PCLB Pinnacle Bancshares Inc (PK)

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, 2014, Pinnacle reported net income of $550,000 compared to $491,000 for the three months ended June 30, 2013.
• For the six months ended June 30, 2014, Pinnacle reported net income of $1,014,000 compared to $964,000 for the six months ended June 30, 2013.
• Net interest income after the provision for loan losses for the three and six months ended June 30, 2014, was $1,721,000 and $3,422,000, respectively, compared with $1,731,000 and $3,395,000 respectively, in the same periods last year.
• Basic and diluted earnings per share for the three and six months ended June 30, 2014 were $0.46 and $0.84 per share, respectively, compared to $0.41 and $0.80 per share, respectively, for the same periods last year.
• For the three and six months ended June 30, 2014, return on average assets was 0.99%, and 0.91%, respectively, compared to 0.92% and 0.91%, respectively, in the comparable 2013 period.

Included in net income for the three and six months ended June 30, 2014 is a gain on sale of securities available for sale of approximately $69,000.

Pinnacle’s net interest margin was 3.32% and 3.34% for the three and six months ended June 30, 2014, respectively, compared to 3.54% and 3.59% for the three and six months ended June 30, 2013, respectively. The decline in the net interest margin was primarily due to declining loan volumes.

At June 30, 2014, Pinnacle’s allowance for loan losses as a percent of total loans was 1.80%, compared to 1.56% at December 31, 2013. Nonperforming loans as a percentage of total loans was .63% as of June 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 $120,000.

Mr. Nolen stated: “Pinnacle continues to maintain strong regulatory capital. We are pleased with our net income and credit quality improvements which reflect the continued efforts of our Board and associates. We remain focused on our current strategies which are intended to provide superior services to customers in our market and enhance shareholder value.”

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 June 30, 2014   2013 Net income $ 550,000

 

$ 491,000 Basic and diluted earnings per share $ 0.46 $ 0.41   Performance ratios (annualized): Return on average assets 0.99 % 0.92 % Return on average equity 9.21 % 7.48 % Interest rate spread 3.31 % 3.53 % Net interest margin 3.32 % 3.54 % Operating cost to assets 2.62 % 2.83 %   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 $ 0     Six Months Ended June 30,

2014

2013

Net income $ 1,014,000

 

$ 964,000 Basic and diluted earnings per share $ 0.84 $ 0.80   Performance ratios (annualized): Return on average assets 0.91 % 0.91 % Return on average equity 8.67 % 7.38 % Interest rate spread 3.33 % 3.58 % Net interest margin 3.34 % 3.59 % Operating cost to assets 2.70 % 2.81 %   Weighted average basic and diluted shares outstanding

1,205,128

1,205,128

Dividends per share $ 0.22 $ 0.11 Provision for loan losses $ 35,000 $ 75,000     June 30, 2014 December 31, 2013 Total assets $ 225,570,000 $ 220,395,000 Loans receivable, net $ 88,102,000 $ 92,074,000 Deposits $ 197,806,000 $ 189,011,000 Total stockholders’ equity $ 23,996,000 $ 21,889,000 Book value per share $ 19.91 $ 18.16 Stockholders’ equity to assets ratio 10.64 % 10.35 %   Asset quality ratios:

Nonperforming loans as a percent of total loans

0.63 % .65 %

Nonperforming assets as a percent of total loans

1.12 % 1.25 %

Allowance for loan losses as a percent of total loans

1.80 % 1.56 %

Allowance for loan losses as a percent of nonperforming loans

286.15 % 239.47 %            

FINANCIAL INFORMATIONPINNACLE BANCSHARES, INC.CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

   

(Unaudited)

  June 30, December 31, 2014 2013  

Assets

Cash and cash equivalents $ 1,416,981 $ 1,641,460 Interest bearing deposits in banks 8,316,037 3,278,142 Securities available for sale 111,259,680 106,113,770 Restricted equity securities 822,200 950,400 Loans held for sale 0 0   Loans 89,713,264 93,530,823 Less Allowance for loan Losses   1,611,018     1,456,459   Loans, net   88,102,246     92,074,364     Other real estate owned 438,074 557,386 Premises and equipment, net 5,588,527 5,639,376 Goodwill 306,488 306,488

Bank owned life insurance

7,984,158

7,809,614

Accrued interest receivable

1,016,273

966,009

Other assets

 

319,789

   

1,058,450

 

Total assets

$

225,570,453

 

$

220,395,459

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

Deposits Noninterest-bearing $ 47,014,095 $ 43,386,191 Interest-bearing $ 150,791,441   $ 145,624,942   Total deposits $ 197,805,536 $ 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 128,989 116,889 Other liabilities   547,091     663,402   Total liabilities   201,574,616     198,506,657     Stockholders’ equity

Common stock, par value $.01 per share; 2,400,000 authorized; 1,872,313 issued at June 30, 2014 and December 31, 2013; 1,205,128 outstanding at June 30, 2014 and December 31, 2013

 

 

18,723

 

 

18,723

Additional paid-in capital 8,923,223 8,923,223

Treasury stock, at cost (667,185 shares outstanding at June 30, 2014 and December 31, 2013)

(7,974,814

)

(7,974,814

)

Retained earnings 22,187,282 21,438,680 Accumulated other comprehensive income (loss), net of tax   841,423     (517,010 ) Total stockholders’ equity   23,995,837     21,888,802       Total liabilities and stockholders’ equity $ 225,570,453   $ 220,395,459              

PINNACLE BANCSHARES, INC.

 

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME

   

Three Months Ended

 

Six Months Ended

June 30,

June 30,

2014   2013 2014   2013 Interest income Loans, including fees $ 1,108,372 $ 1,238,361 $ 2,232,765 $ 2,499,146 Securities available for sale 754,348 651,050 1,511,406 1,297,040 Other interest   5,917   6,509   10,565     11,173 Total interest income 1,868,637 1,895,920 3,754,736 3,807,359 Interest expense Deposits 121,551 140,074 244,694 286,033 Borrowings and repurchase agreements 455 10 2,560 1,653 Subordinated debentures   25,500   24,949   50,449     50,108 Total interest expense   147,506   165,033   297,703     337,794   Net interest income 1,721,131 1,730,887 3,457,033 3,469,565 Provision for loan losses   0   0   35,000     75,000 Net interest income after provision for loan losses   1,721,131   1,730,887   3,422,033     3,394,565 Other income Fees and service charges on deposit accounts 261,090 257,288 515,927 507,394 Service fee income, net 6,636 7,673 14,402 16,610 Bank owned life insurance 87,273 86,413 174,545 172,826 Mortgage fee income 6,866 20,734 27,914 42,207 Net gain on securities available for sale   68,759   0   68,759     0 Total other income   430,624   372,108   801,547     739,037   Other expense: Salaries and employee benefits 705,868 649,619 1,453,514 1,308,271 Occupancy expense 235,675 261,807 494,126 512,390 Marketing and professional expense 106,382 118,002 208,829 238,325 Net (gain) loss on sale of real estate owned 14,188 85,693 (3,173 ) 93,652 Other operating expenses   414,818   394,607   850,139     815,732 Total other expenses   1,476,931   1,509,728   3,003,435     2,968,370   Income before income taxes 674,824 593,267 1,220,145 1,165,232   Income tax expense   124,847   102,710   206,414     201,585   Net income $ 549,977 $ 490,557 $ 1,013,731   $ 963,647   Cash dividend per share $ 0.22 $ 0.11 $ 0.11   $ 0.11   Basic and diluted earnings per share $ 0.46 $ 0.41 $ 0.84   $ 0.80  

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’ EQUITYSIX MONTHS ENDED JUNE 30, 2014 AND 2013

            Accumulated   Other Additional Comprehensive Total Common Stock Paid-in Treasury Retained Income Stockholders’ Shares   Amount Capital Stock

(Loss)

(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 0 963,647 0 963,647 Cash dividends declared ($.11 per share) 0 0 0 0

(132,563

) 0 (132,563 ) Other comprehensive loss 0     0     0     0       0       (2,044,396 )     (2,044,396 ) Balance June 30, 2013 1,872,313   $ 18,723   $ 8,923,223   $ (7,974,814 )   $ 20,725,274     $ (135,493 )   $ 21,556,913       Accumulated Other Additional Comprehensive Total Common Stock Paid-in Treasury Retained Income Stockholders’ Shares Amount Capital Stock Earnings

(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 1,013,731 0 1,013,731 Cash dividends declared ($.22 per share) 0 0 0 0

(265,129

) 0 (265,129 ) Other comprehensive income 0     0     0     0       0       1,358,433       1,358,433   Balance June 30, 2014 1,872,313   $ 18,723   $ 8,923,223   $ (7,974,814 )   $ 22,187,282     $ 841,423     $ 23,995,837              

PINNACLE BANCSHARES, INC.

 

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

   

For the Six Months Ended

June 30, 2014   2013 OPERATING ACTIVITIES: Net income 1,013,731 963,647 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 208,934 240,034 Provision for loan losses 35,000 75,000 Net investment amortization expense 227,145 219,125 Bank owned life insurance (174,544 ) (172,825 ) Gain on sale of securities available for sale (68,759 ) 0 (Gain) loss on sale of or write-down of real estate owned, net (3,173 ) 93,652 Net decrease in loans held for sale 0 237,676 Increase in accrued interest receivable (50,264 ) (41,288 ) Increase in accrued interest payable 12,100 18,388 Net other operating activities   (210,564 )   (856 ) Net cash provided by operating activities   989,606     1,632,553   INVESTING ACTIVITIES: Net loan repayments 4,014,998 1,821,201 Net increase in interest bearing deposits in other banks (5,037,895 ) (6,386,852 ) Purchase of securities available for sale (13,605,882 ) (16,503,023 ) Proceeds from sale of securities available for sale 1,925,000 0 Proceeds from maturing, sale and payments received on securities available for sale 8,567,933 8,505,486 Net redemption of restricted equity securities 128,200 138,900 Purchase of premises and equipment (158,085 ) (32,626 ) Proceeds from sales of real estate owned   44,605     30,362   Net cash used in investing activities   (4,121,126 )   (12,426,552 ) FINANCING ACTIVITIES: Net increase in deposits 8,794,403 13,705,406 Increase (decrease) in repurchase agreements (1,722,233 ) 1,242,477 Net decrease in other borrowings (3,900,000 ) (3,800,000 ) Payments of cash dividends   (265,129 )   (132,563 ) Net cash provided by financing activities   2,907,041     11,015,320   NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (224,479 ) 221,321 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD   1,641,460     1,332,968     CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,416,981   $ 1,554,289     SUPPLEMENTAL DISCLOSURES: Cash paid during the period for: Interest $ 285,603 $ 319,406 Taxes $ 232,540 $ 112,458   OTHER NONCASH TRANSACTIONS Real estate acquired through foreclosure $ 77,880 $ 74,315      

Pinnacle Bancshares, Inc.Robert B. Nolen, Jr., 205-221-4111President and Chief Executive Officer