Pinnacle Bankshares Corporation Announces Record High 2nd Quarter/Mid-Year 2026 Earnings

Q: How did Pinnacle Bankshares (OTCQX:PPBN) perform in Q2 2026?

Pinnacle Bankshares reported Q2 2026 net income of $6.45 million , up 140% year-over-year, or $2.97 per share. According to Pinnacle, this included a gain from selling its Bearing Insurance ownership interest and higher net interest income, partially offset by higher credit loss provisions and expenses.

Q: How did the Bearing Insurance sale impact Pinnacle Bankshares’ 2026 results (PPBN)?

The Bearing Insurance sale generated a $3.75 million pretax gain, or $2.96 million after tax, boosting 2026 earnings. According to Pinnacle, core Q2 net income excluding this sale still rose 30% to $3.49 million , and core year-to-date net income increased 32% to $6.55 million .

Q: What is Pinnacle Bankshares’ net interest margin and loan growth as of June 30, 2026?

Year-to-date 2026 net interest margin was 4.16% , up 11 basis points from 2025, driven by higher earning assets. According to Pinnacle, total loans reached $748.95 million , reflecting 1% growth since December 31, 2025 in a challenging rate and economic environment.

Q: How strong are Pinnacle Bankshares’ asset quality and reserves in mid-2026?

Nonperforming loans were 0.17% of total loans, and the allowance for credit losses covered 415% of nonperforming loans. According to Pinnacle, the allowance was $5.29 million , or 0.71% of total loans, supporting management’s view of strong asset quality.

Q: What does the 2026 liquidity and deposit growth mean for Pinnacle Bankshares (PPBN)?

Liquidity was about 36% at June 30, 2026, supported by deposit growth of 7% to $1.04 billion . According to Pinnacle, higher cash and securities, plus unused credit lines, provide ample funding flexibility without using contingency liquidity sources over the past year.

Q: How did Pinnacle Bankshares’ stock price and book value change by June 30, 2026?

Pinnacle Bankshares’ stock closed Q2 2026 at $55.10 , up 21% from $45.50 at year-end 2025. According to Pinnacle, book value per share increased to $43.42 and tangible book value to $42.85 , reflecting retained earnings net of dividends, buybacks, and securities valuation changes.

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Pinnacle Bankshares (OTCQX:PPBN) reported record high earnings for the second quarter and first half of 2026. Q2 net income rose 140% year-over-year to $6.45 million, or $2.97 per share, and six‑month net income increased 92% to $9.51 million, or $4.36 per share, boosted by a $3.75 million pretax gain from the sale of the Bank’s ownership interest in Bearing Insurance.

Excluding this sale, core Q2 net income grew 30% to a record $3.49 million, and core six‑month net income rose 32% to $6.55 million. Year‑to‑date ROA reached 1.74% (1.20% core) and ROE 21.04% (14.48% core). Net interest income increased 9.5% with net interest margin expanding 11 basis points to 4.16%, while noninterest expense rose only 1%. Total assets grew 7% since year‑end to $1.14 billion, deposits also rose 7% to $1.04 billion, and liquidity improved to about 36%. The stock price ended the quarter at $55.10, up 21% from December 31, 2025.

Positive

Q2 2026 net income up 140% YoY to $6.45M, EPS $2.97
Core Q2 net income up 30% YoY to $3.49M, a record high
YTD 2026 net income up 92% YoY to $9.51M; ROA 1.74%, ROE 21.04%
Net interest income up 9.5% YTD to $21.41M; margin widened to 4.16%
Noninterest income up 111% YTD to $8.08M, aided by $3.75M Bearing sale gain
Total assets and deposits each up 7% since year‑end 2025; liquidity ratio ~36%
Efficiency ratio improved to 58.92% from 73.34% a year earlier
Stock price up 21% in first half 2026 to $55.10
Nonperforming loans only 0.17% of total; ACL coverage 415%

Negative

Loan growth modest at 1% ($8.6M) in first half 2026
Provision for credit losses up to $307K YTD from $110K a year earlier
Unrealized losses on AFS securities increased to $8.46M from $7.45M
Bank leverage ratio edged down to 8.84% from 8.89%
Nonperforming loans ratio rose to 0.17% from 0.13% year‑over‑year

News Market Reaction – PPBN

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In the Jul 28 session, PPBN gained 5.02%, reflecting a notable positive market reaction.

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07/28/2026 - 01:00 PM

ALTAVISTA, Va., July 28, 2026 (GLOBE NEWSWIRE) -- Net income for Pinnacle Bankshares Corporation (OTCQX:PPBN), the one-bank holding company (the “Company” or “Pinnacle”) for First National Bank (the “Bank”), was $6,453,000, or $2.97 per basic and diluted share, for the second quarter of 2026 and $9,514,000, or $4.36 per basic and diluted share, for the six months ended June 30, 2026. In comparison, net income was $2,690,000, or $1.21 per basic and diluted share, and $4,951,000, or $2.23 per basic and diluted share, respectively, for the same periods of 2025. Net income for both time periods in 2026 was positively impacted by the sale of the Bank’s ownership interest in Bearing Insurance, LLC (Bearing Sale), which generated a pretax gain of $3,752,000 ($2,964,000 after tax). Consolidated results for the quarter and the year are unaudited.

2^nd Quarter (QTR) & Year-to-Date (YTD) 2026 Highlights

Income Statement (Comparisons are to the Second Quarter and First Six Months of 2025)

2^nd QTR 2026
- Net Income increased 140% to $6,453,000 including the Bearing Sale.
- Core 2^nd QTR 2026 Net Income increased 30% to $3,489,000, excluding the Bearing Sale, which is a record quarterly high.
YTD 2026
- Net Income increased 92% to $9,514,000, including the Bearing Sale, providing a Return on Assets of 1.74%.
- Core Net Income increased 32% to $6,550,000, excluding the Bearing Sale, providing a Return on Assets of 1.20%.
- Net Interest Income increased 9.5% primarily due to higher volume of earning assets and an 11-basis points expansion in net interest margin to 4.16%.
- Provision for Credit Losses increased $196,000 due mainly to loan growth.
- Noninterest Income improved 111% primarily due to the Bearing Sale. Core Noninterest Income improved 13%, excluding the gain.
- Noninterest Expense increased only 1%.

Balance Sheet as of June 30, 2026 (Comparisons are to December 31, 2025)

Total Assets increased $76.6 million, or 7%, to $1.142 billion.
Loans increased $8.6 million or 1%, to $749 million.
Securities increased $35.5 million, or 23%, to $188 million.
Deposits increased $76.6 million, or 7%, to $1.042 billion.
Our Liquidity Ratio increased further to 36% (16% excluding Available for Sale Securities).

Capital Ratios and Stock Price as of June 30, 2026 (Comparisons are to December 31, 2025)

The Bank’s Leverage Ratio decreased slightly to 8.84%, while the Total Risk-Based Capital Ratio increased to 13.76%.
Our Stock Price ended the quarter at $55.10 per share, based on the last trade, which is an increase of $9.60, or 21%.

Net Income and Profitability

Net income generated during the second quarter of 2026 represents a $3,763,000, or 140%, increase compared to the same quarter of 2025, while net income generated for the first half of 2026 represents a $4,563,000, or 92%, increase compared to the same time period of 2025. The increase in net income for the second quarter and first half of 2026 was driven by higher noninterest income, which includes the $2,964,000 after tax gain generated by the Bearing Sale, and higher net interest income partially offset by higher provision for credit losses and higher noninterest expense.

Profitability as measured by the Company’s return on average assets (“ROA”) increased to 1.74% (1.20% excluding the Bearing Sale) for the six months ended June 30, 2026, compared to 0.97% for the same time period of 2025. Return on average equity (“ROE”) was 21.04% (14.48% excluding the Bearing Sale) for six months ended June 30, 2026, compared to 12.16% for the same period of 2025.

“We are very pleased with Pinnacle’s enhanced profitability thus far in 2026,” stated Aubrey H. Hall, III, President and Chief Executive Officer for both the Company and the Bank. Mr. Hall further commented, “Core net income has increased over 30% year-to-date driven by further expansion of our net interest margin, higher core noninterest income, and controlled noninterest expense. Pinnacle remains in a sound financial position with ample liquidity resulting from deposit growth accompanied by strong asset quality, which continue to be key factors for continued success.”

Net Interest Income and Margin

The Company generated $11,051,000 in net interest income for the second quarter of 2026, which represents a $984,000, or 10%, increase compared to $10,067,000 for the same quarter of 2025. Interest income increased $995,000, or 8%, due to higher average earning assets, while interest expense increased only $11,000, or less than 1%.

Net interest income for the first half of 2026 was $21,408,000, which represents a $1,862,000, or 9.5%, increase compared to $19,546,000 for the same time period of 2025 as net interest margin increased 11 basis points to 4.16%. Interest income increased $1,682,000, or 7%, as yield on earning assets remained 5.20% and average earning assets increased by 6% year over year. Interest expense decreased $180,000, or 3%, due to lower interest rates paid on deposits as cost to fund earning assets decreased 11 basis points to 1.04%.

Reserves for Credit Losses and Asset Quality

The provision for credit losses was $229,000 in the second quarter of 2026 compared to $73,000 for the same quarter of 2025. For the first half of 2026, the provision for credit losses was $307,000 compared to $110,000 for the same time period of 2025. Provision expense has increased mainly due to loan growth as asset quality continues to be strong.

The allowance for credit losses (ACL) was $5,288,000 as of June 30, 2026, which represented 0.71% of total loans outstanding. In comparison, the ACL was $5,235,000 or 0.71% of total loans outstanding as of December 31, 2025. Non-performing loans to total loans decreased to 0.17% as of June 30, 2026, compared to 0.20% as of year-end 2025. ACL coverage of non-performing loans increased to 415% as of June 30, 2026, compared to 349% as of year-end 2025. Management views the allowance balance as being sufficient to offset potential future losses in the loan portfolio.

Noninterest Income and Expense

Noninterest income for the second quarter of 2026 increased $4,080,000, or 196%, to $6,165,000 compared to $2,085,000 for the same quarter of 2025. The increase was primarily due to $3,752,000 in revenue from the Bearing Sale. Pinnacle also experienced a $113,000, or 13%, increase in service charges on deposit accounts, including debit card interchange fees, in the second quarter of 2026 compared to the same time period in 2025.

For the first half of 2026, noninterest income increased $4,247,000, or 111%, to $8,077,000 as compared to $3,830,000 for the same time period of 2025. The increase was primarily due to the Bearing Sale, a $190,000, or 11%, increase in service charges on deposit accounts, including debit card interchange fees, and smaller increases in bank-owned life insurance (BOLI) income, merchant card fees, loan fee income, and commissions derived from investment and insurance sales commissions.

Noninterest expense for the second quarter of 2026 increased only $146,000, or 2%, to $8,941,000 compared to $8,795,000 for the same quarter of 2025. Slightly higher operating costs associated with growth of the Company included a $278,000, or 6%, increase in salaries and benefits partially offset by a $131,000 decrease in subordinated debt expense and smaller decreases in other operating expense categories. Note: The Company paid off outstanding subordinated debt last year.

For the first half of 2026, noninterest expense increased only $219,000, or 1%, to $17,374,000, compared to $17,155,000 for the same time period of 2025. The increase was mainly due to a $385,000, or 4% increase in salaries and benefits, partially offset by a $263,000 decrease in subordinated debt expense, and smaller decreases in audit and accounting fees, office supplies and printing, and postage.

The Balance Sheet and Liquidity

Total assets as of June 30, 2026, were $1,141,859,000, up 7% , from $1,065,228,000 as of December 31, 2025. The principal components of the Company’s assets as of June 30, 2026 were $748,947,000 in total loans, $187,938,000 in securities, and $152,249,000 in cash and cash equivalents.

For the first half of 2026, total loans increased $8,619,000, or 1%, from $740,328,000 as of December 31, 2025. Loan growth has been challenging thus far this year due to the interest rate environment and uncertainties regarding the direction of the economy.

Securities have increased $35,486,000, or 23%, from $152,452,000 as of December 31, 2025, with the increase being mainly driven by the limited loan growth. The majority of the Company’s securities portfolio is relatively short-term in nature with 40% of the Company’s securities portfolio invested in U.S. Treasuries with an average maturity of 0.85 years and $49,000,000 maturing during the next six months. The Company’s entire securities portfolio was classified as available for sale on June 30, 2026, which provides transparency regarding unrealized losses. Unrealized losses associated with the available for sale securities portfolio were $8,463,000 as of June 30, 2026, or 4% of book value, compared to $7,452,000 as of December 31, 2025, or 5% of book value.

Cash and cash equivalents as of June 30, 2026 increased $29,987,000, or 25%, to $152,249,000 from $122,261,000 as of December 31, 2025 as a result of deposits growth. The Company had a strong liquidity ratio of 36% as of June 30, 2026. The liquidity ratio, excluding the available for sale securities portfolio, was 16% providing the opportunity to sell excess funds at an attractive federal funds rate. The Company has access to multiple liquidity lines of credit through its correspondent banking relationships and the Federal Home Loan Bank. None of these contingency funding sources have been utilized over the past year.

Total liabilities as of June 30, 2026, were $1,048,020,000, up $72,200,000, or 7%, from $975,820,000 as of December 31, 2025, as deposits increased $70,364,000, or 7%, in the first half of 2026 to $1,041,674,000 from $971,311,000. The Bank retains and acquires customer relationships through utilization of a community bank approach focused on personalized service while capitalizing on market disruption caused by further bank consolidation and large national bank branch closures.

Total stockholders’ equity as of June 30, 2026 was $93,839,000 and consisted primarily of $85,692,000 in retained earnings. In comparison, as of December 31, 2025 total stockholders’ equity was $89,408,000. The increase in stockholders’ equity is due mainly to year-to-date 2026 net income offset by dividends paid to shareholders, a repurchase of 70,710 shares of the Company’s stock during the first quarter of 2026, and an increase in the unrealized losses associated with the securities portfolio. Both the Company and Bank remain “well capitalized” per all regulatory definitions.

Annual Meeting of Shareholders Results

At the Annual Meeting of Shareholders held on May 12, 2026, James E. Burton, IV, Judson H. Dalton, Robert Hurt, Donald W. Merricks, and Ramsey W. Yeatts were re-elected to the Board of Directors as Class II Directors to serve until the 2029 Annual Meeting of Shareholders.

Additionally, Mr. Hall presented his Annual Report to Shareholders, which included information on Pinnacle’s performance for 2025 and the first quarter of 2026. He also offered comments on the economy, the banking industry, peer rankings, Pinnacle’s Share Repurchase Plan, and the Company’s Strategic Initiatives. Mr. Hall’s PowerPoint presentation may be viewed on our website at www.1stnatbk.com under the Investor Relations tab by clicking Financial Information, then 2026 Annual Shareholders’ Meeting Presentation.

Company Information

Pinnacle is a locally managed community banking organization serving Central and Southern Virginia. The one-bank holding company of First National Bank serves market areas consisting primarily of all or portions of the Counties of Amherst, Bedford, Campbell, Halifax, and Pittsylvania, and the Cities of Charlottesville, Danville, and Lynchburg. The Company has a total of nineteen branches with one branch in Amherst County within the Town of Amherst; two branches in Bedford County; five branches in Campbell County, including two within the Town of Altavista where the Bank was founded; one branch in the City of Charlottesville; three branches in the City of Danville; one branch and a commercial loan production office in Halifax County within the Town of South Boston; three branches in the City of Lynchburg; and three branches in Pittsylvania County, including one within the Town of Chatham. In 2026, First National Bank is celebrating its 118th year of operation.

Cautionary Statement Regarding Forward-Looking Statements

This press release may contain “forward-looking statements” within the meaning of federal securities laws that involve significant risks and uncertainties. Any statements contained herein that are not historical facts are forward-looking and are based on current assumptions and analysis by the Company. These forward-looking statements, including statements made in Mr. Hall’s quotes may include, but are not limited to, statements regarding the credit quality of our asset portfolio in future periods, the expected losses of nonperforming loans in future periods, future returns and capital accretion, our cost of funds, the maintenance of our net interest margin, future operating results and business performance and our growth initiatives. Although we believe our plans and expectations reflected in these forward-looking statements are reasonable, our ability to predict results or the actual effect of future plans or strategies is inherently uncertain, and we can give no assurance that these plans or expectations will be achieved. Factors that could cause actual results to differ materially from management's expectations include, but are not limited to: changes in consumer spending and saving habits that may occur, including increased inflation; changes in general business, economic, and market conditions; attracting, hiring, training, motivating, and retaining qualified employees; changes in fiscal and monetary policies, and laws and regulations; changes in interest rates, inflation rates, deposit flows, loan demand, and real estate values; changes in the quality or composition of the Company’s loan portfolio and the value of the collateral securing loans; changes in macroeconomic trends and uncertainty, including liquidity concerns at other financial institutions, and the potential for local and/or global economic recession; changes in demand for financial services in Pinnacle’s market areas; increased competition from both banks and non-banks in Pinnacle’s market areas; a deterioration in credit quality and/or a reduced demand for, or supply of, credit; increased information security risk, including cyber security risk, which may lead to potential business disruptions or financial losses; volatility in the securities markets generally, including in the value of securities in the Company’s securities portfolio or in the market price of Pinnacle common stock specifically; and other factors, which could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. These risks and uncertainties should be considered in evaluating the forward-looking statements contained herein, and you should not place undue reliance on such statements, which reflect our views as of the date of this release.

Selected Financial Highlights are shown on the next page.


Pinnacle Bankshares Corporation Selected Financial Highlights (6/30/26, 3/31/26, and 6/30/25 results unaudited) (In thousands, except ratios, share, and per share data)

	3 Months Ended	3 Months Ended	3 Months Ended
Income Statement Highlights	6/30/2026	3/31/2026	6/30/2025
Interest Income	$13,750	$13,062	$12,755
Interest Expense	2,699	2,705	2,688
Net Interest Income	11,051	10,357	10,067
Provision for Credit Losses	229	78	73
Noninterest Income	6,165	1,912	2,085
Noninterest Expense	8,941	8,433	8,795
Net Income	6,453	3,061	2,690
Earnings Per Share (Basic)	2.97	1.39	1.21
Earnings Per Share (Diluted)	2.97	1.39	1.21

	6 Months Ended	Year Ended	6 Months Ended
Income Statement Highlights	6/30/2026	12/31/2025	6/30/2025
Interest Income	$26,812	$51,262	$25,130
Interest Expense	5,404	11,138	5,584
Net Interest Income	21,408	40,124	19,546
Provision for Credit Losses	307	308	110
Noninterest Income	8,077	7,792	3,830
Noninterest Expense	17,374	34,306	17,155
Net Income	9,514	10,772	4,951
Earnings Per Share (Basic)	4.36	4.85	2.23
Earnings Per Share (Diluted)	4.36	4.85	2.23

Balance Sheet Highlights	6/30/2026	12/31/2025	6/30/2025
Cash and Cash Equivalents	152,249	$122,261	117,574
Total Loans	748,947	740,328	726,539
Total Securities	187,938	152,452	145,290
Total Assets	1,141,859	1,065,228	1,040,560
Total Deposits	1,041,674	971,311	939,776
Total Liabilities	1,048,020	975,820	956,103
Stockholders' Equity	93,839	89,408	84,457
Shares Outstanding	2,161,255	2,225,276	2,225,727

Ratios and Stock Price	6/30/2026	12/31/2025	6/30/2025
Gross Loan-to-Deposit Ratio	71.90%	76.22%	77.31%
Net Interest Margin (Year-to-date)	4.16%	4.09%	4.05%
Liquidity	36.42%	31.02%	30.22%
Efficiency Ratio	58.92%	71.58%	73.34%
Return on Average Assets (ROA)	1.74%	1.05%	0.97%
Return on Average Equity (ROE)	21.04%	12.78%	12.16%
Leverage Ratio (Bank)	8.84%	8.89%	9.63%
Tier 1 Capital Ratio (Bank)	13.04%	12.46%	13.21%
Total Capital Ratio (Bank)	13.76%	13.18%	13.93%
Stock Price	$55.10	$45.50	$33.01
Book Value	$43.42	$40.18	$37.95
Tangible Book Value	$42.85	$39.59	$37.32


Asset Quality Highlights	6/30/2026	12/31/2025	6/30/2025
Nonaccruing Loans	$1,261	$1,497	$854
Loans 90 Days or More Past Due and Accruing	13	3	121
Total Nonperforming Loans	1,274	1,500	975
Loan Modifications	0	105	107
Loans Individually Evaluated	1,487	1,860	1,109
Other Real Estate Owned (OREO) (Foreclosed Assets)	0	0	0
Total Nonperforming Assets	1,274	1,500	854
Nonperforming Loans to Total Loans	0.17%	0.20%	0.13%
Nonperforming Assets to Total Assets	0.11%	0.14%	0.09%
Allowance for Credit Losses	$5,288	$5,235	$5,156
Allowance for Credit Losses to Total Loans	0.71%	0.71%	0.71%
Allowance for Credit Losses to Nonperforming Loans	415%	349%	529%

CONTACT: Pinnacle Bankshares Corporation, Bryan M. Lemley, 434-477-5882 or bryanlemley@1stnatbk.com

FAQ

How did Pinnacle Bankshares (OTCQX:PPBN) perform in Q2 2026?

Pinnacle Bankshares reported Q2 2026 net income of $6.45 million, up 140% year-over-year, or $2.97 per share. According to Pinnacle, this included a gain from selling its Bearing Insurance ownership interest and higher net interest income, partially offset by higher credit loss provisions and expenses.

What were Pinnacle Bankshares’ year-to-date 2026 earnings and returns for PPBN?

For the first six months of 2026, Pinnacle Bankshares earned $9.51 million, a 92% increase versus 2025, with EPS of $4.36. According to Pinnacle, year-to-date return on average assets reached 1.74% and return on average equity was 21.04%, both higher than a year earlier.

How did the Bearing Insurance sale impact Pinnacle Bankshares’ 2026 results (PPBN)?

The Bearing Insurance sale generated a $3.75 million pretax gain, or $2.96 million after tax, boosting 2026 earnings. According to Pinnacle, core Q2 net income excluding this sale still rose 30% to $3.49 million, and core year-to-date net income increased 32% to $6.55 million.

What is Pinnacle Bankshares’ net interest margin and loan growth as of June 30, 2026?

Year-to-date 2026 net interest margin was 4.16%, up 11 basis points from 2025, driven by higher earning assets. According to Pinnacle, total loans reached $748.95 million, reflecting 1% growth since December 31, 2025 in a challenging rate and economic environment.

How strong are Pinnacle Bankshares’ asset quality and reserves in mid-2026?

Nonperforming loans were 0.17% of total loans, and the allowance for credit losses covered 415% of nonperforming loans. According to Pinnacle, the allowance was $5.29 million, or 0.71% of total loans, supporting management’s view of strong asset quality.

What does the 2026 liquidity and deposit growth mean for Pinnacle Bankshares (PPBN)?

Liquidity was about 36% at June 30, 2026, supported by deposit growth of 7% to $1.04 billion. According to Pinnacle, higher cash and securities, plus unused credit lines, provide ample funding flexibility without using contingency liquidity sources over the past year.

How did Pinnacle Bankshares’ stock price and book value change by June 30, 2026?

Pinnacle Bankshares’ stock closed Q2 2026 at $55.10, up 21% from $45.50 at year-end 2025. According to Pinnacle, book value per share increased to $43.42 and tangible book value to $42.85, reflecting retained earnings net of dividends, buybacks, and securities valuation changes.