Pinnacle Bancshares Announces Results for Second Quarter Ended June 30, 2016

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, 2016, Pinnacle reported net income of $556,000 compared to $617,000 for the three months ended June 30, 2015.
  • For the six months ended June 30, 2016, Pinnacle reported net income of $1,194,000 compared to $1,154,000 for the six months ended June 30, 2015.
  • Net interest income after the provision for loan losses for the three and six months ended June 30, 2016, was $1,731,000 and $3,483,000, respectively, compared with $1,811,000 and $3,610,000 respectively, in the same periods last year.
  • Basic and diluted earnings per share for the three and six months ended June 30, 2016 were $0.48 and $1.03 per share, respectively, compared to $0.52 and $0.98 per share, respectively, for the same periods last year.
  • For the three and six months ended June 30, 2016, return on average assets was 1.00%, and 1.07%, respectively, compared to 1.07% and 1.01%, respectively, in the comparable 2015 period.

Included in net income for the three and six months ended June 30, 2016 is gains on sale of securities available for sale of approximately $42,000 and $192,000 as compared to $108,000 for both the three and six months ended June 30, 2015.

Pinnacle’s net interest margin was 3.39% and 3.42% for the three and six months ended June 30, 2016, respectively, compared to 3.40% and 3.41% for the three and six months ended June 30, 2015, respectively.

At June 30, 2016, Pinnacle’s allowance for loan losses as a percent of total loans was 1.90%, compared to 1.81% at December 31, 2015. At June 30, 2016, the allowance for loan losses as a percent of nonperforming loans was 664.46%, compared to 761.06% at December 31, 2015. Nonperforming assets were $243,000 at June 30, 2016, compared to $276,000 at December 31, 2015. The ratio of nonperforming assets to total loans was .29% at June 30, 2016, compared to .32% at December 31, 2015.

Pinnacle was classified as “well capitalized” at June 30, 2016. Total risk-based capital was 20.60% for the subsidiary bank. Tier 1 risk-based capital and Tier 1 leverage capital ratios for the subsidiary bank were 19.39% and 11.69%, respectively. 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, 2016, and 2015.

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,
2016     2015
Net income $ 556,000 $ 617,000
Basic and diluted earnings per share $ 0.48 $ 0.52
 
Performance ratios (annualized):
Return on average assets 1.00 % 1.07 %
Return on average equity 8.71 % 10.16 %
Interest rate spread 3.28 % 3.31 %
Net interest margin 3.39 % 3.40 %
Operating cost to assets 2.70 % 2.60 %
 
Weighted average basic and diluted shares outstanding 1,156,081 1,180,128
Dividends per share $ 0.11 $ 0.11
Provision for loan losses $ - $ -
 
 
Six Months Ended June 30,
2016 2015
Net income $ 1,194,000 $ 1,154,000
Basic and diluted earnings per share $ 1.03 $ 0.98
 
Performance ratios (annualized):
Return on average assets 1.07 % 1.01 %
Return on average equity 9.41 % 9.60 %
Interest rate spread 3.31 % 3.32 %
Net interest margin 3.42 % 3.41 %
Operating cost to assets 2.68 % 2.64 %
 
Weighted average basic and diluted shares outstanding 1,160,864 1,180,128
Dividends per share $ 0.22 $ 0.22
Provision for loan losses $ - $ -
 
 

(Audited)

June 30, 2016 December 31, 2015
Total assets $ 224,478,000 $ 219,509,000
Loans receivable, net $ 82,983,000 $ 85,960,000
Deposits $ 192,476,000 $ 184,917,000
Other borrowings $ - $ 5,000,000
Total stockholders’ equity $ 27,573,000 $ 25,838,000
Weighted average book value per share $ 23.75 $ 21.91
Stockholders’ equity to assets ratio 11.42 % 10.70 %
 
Asset quality ratios:
Nonperforming loans as a percent of total loans .29 % .24 %
Nonperforming assets as a percent of total loans .29 % 32 %
Allowance for loan losses as a percent of total loans 1.90 % 1.81 %
Allowance for loan losses as a percent of nonperforming loans 664.46 % 761.06 %
 
 
 
 
 
 
 

FINANCIAL INFORMATION

 

PINNACLE BANCSHARES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

 
      (Unaudited)    
June 30, December 31,
2016 2015
 

Assets

Cash and cash equivalents $ 1,941,015 $ 1,718,147
Interest bearing deposits in banks 13,087,042 3,138,418
Securities available for sale 110,167,132 112,108,512
Restricted equity securities 722,600 934,600
 
Loans 84,591,251 87,543,012
Less Allowance for loan losses   1,608,037     1,582,707  
Loans, net   82,983,214     85,960,305  
 
Other real estate owned 1 68,185
Premises and equipment, net 5,258,319 5,326,322
Goodwill 306,488 306,488
Bank owned life insurance 8,704,785 8,522,155
Accrued interest receivable 1,101,417 1,155,531
Other assets   205,641     270,623  
Total assets $ 224,477,654   $ 219,509,286  
 

Liabilities and Stockholders’ Equity

Deposits
Noninterest-bearing $ 51,956,686 $ 48,001,274
Interest-bearing   140,519,102     136,915,937  
Total deposits 192,475,788 184,917,211
 
Other borrowings - 5,000,000
Subordinated debentures 3,093,000 3,093,000
Accrued interest payable 98,267 93,830
Other liabilities   1,237,981     567,308  
Total liabilities   196,905,036     193,671,349  
 
Stockholders’ equity
Common stock, par value $.01 per share; 2,400,000 authorized; 1,872,313 issued; 1,149,278 and 1,172,628 outstanding, respectively 18,723 18,723
Additional paid-in capital 8,923,223 8,923,223
Treasury stock (723,035 and 699,685 shares, respectively) (9,004,876 ) (8,532,831 )
Retained earnings 25,580,295 24,640,492
Accumulated other comprehensive income, net of tax   2,055,253     788,330  
 
Total stockholders’ equity   27,572,618     25,837,937  
 
Total liabilities and stockholders’ equity $ 224,477,654   $ 219,509,286  
 
 
 
 
 
 
 

PINNACLE BANCSHARES, INC.

 

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME

 
      Three Months Ended     Six Months Ended
June 30, June 30,
2016     2015 2016     2015
Interest income
Loans, including fees $ 1,068,213 $ 1,126,580 $ 2,167,286 $ 2,250,235
Securities available for sale 791,283 818,512 1,568,910 1,630,038
Other interest   14,794   8,550   29,625   13,404
Total interest income   1,874,290   1,953,642   3,765,821   3,893,677
 
Interest expense
Deposits 111,436 111,940 220,433 223,622
Borrowings and repurchase agreements 2,606 5,051 7,103 8,929
Subordinated debentures   29,600   25,250   55,300   50,750
Total interest expense   143,642   142,241   282,836   283,301
 
Net interest income 1,730,648 1,811,401 3,482,985 3,610,376
Provision for loan losses   -   -   -   -
Net interest income after provision

for loan losses

  1,730,648   1,811,401   3,482,985   3,610,376
 
Other income
Fees and service charges on deposit accounts 306,500 237,298 593,230 472,251
Service fee income, net 4,203 5,178 8,548 10,711
Bank owned life insurance 91,315 90,863 182,630 181,726
Mortgage fee income 15,360 9,471 23,768 12,382
Gain on sale of premises and equipment - - - 12,700
Net gain on securities available for sale   41,566   108,102   191,546   108,102
Total other income   458,944   450,912   999,722   797,872
 
Other expense:
Salaries and employee benefits 790,714 768,934 1,575,344 1,557,752
Occupancy expense 233,017 241,060 461,324 490,178
Marketing and professional expense 85,065 78,521 162,112 153,081
Net (gain) loss on sale of real estate owned - 182 4,167 4,472
Other operating expenses   392,707   414,722   780,393   815,209
Total other expenses   1,501,503   1,503,419   2,983,340   3,020,692
 
Income before income taxes 688,089 758,894 1,499,367 1,387,556
 
Income tax expense   132,285   142,367   305,062   233,787
 
Net income $ 555,804 $ 616,527 $ 1,194,305 $ 1,153,769
 
Cash dividend per share $ 0.11 $ 0.11 $ 0.22 $ 0.22
 
Basic and diluted earnings per share $ 0.48 $ 0.52 $ 1.03 $ 0.98
 

Weighted –average basic and diluted shares outstanding

  1,156,081   1,180,128   1,160,864   1,180,128
 
 
 
 
 
 
 

PINNACLE BANCSHARES, INC.

 

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
Six Months Ended June 30, 2016 and 2015

 
                      Accumulated    
Additional Other Total
Common Stock Paid-in Treasury Retained Comprehensive Stockholders’
Shares     Amount Capital Stock Earnings Income Equity
Balance December 31, 2014 1,872,313 $ 18,723 $ 8,923,223 $ (8,380,575 ) $ 22,938,150 $ 1,247,166 $ 24,746,687
Net income - - - 1,153,769 - 1,153,769
Cash dividends declared

($.22 per share)

- - - - (259,628 ) - (259,628 )
Other comprehensive loss -   -   -   -     -     (908,894 )   (908,894 )
Balance June 30, 2015 1,872,313 $ 18,723 $ 8,923,223 $ (8,380,575 ) $ 23,832,291   $ 338,272   $ 24,731,934  
 
 
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  
 
 
 
 
 
 
 

PINNACLE BANCSHARES, INC.

 

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 
      For the Six Months Ended
June 30,
2016     2015
OPERATING ACTIVITIES:
Net income $ 1,194,305 $ 1,153,769
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation 187,063 193,121
Provision for loan losses - -
Net investment amortization expense 169,977 280,117
Bank owned life insurance (182,630 ) (181,726 )
Gain on sale of securities available for sale (191,546 ) (108,102 )
Loss on sale of or write-down of real estate owned 4,167 4,472
Gain on sale of premises and equipment - (12,700 )
(Increase) decrease in accrued interest receivable 54,114 (76,709 )
Increase in accrued interest payable 4,437 13,130
Net other operating activities   (40,846 )   (183,101 )
Net cash provided by operating activities   1,199,041     1,082,271  
 
INVESTING ACTIVITIES:
Net (increase) decrease in loans 2,977,091 (5,006,330 )
Net increase in interest bearing deposits in other banks (9,948,624 ) (946,073 )
Purchase of securities available for sale (11,992,587 ) (16,810,262 )
Proceeds from sale of securities available for sale 7,867,285 2,853,343
Proceeds from maturing, sale and payments received on securities available for sale 8,131,675 7,548,056
Net (purchase) redemption of restricted equity securities 212,000 (324,900 )
Purchase of premises and equipment (119,060 ) (42,218 )
Proceeds from premises and equipment - 12,700
Proceeds from sales of real estate owned   64,017     18,728  
Net cash used in investing activities   (2,808,203 )   (12,696,956 )
 
FINANCING ACTIVITIES:
Net increase in deposits 7,558,577 2,192,868
Net increase (decrease) in other borrowings (5,000,000 ) 10,000,000
Purchase of treasury stock (472,045 ) -
Payments of cash dividends   (254,502 )   (259,628 )
Net cash provided by financing activities   1,832,030     11,933,240  
 
Net increase in cash and cash equivalents 222,868 318,555
 
Cash and cash equivalents at beginning of period   1,718,147     1,430,862  
 
Cash and cash equivalents at end of period $ 1,941,015   $ 1,749,417  
 
SUPPLEMENTAL DISCLOSURES:
Cash paid during the period for:
Interest $ 278,399 $ 270,171
Taxes $ 309,134 $ 319,624
 
OTHER NONCASH TRANSACTIONS
Real estate acquired through foreclosure $ 0 $ 100,221
Internally financed sales of other real estate owned $ 0 $ 0
 
 
 
 

Contacts

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

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