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Pinnacle Bancshares Announces Results for Second Quarter Ended June 30, 2022

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JASPER, Ala., July 26, 2022--(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, 2022, Pinnacle reported net income of $1,210,000 compared to $984,000 for the three months ended June 30, 2021.

  • For the six months ended June 30, 2022, Pinnacle reported net income of $2,320,000 compared to $1,891,000 for the six months ended June 30, 2021. PPP loan fees recognized during the six months ended June 30, 2022 and 2021 were $190,000 and $191,000, respectively.

  • Net interest income for the three and six months ended June 30, 2022, was $2,832,000 and $5,567,000, respectively, compared with $2,463,000 and $4,842,000 respectively, in the same periods last year.

  • Basic and diluted earnings per share for the three and six months ended June 30, 2022 were $1.25 and $2.39 per share, respectively, compared to $1.01 and $1.94 per share, respectively, for the same periods last year.

  • For the three and six months ended June 30, 2022, return on average assets was 1.39%, and 1.33%, respectively, compared to 1.26% and 1.25%, respectively, in the comparable 2021 period.

Pinnacle’s net interest margin was 3.28% for both the three and six months ended June 30, 2022, respectively, compared to 3.41% and 3.48% for the three and six months ended June 30, 2021, respectively.

At June 30, 2022, Pinnacle’s allowance for loan losses as a percent of total loans was 2.08%, compared to 2.02% at December 31, 2021. Excluding PPP loans of $376,000 and $4.3 million dollars, the allowance for loan losses as a percent of total loans as of June 30, 2022 and December 31, 2021, was 2.08% and 2.09%, respectively. Nonperforming assets were $60,000 at June 30, 2022, compared to $30,000 at December 31, 2021. The ratio of nonperforming assets to total loans was .05% and .01% at June 30, 2022 and December 31, 2021, respectively. All capital ratios are higher than the requirements for a well-capitalized institution.

Dividends of $.25 and $.50 were paid to shareholders during the three and six months ended for June 30, 2022, respectively as compared to $.22 and $.44 per share dividends that were paid to shareholders during the three and six months ended June 30, 2021.

Impact of COVID-19 on Our Business

As a result of the spread of the COVID-19 coronavirus, economic uncertainties have arisen which are likely to negatively impact the Company. The extent of COVID-19’s impact on the Company’s operational and financial performance will depend on certain developments, including the duration and spread of the outbreak, the virus’ impact on the Company’s customers, employees and vendors, and vaccination supply and delivery. At this point, the extent to which COVID-19 may impact the Company’s financial condition or results of operations remains uncertain.

Effects of Inflation

We do not believe that inflation has had a material effect on our results of operations for the three- and six-months period ended June 30, 2022 and June 30, 2021; however, our business could be affected by inflation in the future which we plan to mitigate through a combination of pricing actions and operating efficiencies, although these actions could have an adverse impact on demand.

Forward-Looking Statements

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,

2022

2021

Net income

$

1,210,000

$

984,000

Basic and diluted earnings per share

$

1.25

$

1.01

Performance ratios (annualized):

Return on average assets

1.39

%

1.26

%

Return on average equity (excluding OCI)

13.82

%

12.44

%

Interest rate spread

3.19

%

3.31

%

Net interest margin

3.28

%

3.41

%

Operating cost to assets

2.02

%

2.17

%

Weighted average basic and diluted shares outstanding

969,445

973,505

Dividends per share

$

0.25

$

0.22

Provision for loan losses

$

-

$

-

Six Months Ended June 30,

2022

2021

Net income

$

2,320,000

$

1,891,000

Basic and diluted earnings per share

$

2.39

$

1.94

Performance ratios (annualized):

Return on average assets

1.33

%

1.25

%

Return on average equity (excluding OCI)

13.30

%

12.09

%

Interest rate spread

3.20

%

3.38

%

Net interest margin

3.28

%

3.48

%

Operating cost to assets

2.03

%

2.24

%

Weighted average basic and diluted shares outstanding

970,114

973,505

Dividends per share

$

0.50

$

0.44

Provision for loan losses

$

-

$

-

(Audited)

June 30, 2022

December 31, 2021

Total assets

$

339,113,000

$

339,710,000

Loans receivable, net (includes $376k and $4.3M PPP loans, respectively)

$

118,893,000

$

122,659,000

Deposits

$

323,835,000

$

298,693,000

Brokered CD’s included in deposits

$

11,748,000

$

24,937,000

Total stockholders’ equity

$

10,614,000

$

35,659,000

Book value per share (excluding OCI)

$

35.28

$

35.15

Total average stockholders’ equity to assets ratio (excluding OCI)

9.98

%

10.19

%

Asset quality ratios:

Nonperforming loans as a percent of total loans

.05

%

.01

%

Nonperforming assets as a percent of total loans

.05

%

.01

%

Allowance for loan losses as a percent of total loans

2.08

%

2.02

%

Allowance for loan losses as a percent of nonperforming loans

4,210.00

%

8,460.00

%

FINANCIAL INFORMATION

PINNACLE BANCSHARES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(Unaudited)

(Audited)

June 30,

December 31,

2022

2021

Assets

Cash and cash equivalents

$

2,025,947

1,730,327

Interest bearing deposits in banks

10,943,513

11,146,497

Securities available for sale

177,731,521

183,516,514

Restricted equity securities

773,600

741,600

Loans

121,419,789

125,196,462

Less Allowance for loan losses

2,526,489

2,537,948

Loans, net

118,893,300

122,658,514

Premises and equipment, net

7,001,270

7,015,537

Right-of-use lease assets – operating

445,911

493,627

Goodwill

306,488

306,488

Bank owned life insurance

10,014,387

9,822,441

Accrued interest receivable

1,969,592

1,917,598

Other assets

9,007,475

361,228

Total assets

$

339,113,004

339,710,371

Liabilities and Stockholders’ Equity

Deposits

Noninterest-bearing

$

92,010,352

88,430,320

Interest-bearing

231,824,569

210,262,213

Total deposits

323,834,921

298,692,533

Subordinated debentures

3,093,000

3,093,000

Accrued interest payable

92,702

77,843

Operating lease liabilities

445,911

493,627

Other liabilities

1,032,550

1,694,225

Total liabilities

328,499,084

304,051,228

Stockholders’ equity

Common stock, par value $.01 per share; 2,400,000 authorized; 1,872,313 issued; 909,534 and 970,791 shares outstanding, respectively.

18,723

18,723

Additional paid‑in capital

8,923,223

8,923,223

Treasury stock (962,779 and 901,522 shares, respectively)

(15,588,799

)

(13,533,621

)

Retained earnings

40,545,323

38,710,339

Accumulated other comprehensive income (loss), net of tax

(23,284,550

)

1,540,479

Total stockholders’ equity

10,613,920

35,659,143

Total liabilities and stockholders’ equity

$

339,113,004

$

339,710,371

PINNACLE BANCSHARES, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME

Three Months Ended

Six Months Ended

June 30,

June 30,

2022

2021

2022

2021

Interest income

Loans, including fees

$

1,590,490

$

1,526,216

$

3,245,439

$

3,064,459

Securities available for sale

1,367,724

1,060,940

2,582,022

2,031,546

Other interest

35,438

5,420

45,759

11,052

Total interest income

2,993,652

2,592,576

5,873,220

5,107,057

Interest expense

Deposits

125,070

91,510

231,305

188,682

Borrowings and repurchase agreements

-

795

-

795

Subordinated debentures

36,710

37,550

75,310

76,050

Total interest expense

161,780

129,855

306,615

265,527

Net interest income

2,831,872

2,462,721

5,566,605

4,841,530

Provision for loan losses

-

-

-

-

Net interest income after provision

for loan losses

2,831,872

2,462,721

5,566,605

4,841,530

Other income

Fees and service charges on deposit accounts

382,786

353,863

740,619

700,051

Service fee income, net

811

1,001

1,697

2,059

Bank owned life insurance

95,973

97,967

191,946

195,935

Mortgage fee income

12,887

14,987

27,248

17,474

Total other income

492,457

467,818

961,510

915,519

Other expense:

Salaries and employee benefits

1,026,255

965,842

2,051,838

1,924,815

Occupancy expense

203,934

212,163

433,556

434,307

Marketing and professional expense

63,764

67,527

128,665

132,164

Other operating expenses

467,623

445,711

929,464

878,612

Total other expenses

1,761,576

1,691,243

3,543,523

3,369,898

Income before income taxes

1,562,753

1,239,296

2,984,592

2,387,151

Income tax expense

353,134

255,536

664,213

496,439

Net income

$

1,209,619

$

983,760

$

2,320,379

$

1,890,712

Cash dividend per share

$

0.25

$

0.22

$

0.50

$

0.44

Basic and diluted earnings per share

$

1.25

$

1.01

$

2.39

$

1.94

Weighted –average basic and diluted

shares outstanding

969,445

973,505

970,114

973,505

PINNACLE BANCSHARES, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Six Months Ended June 30, 2022 and 2021

Accumulated

Additional

Other

Total

Common Stock

Paid-in

Treasury

Retained

Comprehensive

Stockholders’

Shares

Amount

Capital

Stock

Earnings

Income

Equity

Balance December 31, 2020

1,872,313

$

18,723

$

8,923,223

$

(13,441,345

)

$

34,874,072

$

3,957,193

$

34,331,866

Net income

-

-

-

-

1,572,615

-

1,572,615

Cash dividends declared

($.44 per share)

-

-

-

-

(428,343

)

-

(428,343

)

Other comprehensive loss

-

-

-

-

-

(1,448,820

)

(1,448,820

)

Balance June 30, 2021

1,872,313

$

18,723

$

8,923,223

$

(13,441,345

)

$

36,336,441

$

2,508,373

$

34,345,415

Accumulated

Additional

Other

Total

Common Stock

Paid-in

Treasury

Retained

Comprehensive

Stockholders’

Shares

Amount

Capital

Stock

Earnings

Income (Loss)

Equity

Balance December 31, 2021

1,872,313

$ 18,723

$ 8,923,223

$ (13,533,621)

$ 38,710,339

$ 1,540,479

$ 35,659,143

Net income

-

-

-

-

2,320,379

-

2,320,379

Cash dividends declared

($.50 per share)

-

-

-

-

(485,395)

-

(485,395)

Purchase of treasury stock

-

-

-

(2,055,178)

-

-

(2,055,178)

Other comprehensive loss

-

-

-

-

-

(24,825,029)

(24,825,029)

Balance June 30, 2022

1,872,313

$ 18,723

$ 8,923,223

$ (15,588,799)

$ 40,545,323

$ (23,284,550)

$ 10,613,920

PINNACLE BANCSHARES, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Six Months Ended

June 30,

2022

2021

OPERATING ACTIVITIES:

Net income

$

2,320,379

$

1,890,712

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

Depreciation

220,219

214,258

Net investment amortization expense

121,027

161,957

Bank owned life insurance

(191,946

)

(195,935

)

Increase in accrued interest receivable

(51,994

)

(241,911

)

Increase (decrease) in accrued interest payable

14,859

(45,535

)

Net other operating activities

(128,162

)

727,798

Net cash provided by operating activities

2,304,382

2,511,344

INVESTING ACTIVITIES:

Net (increase) decrease in loans

3,765,214

(11,483,330

)

Net (increase) decrease in interest bearing deposits in other banks

202,984

(9,562,744

)

Purchase of securities available for sale

(32,299,292

)

(37,014,405

)

Proceeds from maturing, sale and payments received on securities available for sale

3,958,469

10,460,206

Net (purchase) redemption of restricted equity securities

(32,000

)

69,500

Purchase of premises and equipment

(205,952

)

(774,655

)

Net cash used in investing activities

(24,610,577

)

(48,305,428

)

FINANCING ACTIVITIES:

Net increase in deposits

25,142,388

46,112,054

Purchase of treasury stock

(2,055,178

)

-

Payments of cash dividends

(485,395

)

(428,343

)

Net cash provided by financing activities

22,601,815

45,683,711

Net increase (decrease) in cash and cash equivalents

295,620

(110,373

)

Cash and cash equivalents at beginning of period

1,730,327

2,080,667

Cash and cash equivalents at end of period

$

2,025,947

$

1,970,294

SUPPLEMENTAL DISCLOSURES:

Cash paid during the period for:

Interest

$

291,756

$

311,062

Taxes

$

677,568

$

415,000

OTHER NONCASH TRANSACTIONS

Real estate acquired through foreclosure

$

-

$

-

Internally financed sales of other real estate owned

$

-

$

-

View source version on businesswire.com: https://www.businesswire.com/news/home/20220726006135/en/

Contacts

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