Pinnacle Bancshares Announces Results for Third Quarter Ended September 30, 2021

Rhea-AI Summary

Pinnacle Bancshares (PCLB) reported a substantial increase in net income to $1.83 million for Q3 2021, up from $712,000 in Q3 2020. For the first nine months, net income reached $3.72 million compared to $2.29 million in the same period last year. The bank recorded significant PPP loan fee income and a rise in bank-owned life insurance income. Basic earnings per share rose to $1.88 from $0.72 year-over-year. However, the company remains cautious about potential impacts from COVID-19, noting economic uncertainties that could affect future performance.

Positive

• Net income increased significantly to $1.83 million for Q3 2021 from $712,000 in Q3 2020.
• Basic and diluted earnings per share rose to $1.88 for Q3 2021 from $0.72 for Q3 2020.
• Return on average assets improved to 2.19% for Q3 2021, compared to 1.04% in Q3 2020.
• Nonperforming assets decreased to $12,000, lowering the ratio to 0.01% of total loans.
• Dividends increased to $0.22 and $0.66 per share for Q3 and YTD 2021, respectively.

Negative

• Potential negative impact on performance due to COVID-19 uncertainties.
• Net interest margin decreased slightly to 3.52% for Q3 2021 from 3.59% in Q3 2020.

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, 2021, Pinnacle reported net income of $1,829,000 compared to $712,000 for the three months ended September 30, 2020.
• For the nine months ended September 30, 2021, Pinnacle reported net income of $3,720,000 compared to $2,285,000 for the nine months ended September 30, 2020.
• Included in net interest income for each of the three months ended September 30, 2021 and 2020 are Paycheck Protection Program (“PPP”) amortized loan fees of approximately $240,000 and $97,000, respectively. Included in net interest income for each of the nine months ended September 30, 2021 and 2020 are PPP amortized loan fees of approximately $431,000 and $97,000, respectively.
• Bank-owned life insurance income, which is included in non-interest income, was approximately $820,000 and $1,015,000 for the three months and nine months ended September 30, 2021 as compared to $94,000 and $283,000 for the three months and nine months ended September 30, 2020.
• Gain on sale of available for sales of securities in the amount of approximately $227,000 was recorded during both the three and nine months ended September 30, 2021 as compared to $153,000 recorded during the nine months ended September 30, 2020. There were no gains on sale of available for sales of securities recorded during the three months ended September 30, 2020.
• The Bank used part of the PPP loan fee income to make contributions to charities in its local communities. This represented an increase of approximately $123,000 and $143,000 in non-interest expense for the three months and nine months ended September 30, 2021 and 2020, respectively. The charitable organizations used these contributions in part to assist our community in dealing with the continued adverse effects of COVID-19.
• Basic and diluted earnings per share for the three and nine months ended September 30, 2021 were $1.88 and $3.82 per share, respectively, compared to $0.72 and $2.29 per share, respectively, for the same periods last year.
• For the three and nine months ended September 30, 2021, return on average assets was 2.19%, and 1.59%, respectively, compared to 1.04% and 1.17%, respectively, in the comparable 2020 period.

Pinnacle’s net interest margin was 3.52% and 3.49% for the three and nine months ended September 30, 2021, respectively, compared to 3.59% and 3.56% for the three and nine months ended September 30, 2020, respectively.

At September 30, 2021, Pinnacle’s allowance for loan losses as a percent of total loans was 1.85%, compared to 2.13% at December 31, 2020. The allowance for loan losses as a percent of total loans, excluding PPP loans of approximately $7.6 million dollars, was 1.97% as of September 30, 2021. Nonperforming assets were $12,000 at September 30, 2021, compared to $130,000 at December 31, 2020. The ratio of nonperforming assets to total loans was .01% and .12% at September 30, 2021 and December 31, 2020, respectively. All capital ratios are higher than the requirements for a well-capitalized institution.

Dividends of $.22 and $.66 per share were paid to shareholders during the three and nine months ended for September 30, 2021 as compared to $.19 and $.57 per share paid during the three and nine months ended for September 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 September 30,
		2021				2020
Net income		$	1,829,000			$	712,000
Basic and diluted earnings per share		$	1.88			$	0.72
Performance ratios (annualized):
Return on average assets			2.19	%			1.04	%
Return on average equity			22.21	%			9.58	%
Interest rate spread			3.42	%			3.43	%
Net interest margin			3.52	%			3.59	%
Operating cost to assets			2.42	%			2.59	%
Weighted average basic and diluted shares outstanding			971,234				983,119
Dividends per share		$	0.22			$	0.19
Provision for loan losses		$	-			$	-
		Nine Months Ended September 30,
		2021				2020
Net income		$	3,720,000			$	2,285,000
Basic and diluted earnings per share		$	3.82			$	2.29
Performance ratios (annualized):
Return on average assets			1.59	%			1.17	%
Return on average equity			15.58	%			10.30	%
Interest rate spread			3.40	%			3.36	%
Net interest margin			3.49	%			3.56	%
Operating cost to assets			2.30	%			2.54	%
Weighted average basic and diluted shares outstanding			972,740				997,340
Dividends per share		$	0.66			$	0.57
Provision for loan losses		$	-			$	-
						(Audited)
		September 30, 2021				December 31, 2020
Total assets		$	337,849,000			$	275,742,000
Loans receivable, net		$	124,127,000			$	109,429,000
Deposits		$	295,710,000			$	235,109,000
Brokered CD’s included in deposits		$	21,951,000			$	14,980,000
Total stockholders’ equity		$	35,806,000			$	34,332,000
Book value per share		$	36.88			$	34.63
Average Stockholders’ equity to assets ratio (excluding OCI)			10.19	%			11.15	%
Asset quality ratios:
Nonperforming loans as a percent of total loans			.01	%			.12	%
Nonperforming assets as a percent of total loans			.01	%			.12	%
Allowance for loan losses as a percent of total loans			1.85	%			2.13	%
Allowance for loan losses as a percent of nonperforming loans			19483.33	%			1,833.08	%

FINANCIAL INFORMATION
PINNACLE BANCSHARES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
		(Unaudited)				(Audited)
		September 30,				December 31,
		2021				2020
Assets
Cash and cash equivalents		$	2,103,745				2,080,667
Interest bearing deposits in banks			5,643,770				4,106,661
Securities available for sale			185,828,408				139,688,995
Restricted equity securities			716,000				785,500
Loans			126,465,696				111,811,886
Less Allowance for loan losses			2,338,233				2,382,799
Loans, net			124,127,463				109,429,087
Premises and equipment, net			7,064,494				6,555,446
Right-of-use lease assets – operating			517,297				587,970
Goodwill			306,488				306,488
Bank owned life insurance			9,731,814				10,296,876
Accrued interest receivable			1,400,944				1,491,026
Other assets			408,236				413,613
Total assets		$	337,848,659				275,742,329
Liabilities and Stockholders’ Equity
Deposits
Noninterest-bearing		$	88,074,409				72,897,929
Interest-bearing			207,635,647				162,210,802
Total deposits			295,710,056				235,108,731
Subordinated debentures			3,093,000				3,093,000
Accrued interest payable			90,219				145,826
Operating lease liabilities			517,297				587,970
Other liabilities			2,632,426				2,474,936
Total liabilities			302,042,998				241,410,463
Stockholders’ equity
Common stock, par value $.01 per share; 2,400,000 authorized; 1,872,313 issued; 970,791 and 973,505 shares outstanding, respectively			18,723				18,723
Additional paid‑in capital			8,923,223				8,923,223
Treasury stock (901,522 and 898,808 shares, respectively)			(13,533,621	)			(13,441,345	)
Retained earnings			37,952,233				34,874,072
Accumulated other comprehensive income, net of tax			2,445,103				3,957,193
Total stockholders’ equity			35,805,661				34,331,866
Total liabilities and stockholders’ equity		$	337,848,659			$	275,742,329

PINNACLE BANCSHARES, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
		Three Months Ended						Nine Months Ended
		September 30,						September 30,
		2021			2020			2021			2020
Interest income
Loans, including fees		$	1,718,950		$	1,558,204		$	4,783,409		$	4,433,232
Securities available for sale			1,113,658			858,000			3,145,204			2,591,275
Other interest			15,752			13,242			26,804			38,919
Total interest income			2,848,360			2,429,446			7,955,417			7,063,426
Interest expense
Deposits			94,842			152,062			283,524			587,091
Borrowings			-			-			795			3,330
Subordinated debentures			37,550			35,000			113,600			113,310
Total interest expense			132,392			187,062			397,919			703,731
Net interest income			2,715,968			2,242,384			7,557,498			6,359,695
Provision for loan losses			-			-			-			-
Net interest income after provision for loan losses			2,715,968			2,242,384			7,557,498			6,359,695
Other income
Fees and service charges on deposit accounts			393,121			318,078			1,093,172			986,071
Service fee income, net			992			1,255			3,051			4,048
Bank owned life insurance			819,545			94,186			1,015,480			282,558
Mortgage fee income			12,164			4,877			29,638			30,451
Net gain on securities available for sale			227,238			-			227,238			152,658
Total other income			1,453,060			418,396			2,368,579			1,455,786
Other expense:
Salaries and employee benefits			1,072,154			970,728			2,996,969			2,845,648
Occupancy expense			229,893			215,986			664,200			633,969
Marketing and professional expense			65,957			67,725			198,121			195,786
Other operating expenses			651,548			521,130			1,530,160			1,287,460
Total other expenses			2,019,552			1,775,569			5,389,450			4,962,863
Income before income taxes			2,149,476			885,211			4,536,627			2,852,618
Income tax expense			320,111			172,982			816,550			567,774
Net income		$	1,829,365		$	712,229		$	3,720,077		$	2,284,844
Cash dividend per share		$	0.22		$	0.19		$	0.66		$	0.57
Basic and diluted earnings per share		$	1.88		$	0.72		$	3.82		$	2.29
Weighted –average basic and diluted shares outstanding			971,234			983,119			972,740			997,340

PINNACLE BANCSHARES, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
Nine Months Ended September 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		-			-			-							2,284,844				-				2,284,844
Cash dividends declared ($.57 per share)		-			-			-			-				(567,897	)			-				(567,897	)
Purchase of treasury stock		-			-			-			(1,710,456	)			-				-				(1,710,456	)
Other comprehensive income		-			-			-			-				-				2,801,152				2,801,152
Balance September 30, 2020		1,872,313		$	18,723		$	8,923,223		$	(13,441,344	)		$	34,162,863			$	3,931,730			$	33,595,195
																		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		-			-			-							3,720,077				-				3,720,077
Cash dividends declared ($.66 per share)		-			-			-			-				(641,916	)			-				(641,916	)
Purchase of treasury stock		-			-			-			(92,276	)			-				-				(92,276	)
Other comprehensive loss		-			-			-			-				-				(1,512,090	)			(1,512,090	)
Balance September 30, 2021		1,872,313		$	18,723		$	8,923,223		$	(13,533,621	)		$	37,952,233			$	2,445,103			$	35,805,661

PINNACLE BANCSHARES, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
		For the Nine Months Ended
		September 30,
		2021				2020
OPERATING ACTIVITIES:
Net income		$	3,720,077			$	2,284,844
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation			332,075				298,504
Provision for loan losses			-				-
Net investment amortization expense			239,487				205,007
Net (increase) decrease in bank owned life insurance			565,062				(282,558	)
Gain on sale of securities available for sale			(227,238	)			(152,658	)
Decrease in accrued interest receivable			90,082				84,462
Increase (decrease) in accrued interest payable			(55,607	)			663
Net other operating activities			915,738				422,074
Net cash provided by operating activities			5,579,676				2,860,338
INVESTING ACTIVITIES:
Net increase in loans			(14,698,376	)			(23,788,381	)
Net increase (decrease) in interest bearing deposits in other banks			(1,537,109	)			332,822
Purchase of securities available for sale			(68,497,440	)			(34,701,151	)
Proceeds from sale of securities available for sale			7,752,740				2,732,970
Proceeds from maturing, sale and payments received on securities available for sale			12,328,077				12,330,031
Net redemption of restricted equity securities			69,500				34,000
Purchase of premises and equipment			(841,123	)			(201,178	)
Net cash used in investing activities			(65,423,731	)			(43,260,887	)
FINANCING ACTIVITIES:
Net increase in deposits			60,601,325				43,177,108
Purchase of treasury stock			(92,276	)			(1,710,456	)
Payments of cash dividends			(641,916	)			(567,897	)
Net cash provided by financing activities			59,867,133				40,898,755
Net increase in cash and cash equivalents			23,078				498,206
Cash and cash equivalents at beginning of period			2,080,667				1,814,912
Cash and cash equivalents at end of period		$	2,103,745			$	2,313,118
SUPPLEMENTAL DISCLOSURES:
Cash paid during the period for:
Interest		$	453,526			$	703,068
Taxes		$	713,000			$	821,131
OTHER NONCASH TRANSACTIONS
Real estate acquired through foreclosure		$	-			$	86,400
Internally financed sales of other real estate owned		$	-			$	-

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20211026006171/en/

Joe B. Adams, III

Chief Financial Officer

(205) 221-8866

Source: Pinnacle Bancshares, Inc.

FAQ

What are Pinnacle Bancshares' Q3 2021 financial results?

Pinnacle Bancshares reported a net income of $1.83 million for Q3 2021, significantly up from $712,000 in the same quarter of 2020.

What is the earnings per share for Pinnacle Bancshares for Q3 2021?

The basic and diluted earnings per share for Q3 2021 were $1.88, compared to $0.72 for Q3 2020.

How has COVID-19 affected Pinnacle Bancshares' performance?

Pinnacle Bancshares noted potential negative impacts from COVID-19, emphasizing economic uncertainties affecting their financial performance.

What was the return on average assets for Pinnacle Bancshares in Q3 2021?

The return on average assets was 2.19% for Q3 2021, an increase from 1.04% in Q3 2020.

What is the status of nonperforming assets at Pinnacle Bancshares?

Nonperforming assets were recorded at $12,000, with a ratio of 0.01% of total loans as of September 30, 2021.