JASPER, Ala., July 30, 2024--(BUSINESS WIRE)--Robert B. Nolen, Jr., President and Chief Executive Officer of Pinnacle Bancshares, Inc. (OTCBB: PCLB), today announced the Company’s second quarter results of operations.
For the three months ended June 30, 2024, Pinnacle’s basic/diluted earnings per share was $1.11 as compared to $1.26 per share for the three months ended June 30, 2023. Net income for the three months ended June 30, 2024 was $1,007,000 as compared to $1,145,000 for the three months ended June 30, 2023 and $981,000 for the three months ended December 31, 2023.
For the six months ended June 30, 2024, Pinnacle’s basic/diluted earnings per share was $2.17 as compared to $2.56 per share for the six months ended June 30, 2023. Net income for the six months ended June 30, 2024 was $1,970,000 as compared to $2,325,000 for the six months ended June 30, 2023.
For the three and six months ended June 30, 2024, return on average assets was 1.18%, and 1.15%, respectively, compared to 1.36% and 1.38%, respectively, in the comparable 2023 period.
The Company’s net interest margin was 3.22% and 3.15% for the three and six months ended June 30, 2024, respectively, as compared to 3.35% and 3.43% for the three and six months ended June 30, 2023. The Company anticipates that interest expense relating to its funding will continue to increase during the remainder of the year as a result of several factors such as increased deposit exception pricing and increased deposit migration to higher yielding deposit products.
At June 30, 2024, the Company’s allowance for loan losses as a percent of total loans was 1.92%, compared to 1.96% at December 31, 2023. There were no nonperforming assets as of June 30, 2024 as well as December 31, 2023.
Pinnacle Bank was classified as "well capitalized" at June 30, 2024. All capital ratios are significantly higher than the requirements for a well-capitalized institution. As of June 30, 2024, the Bank’s common equity Tier 1 capital and Tier 1 risk-based capital ratios were each 18.58%. As of June 30, 2024, its total capital ratio was 19.71%, and its Tier 1 leverage ratio was 11.62%.
Dividends of $.27 and $.54 per share were paid to shareholders during the three and six months ended for both June 30, 2024 and 2023.
Management believes that the Company has sufficient liquidity through its low loan to deposit ratio at June 30, 2024, as well as available funding from outside sources. Our net funding availability, as a percentage of our franchise funding, is 104.46% 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 June 30, 2024 decreased approximately $1 million, or less than 1%, as compared to December 31, 2023. As mentioned previously, pricing of deposits is anticipated to become more competitive during the remainder of the year, and thus deposits could continue to decrease as they did during the first half of 2024.
Effects of Inflation
Inflation caused a substantial rise in interest rates during 2023 which has had a negative effect in the securities market. As a result of rising interest rates, the Company recorded an accumulated other comprehensive loss on securities available for sale of approximately $26.9 million as of June 30, 2024 as compared to $26.7 million as of December 31, 2023. Although these unrealized losses recorded as of June 30, 2024 and December 31, 2023 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. In addition, these losses do not impact our regulatory capital ratios.
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,
2024
2023
Net income
$
1,007,000
$
1,145,000
Basic and diluted earnings per share
$
1.11
$
1.26
Performance ratios (annualized):
Return on average assets
1.18
%
1.36
%
Return on average equity (excluding OCI)
9.96
%
12.30
%
Interest rate spread
2.69
%
3.04
%
Net interest margin
3.22
%
3.35
%
Operating cost to assets
2.42
%
2.25
%
Weighted average basic and diluted shares outstanding
909,347
909,534
Dividends per share
$
0.27
$
0.27
Provision for loan losses
$
-
$
-
Six Months Ended June 30,
2024
2023
Net income
$
1,970,000
$
2,325,000
Basic and diluted earnings per share
$
2.17
$
2.56
Performance ratios (annualized):
Return on average assets
1.15
%
1.38
%
Return on average equity (excluding OCI)
9.84
%
12.64
%
Interest rate spread
2.62
%
3.20
%
Net interest margin
3.15
%
3.43
%
Operating cost to assets
2.38
%
2.31
%
Weighted average basic and diluted shares outstanding
909,441
909,534
Dividends per share
$
0.54
$
0.54
Provision for loan losses
$
-
$
-
(Audited)
June 30, 2024
December 31, 2023
Total assets
$
346,463,000
$
342,578,000
Loans receivable, net
$
122,713,000
$
122,973,000
Deposits
$
310,309,000
$
311,339,000
Brokered CD’s included in deposits
$
11,958,000
$
11,907,000
Total stockholders’ equity
$
14,074,000
$
12,787,000
Book value per share
$
15.49
$
14.06
Book value per share (excluding OCI)
$
44.66
$
43.02
Total average stockholders’ equity to assets ratio (excluding OCI)
11.68
%
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
1.92
%
1.96
%
FINANCIAL INFORMATION
PINNACLE BANCSHARES, INC. CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Unaudited)
(Audited)
June 30,
December 31,
2024
2023
Assets
Cash and cash equivalents
$
1,804,554
$
2,190,793
Interest bearing deposits in banks
26,909,971
19,518,942
Securities available for sale
162,147,426
165,520,025
Restricted equity securities
954,300
836,200
Loans
125,119,762
125,433,112
Less Allowance for loan losses
2,406,847
2,459,372
Loans, net
122,712,915
122,973,740
Premises and equipment, net
8,451,263
8,421,289
Right-of-use lease assets – operating
281,291
302,171
Goodwill
306,488
306,488
Bank owned life insurance
10,812,011
10,601,839
Accrued interest receivable
2,026,137
2,107,189
Deferred tax assets, net
9,158,960
8,951,799
Other assets
898,016
847,912
Total assets
$
346,463,332
$
342,578,387
Liabilities and Stockholders’ Equity
Deposits
Noninterest-bearing
$
92,189,466
$
89,518,619
Interest-bearing
218,119,770
221,820,527
Total deposits
310,309,236
311,339,146
Subordinated debentures
3,093,000
3,093,000
Other borrowings
16,500,000
12,500,000
Accrued interest payable
863,883
1,392,273
Operating lease liabilities
281,291
302,171
Other liabilities
1,342,397
1,165,256
Total liabilities
332,389,807
329,791,846
Stockholders’ equity
Common stock, par value $.01 per share; 2,400,000 authorized; 1,872,313 issued; 908,534 and 909,534 shares outstanding, respectively.
18,723
18,723
Additional paid‑in capital
8,923,223
8,923,223
Treasury stock (963,779 and 962,779 shares, respectively)
(15,619,799
)
(15,588,799
)
Retained earnings
47,251,484
45,772,256
Accumulated other comprehensive loss, net of tax
(26,500,106
)
(26,338,862
)
Total stockholders’ equity
14,073,525
12,786,541
Total liabilities and stockholders’ equity
$
346,463,332
$
342,578,387
PINNACLE BANCSHARES, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended
Six Months Ended
June 30,
June 30,
2024
2023
2024
2023
Interest income
Loans, including fees
$
2,136,245
$
1,853,182
$
4,162,616
$
3,583,300
Securities available for sale
1,326,707
1,382,618
2,662,995
2,795,107
Other interest
340,093
194,438
648,917
338,294
Total interest income
3,803,045
3,430,238
7,474,528
6,716,701
Interest expense
Deposits
757,324
382,578
1,518,271
609,629
Borrowings and repurchase agreements
190,262
138,121
369,065
140,330
Subordinated debentures
39,050
39,050
78,100
78,100
Total interest expense
986,636
559,749
1,965,436
828,059
Net interest income
2,816,409
2,870,489
5,509,092
5,888,642
Provision for loan losses
-
-
-
-
Net interest income after provision for loan losses
2,816,409
2,870,489
5,509,092
5,888,642
Other income
Fees and service charges on deposit accounts
423,780
389,931
848,623
752,226
Service fee income, net
-
716
743
1,487
Bank owned life insurance
106,500
97,806
210,172
196,612
Mortgage fee income
2,522
5,065
4,653
10,768
Total other income
532,802
493,518
1,064,191
961,093
Other expense:
Salaries and employee benefits
1,158,295
1,100,851
2,295,710
2,236,649
Occupancy expense
320,432
216,178
633,103
456,339
Marketing and professional expense
72,425
67,772
147,288
136,591
Other operating expenses
519,858
506,441
999,681
1,049,113
Total other expenses
2,071,010
1,891,242
4,075,782
3,878,692
Income before income taxes
1,278,201
1,472,765
2,497,501
2,971,043
Income tax expense
271,395
327,829
527,125
645,934
Net income
$
1,006,806
$
1,144,936
$
1,970,376
$
2,325,109
Cash dividend per share
$
0.27
$
0.27
$
0.54
$
0.54
Basic and diluted earnings per share
$
1.11
$
1.26
$
2.17
$
2.56
Weighted –average basic and diluted shares outstanding
909,347
909,534
909,441
909,534
PINNACLE BANCSHARES, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY Six Months Ended June 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
-
-
-
-
2,325,109
-
2,325,109
Cash dividends declared ($.54 per share)
-
-
-
-
(491,147
)
-
(491,147
)
Other comprehensive income
-
-
-
-
-
2,413,976
2,413,976
Balance June 30, 2023
1,872,313
$
18,723
$
8,923,223
$
(15,588,799
)
$
44,108,334
$
(27,465,627
)
$
9,985,854
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
-
-
-
-
1,970,376
-
1,970,376
Cash dividends declared ($.54 per share)
-
-
-
-
(491,148
)
-
(491,148
)
Purchase of treasury stock
-
-
-
(31,000
)
-
-
(31,000
)
Other comprehensive loss
-
-
-
-
-
(161,244
)
(161,244
)
Balance June 30, 2024
1,872,313
$
18,723
$
8,923,223
$
(15,619,799
)
$
47,251,484
$
(26,500,106
)
$
14,073,525
PINNACLE BANCSHARES, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six Months Ended
June 30,
2024
2023
OPERATING ACTIVITIES:
Net income
$
1,970,376
$
2,325,109
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation
261,892
199,301
Net investment amortization expense
101,905
85,736
Bank owned life insurance
(210,172
)
(196,612
)
Decrease in accrued interest receivable
81,052
71,241
(Increase) decrease in accrued interest payable
(528,390
)
363,105
Net other operating activities
58,211
(9,928
)
Net cash provided by operating activities
1,734,874
2,837,952
INVESTING ACTIVITIES:
Net (increase) decrease in loans
260,825
(241,853
)
Net increase in interest bearing deposits in other banks
(7,391,029
)
(7,237,446
)
Proceeds from maturing, sale and payments received on securities available for sale
2,971,115
6,094,227
Net (purchase) redemption of restricted equity securities
(118,100
)
3,800
Purchase of premises and equipment
(291,866
)
(1,244,094
)
Net cash used in investing activities
(4,569,055
)
(2,625,366
)
FINANCING ACTIVITIES:
Net decrease in deposits
(1,029,910
)
(11,720,282
)
Proceeds from other borrowings
16,500,000
16,100,000
Repayments of other borrowings
(12,500,000
)
(3,600,000
)
Purchase of treasury stock
(31,000
)
-
Payments of cash dividends
(491,148
)
(491,147
)
Net cash provided by financing activities
2,477,942
288,571
Net increase (decrease) in cash and cash equivalents
(386,239
)
501,157
Cash and cash equivalents at beginning of period
2,190,793
1,742,938
Cash and cash equivalents at end of period
$
1,804,554
$
2,244,095
SUPPLEMENTAL DISCLOSURES:
Cash paid during the period for:
Interest
$
2,493,826
$
464,954
Taxes
$
387,747
$
604,928
OTHER NONCASH TRANSACTIONS
Real estate acquired through foreclosure
$
-
$
-
Internally financed sales of other real estate owned
