Pinnacle Bancshares Announces Results for Third Quarter Ended September 30, 2023
Pinnacle Bancshares, Inc. (OTCBB: PCLB) reported net income of $1,174,000 for Q3 2023, resulting in earnings per share of $1.29. For the nine months ended September 30, 2023, net income was $3,499,000, with earnings per share of $3.85. Return on average assets for Q3 2023 was 1.40% and for the nine months was 1.39%. Net interest margin decreased to 3.25% for Q3 2023 compared to 3.37% in Q3 2022. Pinnacle's allowance for loan losses decreased to 2.02% at September 30, 2023. The company adopted the current expected credit loss (CECL) model effective January 1, 2023. Dividends of $0.27 and $0.81 per share were paid to shareholders in Q3 2023. Total deposits decreased by $8.9 million, or 2.8%, compared to December 31, 2022.
10/31/2023 - 08:30 AM
JASPER, Ala. --(BUSINESS WIRE)--
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, 2023, net income of $1,174,000 $1.29 $1,168,000 $1.28
For the nine months ended September 30, 2023, Pinnacle reported net income of $3,499,000 $3.85 $3,488,000 $3.67
For the three and nine months ended September 30, 2023, return on average assets was 1.40% , and 1.39% , respectively, compared to 1.42% and 1.37% , respectively, in the comparable 2022 period.
Pinnacle’s net interest margin was 3.25% and 3.37% for the three and nine months ended September 30, 2023, respectively, compared to 3.37% and 3.31% for the three and nine months ended September 30, 2022, respectively. The Company anticipates that interest expense relating to its funding will continue to significantly increase during the remainder of the year as well as next year as a result of several factors such as increased deposit exception pricing and increased deposit migration to higher yielding deposit products.
At September 30, 2023, Pinnacle’s allowance for loan losses as a percent of total loans was 2.02% , compared to 2.16% at December 31, 2022. There were no nonperforming assets at September 30, 2023 as well as at December 31, 2022. Effective January 1, 2023, the Company adopted the current expected credit loss (CECL) model to account for credit losses on financial instruments, including loans. The adoption of the CECL model did not have an impact on the Company’s loan loss reserve due to minimal net losses that have occurred during the past five years.
Pinnacle Bank was classified as “well capitalized” at September 30, 2023. All capital ratios are higher than the requirements for a well-capitalized institution. As of September 30, 2023, the Bank’s common equity Tier 1 capital and Tier 1 risk-based capital ratios were each 17.82% . As of June 30, 2023, its total capital ratio was 18.74% , and its Tier 1 leverage ratio was 11.20% .
Dividends of $.27 and $.81 per share were paid to shareholders during the three and nine months ended for September 30, 2023 as compared to $.25 and $.75 per share paid during the three and nine months ended for September 30, 2022.
Management believes that the Company has adequate liquidity through its low loan to deposit ratio at September 30, 2023, as well as available funding from outside sources. Our net funding availability, as a percentage of our franchise funding, is 95.56% 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 also retested its Federal Funds line and other borrowing lines during the first nine months of 2023.
The Company’s total deposits at September 30, 2023 decreased $8.9 million 2.8% , as compared to December 31, 2022. As mentioned previously, pricing of deposits is anticipated to become more competitive during the remainder of the year as well as next year, and thus deposits could continue to decrease as they did during the first nine months of 2023.
Effects of Inflation
Inflation has caused a substantial rise in interest rates during 2023 which has had a negative effect in the securities market. As a result of the continued rise in interest rates, the Company has recorded an accumulated other comprehensive loss on securities available for sale of approximately $35.1 million $30.3 million
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,
2023
2022
Net income
$
1,174,000
$
1,168,000
Basic and diluted earnings per share
$
1.29
$
1.28
Performance ratios (annualized):
Return on average assets
1.40
%
1.42
%
Return on average equity (excluding OCI)
12.30
%
14.18
%
Interest rate spread
2.84
%
3.26
%
Net interest margin
3.25
%
3.37
%
Operating cost to assets
2.24
%
2.23
%
Weighted average basic and diluted shares outstanding
909,534
909,534
Dividends per share
$
0.27
$
0.25
Provision for loan losses
$
-
$
-
Nine Months Ended September 30,
2023
2022
Net income
$
3,499,000
$
3,488,000
Basic and diluted earnings per share
$
3.85
$
3.67
Performance ratios (annualized):
Return on average assets
1.39
%
1.37
%
Return on average equity (excluding OCI)
12.52
%
13.36
%
Interest rate spread
3.07
%
3.22
%
Net interest margin
3.37
%
3.31
%
Operating cost to assets
2.29
%
2.11
%
Weighted average basic and diluted shares outstanding
909,534
949,699
Dividends per share
$
0.81
$
0.75
Provision for loan losses
$
-
$
-
(Audited)
September 30, 2023
December 31, 2022
Total assets
$
335,492,000
$
332,718,000
Loans receivable, net
$
119,256,000
$
115,956,000
Deposits
$
313,355,000
$
322,261,000
Brokered CD’s included in deposits
$
11,899,000
$
11,756,000
Total stockholders’ equity
$
3,849,000
$
5,738,000
Book value per share (excluding OCI)
$
42.21
$
39.17
Average Stockholders’ equity to assets ratio (excluding OCI)
11.09
%
10.47
%
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
2.02
%
2.16
%
FINANCIAL INFORMATION
PINNACLE BANCSHARES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Unaudited)
(Audited)
September 30,
December 31,
2023
2022
Assets
Cash and cash equivalents
$
1,738,471
$
1,742,938
Interest bearing deposits in banks
23,471,237
12,185,982
Securities available for sale
155,711,014
170,580,649
Restricted equity securities
836,200
773,600
Loans
121,719,199
118,516,666
Less Allowance for loan losses
2,463,182
2,561,079
Loans, net
119,256,017
115,955,587
Premises and equipment, net
8,356,209
6,926,631
Right-of-use lease assets – operating
326,309
398,364
Goodwill
306,488
306,488
Bank owned life insurance
10,500,752
10,206,335
Accrued interest receivable
1,530,590
2,070,895
Deferred tax assets, net
12,407,709
10,594,339
Other assets
1,051,320
976,361
Total assets
$
335,492,316
$
332,718,169
Liabilities and Stockholders’ Equity
Deposits
Noninterest-bearing
$
93,967,289
$
94,784,231
Interest-bearing
219,387,746
227,476,410
Total deposits
313,355,035
322,260,641
Subordinated debentures
3,093,000
3,093,000
Other borrowings
12,500,000
-
Accrued interest payable
953,149
111,652
Operating lease liabilities
326,309
398,364
Other liabilities
1,415,535
1,116,596
Total liabilities
331,643,028
326,980,253
Stockholders’ equity
Common stock, par value $.01 per share; 2,400,000 authorized; 1,872,313 issued; 909,534 shares outstanding
18,723
18,723
Additional paid‑in capital
8,923,223
8,923,223
Treasury stock, 962,779 shares at cost
(15,588,799
)
(15,588,799
)
Retained earnings
45,036,693
42,274,372
Accumulated other comprehensive loss, net of tax
(34,540,552
)
(29,889,603
)
Total stockholders’ equity
3,849,288
5,737,916
Total liabilities and stockholders’ equity
$
335,492,316
$
332,718,169
PINNACLE BANCSHARES, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended
Nine Months Ended
September 30,
September 30,
2023
2022
2023
2022
Interest income
Loans, including fees
$
1,941,342
$
1,600,000
$
5,524,642
$
4,845,439
Securities available for sale
1,361,835
1,405,805
4,156,942
3,987,827
Other interest
235,620
52,659
573,914
98,418
Total interest income
3,538,797
3,058,464
10,255,498
8,931,684
Interest expense
Deposits
556,599
155,403
1,166,228
386,708
Borrowings
148,848
810
289,178
810
Subordinated debentures
39,050
38,600
117,150
113,910
Total interest expense
744,497
194,813
1,572,556
501,428
Net interest income
2,794,300
2,863,651
8,682,942
8,430,256
Provision for loan losses
-
-
-
-
Net interest income after provision
for loan losses
2,794,300
2,863,651
8,682,942
8,430,256
Other income
Fees and service charges on deposit accounts
503,147
379,232
1,255,373
1,119,851
Service fee income, net
677
837
2,164
2,534
Bank owned life insurance
97,806
95,973
294,418
287,919
Mortgage fee income
1,345
509
12,113
27,757
Total other income
602,975
476,551
1,564,068
1,438,061
Other expense:
Salaries and employee benefits
1,104,360
1,017,682
3,341,009
3,069,520
Occupancy expense
215,091
226,707
671,430
660,263
Marketing and professional expense
70,122
72,903
206,713
201,568
Other operating expenses
495,168
518,116
1,544,281
1,447,580
Total other expenses
1,884,741
1,835,408
5,763,433
5,378,931
Income before income taxes
1,512,534
1,504,794
4,483,577
4,489,386
Income tax expense
338,607
336,763
984,541
1,000,976
Net income
$
1,173,927
$
1,168,031
$
3,499,036
$
3,488,410
Cash dividend per share
$
0.27
$
0.25
$
0.81
$
0.75
Basic and diluted earnings per share
$
1.29
$
1.28
$
3.85
$
3.67
Weighted –average basic and diluted
shares outstanding
909,534
909,534
909,534
949,699
PINNACLE BANCSHARES, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
Nine Months Ended September 30, 2023 and 2022
Accumulated
Additional
Other
Total
Common Stock
Paid-in
Treasury
Retained
Comprehensive
Stockholders’
Shares
Amount
Capital
Stock
Earnings
Income (Loss)
Equity
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
-
-
-
3,488,410
-
3,488,410
Cash dividends declared
-
-
-
-
(712,779
)
-
(712,779
)
($.75 per share)
Purchase of treasury stock
-
-
-
(2,055,178
)
-
-
(2,055,178
)
Other comprehensive loss
-
-
-
-
-
(32,004,484
)
(32,004,484
)
Balance September 30, 2022
1,872,313
$
18,723
$
8,923,223
$
(15,588,799
)
$
41,485,970
$
(30,464,005
)
$
4,375,112
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
-
-
-
-
(736,715
)
-
(736,715
)
($.81 per share)
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
PINNACLE BANCSHARES, INC,
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine Months Ended
September 30,
2023
2022
OPERATING ACTIVITIES:
Net income
$
3,499,036
$
3,488,410
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation
296,162
322,633
Net investment amortization expense
130,812
163,944
Net increase in bank owned life insurance
(294,418
)
(287,919
)
Decrease in accrued interest receivable
540,306
393,609
Increase in accrued interest payable
841,497
49,906
Net other operating activities
201,969
(197,719
)
Net cash provided by operating activities
5,215,364
3,932,864
INVESTING ACTIVITIES:
Net (increase) decrease in loans
(3,300,429
)
8,214,887
Net (increase) decrease in interest bearing deposits in other banks
(11,285,255
)
4,105,621
Purchase of securities available for sale
-
(40,160,098
)
Proceeds from maturing, calls, and payments received on securities available for sale
8,295,689
8,714,406
Net purchase of restricted equity securities
(62,600
)
(32,000
)
Purchase of premises and equipment
(1,725,739
)
(351,154
)
Net cash used in investing activities
(8,078,334
)
(19,508,338
)
FINANCING ACTIVITIES:
Net increase (decrease) in deposits
(8,904,782
)
18,522,973
Proceeds from other borrowings
16,100,000
-
Repayments of other borrowings
(3,600,000
)
-
Purchase of treasury stock
-
(2,055,178
)
Payments of cash dividends
(736,715
)
(712,779
)
Net cash provided by financing activities
2,858,503
15,755,016
Net increase (decrease) in cash and cash equivalents
(4,467
)
179,542
Cash and cash equivalents at beginning of period
1,742,938
1,730,327
Cash and cash equivalents at end of period
$
1,738,471
$
1,909,869
SUPPLEMENTAL DISCLOSURES:
Cash paid during the period for:
Interest
$
731,059
$
451,522
Taxes
$
945,928
$
1,008,568
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/20231031828567/en/
Joe B. Adams, III
Source: Pinnacle Bancshares, Inc.
What is the net income of Pinnacle Bancshares, Inc. for Q3 2023?
Pinnacle Bancshares, Inc. reported a net income of $1,174,000 for Q3 2023.
What is the earnings per share for Q3 2023?
The earnings per share for Q3 2023 is $1.29.
What is the return on average assets for Q3 2023?
The return on average assets for Q3 2023 is 1.40%.
What is the net interest margin for Q3 2023?
The net interest margin for Q3 2023 is 3.25%.
What is the allowance for loan losses at September 30, 2023?
The allowance for loan losses at September 30, 2023 is 2.02%.
When did Pinnacle Bancshares, Inc. adopt the current expected credit loss (CECL) model?
Pinnacle Bancshares, Inc. adopted the current expected credit loss (CECL) model effective January 1, 2023.
How much dividends were paid to shareholders in Q3 2023?
Dividends of $0.27 and $0.81 per share were paid to shareholders in Q3 2023.
What is the change in total deposits compared to December 31, 2022?
Total deposits decreased by $8.9 million, or 2.8%, compared to December 31, 2022.
