Pinnacle Bancshares Announces Results for First Quarter Ended March 31, 2022

JASPER, Ala.--(BUSINESS WIRE)-- Robert B. Nolen, Jr., President and Chief Executive Officer of Pinnacle Bancshares, Inc. (OTCBB: PCLB), today announced Pinnacle’s results of operations for the first quarter ended March 31, 2022:

• For the three months ended March 31, 2022, Pinnacle reported net income of $1,111,000, compared to $907,000 for the three months ended March 31, 2021.
• Net interest income after the provision for loan losses for the three months ended March 31, 2022, was $2,735,000, compared with $2,379,000 in the same period last year.
• Included in net interest income for the three months ended March 31, 2022 are Paycheck Protection Program (“PPP”) amortized loan fees of approximately $120,000 as compared to $141,000 for the three months ended March 31, 2021.
• For the three months ended March 31, 2022, basic and diluted earnings per share were each $1.14. For the same period in 2021 basic and diluted earnings per share were each $0.93.
• For the three months ended March 31, 2022, return on average assets was 1.29%, compared to 1.26% in the comparable 2021 period.

The Company’s net interest margin was 4.06% for the three months March 31, 2022, compared to 3.61% for the three months ended March 31, 2021.

At March 31, 2022, Pinnacle’s allowance for loan losses as a percent of total loans was 2.05%, compared to 2.02% at December 31, 2021. Excluding PPP loans of $2.2 million dollars and $4.3 million dollars, the allowance for loan losses as a percent of total loans as of March 31, 2022 and December 31, 2021, was both 2.09%. Nonperforming assets were $11,000 at March 31, 2022, compared to $30,000 at December 31, 2021. The ratio of nonperforming assets to total loans was .01% at March 31, 2022, and .01% at December 31, 2021.

Pinnacle was classified as “well capitalized” at March 31, 2022. All capital ratios are significantly higher than the requirements for a well-capitalized institution.

Dividends of $.25 per share were paid to shareholders during the first quarter of 2022 and $.22 per share during the first quarter 2021.

Impact of COVID-19 on Our Business

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.

Effects of Inflation

We do not believe that inflation has had a material effect on our results of operations for the three-month period ended March 31, 2022 and March 31, 2021; however, our business could be affected by inflation in the future which we plan to mitigate through a combination of pricing actions and operating efficiencies, although these actions could have an adverse impact on demand.

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.
AND SUBSIDIARY
UNAUDITED FINANCIAL HIGHLIGHTS
		Three Months Ended March 31,
		2022				2021
Net Income		$	1,110,760			$	907,000
Weighted average basic shares outstanding			970,791				973,505
Weighted average diluted shares outstanding			970,791				973,505
Dividend per share		$	.25			$	.22
Provision for loan losses		$	-			$	-
Basic and diluted earnings per share		$	1.14			$	0.93
Performance Ratios: (annualized)
Return on average assets			1.29	%			1.26	%
Return on average equity			12.96	%			11.90	%
Interest rate spread			4.01	%			3.51	%
Net interest margin			4.06	%			3.61	%
Operating cost to assets			2.06	%			2.33	%
						(Audited)
		March 31, 2022				December 31, 2021
Total assets		$	349,351,000			$	339,710,000
Loans receivable, net		$	120,432,000			$	122,659,000
Deposits		$	320,414,000			$	298,693,000
Brokered CD’s included in deposits		$	19,944,000			$	24,937,000
Total stockholders’ equity		$	23,851,000			$	35,659,000
Weighted average book value per share (excluding OCI)		$	36.04			$	35.15
Total average stockholders' equity to asset ratio			9.92	%			10.19	%
Asset Quality Ratios:
Nonperforming loans as a percent of total loans			.01	%			.01	%
Nonperforming assets as a percent of total loans			.01	%			.01	%
Allowance for loan losses as a percent of total loans			2.05	%			2.02	%
Allowance for loan losses as a percent of nonperforming loans			22936.36	%			8460.00	%

PINNACLE BANCSHARES, INC.
AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CONDITION
		(Unaudited)				(Audited)
		March 31,				December 31,
		2022				2021
Assets
Cash and cash equivalents		$	2,069,123			$	1,730,327
Interest bearing deposits in banks			17,111,285				11,146,497
Securities available for sale			185,344,095				183,516,514
Restricted equity securities			773,600				741,600
Loans			122,954,984				125,196,462
Less allowance for loan losses			2,522,536				2,537,948
Loans, net			120,432,448				122,658,514
Premises and equipment, net			6,929,559				7,015,537
Operating right-of-use lease assets			469,697				493,627
Goodwill			306,488				306,488
Bank owned life insurance			9,918,414				9,822,441
Accrued interest receivable			1,458,577				1,917,598
Other assets			4,537,826				361,228
Total assets		$	349,351,112			$	339,710,371
Liabilities and Stockholders’ Equity
Deposits:
Noninterest-bearing		$	91,773,265			$	88,430,320
Interest-bearing			228,640,848				210,262,213
Total deposits			320,414,113				298,692,533
Subordinated debentures			3,093,000				3,093,000
Accrued interest payable			92,745				77,843
Operating lease liabilities			469,697				493,627
Other liabilities			1,430,708				1,694,225
Total liabilities			325,500,263				304,051,228
Stockholders’ equity
Common stock, $.01 par value, 2,400,000 shares authorized;
1,872,313 shares issued; 970,791 shares outstanding			18,723				18,723
Additional paid-in capital			8,923,223				8,923,223
Treasury stock, at cost (901,522 shares)			(13,533,621	)			(13,533,621	)
Retained earnings			39,578,402				38,710,339
Accumulated other comprehensive income (loss), net of tax			(11,135,878	)			1,540,479
Total stockholders’ equity			23,850,849				35,659,143
Total liabilities and stockholders’ equity		$	349,351,112			$	339,710,371

PINNACLE BANCSHARES, INC.
AND SUBSIDIARY
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended March 31, 2022 and 2021
		2022				2021
Interest income
Loans, including fees		$	1,654,949			$	1,538,243
Taxable securities			1,179,914				912,113
Nontaxable securities			34,384				58,493
Other interest			10,321				5,632
Total interest income			2,879,568				2,514,481
Interest expense
Deposits			106,235				97,172
Subordinated debentures			38,600				38,500
Total interest expense			144,835				135,672
Net interest income			2,734,733				2,378,809
Provision for loan losses			-				-
Net interest income after provision for loan losses			2,734,733				2,378,809
Other income
Fees and service charges on deposit accounts			357,833				346,188
Servicing fee income, net			886				1,059
Bank owned life insurance			95,973				97,967
Mortgage fee income			14,361				2,487
Total other income			469,053				447,701
Other expenses
Salaries and employee benefits			1,025,583				958,973
Occupancy expenses			229,622				222,144
Marketing and professional expenses			64,901				64,637
Other operating expenses			461,841				432,901
Total other expenses			1,781,947				1,678,655
Income before income taxes			1,421,839				1,147,855
Income tax expense			311,079				240,903
Net income		$	1,110,760			$	906,952
Basic and diluted earnings per share		$	1.14			$	0.93
Cash dividends per share		$	0.25			$	0.22
Weighted-average basic and diluted shares outstanding			970,791				973,505

PINNACLE BANCSHARES, INC.
AND SUBSIDIARY
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
Three Months Ended March 31, 2022 and 2021
																				Accumulated
								Additional												Other				Total
	Common Stock							Paid-in				Treasury				Retained				Comprehensive				Stockholders’
	Shares			Par Value				Capital				Stock				Earnings				Income (Loss)				Equity
Balance, December 31, 2012	1,872,313			$	18,723			$	8,923,223			$	(13,441,345	)		$	34,874,072			$	3,957,193			$	34,331,866
Net income	-				-				-				-				906,952				-				906,952
Cash dividends declared,
$0.22 per share	-				-				-				-				(214,171	)			-				(214,171	)
Other comprehensive loss	-				-				-				-				-				(2,924,470	)			(2,924,470	)
Balance, March 31, 2021	1,872,313			$	18,723			$	8,923,223			$	(13,441,345	)		$	35,566,853			$	1,032,723			$	32,100,177
Balance, December 31, 2021	1,872,313			$	18,723			$	8,923,223			$	(13,533,621	)		$	38,710,339			$	1,540,479			$	35,659,143
Net income	-				-				-				-				1,110,760				-				1,110,760
Cash dividends declared,
$0.25 per share	-				-				-				-				(242,697	)			-				(242,697	)
Other comprehensive loss	-				-				-				-				-				(12,676,357	)			(12,676,357	)
Balance, March 31, 2022	1,872,313			$	18,723			$	8,923,223			$	(13,533,621	)		$	39,578,402			$	(11,135,878	)		$	23,850,849

PINNACLE BANCSHARES, INC.
AND SUBSIDIARY
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended March 31, 2022 and 2021
		2022				2021
OPERATING ACTIVITIES
Net income		$	1,110,760			$	906,952
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation			115,917				103,599
Net amortization of securities			71,700				81,760
Bank owned life insurance			(95,973	)			(97,967	)
Decrease in accrued interest receivable			459,021				307,664
Increase (decrease) in accrued interest payable			14,902				(22,632	)
Net other operating activities			265,363				539,307
Net cash provided by operating activities			1,941,690				1,818,683
INVESTING ACTIVITIES
Net (increase) decrease in loans			2,226,066				(10,896,412	)
Net increase in interest-bearing deposits in banks			(5,964,788	)			(10,902,836	)
Purchase of securities available for sale			(20,435,341	)			(19,626,046	)
Proceeds from maturing or callable securities available for sale			1,154,225				6,103,652
Net (purchase) redemption of restricted equity securities			(32,000	)			69,500
Purchase of premises and equipment			(29,939	)			(469,528	)
Net cash used in investing activities			(23,081,777	)			(35,721,670	)
FINANCING ACTIVITIES
Net increase in deposits			21,721,580				34,077,734
Payments of cash dividends			(242,697	)			(214,171	)
Net cash provided by financing activities			21,478,883				33,863,563
Net increase (decrease) in cash and cash equivalents			338,796				(39,424	)
Cash and cash equivalents at beginning of year			1,730,327				2,080,667
Cash and cash equivalents at end of year		$	2,069,123			$	2,041,243
SUPPLEMENTAL DISCLOSURE
Cash paid during the year for:
Interest		$	129,933			$	158,304
Taxes		$	-			$	-
OTHER NONCASH TRANSACTIONS
Real estate acquired through foreclosure		$	-			$	-

 

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Joe B. Adams, III

Chief Financial Officer

(205) 221-8866

Source: Pinnacle Bancshares, Inc.