Pinnacle Bancshares Announces Results for First Quarter Ended March 31, 2014

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 first quarter ended March 31, 2014:

  • For the three months ended March 31, 2014, Pinnacle reported net income of $464,000, compared to $474,000 for the three months ended March 31, 2013.
  • Net interest income after the provision for loan losses for the three months ended March 31, 2014, was $1,701,000, compared with $1,664,000 in the same period last year.
  • For the three months ended March 31, 2014, basic and diluted earnings were each $0.39 per share. For the same period in 2013 basic and diluted earnings were each $0.39 per share.
  • For the three months ended March 31, 2014, return on average assets was 0.84%, compared to 0.91% in the comparable 2013 period.

In the first quarter of 2014, Pinnacle’s net interest margin declined primarily due to lower loan volumes. The Company’s net interest margin was 3.40% for the three months March 31, 2014, compared to 3.64% for the three months ended March 31, 2013.

At March 31, 2014, Pinnacle’s allowance for loan losses as a percent of total loans was 1.63%, compared to 2.20% at March 31, 2013. The allowance for loan losses at March 31, 2013 contained specific reserves on impaired loans that were subsequently charged off during 2013. At March 31, 2014, the allowance for loan losses as a percent of nonperforming loans was 285%, compared to 287% at March 31, 2013. Based on current real estate valuations Pinnacle believes its allowance for loan losses is adequate.

Dividends of $.11 per share was paid to shareholders during the first quarter of 2014 while there was no dividend payment during the first quarter of 2013. Mr. Nolen reminded investors that, in December 2012, the Board of Directors declared and paid a special cash dividend of $0.11 per share on the Company’s common stock and thus there was no dividend payment during first quarter 2013. This dividend was in lieu of paying a regular quarterly cash dividend in the first quarter of 2014.

Despite the stabilization of the economy, Mr. Nolen cautioned investors that 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 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
 
Three Months Ended March 31,
2014 2013
Net Income $ 464,000 $ 474,000
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 $ .11 $ 0
Provision for loan losses $ 35,000 $ 75,000
Basic and diluted earnings per share $ 0.39 $ 0.39
Performance Ratios: (annualized)

 

Return on average assets

0.84

%

0.91 %
Return on average equity 8.11 % 8.22 %
Interest rate spread 3.31 % 3.63 %
Net interest margin 3.40 % 3.64 %
Operating cost to assets 2.76 % 2.79 %
 
 
At March 31,
2014 2013
Total assets $ 224,962,000 $ 209,899,000
Loans receivable, net $ 90,216,000 $ 94,238,000
Deposits $ 197,103,000 $ 182,400,000
Total stockholders' equity $ 22,964,000 $ 23,077,000
Weighted average book value per share $ 19.06 $ 19.15
Total stockholders' equity to asset ratio 10.21 % 10.99 %
Asset Quality Ratios:
Nonperforming loans as a percent of total loans .57 % .77 %
Nonperforming assets as a percent of total Loans .46 % .51 %
Allowance for loan losses as a percent of total loans 1.63 % 2.20 %

Allowance for loan losses as a percent of nonperforming loans

285.31 % 286.64 %
 
       

PINNACLE BANCSHARES, INC.

AND SUBSIDIARY

 

CONSOLIDATED STATEMENTS OF CONDITION

MARCH 31

 
2014 2013

Assets

Cash and cash equivalents $ 1,519,703 $ 1,550,536
Interest bearing deposits in banks 3,048,098 6,971,953
Securities available for sale 113,447,004 90,567,004
Restricted equity securities 862,700 855,900
Loans held for sale 0 0
 
Loans 91,763,796 96,361,210
Less allowance for loan losses   1,547,983     2,123,428  
Loans, net   90,215,813     94,237,782  
 
Other real estate owned 509,947 331,019
Premises and equipment, net 5,583,443 5,930,396
Goodwill 306,488 306,488
Bank owned life insurance 7,896,886 7,550,376
Accrued interest receivable 953,882 915,092
Other assets 618,342 681,957
       
Total assets $ 224,962,306   $ 209,898,503  
 

Liabilities and Stockholders’ Equity

Deposits:
Noninterest-bearing $ 46,755,152 $ 38,467,655
Interest-bearing   150,347,515     143,931,990  
Total deposits 197,102,667 182,399,645
 
Repurchase agreements 402,487 208,847
Other borrowings 916,000 0
Subordinated debentures 3,093,000 3,093,000
Accrued interest payable 128,762 113,480
Other liabilities   355,440     1,006,164  
Total liabilities   201,998,356     186,821,136  
 
Stockholders’ equity

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

18,723 18,723
Additional paid-in capital 8,923,223 8,923,223
Treasury stock, at cost (667,185 shares) (7,974,814 ) (7,974,814 )
Retained earnings 21,769,870 20,367,280
Accumulated other comprehensive income, net of tax   226,948     1,742,955  
Total stockholders’ equity   22,963,950     23,077,367  
 
Total liabilities and stockholders’ equity $ 224,962,306   $ 209,898,503  
 
       

PINNACLE BANCSHARES, INC.

AND SUBSIDIARY

 

CONSOLIDATED STATEMENTS OF INCOME

Three Months Ended March 31, 2014 and 2013

 
2014 2013
Interest income
Loans, including fees $ 1,124,393 $ 1,260,785
Taxable securities 484,180 400,270
Nontaxable securities 272,878 245,720
Other interest   4,648   4,664
Total interest income   1,886,099   1,911,439
 
Interest expense
Deposits 123,143 145,959
Borrowings and repurchase agreements 2,105 1,643
Subordinated debentures   24,949   25,159
Total interest expense   150,197   172,761
 
Net interest income 1,735,902 1,738,678
Provision for loan losses   35,000   75,000
Net interest income after provision for loan losses   1,700,902   1,663,678
 
Other income
Fees and service charges on deposit accounts 254,837 250,106
Servicing fee income, net 7,766 8,937
Bank owned life insurance 87,272 86,413
Net gain on sales of other real estate owned 17,361 0
Net gain on loans held for sale   21,048   21,473
Total other income   388,284   366,929
 
Other expenses
Salaries and employee benefits 747,646 658,652
Occupancy expenses 258,451 250,583
Marketing and professional expenses 102,447 120,323
Net loss on sales of other real estate owned 0 7,959
Other operating expenses   435,321   421,125
Total other expenses   1,543,865   1,458,642
 
Income before income taxes 545,321 571,965
 
Income tax expense   81,567   98,875
 
Net income $ 463,754 $ 473,090
 
Basic and diluted earnings per share $ 0.39 $ 0.39
 
Cash dividends per share $ 0.11 $ 0.00
Weighted-average basic and diluted shares outstanding   1,205,128   1,205,128
 
                         

PINNACLE BANCSHARES, INC.

AND SUBSIDIARY

 

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Three Months Ended March  31, 2014 and 2013

 
Accumulated
Additional Other Total
Common Stock Paid-in Treasury Retained

Comprehensive

Stockholders’
Shares   Par Value Capital Stock Earnings Income (loss) Equity
   
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 - - - - 473,090 - 473,090
Other comprehensive loss   -   -   -   -     -     (165,948 ) $ (165,948 )

Balance, March 31, 2013

1,872,313

18,723

$

8,923,223

$

(7,974,814

)

$

20,367,280

$

1,742,955

$

23,077,367

 
Balance, December 31, 2013 1,872,313 $ 18,723 $ 8,923,223 $ (7,974,814 ) $ 21,438,680 $ (517,010 ) $ 21,888,802
Net income - - - - 463,754 - 463,754

Cash dividends declared, $0.11 per share

- - - - (132,564 ) - (132,564 )
Other comprehensive income   -   -   -   -     -     743,958     743,958  
Balance, March 31, 2014   1,872,313 $ 18,723 $ 8,923,223 $ (7,974,814 ) $ 21,769,870   $ 226,948   $ 22,963,950  
 
       

PINNACLE BANCSHARES, INC.

AND SUBSIDIARY

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended March 31, 2014 and 2013

 
2014 2013
OPERATING ACTIVITIES
Net income $ 463,754 $ 473,090

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

Depreciation 106,483 120,750
Provision for loan losses 35,000 75,000
Net amortization of securities 115,268 106,252
Bank owned life insurance (87,272 ) (86,413 )
Gain on sale of loans held for sale (21,048 ) (21,473 )
(Gain) loss on sale and write down of real estate owned (17,361 ) 7,959
Net proceeds from sales of loans held for sale 21,048 417,274
Increase (decrease) in accrued interest receivable 12,127 (13,308 )
Increase in accrued interest payable 11,873 3,169
Net other operating activities   (323,828 )   (57,618 )
Net cash provided by operating activities   316,044     1,024,682  
INVESTING ACTIVITIES
Net loan repayments 1,875,774 1,649,974
Net increase (decrease) in interest-bearing deposits in banks 230,044 (4,737,071 )
Purchase of securities available for sale (11,334,799 ) (3,880,000
Proceeds from maturing or callable securities available for sale 5,086,229 4,632,460
Net redemption of restricted equity securities 87,700 138,900
Purchase of premises and equipment (50,550 ) (11,935 )
Proceeds from sales of other real estate owned   12,577     24,764  
Net cash used in investing activities   (4,093,205 )   (2,182,908 )
 
FINANCING ACTIVITIES
Net increase in deposits 8,091,534 5,085,740
Net decrease in other borrowings (2,984,000 ) (3,800,000 )
Increase (decrease) in repurchase agreements (1,319,746 ) 90,054
Payments of cash dividends   (132,564 )   0  
Net cash provided by financing activities   3,655,224     1,375,794  
 
Net increase (decrease) in cash and cash equivalents (121,757 ) 217,568
 
Cash and cash equivalents at beginning of year   1,641,460     1,332,968  
 
Cash and cash equivalents at end of year $ 1,519,703   $ 1,550,536  
 
SUPPLEMENTAL DISCLOSURE
Cash paid during the year for:
Interest $ 138,324 $ 169,593
Taxes $ 78,540 $ 6,000
OTHER NONCASH TRANSACTIONS

Other real estate owned acquired in settlement of loans

$ 52,223 $ 0

Contacts

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

Sharing

Contacts

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