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

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

$

-

 

 

$

-

 

 

Contacts

Joe B. Adams, III

Chief Financial Officer

(205) 221-8866

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