Pinnacle Bancshares Announces Results for Second Quarter Ended June 30, 2024

Rhea-AI Summary

Pinnacle Bancshares (OTCBB: PCLB) reported its Q2 2024 results. Net income for Q2 2024 was $1,007,000, down from $1,145,000 in Q2 2023. Earnings per share decreased to $1.11 from $1.26 year-over-year. For the first half of 2024, net income was $1,970,000, compared to $2,325,000 in H1 2023. The company's net interest margin declined to 3.22% for Q2 2024 from 3.35% in Q2 2023. Pinnacle Bank remains well-capitalized with strong capital ratios. The company expects increased interest expenses due to competitive deposit pricing. Total deposits decreased slightly by $1 million compared to December 31, 2023. An accumulated other comprehensive loss of $26.9 million was recorded on securities available for sale due to rising interest rates.

Positive

• Pinnacle Bank maintains 'well-capitalized' status with strong capital ratios
• No nonperforming assets as of June 30, 2024
• Consistent dividend payments of $0.27 per share in Q2 2024
• Strong liquidity position with low loan-to-deposit ratio

Negative

• Net income decreased from $1,145,000 in Q2 2023 to $1,007,000 in Q2 2024
• Earnings per share declined from $1.26 in Q2 2023 to $1.11 in Q2 2024
• Net interest margin decreased from 3.35% in Q2 2023 to 3.22% in Q2 2024
• Total deposits decreased by approximately $1 million compared to December 31, 2023
• Accumulated other comprehensive loss of $26.9 million on securities available for sale

JASPER, Ala.--(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	$	-			$	-

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240730177646/en/

Joe B. Adams, III

Chief Financial Officer

(205) 221-8866

Source: Pinnacle Bancshares, Inc.

FAQ

What was Pinnacle Bancshares' (PCLB) net income for Q2 2024?

Pinnacle Bancshares' net income for Q2 2024 was $1,007,000.

How did Pinnacle Bancshares' (PCLB) earnings per share change in Q2 2024 compared to Q2 2023?

Pinnacle Bancshares' earnings per share decreased from $1.26 in Q2 2023 to $1.11 in Q2 2024.

What was Pinnacle Bancshares' (PCLB) net interest margin in Q2 2024?

Pinnacle Bancshares' net interest margin for Q2 2024 was 3.22%.

How much did Pinnacle Bancshares (PCLB) pay in dividends during Q2 2024?

Pinnacle Bancshares paid dividends of $0.27 per share during Q2 2024.