Pinnacle Bancshares Announces Results for Third Quarter Ended September 30, 2024

Oct 30 2024 20:15 BST

JASPER, Ala.--(BUSINESS WIRE)--Oct. 30, 2024-- 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, 2024, Pinnacle’s basic/diluted earnings per share was $1.16 as compared to $1.29 for the three months ended September 30, 2023. Net income for the three months ended September 30, 2024 was $1,057,000 as compared to $1,174,000 for the three months ended September 30, 2023 and $981,000 for the three months ended December 31, 2023.
For the nine months ended September 30, 2024, Pinnacle’s basic/diluted earnings per share was $3.33 as compared to $3.85 for the nine months ended September 30, 2023. Net income for the nine months ended September 30, 2024 was $3,027,000 as compared to $3,499,000 for the nine months ended September 30, 2023.
For the three and nine months ended September 30, 2024, return on average assets was 1.20%, and 1.17%, respectively, compared to 1.40% and 1.39%, respectively, in the comparable 2023 period.

Pinnacle’s net interest margin was 3.24% and 3.18% for the three and nine months ended September 30, 2024, respectively, compared to 3.25% and 3.37% for the three and nine months ended September 30, 2023, respectively.

At September 30, 2024, Pinnacle’s allowance for loan losses as a percent of total loans was 1.84%, compared to 1.96% at December 31, 2023. There were no nonperforming assets at September 30, 2024 as well as at December 31, 2023.

Pinnacle Bank was classified as “well capitalized” at September 30, 2024. All capital ratios are higher than the requirements for a well-capitalized institution. As of September 30, 2024, the Bank’s common equity Tier 1 capital and Tier 1 risk-based capital ratios were each 18.78%. As of September 30, 2024, its total capital ratio was 19.90%, and its Tier 1 leverage ratio was 11.52%.

Dividends of $.27 and $.81 per share were paid to shareholders during the three and nine months ended for both September 30, 2024 and September 30, 2023.

Management believes that the Company has adequate liquidity through its low loan to deposit ratio at September 30, 2024, as well as available funding from outside sources. Our net funding availability, as a percentage of our franchise funding, is 105.48% as compared to our established minimal limit of 25%. In addition, the Bank provides access to additional FDIC insurance coverage for accounts that would otherwise exceed deposit insurance coverage. The Company’s total deposits at September 30, 2024 increased $3.3 million, or 1%, as compared to December 31, 2023.

Effects of Inflation

Inflation caused a substantial rise in interest rates during 2022 and 2023 which has had a negative effect in the securities market. As a result of the increase in interest rates since 2022, the Company has recorded an accumulated other comprehensive loss on securities available for sale of approximately $21.8 million as of September 30, 2024 as compared to recording other comprehensive loss in the amount of $26.7 million as of December 31, 2023. Although these unrealized losses recorded as of September 30, 2024 were significant, management does not anticipate these losses to be other than temporary as these unrealized losses do not currently appear related to any credit deterioration within the portfolio but from higher interest rates.

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,
		2024			2023
Net income	$	1,057,000		$	1,174,000
Basic and diluted earnings per share	$	1.16		$	1.29

Performance ratios (annualized):
Return on average assets		1.20	%		1.40	%
Return on average equity (excluding OCI)		10.32	%		12.30	%
Interest rate spread		2.68	%		2.84	%
Net interest margin		3.24	%		3.25	%
Operating cost to assets		2.34	%		2.24	%

Weighted average basic and diluted shares outstanding		908,508			909,534
Dividends per share	$	0.27		$	0.27
Provision for loan losses	$	-		$	-

	Nine Months Ended September 30,
		2024			2023
Net income	$	3,027,000		$	3,499,000
Basic and diluted earnings per share	$	3.33		$	3.85

Performance ratios (annualized):
Return on average assets		1.17	%		1.39	%
Return on average equity (excluding OCI)		10.00	%		12.52	%
Interest rate spread		2.64	%		3.07	%
Net interest margin		3.18	%		3.37	%
Operating cost to assets		2.37	%		2.29	%

Weighted average basic and diluted shares outstanding		909,127			909,534
Dividends per share	$	0.81		$	0.81
Provision for loan losses	$	-		$	-
				*(Audited)*
	September 30, 2024			December 31, 2023
Total assets	$	349,193,000		$	342,578,000
Loans receivable, net	$	128,862,000		$	122,973,000
Deposits	$	314,702,000		$	311,339,000
Brokered CD’s included in deposits	$	14,895,000		$	11,907,000
Total stockholders’ equity	$	19,951,000		$	12,787,000
Book value per share	$	21.97		$	14.06
Book value per share (excluding OCI)	$	45.56		$	43.02
Average Stockholders’ equity to assets ratio (excluding OCI)		11.67	%		11.25	%

Asset quality ratios:
Nonperforming loans as a percent of total loans		.00	%		.00	%
Nonperforming assets as a percent of total loans		.00	%		.00	%
Allowance for loan losses as a percent of total loans		1.84	%		1.96	%

FINANCIAL INFORMATION PINNACLE BANCSHARES, INC. CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

	*(Unaudited)*			*(Audited)*
	September 30,			December 31,
		2024			2023

Assets
Cash and cash equivalents	$	2,285,483		$	2,190,793
Interest bearing deposits in banks		14,162,953			19,518,942
Securities available for sale		173,332,274			165,520,025
Restricted equity securities		954,300			836,200

Loans		131,279,465			125,433,112
Less Allowance for loan losses		2,417,390			2,459,372
Loans, net		128,862,075			122,973,740

Premises and equipment, net		8,319,522			8,421,289
Right-of-use lease assets – operating		270,944			302,171
Goodwill		306,488			306,488
Bank owned life insurance		10,918,511			10,601,839
Accrued interest receivable		1,608,138			2,107,189
Deferred tax assets, net		7,337,873			8,951,799
Other assets		834,435			847,912
Total assets	$	349,192,996		$	342,578,387

Liabilities and Stockholders’ Equity
Deposits
Noninterest-bearing	$	86,434,945		$	89,518,619
Interest-bearing		228,267,309			221,820,527
Total deposits		314,702,254			311,339,146

Subordinated debentures		3,093,000			3,093,000
Other borrowings		9,000,000			12,500,000
Accrued interest payable		769,491			1,392,273
Operating lease liabilities		270,944			302,171
Other liabilities		1,406,324			1,165,256
Total liabilities		329,242,013			329,791,846

Stockholders’ equity
Common stock, par value $.01 per share; 2,400,000 authorized; 1,872,313issued; 908,134 and 909,534 shares outstanding, respectively		18,723			18,723
Additional paid‑in capital		8,923,223			8,923,223
Treasury stock, 964,179 and 962,779 shares at cost, respectively		(15,630,199	)		(15,588,799	)
Retained earnings		48,063,272			45,772,256
Accumulated other comprehensive loss, net		(21,424,036	)		(26,338,862	)

Total stockholders’ equity		19,950,983			12,786,541

Total liabilities and stockholders’ equity	$	349,192,996		$	342,578,387

PINNACLE BANCSHARES, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2024		2023		2024		2023
Interest income
Loans, including fees	$	2,198,772	$	1,941,342	$	6,361,388	$	5,524,642
Securities available for sale		1,327,160		1,361,835		3,990,155		4,156,942
Other interest		395,345		235,620		1,044,262		573,914
Total interest income		3,921,277		3,538,797		11,395,805		10,255,498

Interest expense
Deposits		811,310		556,599		2,329,581		1,166,228
Borrowings		201,884		148,848		570,949		289,178
Subordinated debentures		39,050		39,050		117,150		117,150
Total interest expense		1,052,244		744,497		3,017,680		1,572,556

Net interest income		2,869,033		2,794,300		8,378,125		8,682,942
Provision for loan losses		-		-		-		-
Net interest income after provision for loan losses		2,869,033		2,794,300		8,378,125		8,682,942

Other income
Fees and service charges on deposit accounts		429,651		503,147		1,278,274		1,255,373
Service fee income, net		-		677		743		2,164
Bank owned life insurance		106,500		97,806		316,672		294,418
Mortgage fee income		1,514		1,345		6,167		12,113
Total other income		537,665		602,975		1,601,856		1,564,068

Other expense:
Salaries and employee benefits		1,172,413		1,104,360		3,468,123		3,341,009
Occupancy expense		303,811		215,091		936,914		671,430
Marketing and professional expense		76,575		70,122		223,863		206,713
Other operating expenses		508,549		495,168		1,508,230		1,544,281
Total other expenses		2,061,348		1,884,741		6,137,130		5,763,433

Income before income taxes		1,345,350		1,512,534		3,842,851		4,483,577

Income tax expense		288,258		338,607		815,383		984,541

Net income	$	1,057,092	$	1,173,927	$	3,027,468	$	3,499,036

Cash dividend per share	$	0.27	$	0.27	$	0.81	$	0.81

Basic and diluted earnings per share	$	1.16	$	1.29	$	3.33	$	3.85

Weighted –average basic and diluted shares outstanding		908,508		909,534		909,127		909,534

PINNACLE BANCSHARES, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY Nine Months Ended September 30, 2024 and 2023

												Accumulated
				Additional								Other			Total
	Common Stock			Paid-in		Treasury			Retained			Comprehensive			Stockholders’
	Shares	Amount		Capital		Stock			Earnings			Loss			Equity
Balance December 31, 2022	1,872,313	$	18,723	$	8,923,223	$	(15,588,799	)	$	42,274,372		$	(29,889,603	)	$	5,737,916
Net income	-		-		-					3,499,036			-			3,499,036
Cash dividends declared ($.81 per share)	-		-		-		-			(736,715	)		-			(736,715	)
Other comprehensive loss	-		-		-		-			-			(4,650,949	)		(4,650,949	)
Balance September 30, 2023	1,872,313	$	18,723	$	8,923,223	$	(15,588,799	)	$	45,036,693		$	(34,540,552	)	$	3,849,288

												Accumulated
				Additional								Other			Total
	Common Stock			Paid-in		Treasury			Retained			Comprehensive			Stockholders’
	Shares	Amount		Capital		Stock			Earnings			Loss			Equity
Balance December 31, 2023	1,872,313	$	18,723	$	8,923,223	$	(15,588,799	)	$	45,772,256		$	(26,338,862	)	$	12,786,541
Net income	-		-		-					3,027,468			-			3,027,468
Cash dividends declared ($.81 per share)	-		-		-		-			(736,452	)		-			(736,452	)
Purchase of treasury stock	-		-		-		(41,400	)		-			-			(41,400	)
Other comprehensive income	-		-		-		-			-			4,914,826			4,914,826
Balance September 30, 2024	1,872,313	$	18,723	$	8,923,223	$	(15,630,199	)	$	48,063,272		$	(21,424,036	)	$	19,950,983

PINNACLE BANCSHARES, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	For the Nine Months Ended
	September 30,
		2024			2023
OPERATING ACTIVITIES:
Net income	$	3,027,468		$	3,499,036
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		393,633			296,162
Net investment amortization expense		147,629			130,812
Net increase in bank owned life insurance		(316,672	)		(294,418	)
Decrease in accrued interest receivable		499,051			540,306
Increase (decrease) in accrued interest payable		(622,782	)		841,497
Net other operating activities		80,801			201,969
Net cash provided by operating activities		3,209,128			5,215,364

INVESTING ACTIVITIES:
Net increase in loans		(5,888,335	)		(3,300,429	)
Net (increase) decrease in interest bearing deposits in other banks		5,355,989			(11,285,255	)
Purchase of securities available for sale		(6,323,402	)		-
Proceeds from maturing, calls, and payments received on securities available for sale		5,066,020			8,295,689
Net purchase of restricted equity securities		(118,100	)		(62,600	)
Purchase of premises and equipment		(291,866	)		(1,725,739	)
Net cash used in investing activities		(2,199,694	)		(8,078,334	)

FINANCING ACTIVITIES:
Net increase (decrease) in deposits		3,363,108			(8,904,782	)
Proceeds from other borrowings		16,500,000			16,100,000
Repayments of other borrowings		(20,000,000	)		(3,600,000	)
Purchase of treasury stock		(41,400	)		-
Payments of cash dividends		(736,452	)		(736,715	)
Net cash provided by (used in) financing activities		(914,744	)		2,858,503

Net increase (decrease) in cash and cash equivalents		94,690			(4,467	)

Cash and cash equivalents at beginning of period		2,190,793			1,742,938

Cash and cash equivalents at end of period	$	2,285,483		$	1,738,471

SUPPLEMENTAL DISCLOSURES:
Cash paid during the period for:
Interest	$	3,640,462		$	731,059
Taxes	$	700,747		$	945,928

OTHER NONCASH TRANSACTIONS
Real estate acquired through foreclosure	$	-		$	-
Internally financed sales of other real estate owned	$	-		$	-

View source version on businesswire.com: https://www.businesswire.com/news/home/20241030595801/en/

Joe B. Adams, III
Chief Financial Officer
(205) 221-8866

Source: Pinnacle Bancshares, Inc.