Pinnacle Bancshares Announces Results for Third Quarter

JASPER, Ala.--()--Robert B. Nolen, Jr., President and Chief Executive Officer of Pinnacle Bancshares, Inc. (OTC Pink: PCLB), today announced Pinnacle’s third quarter results of operations.

For the three months ended September 30, 2015, net income was $578,000, compared with net income of $493,000 for the three months ended September 30, 2014.

For the nine months ended September 30, 2015, net income was $1,732,000, compared with net income of $1,507,000 for the nine months ended September 30, 2014.

Basic and diluted earnings per share for the three and nine month periods ended September 30, 2015, were $0.49 and $1.47 per share, respectively, compared to $0.41 and $1.25 per share, respectively, for the same periods last year.

For the three and nine months ended September 30, 2015, return on average assets was 1.01%, and 1.01%, respectively, compared to .88% and 0.90%, respectively, in the comparable 2014 periods.

Included in net income for the nine months ended September 30, 2015 and 2014 are gains on sale of securities available for sale of approximately $108,000 and $69,000, respectively. There were no gains of sale of securities available for sale for the three months ended September 30, 2015 and 2014.

Net interest margin was 3.40% and 3.41% for the three and nine months ended September 30, 2015, respectively, compared to 3.31% and 3.33% for the three and nine months ended September 30, 2014, respectively.

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.

At September 30, 2015, the Company’s allowance for loan losses as a percent of total loans was 1.67%, compared to 1.87% at December 31, 2014. Nonperforming loans as a percentage of total loans was .33% as of September 30, 2015 as compared to .93% as of December 31, 2014. At September 30, 2015, the allowance for loan losses as a percent of nonperforming loans was 507.51%, compared to 202.05% at December 31, 2014.

Pinnacle was classified as “well capitalized” at the end of the third quarter of 2015. At September 30, 2015, total risk-based capital was 19.72% for the subsidiary bank. Tier 1 risk-based capital and Tier 1 leverage capital ratios for the subsidiary bank were 18.47% and 10.93%, respectively. All capital ratios are significantly higher than the requirements for a well capitalized institution.

Dividends of $.11 and $.33 per share were paid to shareholders during the three and nine months ended for September 30, 2015, and 2014.

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

(Rounded to the nearest thousands, except share and per share data)

 
    Three Months Ended September 30,
2015     2014
Net income $ 578,000 $ 493,000
Basic and diluted earnings per share $ 0.49 $ 0.41
 
Performance ratios (annualized):
Return on average assets 1.01 % .88 %
Return on average equity 9.35 % 8.05 %
Interest rate spread 3.29 % 3.20 %
Net interest margin 3.40 % 3.31 %
Operating cost to assets 2.60 % 2.59 %
 
Weighted average basic and diluted shares outstanding 1,180,128 1,205,128
Dividends per share $ 0.11 $ 0.11
Provision for loan losses $ - $ -
 
Nine Months Ended September 30,
2015 2014
Net income $ 1,732,000 $ 1,507,000
Basic and diluted earnings per share $ 1.47 $ 1.25
 
Performance ratios (annualized):
Return on average assets 1.01 % 0.90 %
Return on average equity 9.51 % 8.71 %
Interest rate spread 3.31 % 3.23 %
Net interest margin 3.41 % 3.33 %
Operating cost to assets 2.62 % 2.66 %
 
Weighted average basic and diluted shares outstanding 1,180,128 1,205,128
Dividends per share $ 0.33 $ 0.33
Provision for loan losses $ - $ 35,000
 
(Audited)
September 30, 2015 December 31, 2014
Total assets $ 228,552,000 $ 219,031,000
Loans receivable, net $ 87,392,000 $ 82,684,000
Deposits $ 187,588,000 $ 190,197,000
Other borrowings $ 11,500,000 $ -
Total stockholders’ equity $ 25,711,000 $ 24,747,000
Weighted average book value per share $ 21.79 $ 20.61
Stockholders’ average equity to assets ratio 10.58 % 10.39 %
 
Asset quality ratios:
Non-performing loans as a percent of total loans 0.33 % 0.93 %
Non-performing assets as a percent of total assets 0.21 % 1.10 %
Allowance for loan losses as a percent of total loans 1.67 % 1.87 %
Allowance for loan losses as a percent of non-performing loans 507.51 % 202.05 %
 
 

FINANCIAL INFORMATION

PINNACLE BANCSHARES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

 
    (Unaudited)     (Audited)
September 30, 2015 December 31, 2014

Assets

Cash and cash equivalents $ 1,516,722 $ 1,430,862
Interest bearing deposits in banks 2,484,426 1,462,440
Securities available for sale 120,447,701 117,159,151
Restricted equity securities 1,210,900 822,200
Loans 88,879,377 84,259,997
Less Allowance for loan Losses   1,487,202     1,575,914  
Loans, net   87,392,175     82,684,083  
Other real estate owned 76,844 96,905
Premises and equipment, net 5,339,475 5,487,393
Goodwill 306,488 306,488
Bank owned life insurance 8,431,292 8,158,702
Accrued interest receivable 1,069,290 1,075,469
Other assets   276,586     346,874  
Total assets $ 228,551,899   $ 219,030,567  
 

Liabilities and Stockholders’ Equity

Deposits
Noninterest-bearing $ 47,315,850 $ 43,668,702
Interest-bearing $ 140,272,017   $ 146,528,707  
Total deposits $ 187,587,867 $ 190,197,409
Other borrowings 11,500,000 -
Subordinated debentures 3,093,000 3,093,000
Accrued interest payable 92,281 93,062
Other liabilities   567,946     900,409  
Total liabilities   202,841,094     194,283,880  
 
Stockholders’ equity
Common stock, par value $.01 per share; 2,400,000 authorized; 1,872,313 issued; 1,180,128 outstanding 18,723 18,723
Additional paid-in capital 8,923,223 8,923,223
Treasury stock, at cost (692,185 shares outstanding at September 30, 2015 and December 31, 2014)

(8,380,575

)

(8,380,575 )
Retained earnings 24,280,425 22,938,150
Accumulated other comprehensive income, net of tax   869,009     1,247,166  
Total stockholders’ equity   25,710,805     24,746,687  
Total liabilities and stockholders’ equity $ 228,551,899   $ 219,030,567  
 
 

PINNACLE BANCSHARES, INC.

 

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 
    Three Months Ended     Nine Months Ended
September 30, September 30
2015     2014 2015     2014
INTEREST REVENUE:
Interest & fee income on loans $ 1,114,741 $ 1,087,068 $ 3,364,977 $ 3,319,833
Interest and dividends on securities 824,569 763,924 2,454,607 2,275,330
Other interest   16,742   14,493   30,145   25,058
  1,956,052   1,865,485   5,849,729   5,620,221
INTEREST EXPENSE:
Interest on deposits 112,822 120,519 336,444 365,213
Interest on subordinated debt 23,000 24,900 73,750 75,349
Interest on borrowed funds   6,057   50   14,986   2,610
  141,879   145,469   425,180   443,172

NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES

1,814,173 1,720,016 5,424,549 5,177,049
PROVISION FOR LOAN LOSSES   -   -   -   35,000

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES

 

1,814,173

  1,720,016   5,424,549   5,142,049
NONINTEREST INCOME:
Fees and service charges on deposit accounts 278,443 274,490 750,694 790,417
Service fee income 5,070 6,483 15,781 20,885
Bank owned life insurance 90,863 87,272 272,589 261,817
Mortgage fee income 9,624 3,785 22,006 31,699
Gain on sale of securities available for sale   -   -   108,102   68,759
  384,000   372,030   1,169,172   1,173,577
NONINTEREST EXPENSE:
Compensation and benefits 751,770 709,816 2,309,522 2,163,330
Occupancy 238,302 252,254 728,480 746,380
Marketing and professional 80,182 101,965 233,263 310,794

Net loss on sale or write-down of other real estate owned

12,626 52,012 17,098 48,839
Other   410,107   392,255   1,212,016   1,242,394
  1,492,987   1,508,302   4,500,979   4,511,737
INCOME BEFORE INCOME TAXES 705,186 583,744 2,092,742 1,803,889
INCOME TAX EXPENSE   127,238   90,782   361,025   297,196
NET INCOME $ 577,948 $ 492,962 $ 1,731,717 $ 1,506,693
Cash dividend per share $ 0.11 $ 0.11 $ 0.11 $ 0.33
Basic and diluted earnings per share $ 0.49 $ 0.41 $ 1.47 $ 1.25
Weighted –average basic and diluted shares outstanding 1,180,128 1,205,128 1,180,128 1,205,128
 
 

PINNACLE BANCSHARES, INC.

 

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2015 AND 2014

 
                    Accumulated    
Additional Other Total

Common Stock

Paid-in Treasury Retained Comprehensive Stockholders’

Shares

   

Amount

Capital

Stock

Earnings

Income (Loss)

Equity

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 - - - - 1,506,693 - 1,506,693
Cash dividends declared ($.33 per share) - - - - (397,693 ) - (397,693 )
Other comprehensive income -       -       -       -         -         1,490,388         1,490,388  
Balance September 30, 2014 1,872,313     $ 18,723     $ 8,923,223     $ (7,974,814 )     $ 22,547,680       $ 973,378       $ 24,488,190  
 
 
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 - - - - 1,731,717 - 1,731,717
Cash dividends declared ($.33 per share) - - - - (389,442 ) - (389,442 )
Other comprehensive loss -       -       -       -         -         (378,178 )       (378,178 )
Balance September 30, 2015 1,872,313     $ 18,723     $ 8,923,223     $ (8,380,575 )     $ 24,280,425       $ 869,009       $ 25,710,805  
 
 

PINNACLE BANCSHARES, INC,

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 
    For the Nine Months Ended
September 30
2015     2014
OPERATING ACTIVITIES:
Net income $ 1,731,717 $ 1,506,693
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation 286,563 307,948
Provision for loan losses - 35,000
Amortization expense, net 424,568 332,617
Bank owned life insurance (272,589 ) (261,817 )
Gain on sale of sale of securities available for sale (108,102 ) (68,759 )
Loss on sale of or write-down of real estate owned, net 17,098 48,839
Gain on sale of assets (12,700 ) -
Decrease in accrued interest receivable 6,179 9,537
Decrease in accrued interest payable (781 ) (19,137 )
Net other operating activities   (30,403 )   (132,608 )
Net provided by operating activities   2,041,550     1,758,313  
INVESTING ACTIVITIES:
Net loan (increase) decrease (4,808,303 ) 7,614,379
Net (increase) decrease in interest bearing deposits in banks (1,021,986 ) 86,156
Purchase of securities available-for-sale (18,850,032 ) (19,097,323 )
Proceeds for sale of securities available-for-sale 2,853,343 1,925,000
Proceeds from maturing, calls, and payments received on securities available-for-sale 11,781,742 12,442,935
Net (purchase) redemption of restricted equity securities (388,700 ) 128,200
Purchase of premises and equipment (138,645 ) (190,013 )
Proceeds from sales of premises and equipment 12,700 -
Net proceeds from sales related to real estate owned   103,175     301,950  
Net cash provided by (used in) investing activities   (10,456,706 )   3,211,284  
FINANCING ACTIVITIES:
Net increase (decrease) in deposits (2,609,542 ) 938,246
Decrease in repurchase agreements - (1,722,233 )
Net proceeds (repayments) of other borrowings 11,500,000 (3,900,000 )
Payments of cash dividends   (389,442 )   (397,693 )
Net cash provided by (used in) financing activities   8,501,016     (5,081,680 )
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 85,860 (112,083 )
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD   1,430,862     1,641,460  
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,516,722   $ 1,529,377  
SUPPLEMENTAL DISCLOSURES:
Cash payments for interest on deposits, borrowed funds, and subordinated debentures $ 425,961 $ 462,309
Cash payments for income taxes $ 426,869 $ 309,640
OTHER NONCASH TRANSACTIONS
Real estate acquired through foreclosure $ 100,211 $ 61,981
Internally financed sales of other real estate owned $ - $ 77,800
 

Contacts

Pinnacle Bancshares, Inc.
Joe B. Adams, III
CFO & SVP
(205) 221-8866

Contacts

Pinnacle Bancshares, Inc.
Joe B. Adams, III
CFO & SVP
(205) 221-8866