Pinnacle Bancshares Announces Results for Year Ended and Fourth Quarter December 31, 2022

Rhea-AI Summary

Pinnacle Bancshares, Inc. (OTCBB: PCLB) reported a net income of $4,504,000 for the year ending December 31, 2022, resulting in basic/diluted earnings per share of $4.79, a slight decrease from $4.83 in the previous year. Excluding unusual items, adjusted net income for 2022 was $4,327,000, compared to $3,879,000 in 2021. For Q4 2022, net income reached $1,016,000, up from $972,000 in Q4 2021. Despite net charge-offs of $102,000 and a significant accumulated other comprehensive loss of $30 million due to rising interest rates, the company maintained a well-capitalized status with no nonperforming assets.

Positive

• Net income for 2022 was $4,504,000, resulting in earnings per share of $4.79.
• Adjusted net income for 2022 was $4,327,000, up from $3,879,000 in 2021.
• Q4 2022 net income increased to $1,016,000 compared to $972,000 in Q4 2021.
• No nonperforming assets reported as of December 31, 2022.
• Pinnacle classified as 'well capitalized' with strong capital ratios.

Negative

• Accumulated other comprehensive loss on securities reached approximately $30 million due to rising interest rates.
• Net charge-offs increased to $102,000 in 2022 compared to net recoveries of $45,000 in 2021.

JASPER, Ala.--(BUSINESS WIRE)-- Robert B. Nolen, Jr., President and Chief Executive Officer of Pinnacle Bancshares, Inc. (OTCBB: PCLB), today announced Pinnacle’s results of operations for the fourth quarter and year ended December 31, 2022:

• For the year ended December 31, 2022, net income was $4,504,000, which resulted in basic/diluted earnings per share to be $4.79. Net income for the year ended December 31, 2021 was $4,692,00, which resulted in basic/diluted earnings per share of $4.83. Excluding significant unusual items, net income for the years-ended December 31, 2022 and 2021, was approximately $4,327,000 and $3,879,000, respectively and basic/diluted earnings per share was $4.61 and $3.99 for 2022 and 2021, respectively.
• For the three months ended December 31, 2022, net income was $1,016,000 which resulted in basic/diluted earnings per share to be $1.12. Net income for the three months ended December 31, 2021 was $972,000, which resulted in basic/diluted earnings per share of $1.00 per share. Excluding significant unusual items, net income for the three months ended December 31, 2022 and 2021, was approximately $1,016,000 and $791,000, respectively and basic/diluted earnings per share was $1.12 and $.82.
• Provision for loan losses was $125,000 for the three months and year ended for December 31, 2022 and $200,000 for the three months and year ended for 2021.

Company’s net interest margin was 3.48% and 3.35%, respectively for the three months and year ended December 31, 2022, respectively, compared to 3.48% and 3.49% for both the three months and year ended December 31, 2021, respectively.

At December 31, 2022, Pinnacle’s allowance for loan losses as a percent of total loans was 2.16%, compared to 2.02% at December 31, 2021. Net charge-offs were $102,000 during 2022 as compared to net recoveries was $45,000 in the prior year. There were no nonperforming assets at December 31, 2022, compared to $130,000 at December 31, 2021. The ratio of nonperforming assets to total loans was .00% at December 31, 2022, compared to .01% at December 31, 2021.

Pinnacle was classified as “well capitalized” at the end of 2022. All capital ratios are significantly higher than the requirements for a well-capitalized institution.

Dividends of $.25 and $1.00 per share were paid to shareholders during the three months and year ended for December 31, 2022, as compared to $.22 and $.88 per share during the three months and year ended December 31, 2021.

Effects of Inflation

Inflation has caused a substantial rise in interest rates during 2022 which has had a negative effect in the securities market. As a result of rising interest rates, the Company has recorded an accumulated other comprehensive loss on securities available for sale of approximately $30 million as compared to recording other comprehensive income in the amount of $1.5 million as of December 31, 2021. Thus, this has caused the decrease in total equity during 2022 even though net earnings has been strong. Although these unrealized losses recorded as of December 31, 2022 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.

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 December 31,
		2022				2021
Net income		$	1,016,000			$	972,000
Basic and diluted earnings per share		$	1.12			$	1.00
Performance ratios (annualized):
Return on average assets			1.29	%			1.17	%
Return on average equity			11.45	%			11.44	%
Interest rate spread			3.35	%			3.39	%
Net interest margin			3.48	%			3.48	%
Operating cost to assets			2.57	%			2.13	%
Weighted average basic and diluted shares outstanding			909,534				970,791
Dividends per share		$	0.25			$	0.22
Provision for loan losses		$	125,000			$	200,000
		Years Ended December 31,
		2022				2021
Net income		$	4,504,000			$	4,692,000
Basic and diluted earnings per share		$	4.79			$	4.83
Performance ratios (annualized):
Return on average assets			1.35	%			1.48	%
Return on average equity			12.88	%			14.49	%
Interest rate spread			3.25	%			3.40	%
Net interest margin			3.35	%			3.49	%
Operating cost to assets			2.22	%			2.26	%
Weighted average basic and diluted shares outstanding			939,575				972,248
Dividends per share		$	1.00			$	0.88
Provision for loan losses		$	125,000			$	200,000
						(Audited)
		December 31, 2022				December 31, 2021
Total assets		$	332,905,000			$	339,710,000
Loans receivable, net		$	115,956,000			$	122,659,000
Deposits		$	322,260,000			$	298,693,000
Brokered CD’s included in deposits		$	11,756,000			$	24,937,000
Total stockholders’ equity		$	5,738,000			$	35,659,000
Book value per share (excluding OCI)		$	39.17			$	35.15
Average Stockholders’ equity to assets ratio (excluding OCI)			10.47	%			10.19	%
Asset quality ratios:
Nonperforming loans as a percent of total loans			.00	%			.01	%
Nonperforming assets as a percent of total loans			.00	%			.01	%
Allowance for loan losses as a percent of total loans			2.16	%			2.02	%

FINANCIAL INFORMATION   PINNACLE BANCSHARES, INC. CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
	(Unaudited)				(Audited)
	December 31,				December 31,
	2022				2021
Assets
Cash and cash equivalents	$	2,054,034				1,730,327
Interest bearing deposits in banks		11,874,886				11,146,497
Securities available for sale		170,580,649				183,516,514
Restricted equity securities		773,600				741,600
Loans		118,516,666				125,196,462
Less Allowance for loan losses		2,561,078				2,537,948
Loans, net		115,955,588				122,658,514
Premises and equipment, net		6,926,632				7,015,537
Right-of-use lease assets – operating		398,364				493,627
Goodwill		306,488				306,488
Bank owned life insurance		10,206,334				9,822,441
Accrued interest receivable		2,070,896				1,917,598
Other assets		11,757,553				361,228
Total assets	$	332,905,024				339,710,371
Liabilities and Stockholders’ Equity
Deposits
Noninterest-bearing	$	94,783,406				88,430,320
Interest-bearing		227,476,411				210,262,213
Total deposits		322,259,817				298,692,533
Subordinated debentures		3,093,000				3,093,000
Accrued interest payable		111,652				77,843
Operating lease liabilities		398,364				493,627
Other liabilities		1,304,275				1,694,225
Total liabilities		327,167,108				304,051,228
Stockholders’ equity
Common stock, par value $.01 per share; 2,400,000 authorized; 1,872,313 issued; 909,534 and 970,791 shares outstanding, respectively		18,723				18,723
Additional paid‑in capital		8,923,223				8,923,223
Treasury stock (962,779 and 901,522 shares, respectively)		(15,588,799	)			(13,533,621	)
Retained earnings		42,274,372				38,710,339
Accumulated other comprehensive income (loss), net of tax		(29,889,603	)			1,540,479
Total stockholders’ equity		5,737,916				35,659,143
Total liabilities and stockholders’ equity	$	332,905,024			$	339,710,371

PINNACLE BANCSHARES, INC.   UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
	Three Months Ended									Years Ended
	December 31,									December 31,
	2022				2021					2022					2021
Interest income
Loans, including fees	$	1,666,711			$		1,669,927			$		6,512,150			$		6,453,336
Securities available for sale		1,431,684					1,187,083					5,419,511					4,332,287
Other interest		72,494					4,196					170,912					31,000
Total interest income		3,170,889					2,861,206					12,102,573					10,816,623
Interest expense
Deposits		184,218					103,069					570,926					386,593
Borrowings		935					1,934					1,745					2,729
Subordinated debentures		38,600					37,550					152,510					151,150
Total interest expense		223,753					142,553					725,181					540,472
Net interest income		2,947,136					2,718,653					11,377,392					10,276,151
Provision for loan losses		125,000					200,000					125,000					200,000
Net interest income after provision for loan losses		2,822,136					2,518,653					11,252,392					10,076,151
Other income
Fees and service charges on deposit accounts		384,999					397,276					1,504,850					1,490,449
Service fee income, net		758					911					3,292					3,962
Bank owned life insurance		95,975					90,625					383,894					1,106,105
Mortgage fee income		2,700					8,263					30,457					37,901
Net gain on securities available for sale		-					-					-					227,237
Total other income		484,432					497,075					1,922,493					2,865,654
Other expense:
Salaries and employee benefits		1,095,981					973,561					4,165,501					3,970,530
Occupancy expense		230,977					236,014					891,240					900,124
Marketing and professional expense		88,407					64,551					289,975					262,672
Other operating expenses		609,725					504,497					2,057,305					2,034,747
Total other expenses		2,025,090					1,778,623					7,404,021					7,168,073
Income before income taxes		1,281,478					1,237,105					5,770,864					5,773,732
Income tax expense		265,692					265,425					1,266,668					1,081,975
Net income	$	1,015,786			$		971,680			$		4,504,196			$		4,691,757
Cash dividend per share	$	0.25			$		0.22			$		1.00			$		0.88
Basic and diluted earnings per share	$	1.12			$		1.00			$		4.79			$		4.83
Weighted –average basic and diluted shares outstanding		909,534					970,791					939,575					972,248

PINNACLE BANCSHARES, INC.   UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY Years Ended December 31, 2022 and 2021
																	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	-			-			-							4,691,757				-				4,691,757
Cash dividends declared
($.88 per share)	-			-			-			-				(855,490	)			-				(855,490	)
Purchase of treasury stock	-			-			-			(92,276	)			-				-				(92,276	)
Other comprehensive loss	-			-			-			-				-				(2,416,714	)			(2,416,714	)
Balance December 31, 2021	1,872,313		$	18,723		$	8,923,223		$	(13,533,621	)		$	38,710,339			$	1,540,479			$	35,659,143

																	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	-			-			-							4,504,196				-				4,504,196
Cash dividends declared
($1.00 per share)	-			-			-			-				(940,163	)			-				(940,163	)
Purchase of treasury stock	-			-			-			(2,055,178	)			-				-				(2,055,178	)
Other comprehensive loss	-			-			-			-				-				(31,430,082	)			(31,430,082	)
Balance December 31, 2022	1,872,313		$	18,723		$	8,923,223		$	(15,588,799	)		$	42,274,372			$	(29,889,603	)		$	5,737,916

PINNACLE BANCSHARES, INC,   UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
	For the Years Ended
	December 31,
	2022				2021
OPERATING ACTIVITIES:
Net income	$	4,504,196			$	4,691,757
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		424,648				446,694
Provision for loan losses		125,000				200,000
Net investment amortization expense		208,429				318,421
Net increase in bank owned life insurance		(383,893	)			(1,106,105	)
Gain on sale of securities available for sale		-				(227,237	)
Decrease in accrued interest receivable		(153,298	)			(426,572	)
Increase (decrease) in accrued interest payable		33,809				(67,983	)
Net other operating activities		(96,419	)			332,950
Net cash provided by operating activities		4,662,472				4,161,925
INVESTING ACTIVITIES:
Net (increase) decrease in loans		6,577,926				(13,429,427	)
Net increase in interest bearing deposits in other banks		(728,389	)			(7,039,836	)
Purchase of securities available for sale		(41,170,098	)			(68,497,441	)
Proceeds from sale of securities available for sale		-				7,752,740
Proceeds from maturing, calls, and payments received on securities available for sale		10,777,596				13,348,008
Net (purchase) redemption of restricted equity securities		(32,000	)			43,900
Proceeds from bank owned life insurance		-				1,580,540
Purchase of premises and equipment		(335,743	)			(906,785	)
Net cash used in investing activities		(24,910,708	)			(67,148,301	)
FINANCING ACTIVITIES:
Net increase in deposits		23,567,284				63,583,802
Purchase of treasury stock		(2,055,178	)			(92,276	)
Payments of cash dividends		(940,163	)			(855,490	)
Net cash provided by financing activities		20,571,943				62,636,078
Net increase (decrease) in cash and cash equivalents		323,707				(350,340	)
Cash and cash equivalents at beginning of period		1,730,327				2,080,667
Cash and cash equivalents at end of period	$	2,054,034			$	1,730,327
SUPPLEMENTAL DISCLOSURES:
Cash paid during the period for:
Interest	$	691,372			$	608,455
Taxes	$	1,330,568			$	1,025,679
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/20230223005189/en/

Joe B. Adams, III

Chief Financial Officer

(205) 221-8866

Source: Pinnacle Bancshares, Inc.

FAQ

What were Pinnacle Bancshares' earnings per share for 2022?

Pinnacle Bancshares reported earnings per share of $4.79 for the year ended December 31, 2022.

How did Pinnacle Bancshares' net income in 2022 compare to 2021?

Net income for Pinnacle Bancshares in 2022 was $4,504,000, a slight decrease from $4,692,000 in 2021.

What was the accumulated other comprehensive loss reported by PCLB?

Pinnacle Bancshares recorded an accumulated other comprehensive loss of approximately $30 million due to rising interest rates.

Did Pinnacle Bancshares have any nonperforming assets as of December 31, 2022?

No nonperforming assets were reported as of December 31, 2022.

What was PCLB's net income for the fourth quarter of 2022?

Pinnacle Bancshares' net income for the fourth quarter of 2022 was $1,016,000.