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Pinnacle Bancshares Announces Results for Third Quarter Ended September 30, 2021

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JASPER, Ala., October 26, 2021--(BUSINESS WIRE)--Robert B. Nolen, Jr., President and Chief Executive Officer of Pinnacle Bancshares, Inc. (OTCBB: PCLB), today announced Pinnacle’s third quarter results of operations.

  • For the three months ended September 30, 2021, Pinnacle reported net income of $1,829,000 compared to $712,000 for the three months ended September 30, 2020.

  • For the nine months ended September 30, 2021, Pinnacle reported net income of $3,720,000 compared to $2,285,000 for the nine months ended September 30, 2020.

  • Included in net interest income for each of the three months ended September 30, 2021 and 2020 are Paycheck Protection Program ("PPP") amortized loan fees of approximately $240,000 and $97,000, respectively. Included in net interest income for each of the nine months ended September 30, 2021 and 2020 are PPP amortized loan fees of approximately $431,000 and $97,000, respectively.

  • Bank-owned life insurance income, which is included in non-interest income, was approximately $820,000 and $1,015,000 for the three months and nine months ended September 30, 2021 as compared to $94,000 and $283,000 for the three months and nine months ended September 30, 2020.

  • Gain on sale of available for sales of securities in the amount of approximately $227,000 was recorded during both the three and nine months ended September 30, 2021 as compared to $153,000 recorded during the nine months ended September 30, 2020. There were no gains on sale of available for sales of securities recorded during the three months ended September 30, 2020.

  • The Bank used part of the PPP loan fee income to make contributions to charities in its local communities. This represented an increase of approximately $123,000 and $143,000 in non-interest expense for the three months and nine months ended September 30, 2021 and 2020, respectively. The charitable organizations used these contributions in part to assist our community in dealing with the continued adverse effects of COVID-19.

  • Basic and diluted earnings per share for the three and nine months ended September 30, 2021 were $1.88 and $3.82 per share, respectively, compared to $0.72 and $2.29 per share, respectively, for the same periods last year.

  • For the three and nine months ended September 30, 2021, return on average assets was 2.19%, and 1.59%, respectively, compared to 1.04% and 1.17%, respectively, in the comparable 2020 period.

Pinnacle’s net interest margin was 3.52% and 3.49% for the three and nine months ended September 30, 2021, respectively, compared to 3.59% and 3.56% for the three and nine months ended September 30, 2020, respectively.

At September 30, 2021, Pinnacle’s allowance for loan losses as a percent of total loans was 1.85%, compared to 2.13% at December 31, 2020. The allowance for loan losses as a percent of total loans, excluding PPP loans of approximately $7.6 million dollars, was 1.97% as of September 30, 2021. Nonperforming assets were $12,000 at September 30, 2021, compared to $130,000 at December 31, 2020. The ratio of nonperforming assets to total loans was .01% and .12% at September 30, 2021 and December 31, 2020, respectively. All capital ratios are higher than the requirements for a well-capitalized institution.

Dividends of $.22 and $.66 per share were paid to shareholders during the three and nine months ended for September 30, 2021 as compared to $.19 and $.57 per share paid during the three and nine months ended for September 30, 2020.

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.

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 September 30,

2021

2020

Net income

$

1,829,000

$

712,000

Basic and diluted earnings per share

$

1.88

$

0.72

Performance ratios (annualized):

Return on average assets

2.19

%

1.04

%

Return on average equity

22.21

%

9.58

%

Interest rate spread

3.42

%

3.43

%

Net interest margin

3.52

%

3.59

%

Operating cost to assets

2.42

%

2.59

%

Weighted average basic and diluted shares outstanding

971,234

983,119

Dividends per share

$

0.22

$

0.19

Provision for loan losses

$

-

$

-

Nine Months Ended September 30,

2021

2020

Net income

$

3,720,000

$

2,285,000

Basic and diluted earnings per share

$

3.82

$

2.29

Performance ratios (annualized):

Return on average assets

1.59

%

1.17

%

Return on average equity

15.58

%

10.30

%

Interest rate spread

3.40

%

3.36

%

Net interest margin

3.49

%

3.56

%

Operating cost to assets

2.30

%

2.54

%

Weighted average basic and diluted shares outstanding

972,740

997,340

Dividends per share

$

0.66

$

0.57

Provision for loan losses

$

-

$

-

(Audited)

September 30, 2021

December 31, 2020

Total assets

$

337,849,000

$

275,742,000

Loans receivable, net

$

124,127,000

$

109,429,000

Deposits

$

295,710,000

$

235,109,000

Brokered CD’s included in deposits

$

21,951,000

$

14,980,000

Total stockholders’ equity

$

35,806,000

$

34,332,000

Book value per share

$

36.88

$

34.63

Average Stockholders’ equity to assets ratio (excluding OCI)

10.19

%

11.15

%

Asset quality ratios:

Nonperforming loans as a percent of total loans

.01

%

.12

%

Nonperforming assets as a percent of total loans

.01

%

.12

%

Allowance for loan losses as a percent of total loans

1.85

%

2.13

%

Allowance for loan losses as a percent of nonperforming loans

19483.33

%

1,833.08

%

FINANCIAL INFORMATION

PINNACLE BANCSHARES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(Unaudited)

(Audited)

September 30,

December 31,

2021

2020

Assets

Cash and cash equivalents

$

2,103,745

2,080,667

Interest bearing deposits in banks

5,643,770

4,106,661

Securities available for sale

185,828,408

139,688,995

Restricted equity securities

716,000

785,500

Loans

126,465,696

111,811,886

Less Allowance for loan losses

2,338,233

2,382,799

Loans, net

124,127,463

109,429,087

Premises and equipment, net

7,064,494

6,555,446

Right-of-use lease assets – operating

517,297

587,970

Goodwill

306,488

306,488

Bank owned life insurance

9,731,814

10,296,876

Accrued interest receivable

1,400,944

1,491,026

Other assets

408,236

413,613

Total assets

$

337,848,659

275,742,329

Liabilities and Stockholders’ Equity

Deposits

Noninterest-bearing

$

88,074,409

72,897,929

Interest-bearing

207,635,647

162,210,802

Total deposits

295,710,056

235,108,731

Subordinated debentures

3,093,000

3,093,000

Accrued interest payable

90,219

145,826

Operating lease liabilities

517,297

587,970

Other liabilities

2,632,426

2,474,936

Total liabilities

302,042,998

241,410,463

Stockholders’ equity

Common stock, par value $.01 per share; 2,400,000 authorized; 1,872,313 issued; 970,791 and 973,505 shares outstanding, respectively

18,723

18,723

Additional paid‑in capital

8,923,223

8,923,223

Treasury stock (901,522 and 898,808 shares, respectively)

(13,533,621

)

(13,441,345

)

Retained earnings

37,952,233

34,874,072

Accumulated other comprehensive income, net of tax

2,445,103

3,957,193

Total stockholders’ equity

35,805,661

34,331,866

Total liabilities and stockholders’ equity

$

337,848,659

$

275,742,329

PINNACLE BANCSHARES, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME

Three Months Ended

Nine Months Ended

September 30,

September 30,

2021

2020

2021

2020

Interest income

Loans, including fees

$

1,718,950

$

1,558,204

$

4,783,409

$

4,433,232

Securities available for sale

1,113,658

858,000

3,145,204

2,591,275

Other interest

15,752

13,242

26,804

38,919

Total interest income

2,848,360

2,429,446

7,955,417

7,063,426

Interest expense

Deposits

94,842

152,062

283,524

587,091

Borrowings

-

-

795

3,330

Subordinated debentures

37,550

35,000

113,600

113,310

Total interest expense

132,392

187,062

397,919

703,731

Net interest income

2,715,968

2,242,384

7,557,498

6,359,695

Provision for loan losses

-

-

-

-

Net interest income after provision

for loan losses

2,715,968

2,242,384

7,557,498

6,359,695

Other income

Fees and service charges on deposit accounts

393,121

318,078

1,093,172

986,071

Service fee income, net

992

1,255

3,051

4,048

Bank owned life insurance

819,545

94,186

1,015,480

282,558

Mortgage fee income

12,164

4,877

29,638

30,451

Net gain on securities available for sale

227,238

-

227,238

152,658

Total other income

1,453,060

418,396

2,368,579

1,455,786

Other expense:

Salaries and employee benefits

1,072,154

970,728

2,996,969

2,845,648

Occupancy expense

229,893

215,986

664,200

633,969

Marketing and professional expense

65,957

67,725

198,121

195,786

Other operating expenses

651,548

521,130

1,530,160

1,287,460

Total other expenses

2,019,552

1,775,569

5,389,450

4,962,863

Income before income taxes

2,149,476

885,211

4,536,627

2,852,618

Income tax expense

320,111

172,982

816,550

567,774

Net income

$

1,829,365

$

712,229

$

3,720,077

$

2,284,844

Cash dividend per share

$

0.22

$

0.19

$

0.66

$

0.57

Basic and diluted earnings per share

$

1.88

$

0.72

$

3.82

$

2.29

Weighted –average basic and diluted

shares outstanding

971,234

983,119

972,740

997,340

PINNACLE BANCSHARES, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Nine Months Ended September 30, 2021 and 2020

Accumulated

Additional

Other

Total

Common Stock

Paid-in

Treasury

Retained

Comprehensive

Stockholders’

Shares

Amount

Capital

Stock

Earnings

Income

Equity

Balance December 31, 2019

1,872,313

$

18,723

$

8,923,223

$

(11,730,888

)

$

32,445,916

$

1,130,578

$

30,787,552

Net income

-

-

-

2,284,844

-

2,284,844

Cash dividends declared

($.57 per share)

-

-

-

-

(567,897

)

-

(567,897

)

Purchase of treasury stock

-

-

-

(1,710,456

)

-

-

(1,710,456

)

Other comprehensive income

-

-

-

-

-

2,801,152

2,801,152

Balance September 30, 2020

1,872,313

$

18,723

$

8,923,223

$

(13,441,344

)

$

34,162,863

$

3,931,730

$

33,595,195

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

-

-

-

3,720,077

-

3,720,077

Cash dividends declared

($.66 per share)

-

-

-

-

(641,916

)

-

(641,916

)

Purchase of treasury stock

-

-

-

(92,276

)

-

-

(92,276

)

Other comprehensive loss

-

-

-

-

-

(1,512,090

)

(1,512,090

)

Balance September 30, 2021

1,872,313

$

18,723

$

8,923,223

$

(13,533,621

)

$

37,952,233

$

2,445,103

$

35,805,661

PINNACLE BANCSHARES, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Nine Months Ended

September 30,

2021

2020

OPERATING ACTIVITIES:

Net income

$

3,720,077

$

2,284,844

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

Depreciation

332,075

298,504

Provision for loan losses

-

-

Net investment amortization expense

239,487

205,007

Net (increase) decrease in bank owned life insurance

565,062

(282,558

)

Gain on sale of securities available for sale

(227,238

)

(152,658

)

Decrease in accrued interest receivable

90,082

84,462

Increase (decrease) in accrued interest payable

(55,607

)

663

Net other operating activities

915,738

422,074

Net cash provided by operating activities

5,579,676

2,860,338

INVESTING ACTIVITIES:

Net increase in loans

(14,698,376

)

(23,788,381

)

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

(1,537,109

)

332,822

Purchase of securities available for sale

(68,497,440

)

(34,701,151

)

Proceeds from sale of securities available for sale

7,752,740

2,732,970

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

12,328,077

12,330,031

Net redemption of restricted equity securities

69,500

34,000

Purchase of premises and equipment

(841,123

)

(201,178

)

Net cash used in investing activities

(65,423,731

)

(43,260,887

)

FINANCING ACTIVITIES:

Net increase in deposits

60,601,325

43,177,108

Purchase of treasury stock

(92,276

)

(1,710,456

)

Payments of cash dividends

(641,916

)

(567,897

)

Net cash provided by financing activities

59,867,133

40,898,755

Net increase in cash and cash equivalents

23,078

498,206

Cash and cash equivalents at beginning of period

2,080,667

1,814,912

Cash and cash equivalents at end of period

$

2,103,745

$

2,313,118

SUPPLEMENTAL DISCLOSURES:

Cash paid during the period for:

Interest

$

453,526

$

703,068

Taxes

$

713,000

$

821,131

OTHER NONCASH TRANSACTIONS

Real estate acquired through foreclosure

$

-

$

86,400

Internally financed sales of other real estate owned

$

-

$

-

View source version on businesswire.com: https://www.businesswire.com/news/home/20211026006171/en/

Contacts

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