JASPER, Ala.--(BUSINESS WIRE)--Robert B. Nolen, Jr., President and Chief Executive Officer of Pinnacle Bancshares, Inc. (OTCBB:PCLB), today announced Pinnacle’s second quarter results of operations.
For the three months ended June 30, 2012, net income was $465,000, compared with net income of $304,000 for the three months ended June 30, 2011.
For the six months ended June 30, 2012, net income was $898,000, compared with net income of $346,000 for the six months ended June 30, 2011.
Basic and diluted earnings per share for the three and six month periods ended June 30, 2012, were $0.38 and $0.72 per share, respectively, compared to $0.24 and $0.27 per share, respectively, for the same periods last year.
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.”
The Company’s net interest margin was 3.88% and 3.97% for the three months and six months ended June 30, 2012, respectively, compared to 4.19% and 4.17% for the three months and six months ended June 30, 2011, respectively. Mr. Nolen observed: “Our non-interest income levels continue to be above peer group average, and non-interest expenses continue to be well below peer group average.”
At June 30, 2012, the Company’s allowance for loan losses as a percent of total loans was 1.97%, compared to 2.51% at June 30, 2011 and 2.13% At June 30, 2012, the Company’s allowance for loan losses as a percent of non-performing loans was 264.75%, compared to 221.67%, at June 30, 2011 and 211.68% at December 31, 2011. Based on current real estate valuations, Pinnacle believes its allowance for loan losses is adequate. If economic conditions do not improve, additional charge-offs and further significant increases in the allowance may be necessary.
Charge-offs, net of recoveries, were $238,000 and $454,000 for the three and six months ended June 30, 2012, respectively, compared to $384,000 and $631,000 for the three and six months ended June 30, 2011, respectively. The ratio of non-performing assets to total loans was 0.74% at June 30, 2012, compared to 1.13% at June 30, 2011 and 1.01% December 31, 2011. “Declines in charge-offs and non-performing assets indicate our continued success in resolving problems loan issues aggressively,” said Mr. Nolen.
For the three and six months ended June 30, 2012, recoveries were $32,000 and $81,000, respectively, compared to $34,000 and $54,000 for the three and six months ended June 30, 2011, respectively.
Mr. Nolen noted that the increase in income in the three and six months ended June 30, 2012, compared to the prior year was primarily due to the decrease in Pinnacle’s provision for loan losses, from $350,000 and $950,000 in the three and six months ended June 30, 2011, respectively, to $50,000 and $200,000 in the three and six months ended June 30, 2012, respectively.
This decreased provision during the first half of 2012 was primarily due to the Company’s improved asset quality, the reduction in charge-offs, and the increase in recoveries.
Pinnacle was classified as “well capitalized” at the end of the second quarter of 2012. At June 30, 2012, total risk-based capital was 18.11% for the holding company and 17.80% for the bank, compared with a regulatory requirement of 10.0% for a well capitalized institution. Tier 1 risk-based capital was 16.89% for the holding company and 16.59% for the bank; both ratios were significantly higher than the 6.0% requirement for a well capitalized institution.
In June 2012, the Federal Reserve Board issued proposed new rules to implement revised capital requirements under the Dodd-Frank Act and the Based III international capital standards. Management will evaluate the potential impact of these proposed rules to ensure the capital levels of both the holding company and the bank continue to exceed amounts required to be deemed “well capitalized.”
Mr. Nolen again reminded investors that, although Pinnacle remains well capitalized and has been able to avoid liquidity issues, Pinnacle continues to operate in a challenging and uncertain economic and regulatory environment. Financial institutions in Alabama and throughout the U. S. have been, and continue to be, affected by significant declines in economic conditions and constrained financial markets. Pinnacle retains direct exposure to the residential and commercial real estate markets.
The Company believes declines in economic conditions and financial stresses as a result of the uncertain economic environment, including job losses, have had and could continue to have an adverse affect on Pinnacle’s borrowers or 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 non-performing 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. |
||||||||
| Three Months Ended June 30, | ||||||||
| 2012 | 2011 | |||||||
| Net income | $ | 465,000 |
|
$ | 304,000 | |||
| Basic and diluted earnings per share | $ | 0.38 | $ | 0.24 | ||||
| Performance ratios (annualized): | ||||||||
| Return on average assets | 0.90 | % | 0.59 | % | ||||
| Return on average equity | 8.24 | % | 5.79 | % | ||||
| Interest rate spread | 3.85 | % | 4.17 | % | ||||
| Net interest margin | 3.88 | % | 4.19 | % | ||||
| Operating cost to assets | 2.97 | % | 3.18 | % | ||||
| Weighted average basic and diluted shares outstanding |
1,232,985 |
1,270,128 |
||||||
| Dividends per share | $ | 0.11 | $ | 0.11 | ||||
| Provision for loan losses | $ | 50,000 | $ | 350,000 | ||||
| Six Months Ended June 30, | ||||||||
| June 30, 2012 | June 30, 2011 | |||||||
| Net income | $ | 898,000 |
|
$ | 346,000 | |||
| Basic and diluted earnings per share | $ | 0.27 | $ | 0.27 | ||||
| Performance ratios (annualized): | ||||||||
| Return on average assets | 0.87 | % | 0.34 | % | ||||
| Return on average equity | 7.93 | % | 3.31 | % | ||||
| Interest rate spread | 3.96 | % | 4.16 | % | ||||
| Net interest margin | 3.97 | % | 4.17 | % | ||||
| Operating cost to assets | 2.96 | % | 3.29 | % | ||||
| Weighted average basic and diluted shares outstanding |
1,251,557 |
1,270,128 |
||||||
| Dividends per share | $ | 0.22 | $ | 0.22 | ||||
| Provision for loan losses | $ | 200,000 | $ | 950,000 | ||||
| June 30, 2012 | December 31, 2011 | |||||||
| Total assets | $ | 208,624,000 | $ | 199,231,000 | ||||
| Loans receivable, net | $ | 98,378,000 | $ | 102,446,000 | ||||
| Deposits | $ | 178,309.000 | $ | 170,577,000 | ||||
| Total stockholders’ equity | $ | 22,342,000 | $ | 22,334,000 | ||||
| Book value per share | $ | 18.54 | $ | 17.58 | ||||
| Stockholders’ equity to assets ratio | 10.71 | % | 11.21 | % | ||||
| Asset quality ratios: | ||||||||
|
Nonperforming loans as a percent of total loans |
0.74 | % | 1.01 | % | ||||
|
Nonperforming assets as a percent of total assets |
1.15 | % | 1.39 | % | ||||
|
Allowance for loan losses as a percent of total loans |
1.97 | % | 2.13 | % | ||||
|
Allowance for loan losses as a percent of nonperforming loans |
264.75 | % | 211.68 | % | ||||
|
FINANCIAL INFORMATION |
||||||||
|
PINNACLE BANCSHARES, INC. |
||||||||
| June 30, | December 31, | |||||||
| 2012 | 2011 | |||||||
| Assets | ||||||||
| Cash and cash equivalents | $ | 1,648,330 | $ | 2,510,642 | ||||
| Interest bearing deposits in banks | 8,879,488 | 1,613,466 | ||||||
| Securities available-for-sale | 82,897,251 | 75,734,778 | ||||||
| Restricted equity securities | 854,200 | 957,800 | ||||||
| Loans held for sale | 113,668 | 0 | ||||||
|
Loans receivable, net of allowances for loan losses of $1,974,975 and $2,228,644 respectively |
98,378,218 | 102,445,514 | ||||||
| Foreclosed Assets | 403,881 | 403,881 | ||||||
| Premises and equipment, net | 6,195,874 | 6,186,794 | ||||||
| Goodwill | 306,488 | 306,488 | ||||||
|
Bank owned life insurance |
7,290,682 |
7,117,402 |
||||||
|
Accrued interest receivable |
812,461 |
1,018,331 |
||||||
|
Other assets |
843,825 |
935,476 |
||||||
|
Total assets |
$ |
208,624,366 |
$ |
199,230,572 |
||||
|
|
|
|
||||||
|
|
|
|||||||
|
|
||||||||
| Liabilities and stockholders’ equity | ||||||||
| Deposits | $ | 178,308,820 | $ | 170,576,626 | ||||
| Subordinated debt | 3,093,000 | 3,093,000 | ||||||
| Repurchase agreements | 954,399 | 984,957 | ||||||
| Official checks outstanding | 2,540,712 | 771,362 | ||||||
| Accrued interest payable | 171,837 | 182,020 | ||||||
| Other liabilities | 1,213,182 | 1,288,204 | ||||||
| Total liabilities | 186,281,950 | 176,896,169 | ||||||
| Stockholders’ equity | ||||||||
| Common stock, par value $.01 per share; 2,400,000 authorized; 1,872,313 issued at June 30, 2012 and December 31, 2011, respectively; 1,205,125 and 1,270,128 outstanding at June 30, 2012 and December 31, 2011, respectively |
18,723 |
18,723 |
||||||
| Additional paid-in capital | 8,923,223 | 8,923,223 | ||||||
|
Treasury shares, at cost (667,185 and 602,185 shares outstanding at June 30, 2012 and December 31, 2011, respectively) |
(7,974,814 |
) |
(7,320,909 |
) |
||||
| Retained earnings | 19,234,845 | 18,609,374 | ||||||
| Accumulated other comprehensive loss, net of tax | 2,140,439 | 2,103,992 | ||||||
| Total stockholders’ equity | 22,342,416 | 22,334,403 | ||||||
| Total liabilities and stockholders’ equity | $ | 208,624,366 | $ | 199,230,572 | ||||
|
PINNACLE BANCSHARES, INC. |
|||||||||||||
|
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
|||||||||||||
|
Three Months Ended |
Six Months Ended |
||||||||||||
|
June 30, |
June 30, |
||||||||||||
|
2012 |
2011 |
2012 |
2011 |
||||||||||
| INTEREST REVENUE: | |||||||||||||
| Interest on loans | $ | 1,448,865 | $ | 1,633,377 | $ | 2,963,650 | $ | 3,289,060 | |||||
| Interest and dividends on securities | 600,264 | 633,698 | 1,213,764 | 1,230,621 | |||||||||
| Other interest | 10,482 | 7,083 | 16,469 | 11,652 | |||||||||
| 2,059,611 | 2,274,158 | 4,193,883 | 4,531,333 | ||||||||||
| INTEREST EXPENSE: | |||||||||||||
| Interest on deposits | 198,388 | 308,127 | 410,434 | 654,496 | |||||||||
| Interest on subordinated debt | 26,431 | 24,956 | 53,682 | 49,838 | |||||||||
| Interest on borrowed funds | 0 | 10 | 374 | 72 | |||||||||
| 224,819 | 333,093 | 464,490 | 704,406 | ||||||||||
|
NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES |
1,834,792 | 1,941,065 | 3,729,393 | 3,826,927 | |||||||||
| PROVISION FOR LOAN LOSSES | 50,000 | 350,000 | 200,000 | 950,000 | |||||||||
|
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES |
1,784,792 |
1,591,065 |
3,529,393 |
2,876,927 |
|||||||||
| NONINTEREST INCOME: | |||||||||||||
| Fees and service charges on deposit accounts | 224,000 | 227,627 | 409,099 | 485,965 | |||||||||
| Service fee income | 10,767 | 13,197 | 22,096 | 27,023 | |||||||||
| Fees and charges on loans | 56,547 | 78,514 | |||||||||||
| Bank owned life insurance | 86,640 | 85,075 | 173,280 | 170,150 | |||||||||
| Net gain on sale or write-down of: | |||||||||||||
| Loans held for sale | 34,652 | 10,980 | 43,905 | 23,299 | |||||||||
| Real estate owned | 9,290 | 0 | 9,290 | 0 | |||||||||
| 365,349 | 393,426 | 657,670 | 784,951 | ||||||||||
| NONINTEREST EXPENSE: | |||||||||||||
| Compensation and benefits | 707,011 | 800,328 | 1,430,349 | 1,714,310 | |||||||||
| Occupancy | 268,268 | 353,037 | 552,085 | 678,812 | |||||||||
| Marketing and professional | 126,823 | 90,248 | 225,760 | 183,796 | |||||||||
| Loss on sale of real estate | 0 | 5,334 | 0 | 9,913 | |||||||||
| Other | 439,032 | 385,183 | 810,300 | 775,976 | |||||||||
| 1,541,134 | 1,634,130 | 3,018,494 | 3,362,807 | ||||||||||
| INCOME BEFORE INCOME TAXES | 609,007 | 350,361 | 1,168,569 | 299,071 | |||||||||
| INCOME TAX EXPENSE (BENEFIT) | 143,910 | 46,152 | 270,828 | (47,071 | ) | ||||||||
| NET INCOME | $ | 465,097 | $ | 304,209 | $ | 897,741 | $ | 346,142 | |||||
| Cash dividend per share | $ | 0.11 | $ | 0.11 | $ | 0.22 | $ | 0.22 | |||||
| Basic and diluted earnings per share | $ | 0.38 | $ | 0.24 | $ | 0.72 | $ | 0.27 | |||||
| Weighted –average basic and diluted shares outstanding | 1,232,985 | 1,270,128 | 1,251,557 | 1,270,128 | |||||||||
|
PINNACLE BANCSHARES, INC. |
|||||||||||||||||||||||
|
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY |
|||||||||||||||||||||||
|
FOR THE SIX MONTHS ENDED JUNE 30 2012 AND 2011 |
|||||||||||||||||||||||
| 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 | $ | (7,320,909 | ) | $ | 17,931,987 | $ | 1 ,099,934 | $ | 20,652,958 | |||||||||
| Net income | 0 | 0 | 0 | 0 | 346,142 | 0 | 346,142 | ||||||||||||||||
| Cash dividends declared ($.22 per share) | 0 | 0 | 0 | 0 | (279,423 | ) | 0 | (279,423 | ) | ||||||||||||||
| Other comprehensive income | 0 | 0 | 0 | 0 | 0 | 548,679 | 548,679 | ||||||||||||||||
| Balance June 30, 2011 | 1 ,872,313 | $ | 18,723 | $ | 8,923,223 | $ | (7,320,909 | ) | $ | 17,998,706 | $ | 1,648,613 | $ | 21,268,356 | |||||||||
| Accumulated | |||||||||||||||||||||||
| Additional | Other | Total | |||||||||||||||||||||
| Common Stock | Paid-in | Treasury | Retained | Comprehensive | Stockholders’ | ||||||||||||||||||
| Shares | Amount | Capital | Stock | Earnings | Income | Equity | |||||||||||||||||
| Balance December 31, 2011 | 1,872,313 | $ | 18,723 | $ | 8,923,223 | $ | (7,320,909 | ) | 18,609,374 | $ | 2,103,992 | $ | 22,334,403 | ||||||||||
| Net income | 0 | 0 | 0 | 0 | 897,741 | 0 | 897,741 | ||||||||||||||||
| Cash dividends declared ($.22 per share) | 0 | 0 | 0 | 0 | (272,270 | ) | 0 | (272,270 | ) | ||||||||||||||
| 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 | 36,447 | 36,447 | ||||||||||||||||
| Balance June 30, 2012 | 1 ,872,313 | $ | 18,723 | $ | 8,923,223 | $ | (7,974,814 | ) | $ | 19,234,845 | $ | 2,140,439 | $ | 22,342,416 | |||||||||
|
PINNACLE BANCSHARES, INC. |
||||||||
|
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||||
|
For the Six Months Ended |
||||||||
| June 30, | ||||||||
| 2012 | 2011 | |||||||
| OPERATING ACTIVITIES: | ||||||||
| Net income | 897,741 | $ | 346,142 | |||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation | 236,024 | 249,191 | ||||||
| Provision for loan losses | 200,000 | 950,000 | ||||||
| Amortization expense, net | 103,998 | (14,172 | ) | |||||
| Bank owned life insurance | (173,280 | ) | (170,151 | ) | ||||
| Gain on sale of loans held for sale | (43,905 | ) | (23,299 | ) | ||||
| Loss on sale of or write-down of real estate owned, net | (9,290 | ) | 9,913 | |||||
| Proceeds from sales of loans held for sale | 2,992,966 | 2,464,242 | ||||||
| Origination of loans held for sale | (3,062,729 | ) | (2,189,802 | ) | ||||
| Decrease in accrued interest receivable | 205,870 | 735 | ||||||
| Decrease in other assets | 91,651 | 254,367 | ||||||
| Decrease in accrued interest payable | (10,183 | ) | (123,026 | ) | ||||
| Decrease in other liabilities | (97,360 | ) | (394,724 | ) | ||||
| Net provided by operating activities | 1,331,503 | 1,359,416 | ||||||
| INVESTING ACTIVITIES: | ||||||||
| Net loan repayments | 3,727,166 | 4,473,461 | ||||||
| Net increase in interest bearing deposits in other banks | (7,266,022 | ) | (3,858,435 | ) | ||||
| Purchase of securities available-for-sale | (13,035,681 | ) | (13,319,630 | ) | ||||
| Proceeds from maturing, sale and payments received on securities available-for-sale | 5,827,995 | 7,554,638 | ||||||
| Proceeds from sales of correspondent bank stock | 103,600 | 147,000 | ||||||
| Purchase of premises and equipment | (245,104 | ) | (19,906 | ) | ||||
| Proceeds from sales or capital expenditures related to real estate owned | 149,420 | 260,787 | ||||||
| Net cash used in investing activities | (10,738,626 | ) | (4,762,085 | ) | ||||
| FINANCING ACTIVITIES: | ||||||||
| Net increase in deposits | 7,732,194 | 3,480,312 | ||||||
| Increase (decrease) in official checks outstanding | 1,769,350 | (10,519 | ) | |||||
| Decrease in repurchase agreements | (30,558 | ) | 0 | |||||
| Repurchase of common stock | (653,905 | ) | 0 | |||||
| Payments of cash dividends | (272,270 | ) | (279,423 | ) | ||||
| Net cash provided by financing activities | 8,544,811 | 3,190,370 | ||||||
| NET DECREASE IN CASH AND CASH EQUIVALENTS | (862,312 | ) | (212,299 | ) | ||||
| CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 2,510,642 | 3,486,659 | ||||||
| CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | 1,648,330 | $ | 3,274,360 | ||||
| SUPPLEMENTAL DISCLOSURES: | ||||||||
| Cash payments for interest on deposits, borrowed funds, and subordinated debentures | $ | 474,673 | $ | 827,346 | ||||
| Cash payments for income taxes | $ | 268,000 | $ | 6,000 | ||||
| OTHER NONCASH TRANSACTIONS | ||||||||
| Real estate acquired through foreclosure | $ | 140,130 | 293,459 | |||||