PCLB Pinnacle Bancshares Inc (PK)

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, 2014, net income was $493,000, compared with net income of $494,000 for the three months ended September 30, 2013.

For the nine months ended September 30, 2014, net income was $1,507,000, compared with net income of $1,458,000 for the nine months ended September 30, 2013.

Basic and diluted earnings per share for the three and nine month periods ended September 30, 2014, were $0.41 and $1.25 per share, respectively, compared to $0.41 and $1.21 per share, respectively, for the same periods last year.

For the three and nine months ended September 30, 2014, return on average assets was 0.88%, and 0.90%, respectively, compared to .89% and 0.91%, respectively, in the comparable 2013 periods.

Net interest margin was 3.31% and 3.33% for the three months and nine months ended September 30, 2014, respectively, compared to 3.42% and 3.51% for the three months and nine months ended September 30, 2013, respectively.

In the three and nine months ended September 30, 2014, Pinnacle’s net interest margin declined primarily due to lower loan volumes. Lower provision for loan losses and operating expenses helped offset the decline in net interest income.

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. Although loan growth continues to be challenged, our core deposits, asset quality and regulatory capital ratios remain strong. We conservatively manage our investments, which we expect will provide significant flexibility if and when loan volumes begin to increase in an improving economy.”

At September 30, 2014, the Company’s allowance for loan losses as a percent of total loans was 1.93%, compared to 1.56% at December 31, 2013. Nonperforming loans as a percentage of total loans was .72% as of September 30, 2014 as compared to .65% as of December 31, 2013. The allowance for loan losses as a percent of total loans increased during the first half of the year mainly due to the declines in outstanding loans as well as net recoveries of approximately $171,000.

Net charge-offs (recoveries) were ($52,000) and ($172,000) for the three and nine months ended September 30, 2014, respectively, compared to $177,000 and $630,000 for the three and nine months ended September 30, 2013, respectively. The allowance for loan losses as a percent of total loans increased during the first half of the year mainly due to the declines in outstanding loans as well as net recoveries mentioned above. Asset quality remains strong as evidence of low volumes of past due loans and minimal amounts of other real estate owned.

Pinnacle was classified as “well capitalized” at the end of the third quarter of 2014. At September 30, 2014, 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.

Despite recent improvements, Mr. Nolen cautioned investors that economic conditions and financial stresses, including minimal full-time job growth, 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.

Any 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

(In Thousands, except share and per share data)

  Three Months Ended September 30, 2014     2013 Net income $ 493,000 $ 494,000 Basic and diluted earnings per share $ 0.41 $ 0.41   Performance ratios (annualized): Return on average assets .88% .89% Return on average equity 8.05% 8.99% Interest rate spread 3.20% 3.40% Net interest margin 3.31% 3.42% Operating cost to assets 2.59% 2.70%   Weighted average basic and diluted shares outstanding 1,205,128 1,205,128 Dividends per share $ 0.11 $ 0.11 Provision for loan losses $ 0 $ 25,000   Nine Months Ended September 30, 2014 2013 Net income $ 1,507,000 $ 1,458,000 Basic and diluted earnings per share $ 1.25 $ 1.21   Performance ratios (annualized): Return on average assets 0.90% 0.91% Return on average equity 8.71% 9.00% Interest rate spread 3.23% 3.50% Net interest margin 3.33% 3.51% Operating cost to assets 2.66% 2.71%   Weighted average basic and diluted shares outstanding 1,205,128 1,205,128 Dividends per share $ 0.33 $ 0.22 Provision for loan losses $ 35,000 $ 100,000   September 30, 2014 December 31, 2013 Total assets $ 218,335,000 $ 220,395,000 Loans receivable, net $ 84,441,000 $ 92,074,000 Deposits $ 189,949,000 $ 189,011,000 Total stockholders’ equity $ 24,488,000 $ 21,889,000 Book value per share $ 20.32 $ 18.16 Stockholders’ equity to assets ratio 10.32% 10.35%   Asset quality ratios: Non-performing loans as a percent of total loans 0.72% 0.65% Non-performing assets as a percent of total assets 0.28% 1.25% Allowance for loan losses as a percent of total loans 1.93% 1.56%

Allowance for loan losses as a percent of Non-performing loans

268.66% 239.47%          

FINANCIAL INFORMATION

PINNACLE BANCSHARES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

 

(Unaudited)

September 30, 2014

December 31, 2013

Assets

Cash and cash equivalents $ 1,529,377 $ 1,641,460 Interest bearing deposits in banks 3,191,986 3,278,142 Securities available for sale 112,983,151 106,113,770 Restricted equity securities 822,200 950,400 Loans held for sale 0 0 Loans 86,103,637 93,530,823 Less Allowance for loan Losses 1,662,753 1,456,459 Loans, net 84,440,884 92,074,364 Other real estate owned 190,699 557,386 Premises and equipment, net 5,521,441 5,639,376 Goodwill 306,488 306,488 Bank owned life insurance 8,071,430 7,809,614 Accrued interest receivable 956,472 966,009 Other assets   320,441   1,058,450 Total assets $ 218,334,569 $ 220,395,459  

Liabilities and Stockholders’ Equity

Deposits Noninterest-bearing $ 44,628,411 $ 43,386,191 Interest-bearing $ 145,320,968 $ 145,624,942 Total deposits $ 189,949,379 $ 189,011,133 Repurchase agreements 0 1,722,233 Other borrowings 0 3,900,000 Subordinated debentures 3,093,000 3,093,000 Accrued interest payable 97,752 116,889 Other liabilities   706,248   663,402 Total liabilities   193,846,379   198,506,657   Stockholders’ equity Common stock, par value $.01 per share; 2,400,000 authorized; 1,872,313 issued; 1,205,128 outstanding 18,723 18,723 Additional paid-in capital 8,923,223 8,923,223 Treasury stock, at cost (667,185 shares outstanding at September 30, 2014 and December 31, 2013)

(7,974,814)

(7,974,814)

Retained earnings 22,547,680 21,438,680 Accumulated other comprehensive income (loss), net of tax   973,378   (517,010) Total stockholders’ equity   24,488,190     21,888,802 Total liabilities and stockholders’ equity $ 218,334,569   $ 220,395,459          

PINNACLE BANCSHARES, INC.

 

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

  Three Months Ended Nine Months Ended September 30, September 30 2014     2013 2014     2013 INTEREST REVENUE: Interest & fee income on loans $ 1,087,068 $ 1,208,592 $ 3,319,833 $ 3,707,738 Interest and dividends on securities 763,924 667,297 2,275,330 1,964,337 Other interest   14,493   15,336   25,058   26,509 1,865,485 1,891,225 5,620,221 5,698,584 INTEREST EXPENSE: Interest on deposits 120,519 137,517 365,213 423,550 Interest on subordinated debt 24,900 24,877 75,349 74,986 Interest on borrowed funds   50   1   2,610   1,653   145,469   162,395   443,172   500,189

NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES

1,720,016 1,728,830 5,177,049 5,198,395 PROVISION FOR LOAN LOSSES   -   25,000   35,000   100,000

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES

  1,720,016   1,703,830   5,142,049   5,098,395 NONINTEREST INCOME: Fees and service charges on deposit accounts 274,490 254,730 790,417 762,124 Service fee income 6,483 8,260 20,885 24,870 Bank owned life insurance 87,272 86,413 261,817 259,239 Gain on sale of securities available for sale 0 0 68,759 0 Mortgage fee income   3,785   33,498   31,669   75,705   372,030   382,901   1,173,547   1,121,938 NONINTEREST EXPENSE: Compensation and benefits 709,816 711,255 2,163,330 2,019,526 Occupancy 252,254 257,335 746,380 769,725 Marketing and professional 101,965 107,802 310,794 346,127

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

52,012 (3,621) 48,839 90,031 Other   392,255   416,065   1,242,394   1,231,797   1,508,302   1,488,836   4,511,737   4,457,206 INCOME BEFORE INCOME TAXES 583,744 597,895 1,803,889 1,763,127 INCOME TAX EXPENSE   90,782   103,558   297,196   305,143 NET INCOME $ 492,962 $ 494,337 $ 1,506,693 $ 1,457,984 Cash dividend per share $0.11 $0.11 $0.33 $0.22 Basic and diluted earnings per share $0.41 $0.41 $1.25 $1.21 Weighted –average basic and diluted shares outstanding 1,205,128 1,205,128 1,205,128 1,205,128                          

PINNACLE BANCSHARES, INC.

 

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2014 AND 2013

  Accumulated Additional Other Total Common Stock Paid-in Treasury Retained Comprehensive Stockholders’ Shares     Amount 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 0 0 0 0 1,457,984 0 1,457,984 Cash dividends declared ($.22 per share) 0 0 0 0 (265,128 ) 0 (265,128 ) Other comprehensive loss 0       0       0       0         0         (2,066,715 )       (2,066,715 ) Balance September 30, 2013 1,872,313     $ 18,723     $ 8,923,223     $ (7,974,814 )     $ 21,087,046       $ (157,812 )     $ 21,896,366     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 0 0 0 0 1,506,693 0 1,506,693 Cash dividends declared ($.33 per share) 0 0 0 0 (397,693 ) 0 (397,693 ) Other comprehensive income 0       0       0       0         0         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        

PINNACLE BANCSHARES, INC,

 

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

  For the Nine Months Ended September 30 2014       2013   OPERATING ACTIVITIES: Net income $ 1,506,693 $ 1,457,984 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 307,948 354,949 Provision for loan losses 35,000 100,000 Amortization expense, net 332,617 355,166 Bank owned life insurance (261,817 ) (259,239 ) Gain on sale of sale of securities available for sale (68,759 ) 0 Loss on sale of or write-down of real estate owned, net 48,839 90,031 Gain on sale of assets 0 (5,151 ) Net change in loans held for sale 0 471,506 Decrease in accrued interest receivable 9,537 4,936 Proceeds from refund of FDIC prepaid assessment 0 393,050 Increase (decrease) in accrued interest payable (19,137 ) 1,853 Net other operating activities   (132,608 )   (42,706 ) Net provided by operating activities   1,758,313     2,922,379   INVESTING ACTIVITIES: Net loan repayments 7,614,379 2,544,229 Net (increase) decrease in interest bearing deposits in other banks 86,156 (10,519,666 ) Purchase of securities available-for-sale (19,097,323 ) (24,856,887 ) Proceeds for sale of securities available-for-sale 1,925,000 0 Proceeds from maturing, calls, and payments received on securities available-for-sale 12,442,935 12,784,949 Net redemption of restricted equity securities 128,200 138,900 Purchase of premises and equipment (190,013 ) (47,227 ) Proceeds from sales of premises and equipment 0 5,151 Proceeds from sales or capital expenditures related to real estate owned   301,950     105,486   Net cash provided by (used in) investing activities   3,211,284     (19,845,065 ) FINANCING ACTIVITIES: Net increase in deposits 938,246 19,944,030 Increase (decrease) in repurchase agreements (1,722,233 ) 1,155,496 Repayment of other borrowings (3,900,000 ) (3,800,000 ) Payments of cash dividends   (397,693 )   (265,128 ) Net cash provided by (used in) financing activities   (5,081,680 )   17,034,398   NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (112,083 ) 111,712   CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD   1,641,460     1,332,968   CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,529,377   $ 1,444,680     SUPPLEMENTAL DISCLOSURES: Cash payments for interest on deposits, borrowed funds, and subordinated debentures $ 462,309 $ 498,336 Cash payments for income taxes $ 309,640 $ 182,458 OTHER NONCASH TRANSACTIONS

Real estate acquired through foreclosure

$ 61,981 $

327,951

Internally financed sales of other real estate owned

$

77,880

$

10,000

Pinnacle Bancshares, Inc.Joe B. Adams, IIICFO & SVP205-221-4111