PCLB Pinnacle Bancshares Inc (PK)

Robert B. Nolen, Jr., President and Chief Executive Officer of Pinnacle Bancshares, Inc. (OTCBB:PCLB), today announced Pinnacle’s results of operations for the fourth quarter and year ended December 31, 2012:

• For the three months ended December 31, 2012, Pinnacle reported net income of $506,000, compared to $461,000 for the three months ended December 31, 2011.
• Net interest income before the provision for loan losses for the three months ended December 31, 2012 was $1,803,000, compared with $1,896,000 in the same period last year.
• For the year ended December 31, 2012, net income was $1,955,000, compared with net income of $1,236,000 in the prior year.
• Net interest income before the provision for loan losses for the year ended December 31, 2012, was $7,374,000, compared with $7,817,000 in the prior year.
• For the three months ended December 31, 2012, basic and diluted earnings were each $0.42 per share. For the same period in 2011, basic and diluted earnings were each $0.36 per share.
• Basic and diluted earnings were each $1.59 per share for the year ended December 31, 2012. For 2011, basic and diluted earnings were each $0.97 per share.

Mr. Nolen commented: “Our strategy is to continue to provide high quality products and services to, and practice relationship banking with, our customers who live and conduct business in our market area. We focus on loan quality which should enhance our performance in a challenging environment. Although loan growth has been limited, our core deposits and asset quality ratios have remained strong, and we have conservatively managed our investment portfolio, which we expect will provide significant flexibility if loan volumes begin to increase.”

The Company’s net interest margin was 3.82% and 3.92% for the three months and year ended December 31, 2012, respectively, compared to 4.11% and 4.13% for the three months and year ended December 31, 2011, respectively.

Other income remained stable. Fees and service charges declined slightly from 2011 to 2012 as rule changes implemented from the Dodd-Frank Act reduced certain fees Pinnacle charges. This was offset by gain on sale of loans held for sale as home mortgage production improved from 2011 to 2012.

Other expenses decreased $619,000 from 2011 to 2012. This was due to a $211,000 reduction in compensation and benefits from staff reduction, and a $136,000 reduction in net loss on sales of real estate. In addition there was an approximately $240,000 reduction in other expenses, primarily FDIC insurance, legal fees and supplies.

At December 31, 2012, Pinnacle’s allowance for loan losses as a percent of total loans was 2.07%, compared to 2.13% at December 31, 2011. At December 31, 2012, the allowance for loan losses as a percent of nonperforming loans was 1018.00%, compared to 211.68% at December 31, 2011. Based on current real estate valuations, Pinnacle believes its allowance for loan losses is adequate.

Charge-offs, net of recoveries, were $393,000 in 2012, compared to $1,315,000 in the prior year. Nonperforming assets were $548,000 at December 31, 2012, compared to $1,457,000 at December 31, 2011. The ratio of nonperforming assets to total loans was .56% at December 31, 2012, compared to 1.39% at December 31, 2011. “The declining levels of charge-offs and non-performing assets reflect our continued efforts to address and resolve problem loan issues aggressively. These improvements allowed us to reduce the provision for loan losses to $200,000 in 2012 compared to $1,100,000 in 2011,” said Mr. Nolen.

Despite recent improvements, Mr. Nolen cautioned investors that economic conditions and financial stresses including job losses, 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.

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 Bancshares, Inc.’s wholly owned subsidiary Pinnacle Bank has seven offices located in central and northwest Alabama.

        PINNACLE BANCSHARES, INC Unaudited Financial Highlights   Three Months Ended December 31, 2012 2011 Net Income (loss) $ 506,000 $ 461,000 Weighted average basic shares outstanding

1,205,128

1,270,128 Weighted average diluted shares outstanding 1,205,128 1,270,128 Dividend per share $ 0.22 $ 0.11 Provision for loan losses $ 50,000 $ 50,000 Basic earnings (loss) per share $ 0.42 $ .0.36 Diluted earnings (loss) per share $ 0.42 $ 0.36 Performance Ratios: (annualized) Return on average assets 0.99 % 0.90 % Return on average equity 8.80 % 8.34 % Interest rate spread 3.81 % 4.10 % Net interest margin 3.82 % 4.11 % Operating cost to assets 3.09 % 3.24 %   At December 31, 2012 2011 Net Income $ 1,955,000 $ 1,236,000 Weighted average basic shares outstanding 1,228,279 1,270,128 Weighted average diluted shares outstanding 1,228,279 1,270,128 Dividend per share $ 0.55 $ 0.44 Provision for loan losses $ 200,000 $ 1,100,000 Basic earnings per share $ 1.59 $ 0.97 Diluted earnings per share $ 1.59 $ 0.97 Performance Ratios: Return on average assets 0.95 % 0.60 % Return on average equity 8.49 % 5.59 % Interest rate spread 3.90 % 4.12 % Net interest margin 3.92 % 4.13 % Operating cost to assets 2.98 % 3.28 %   At December 31, 2012 2011 Total assets $ 208,391,000 $ 199,231,000 Loans receivable, net $ 96,359,000 $ 102,446,000 Deposits $ 177,313,000 $ 170,577,000

Total stockholders’ equity

$ 22,770,000 $ 22,334,000 Weighted average book value per share $ 18.54 $ 17.58

Total stockholders’ equity to asset ratio

10.93 % 11.21 % Asset Quality Ratios: Nonperforming loans as a percent of total loans .20 % 1.01 % Nonperforming assets as a percent of total Loans .56 % 1.39 % Allowance for loan losses as a percent of total loans 2.07 % 2.13

Allowance for loan losses as a percent of nonperforming loans

1018.00 % 211.68 %

 

 

PINNACLE BANCSHARES, INC.AND SUBSIDIARY

 

CONSOLIDATED STATEMENTS OF CONDITIONDecember 31, 2012 and 2011

      2012     2011

Assets

Cash and cash equivalents $ 1,332,968 $ 2,510,642 Interest bearing deposits in banks 2,234,882 1,613,466 Securities available for sale 91,693,374 75,734,778 Restricted equity securities 994,800 957,800 Loans held for sale 395,801 -   Loans 97,998,866 104,674,158 Less allowance for loan losses   2,036,110     2,228,664   Loans, net   95,962,756    

102,445,514

    Other real estate owned 347,824 403,881 Premises and equipment, net 6,039,211 6,186,794 Goodwill 306,488 306,488 Bank owned life insurance 7,463,963 7,117,402 Accrued interest receivable 901,784 1,018,331 Other assets   716,917     935,476   Total assets $ 208,390,768   $ 199,230,572    

Liabilities and Stockholders’ Equity

Deposits: Noninterest-bearing $ 39,594,246 $ 32,080,544 Interest-bearing   137,719,659     139,267,444   Total deposits 177,313,905 171,347,988   Repurchase agreements 118,793 984,957 Other borrowings 3,800,000 - Subordinated debentures 3,093,000 3,093,000 Accrued interest payable 110,311 182,020 Other liabilities   1,184,534     1,288,204   Total liabilities   185,620,543     176,896,169     Stockholders’ equity

Common stock, $.01 par value, 2,400,000 shares authorized; 1,872,313 shares issued; 1,205,128 and 1,270,128 shares outstanding

18,723 18,723 Additional paid-in capital 8,923,223 8,923,223 Treasury stock, at cost (667,185 and 602,185 shares, respectively) (7,974,814 ) (7,320,909 ) Retained earnings 19,894,190 18,609,374 Accumulated other comprehensive income, net of tax   1,908,903     2,103,992   Total stockholders’ equity   22,770,225     22,334,403     Total liabilities and stockholders’ equity $ 208,390,768   $ 199,230,572      

PINNACLE BANCSHARES, INC.AND SUBSIDIARY

 

CONSOLIDATED STATEMENTS OF INCOMEYears Ended December 31, 2012 and 2011

      2012     2011 Interest income Loans, including fees $ 5,716,220 $ 6,555,597 Taxable securities 1,769,705 1,899,623 Nontaxable securities 692,190 601,355 Other interest   35,247   36,875 Total interest income   8,213,362   9,093,450   Interest expense Deposits 732,827 1,174,552 Borrowings and repurchase agreements 2,635 2,097 Subordinated debentures   103,475   99,607 Total interest expense

 

838,937

 

1,276,256

  Net interest income 7,374,425 7,817,194 Provision for loan losses   200,000   1,100,000 Net interest income after provision for loan losses   7,174,425   6,717,194   Other income Fees and service charges on deposit accounts 950,616 963,962 Servicing fee income, net 41,979 51,440 Bank owned life insurance 346,561 340,302 Net gain on loans held for sale 86,254 40,061 Net gain on sales of other real estate owned 21,240 - Net gain on sales of securities available for sale   -   47,316 Total other income   1,446,650   1,443,081   Other expenses Salaries and employee benefits 2,870,620 3,081,447 Occupancy expenses 1,286,615 1,554,028 Marketing and professional expenses 298,269 353,188 Net loss on sales of other real estate owned - 136,552 Other operating expenses   1,641,149   1,590,515 Total other expenses   6,096,653   6,715,730   Income before income taxes 2,524,422 1,444,545   Income tax expense   569,636   208,302   Net income $ 1,954,786 $ 1,236,243   Basic and diluted earnings per share $ 1.59 $ 0.97   Cash dividends per share $ 0.55 $ 0.44 Weighted-average basic and diluted shares outstanding   1,228,279   1,270,128    

PINNACLE BANCSHARES, INC.AND SUBSIDIARY

 

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITYYears Ended December 31, 2012 and 2011

                          Accumulated     Additional Other Total

 

Common Stock

Paid-in Treasury Retained Comprehensive Stockholders’

 

Shares

Par Value Capital Stock Earnings Income Equity   Balance, December 31, 2010 1,872,313 $ 18,723 $ 8,923,223 $ (7,320,909 ) $ 17,931,987 $ 1,099,934 $ 20,652,958 Net income - - - - 1,236,243 - 1,236,243

Cash dividends declared, $0.44 per share

- - - - (558,856 ) - (558,856 ) Other comprehensive income -   -   -   -     -     1,004,057     1,004,057   Balance, December 31, 2011

1,872,313

18,723 8,923,223 (7,320,909 ) 18,609,374 2,103,991 22,334,402 Net income - - - - 1,954,786 - 1,954,786

Cash dividends declared, $0.55 per share

- - - - (669,970 ) - (669,970 ) Treasury stock purchase - - - (653,905 ) - - (653,905 ) Other comprehensive income -   -   -   -     -     (195,089 )   (195,089 ) Balance, December 31, 2012 1,872,313 $ 18,723 $ 8,923,223 $ (7,974,814 ) $ 19,894,190   $ 1,908,903   $ 22,770,225      

PINNACLE BANCSHARES, INC.AND SUBSIDIARY

 

CONSOLIDATED STATEMENTS OF CASH FLOWSYears Ended December 31, 2012 and 2011

      2012     2011 OPERATING ACTIVITIES Net income $ 1,954,786 $ 1,236,243 Adjustments to reconcile net income to net cash Provided by operating activities: Depreciation 481,321 484,254 Provision for loan losses 200,000 1,100,000 Deferred tax expense (benefit) 142,138 (86,761 ) Net amortization and accretion of securities 274,185 2,578 Bank owned life insurance (346,561 ) (340,302 ) Gain on sale of loans held for sale (86,254 ) (40,061 ) Gain on sale of securities available for sale - (47,316 ) (Gain) loss on sale or write-down of other real estate owned, net (21,240 ) 136,552 Proceeds from sales of loans held for sale (395,801 ) 251,141 Decrease in accrued interest receivable 116,547 16,208 Decrease in accrued interest payable (71,709 ) (171,544 ) Net other operating activities   574,379    

(102,224

) Net cash provided by operating activities   2,821,791  

 

2,438,768

  INVESTING ACTIVITIES Net decrease in loans 5,192,805 9,184,171 Net (increase) decrease in interest-bearing deposits in banks (621,416 ) 1,535,417 Purchase of securities available for sale (30,795,326 ) (29,862,416 ) Proceeds from sales of securities available for sale - 4,011,875 Proceeds from maturing or callable securities available for sale 14,247,883 14,920,077 Purchase (redemption) of restricted equity securities (37,000 ) 297,400 Purchase of premises and equipment (333,738 ) (206,339 ) Proceeds from sales of other real estate owned   771,449     728,897   Net cash provided by investing activities   (11,575,343 )   609,082     FINANCING ACTIVITIES Net decrease in deposits 5,965,917 (2,988,101 ) Increase in other borrowings 3,800,000 - Decrease in repurchase agreements (866164 ) (476,910 ) Purchase of treasury stock (653,905 ) - Payments of cash dividends   (669,970 )   (558,856 ) Net cash used in financing activities   7,575,878     (4,023,867 )   Net decrease in cash and cash equivalents (1,177,674 ) (976,017 )   Cash and cash equivalents at beginning of year   2,510,642     3,486,659     Cash and cash equivalents at end of year $ 1,332,968   $ 2,510,642     SUPPLEMENTAL DISCLOSURE Cash paid (received) during the year for: Interest $ 910,646 $ 1,447,800 Taxes $ 488,717 $ (35,697 ) OTHER NONCASH TRANSACTIONS Other real estate owned acquired in settlement of loans $ 694,152 $ 705,632