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

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

$

-

 

$

-

 

 

Contacts

Joe B. Adams, III

Chief Financial Officer

(205) 221-8866

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