|
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES
|Fees and service charges on deposit accounts||254,730||248,174||762,124||657,273|
|Service fee income||8,260||10,053||24,870||32,149|
|Bank owned life insurance||86,413||86,640||259,239||259,920|
|Net gain (loss) on sale or write-down of:|
|Loans held for sale||33,498||13,987||75,705||57,892|
|Real estate owned||3,621||43,377||(90,031)||52,667|
|Compensation and benefits||711,255||686,968||2,019,526||2,117,317|
|Marketing and professional||107,802||120,911||346,127||346,671|
|INCOME BEFORE INCOME TAXES||597,895||734,393||1,763,127||1,902,962|
|INCOME TAX EXPENSE||103,558||183,768||305,143||454,596|
|Cash dividend per share||$0.11||$0.22||$0.22||$0.33|
|Basic and diluted earnings per share||$0.41||$0.46||$1.21||$1.17|
|Weighted –average basic and diluted shares outstanding||1,205,128||1,205,128||1,205,128||1,235,967|
PINNACLE BANCSHARES, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2013 AND 2012
|Balance December 31, 2011||1,872,313||$||18,723||$||8,923,223||$||(7,320,909||)||$||18,609,374||$||2,103,992||$||22,334,403|
|Cash dividends declared ($.33 per share)||0||0||0||0||(404,835||)||0||(404,835||)|
|Repurchase of 65,000 shares of common stock||0||0||0||(653,905||)||0||0||(653,905||)|
|Other comprehensive income||0||0||0||0||0||253,329||253,329|
|Balance September 30, 2012||1,872,313||$||18,723||$||8,923,223||$||(7,974,814||)||$||19,652,905||$||2,357,321||$||22,977,358|
|Balance December 31, 2012||1,872,313||$||18,723||$||8,923,223||$||(7,974,814||)||$||19,894,190||$||1,908,903||$||22,770,225|
|Cash dividends declared ($.22 per share)||0||0||0||0||(265,128||)||0||(265,128||)|
|Other comprehensive loss||0||0||0||0||0||(2,066,715||)||(2,066,715||)|
|Balance September 30, 2013||1,872,313||$||18,723||$||8,923,223||$||(7,974,814||)||$||21,087,046||$||(157,812||)||$||21,896,366|
PINNACLE BANCSHARES, INC,
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|For the Nine Months Ended|
|Adjustments to reconcile net income to net cash provided by operating activities:|
|Provision for loan losses||100,000||200,000|
|Amortization expense, net||355,166||179,235|
|Bank owned life insurance||(259,239||)||(259,921||)|
|Gain on sale of loans held for sale||(75,705||)||(57,892||)|
|(Gain) loss on sale of or write-down of real estate owned, net||90,031||(43,377||)|
|Gain on sale of assets||(5,151||)||0|
|Net change in loans held for sale||471,506||(539,066||)|
|Decrease in accrued interest receivable||4,936||193,764|
|Proceeds from refund of FDIC prepaid assessment||393,050||0|
|Increase (decrease) in accrued interest payable||1,853||(36,697||)|
|Net other operating activities||32,999||301,767|
|Net provided by operating activities||2,922,379||1,744,845|
|Net loan repayments||2,544,229||8,125,238|
|Net increase in interest bearing deposits in other banks||(10,519,666||)||(4,305,718||)|
|Purchase of securities available-for-sale||(24,856,887||)||(19,600,681||)|
|Proceeds from maturing, calls, and payments received on securities available-for-sale||12,784,949||9,231,018|
|Purchase of correspondent bank stock||0||(163,900||)|
|Proceeds from sales of correspondent bank stock||138,900||135,900|
|Purchase of premises and equipment||(47,227||)||(266,259||)|
|Proceeds from sales of premises and equipment||5,151||0|
|Proceeds from sales or capital expenditures related to real estate owned||105,486||343,507|
|Net cash used in investing activities||(19,845,065||)||(6,500,895||)|
|Net increase in deposits||19,944,030||4,323,656|
|Increase in repurchase agreements||1,155,496||128,226|
|Repayment of other borrowings||(3,800,000||)||0|
|Repurchase of common stock||0||(653,905||)|
|Payments of cash dividends||(265,128||)||(404,835||)|
|Net cash provided by financing activities||17,034,398||3,393,142|
|NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS||111,712||(1,362,908||)|
|CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD||1,332,968||2,510,642|
|CASH AND CASH EQUIVALENTS AT END OF PERIOD||$||1,444,680||$||1,147,734|
|Cash payments for interest on deposits, borrowed funds, and subordinated debentures||$||498,336||$||695,043|
|Cash payments for income taxes||$||182,458||$||354,000|
|OTHER NONCASH TRANSACTIONS|
|Real estate acquired through foreclosure||$||327,951||$||694,151|