Pinnacle Bancshares Announces Results for Second Quarter Ended June 30, 2021

Rhea-AI Summary

Pinnacle Bancshares (PCLB) reported a strong second quarter for 2021, with net income rising to $984,000, up from $732,000 a year prior. For the first half of 2021, net income reached $1,891,000, compared to $1,573,000 in 2020. The company recognized $50,000 in PPP fees for the quarter and $191,000 year-to-date. Net interest income also increased significantly, reaching $2,463,000 for the quarter. Basic earnings per share improved to $1.01 versus $0.74 last year. Nonperforming assets slightly rose to $144,000. However, COVID-19 presents ongoing uncertainty for the company.

Positive

• Net income for Q2 2021 increased to $984,000, a 34% rise from Q2 2020.
• Net income for the first half of 2021 was $1,891,000, up from $1,573,000 in 2020.
• Net interest income rose to $2,463,000 for Q2, compared to $2,095,000 in Q2 2020.
• Earnings per share increased to $1.01 for Q2 2021, up from $0.74 a year ago.
• Dividends for Q2 2021 were $0.22 per share, up from $0.19 in Q2 2020.

Negative

• Nonperforming assets increased from $130,000 at year-end 2020 to $144,000 by June 30, 2021.
• Ongoing economic uncertainties due to COVID-19 may negatively impact operational performance.

Robert B. Nolen, Jr., President and Chief Executive Officer of Pinnacle Bancshares, Inc. (OTCBB: PCLB), today announced Pinnacle’s second quarter results of operations.

• For the three months ended June 30, 2021, Pinnacle reported net income of $984,000 compared to $732,000 for the three months ended June 30, 2020. Paycheck Protection Program (“PPP”) loan fees recognized during the three months ended June 30, 2021 were $50,000.
• For the six months ended June 30, 2021, Pinnacle reported net income of $1,891,000 compared to $1,573,000 for the six months ended June 30, 2020. There were $153,000 of net gains related to sale of securities available for sale included in the six months ended June 30, 2020. PPP loan fees recognized during the six months ended June 30, 2021 were $191,000.
• Net interest income for the three and six months ended June 30, 2021, was $2,463,000 and $4,842,000, respectively, compared with $2,095,000 and $4,117,000 respectively, in the same periods last year.
• Basic and diluted earnings per share for the three and six months ended June 30, 2021 were $1.01 and $1.94 per share, respectively, compared to $0.74 and $1.57 per share, respectively, for the same periods last year.
• For the three and six months ended June 30, 2021, return on average assets was 1.26%, and 1.25%, respectively, compared to 1.11% and 1.24%, respectively, in the comparable 2020 period.

Pinnacle’s net interest margin was 3.41% and 3.48% for the three and six months ended June 30, 2021, respectively, compared to 3.45% and 3.55% for the three and six months ended June 30, 2020, respectively.

At June 30, 2021, Pinnacle’s allowance for loan losses as a percent of total loans was 1.90%, compared to 2.13% at December 31, 2020. The allowance for loan losses as a percent of total loans, excluding PPP loans of approximately $10.5 million dollars, was 2.08% as of June 30, 2021. Nonperforming assets were $144,000 at June 30, 2021, compared to $130,000 at December 31, 2020. The ratio of nonperforming assets to total loans was .12% at both June 30, 2021 and December 31, 2020. All capital ratios are higher than the requirements for a well-capitalized institution.

Dividends of $.22 and $.44 were paid to shareholders during the three and six months ended for June 30, 2021, respectively as compared to $.19 and $.38 per share dividends that were paid to shareholders during the three and six months ended June 30, 2020.

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.

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,
		2021				2020
Net income		$	984,000			$	732,000
Basic and diluted earnings per share		$	1.01			$	0.74
Performance ratios (annualized):
Return on average assets			1.26	%			1.11	%
Return on average equity			12.44	%			9.95	%
Interest rate spread			3.31	%			3.25	%
Net interest margin			3.41	%			3.45	%
Operating cost to assets			2.17	%			2.41	%
Weighted average basic and diluted shares outstanding			973,505				989,670
Dividends per share		$	0.22			$	0.19
Provision for loan losses		$	-			$	-
		Six Months Ended June 30,
		2021				2020
Net income		$	1,891,000			$	1,573,000
Basic and diluted earnings per share		$	1.94			$	1.57
Performance ratios (annualized):
Return on average assets			1.25	%			1.24	%
Return on average equity			12.09	%			10.67	%
Interest rate spread			3.38	%			3.33	%
Net interest margin			3.48	%			3.55	%
Operating cost to assets			2.24	%			2.51	%
Weighted average basic and diluted shares outstanding			973,505				1,004,529
Dividends per share		$	0.44			$	0.38
Provision for loan losses		$	-			$	-
						(Audited)
		June 30, 2021				December 31, 2020
Total assets		$	321,768,000			$	275,742,000
Loans receivable, net (includes $10.5M and $6.4M PPP loans, respectively)		$	120,912,000			$	109,429,000
Deposits		$	281,221,000			$	235,109,000
Brokered CD’s included in deposits		$	21,944,000			$	14,980,000
Total stockholders’ equity		$	34,345,000			$	34,332,000
Book value per share		$	35.28			$	34.63
Total average stockholders’ equity to assets ratio			10.37	%			11.15	%
Asset quality ratios:
Nonperforming loans as a percent of total loans			.12	%			.12	%
Nonperforming assets as a percent of total loans			.12	%			.12	%
Allowance for loan losses as a percent of total loans			1.90	%			2.13	%
Allowance for loan losses as a percent of nonperforming loans			1,625.69	%			1,833.08	%

FINANCIAL INFORMATION PINNACLE BANCSHARES, INC. CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
		(Unaudited)				(Audited)
		June 30,				December 31,
		2021				2020
Assets
Cash and cash equivalents		$	1,970,294				2,080,667
Interest bearing deposits in banks			13,669,405				4,106,661
Securities available for sale			163,944,535				139,688,995
Restricted equity securities			716,000				785,500
Loans			123,253,145				111,811,886
Less Allowance for loan losses			2,340,728				2,382,799
Loans, net			120,912,417				109,429,087
Premises and equipment, net			7,115,843				6,555,446
Right-of-use lease assets – operating			540,714				587,970
Goodwill			306,488				306,488
Bank owned life insurance			10,492,810				10,296,876
Accrued interest receivable			1,732,937				1,491,026
Other assets			366,151				413,613
Total assets		$	321,767,594				275,742,329
Liabilities and Stockholders’ Equity
Deposits
Noninterest-bearing		$	88,225,794				72,897,929
Interest-bearing			192,994,991				162,210,802
Total deposits			281,220,785				235,108,731
Subordinated debentures			3,093,000				3,093,000
Accrued interest payable			100,291				145,826
Operating lease liabilities			540,714				587,970
Other liabilities			2,467,389				2,474,936
Total liabilities			287,422,179				241,410,463
Stockholders’ equity
Common stock, par value $.01 per share; 2,400,000 authorized; 1,872,313 issued; 973,505 shares outstanding			18,723				18,723
Additional paid-in capital			8,923,223				8,923,223
Treasury stock (898,808 shares)			(13,441,345	)			(13,441,345	)
Retained earnings			36,336,441				34,874,072
Accumulated other comprehensive income, net of tax			2,508,373				3,957,193
Total stockholders’ equity			34,345,415				34,331,866
Total liabilities and stockholders’ equity		$	321,767,594			$	275,742,329

PINNACLE BANCSHARES, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
		Three Months Ended						Six Months Ended
		June 30,						June 30,
		2021			2020			2021			2020
Interest income
Loans, including fees		$	1,526,216		$	1,443,770		$	3,064,459		$	2,875,028
Securities available for sale			1,060,940			877,925			2,031,546			1,733,275
Other interest			5,420			6,545			11,052			25,677
Total interest income			2,592,576			2,328,240			5,107,057			4,633,980
Interest expense
Deposits			91,510			194,992			188,682			435,029
Borrowings and repurchase agreements			795			-			795			3,330
Subordinated debentures			37,550			38,210			76,050			78,310
Total interest expense			129,855			233,202			265,527			516,669
Net interest income			2,462,721			2,095,038			4,841,530			4,117,311
Provision for loan losses			-			-			-			-
Net interest income after provision for loan losses			2,462,721			2,095,038			4,841,530			4,117,311
Other income
Fees and service charges on deposit accounts			353,863			302,346			700,051			667,993
Service fee income, net			1,001			1,370			2,059			2,793
Bank owned life insurance			97,967			94,186			195,935			188,372
Mortgage fee income			14,987			13,568			17,474			25,574
Net gain on securities available for sale			-			-			-			152,658
Total other income			467,818			411,470			915,519			1,037,390
Other expense:
Salaries and employee benefits			965,842			934,378			1,924,815			1,874,920
Occupancy expense			212,163			216,278			434,307			417,983
Marketing and professional expense			67,527			68,815			132,164			128,061
Other operating expenses			445,711			377,090			878,612			766,330
Total other expenses			1,691,243			1,596,561			3,369,898			3,187,294
Income before income taxes			1,239,296			909,947			2,387,151			1,967,407
Income tax expense			255,536			177,943			496,439			394,792
Net income		$	983,760		$	732,004		$	1,890,712		$	1,572,615
Cash dividend per share		$	0.22		$	0.19		$	0.44		$	0.38
Basic and diluted earnings per share		$	1.01		$	0.74		$	1.94		$	1.57
Weighted –average basic and diluted shares outstanding			973,505			989,670			973,505			1,004,529

PINNACLE BANCSHARES, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY Six Months Ended June 30, 2021 and 2020
																		Accumulated
							Additional											Other			Total
		Common Stock					Paid-in			Treasury				Retained				Comprehensive			Stockholders’
		Shares		Amount			Capital			Stock				Earnings				Income			Equity
Balance December 31, 2019		1,872,313		$	18,723		$	8,923,223		$	(11,730,888	)		$	32,445,916			$	1,130,578		$	30,787,552
Net income		-			-			-			-				1,572,615				-			1,572,615
Cash dividends declared ($.38 per share)		-			-			-			-				(381,791	)			-			(381,791	)
Purchase of treasury stock		-			-			-			(1,337,258	)			-				-			(1,337,258	)
Other comprehensive income		-			-			-			-				-				1,686,621			1,686,621
Balance June 30, 2020		1,872,313		$	18,723		$	8,923,223		$	(13,068,146	)		$	33,636,740			$	2,817,199		$	32,327,739

																		Accumulated
							Additional											Other				Total
		Common Stock					Paid-in			Treasury				Retained				Comprehensive				Stockholders’
		Shares		Amount			Capital			Stock				Earnings				Income				Equity
Balance December 31, 2020		1,872,313		$	18,723		$	8,923,223		$	(13,441,345	)		$	34,874,072			$	3,957,193			$	34,331,866
Net income		-			-			-			-				1,890,712				-				1,890,712
Cash dividends declared ($.44 per share)		-			-			-			-				(428,343	)			-				(428,343	)
Other comprehensive loss		-			-			-			-				-				(1,448,820	)			(1,448,820	)
Balance June 30, 2021		1,872,313		$	18,723		$	8,923,223		$	(13,441,345	)		$	36,336,441			$	2,508,373			$	34,345,415

PINNACLE BANCSHARES, INC, UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
		For the Six Months Ended
		June 30,
		2021				2020
OPERATING ACTIVITIES:
Net income		$	1,890,712			$	1,572,615
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation			214,258				194,494
Net investment amortization expense			161,957				135,870
Bank owned life insurance			(195,935	)			(188,372	)
Gain on sale of securities available for sale			-				(152,657	)
Increase in accrued interest receivable			(241,911	)			(263,083	)
Decrease in accrued interest payable			(45,535	)			(19,792	)
Net other operating activities			727,798				604,568
Net cash provided by operating activities			2,511,344				1,883,643
INVESTING ACTIVITIES:
Net increase in loans			(11,483,330	)			(22,815,467	)
Net increase in interest bearing deposits in other banks			(9,562,744	)			(4,036,821	)
Purchase of securities available for sale			(37,014,405	)			(21,737,575	)
Proceeds from sale of securities available for sale			-				2,732,970
Proceeds from maturing, sale and payments received on securities available for sale			10,460,206				6,973,469
Net redemption of restricted equity securities			69,500				34,000
Purchase of premises and equipment			(774,655	)			(186,138	)
Net cash used in investing activities			(48,305,428	)			(39,035,562	)
FINANCING ACTIVITIES:
Net increase in deposits			46,112,054				39,217,770
Purchase of treasury stock			-				(1,337,258	)
Payments of cash dividends			(428,343	)			(381,791	)
Net cash provided by financing activities			45,683,711				37,498,721
Net increase (decrease) in cash and cash equivalents			(110,373	)			346,802
Cash and cash equivalents at beginning of period			2,080,667				1,814,912
Cash and cash equivalents at end of period		$	1,970,294			$	2,162,714
SUPPLEMENTAL DISCLOSURES:
Cash paid during the period for:
Interest		$	311,062			$	536,461
Taxes		$	415,000			$	402,131
OTHER NONCASH TRANSACTIONS
Real estate acquired through foreclosure		$	-			$	-
Internally financed sales of other real estate owned		$	-			$	-

 

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FAQ

What were Pinnacle Bancshares' net income figures for Q2 2021?

Pinnacle Bancshares reported net income of $984,000 for Q2 2021.

How did Pinnacle Bancshares' earnings per share change in 2021 compared to 2020?

The earnings per share for Q2 2021 were $1.01, up from $0.74 in Q2 2020.

What is the total net interest income reported by Pinnacle for the first half of 2021?

The net interest income for the first half of 2021 was $4,842,000.

How did nonperforming assets change for Pinnacle Bancshares in 2021?

Nonperforming assets increased to $144,000 as of June 30, 2021, from $130,000 at December 31, 2020.

What is the impact of COVID-19 on Pinnacle Bancshares' operations?

COVID-19 poses ongoing economic uncertainties that may negatively affect Pinnacle's operational performance.