Pinnacle Bancshares Announces Results for Fourth Quarter and Year Ended December 31, 2013

JASPER, Ala.--()--Robert B. Nolen, Jr., President and Chief Executive Officer of Pinnacle Bancshares, Inc. (OTCBB:PCLB), today announced Pinnacle’s results of operations for the fourth quarter and year ended December 31, 2013:

  • For the three months ended December 31, 2013, Pinnacle reported net income of $484,000, compared to $506,000 for the three months ended December 31, 2013.
  • Net interest income before the provision for loan losses for the three months ended December 31, 2013 was $1,746,000, compared with $1,803,000 in the same period last year.
  • For the year ended December 31, 2013, net income was $1,942,000, compared with net income of $1,955,000 in the prior year.
  • Net interest income before the provision for loan losses for the year ended December 31, 2013, was $6,944,000, compared with $7,374,000 in the prior year.
  • For the three months ended December 31, 2013, basic and diluted earnings were each $0.40 per share. For the same period in 2012, basic and diluted earnings were each $0.42 per share.
  • Basic and diluted earnings were each $1.61 per share for the year ended December 31, 2013. For 2012, basic and diluted earnings were each $1.59 per share.

Mr. Nolen commented: “Our strategy is to continue to provide high quality products and services to, and practice relationship banking with, our customers who live and conduct business in our market area. We focus on loan quality which should enhance our performance in a challenging environment. Although loan growth has continued to be limited, our core deposits and asset quality ratios have remained strong, and we have conservatively managed our investment portfolio, which we expect will provide significant flexibility if loan volumes begin to increase.”

The Company’s net interest margin was 3.40% and 3.48% for the three months and year ended December 31, 2013, respectively, compared to 3.82% and 3.92% for the three months and year ended December 31, 2012, respectively.

Other income increased approximately $86,000 to $1,532,000 during 2013 from other income of $1,446,000 in 2012. Other expenses recorded during 2013 were $5,997,000 as compared to other expenses of $6,096,000 recorded in 2012.

At December 31, 2013, Pinnacle’s allowance for loan losses as a percent of total loans was 1.56%, compared to 2.07% at December 31, 2012. At December 31, 2013, the allowance for loan losses as a percent of nonperforming loans was 239.47%, compared to 1018.00% at December 31, 2012. Based on current real estate valuations, Pinnacle believes its allowance for loan losses is adequate.

Charge-offs, net of recoveries, were $730,000 in 2013, compared to $393,000 in the prior year. Nonperforming assets were $1,165,000 at December 31, 2013, compared to $548,000 at December 31, 2012. The ratio of nonperforming assets to total loans was 1.25% at December 31, 2013, compared to .56% at December 31, 2012. While these asset quality ratios are higher in 2013 as compared to 2012, they are well below the Company’s peer group ratios and indicate that the Company is in sound financial position.

Despite recent improvements, Mr. Nolen cautioned investors that 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
 
Three Months Ended December 31,
2013 2012
Net Income $ 484,000 $ 506,000
Weighted average basic shares outstanding 1,205,128 1,205,128
Weighted average diluted shares outstanding 1,205,128 1,205,128
Dividend per share $ 0.11 $ 0.22
Provision for loan losses $ 50,000 $ 50,000
Basic earnings per share $ 0.40 $ .0.42
Diluted earnings per share $ 0.40 $ 0.42
Performance Ratios: (annualized)
Return on average assets 0.88 % 0.99 %
Return on average equity 8.74 % 8.80 %
Interest rate spread 3.31 % 3.81 %
Net interest margin 3.40 % 3.82 %
Operating cost to assets 2.82 % 3.09 %

 

For the Year Ended At December 31,
2013 2012
Net Income $ 1,942,000 $ 1,955,000
Weighted average basic shares outstanding 1,205,128 1,228,279
Weighted average diluted shares outstanding 1,205,128 1,228,279
Dividend per share $ 0.33 $ 0.55
Provision for loan losses $

150,000

$ 200,000
Basic earnings per share $ 1.61 $ 1.59
Diluted earnings per share $ 1.61 $ 1.59
Performance Ratios:
Return on average assets 0.90 % 0.95 %
Return on average equity 8.69 % 8.49 %
Interest rate spread 3.38 % 3.90 %
Net interest margin 3.48 % 3.92 %
Operating cost to assets 2.78 % 2.98 %
 
At December 31,
2013 2012
Total assets $ 220,395,000 $ 208,391,000
Loans receivable, net $ 92,074,000 $ 96,359,000
Deposits $ 189,011,000 $ 177,313,000
Total stockholders' equity $ 21,889,000 $ 22,770,000
Weighted average book value per share $ 18.16 $ 18.54
Total average stockholders' equity to asset ratio 10.35 % 10.93 %
Asset Quality Ratios:
Nonperforming loans as a percent of total loans .65 % .20 %
Nonperforming assets as a percent of total Loans 1.25 % .56 %
Allowance for loan losses as a percent of total loans 1.56 % 2.07

Allowance for loan losses as a percent of nonperforming loans

239.47 % 1,018.00 %
 
   
PINNACLE BANCSHARES, INC.
AND SUBSIDIARY
 
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2013 AND 2012
 

Assets

2013 2012
 
Cash and cash equivalents $ 1,641,460 $ 1,332,968
Interest bearing deposits in banks 3,278,142 2,234,882
Securities available for sale 106,113,770 91,693,374
Restricted equity securities 950,400 994,800
Loans held for sale - 395,801
 
Loans 93,530,823 97,998,866
Less allowance for loan losses   1,456,459     2,036,110  
Loans, net   92,074,364     95,962,756  
 
Other real estate owned 557,386 347,824
Premises and equipment, net 5,639,376 6,039,211
Goodwill 306,488 306,488
Bank owned life insurance 7,809,614 7,463,963
Accrued interest receivable 966,009 901,784
Other assets   1,058,450     716,917  
 
Total assets $ 220,395,459   $ 208,390,768  
 

Liabilities and Stockholders' Equity

 
Deposits:
Noninterest-bearing 43,386,191 39,594,246
Interest-bearing   145,624,942     137,719,659  
Total deposits 189,011,133 177,313,905
 
Repurchase agreements 1,722,233 118,793
Other borrowings 3,900,000 3,800,000
Subordinated debentures 3,093,000 3,093,000
Accrued interest payable 116,889 110,311
Other liabilities   663,402     1,184,534  
Total liabilities   198,506,657     185,620,543  
 
Stockholders' equity

Common stock, $.01 par value, 2,400,000 shares authorized; 1,872,313 shares issued; 1,205,128 outstanding, respectively

18,723 18,723
Additional paid-in capital 8,923,223 8,923,223
Treasury stock, at cost (667,185 shares, respectively) (7,974,814 ) (7,974,814 )
Retained earnings 21,438,680 19,894,190
Accumulated other comprehensive income (loss), net of tax   (517,010 )   1,908,903  
Total stockholders' equity   21,888,802     22,770,225  
 
Total liabilities and stockholders' equity $ 220,395,459   $ 208,390,768  
 
See Notes to Consolidated Financial Statements.
 
   
PINNACLE BANCSHARES, INC.
AND SUBSIDIARY
 
CONSOLIDATED STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31, 2013 AND 2012
 
2013 2012
Interest income
Loans, including fees $ 4,879,020 $ 5,716,220
Taxable securities 1,588,603 1,769,705
Nontaxable securities 1,091,894 692,190
Other interest   36,770   35,247
Total interest income   7,596,287   8,213,362
 
Interest expense
Deposits 549,535 732,827
Borrowings and repurchase agreements 1,806 635
Subordinated debentures   100,487   105,475
Total interest expense   651,828   838,937
 
Net interest income 6,944,459 7,374,425
Provision for loan losses   150,000   200,000
Net interest income after provision for loan losses   6,794,459   7,174,425
 
Other income
Fees and service charges on deposits accounts 1,058,251 950,616
Servicing fee income, net 32,112 41,979
Bank owned life insurance 345,651 346,561
Net gain on loans held for sale 96,687 86,254
Net gain on sale of other real estate owned   - 21,240
Total other income   1,532,701   1,446,650
 
Other expenses
Salaries and employee benefits 2,779,427 2,870,620
Occupancy expenses 1,250,132 1,286,615
Marketing and professional expenses 301,277 298,269
Net loss on sale of other real estate owned 73,611 -
Net other operating expenses   1,591,902   1,641,149
Total other expenses   5,996,349   6,096,653
 
Income before income taxes 2,330,811 2,524,422
 
Income tax expense   388,629   569,636
 
Net income $ 1,942,182 $ 1,954,786
 
Basic and diluted earnings per share $ 1.61 $ 1.59
 
Cash dividends per share $ 0.33 $ 0.55
 
Weighted-average basic and diluted shares outstanding   1,205,128   1,228,279
 
See Notes to Consolidated Financial Statements.
 
 
PINNACLE BANCSHARES, INC.
AND SUBSIDIARY
             
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 2013 AND 2012
 
Accumulated
Additional Other Total
Common Stock Paid-in Treasury Retained Comprehensive Stockholders'
Shares Par Value Capital Stock Earnings Income (Loss) 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 - - - - 1,954,786 - 1,954,786

Cash dividends declared, $0.55 per share

- - - - (669,970 ) - (669,970 )
Treasury stock purchase - - - (653,905 ) - - (653,905 )
Other comprehensive loss -   -   -   -     -     (195,089 ) (195,089 )
Balance, December 31, 2012 1,872,313 18,723 8,923,223 (7,974,814 ) 19,894,190 1,908,903 22,770,225
Net income - - - - 1,942,182 - 1,942,182

Cash dividends declared, $0.33 per share

- - - - (397,692 ) - (397,692 )
Other comprehensive loss -   -   -   -     -     (2,425,913 ) (2,425,913 )
Balance, December 31, 2013 1,872,313 $ 18,723 $ 8,923,223 $ (7,974,814 ) $ 21,438,680   $ (517,010 ) $21,888,802  
 
 
See Notes to Consolidated Financial Statements.
 
   
PINNACLE BANCSHARES, INC.
AND SUBSIDIARY
 
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2013 AND 2012
 
2013 2012
OPERATING ACTIVITIES
Net income $ 1,942,182 $ 1,954,786

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

Depreciation 462,852 481,321
Provision for loan losses 150,000 200,000
Deferred income tax 32,818 181,527
Net amortization and accretion of securities 482,476 274,185
Bank owned life insurance (345,651 ) (346,561 )
(Gain) loss on sale or write-down of other real estate owned, net 73,611 (21,240 )
Net (increase) decrease in loans held for sale 395,801 (395,801 )
(Increase) decrease in accrued interest receivable (64,225 ) 116,547
Increase (decrease) in accrued interest payable 6,578 (71,709 )
Net other operating activities   606,001     448,736  
Net cash provided by operating activities   3,742,443     2,821,791  
 
INVESTING ACTIVITIES
Net increase in interest-bearing deposits in banks (1,043,260 ) (621,416 )
Purchase of securities available for sale (37,588,034 ) (30,795,326 )
Proceeds from maturities, calls, or paydowns of securities available for sale 18,757,765 14,247,883
Net redemption (purchase) of restricted equity securities 44,400 (37,000 )
Net decrease in loans 3,217,611 5,192,805
Purchase of premises and equipment (63,017 ) (333,738 )
Proceeds from sales of other real estate owned   237,608     771,449  
Net cash used in investing activities   (16,436,927 )   (11,575,343 )
 
FINANCING ACTIVITIES
Net increase in deposits 11,697,228 5,965,917
Increase in other borrowings 100,000 3,800,000
Increase (decrease) in repurchase agreements 1,603,440 (866,164 )
Purchase of treasury stock - (653,905 )
Payments of cash dividends   (397,692 )   (669,970 )
Net cash provided by financing activities   13,002,976     7,575,878  
 
Net increase (decrease) in cash and cash equivalents 308,492 (1,177,674 )
 
Cash and cash equivalents at beginning of year   1,332,968     2,510,642  
 
Cash and cash equivalents at end of year $ 1,641,460   $ 1,332,968  
 
SUPPLEMENTAL DISCLOSURE
Cash paid during the year for:
Interest $ 645,250 $ 910,646
Taxes $ 261,198 $ 488,717
 
OTHER NONCASH TRANSACTIONS
Other real estate owned acquired in settlement of loans $ 530,781 $ 694,152
Internally financed sales of other real estate owned $ 10,000 $ -
 
See Notes to Consolidated Financial Statements.

Contacts

Pinnacle Bancshares, Inc.
Robert B. Nolen, Jr., 205- 221-4111
President and Chief Executive Officer

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Contacts

Pinnacle Bancshares, Inc.
Robert B. Nolen, Jr., 205- 221-4111
President and Chief Executive Officer