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Pinnacle Bancshares Announces Results for First Quarter Ended March 31, 2024

Robert B. Nolen, Jr., President and Chief Executive Officer of Pinnacle Bancshares, Inc. (OTCBB: PCLB), today announced the Company’s results of operations for the first quarter ended March 31, 2024:

  • For the three months ended March 31, 2024, Pinnacle’s basic/diluted earnings per share was $1.06 as compared to $1.30 per share for the three months ended March 31, 2023 and $1.08 per share for the three months ended December 31, 2023. Net income for the three months ended March 31, 2024 was $964,000 as compared to $1,180,000 for the three months ended March 31, 2023 and $981,000 for the three months ended December 31, 2023.
  • For the three months ended March 31, 2024, return on average assets was 1.14%, compared to 1.43% for the three months ended March 31, 2023 and 1.18% for the three months ended December 31, 2023.

The Company’s net interest margin was 3.11% for the three months March 31, 2024, compared to 3.56% for the three months ended March 31, 2023. The Company anticipates that interest expense relating to its funding will continue to increase during 2024 as a result of several factors such as increased deposit exception pricing and increased deposit migration to higher yielding deposit products.

Mr. Nolen commented, “In response to concerns about liquidity and capital strength related to recent bank failures, we remain confident in our risk status. Our primary focus is, and will continue to be, the Bank’s safety and soundness, and the protection of our depositors.”

At March 31, 2024, the Company’s allowance for loan losses as a percent of total loans was 2.02%, compared to 1.96% at December 31, 2023. There were no nonperforming assets at March 31, 2024 as well as at December 31, 2023.

Pinnacle Bank was classified as “well capitalized” at March 31, 2024. All capital ratios are significantly higher than the requirements for a well-capitalized institution. As of March 31, 2024, the Bank’s common equity Tier 1 capital and Tier 1 risk-based capital ratios were each 18.68% and its total capital ratio and Tier 1 leverage was 19.84% and 11.34%, respectively.

Management believes that the Company has sufficient liquidity through its low loan to deposit ratio at March 31, 2024, as well as available funding from outside sources. Our net funding availability, as a percentage of our franchise funding, is 109.25% 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 March 31, 2024 decreased $2.1 million, or less than 1%, as compared to December 31, 2023. As mentioned previously, pricing of deposits is anticipated to become more competitive and thus deposits could continue to decrease as they did during the first quarter 2024.

Dividends of $.27 per share were paid to shareholders during the first quarter of 2024 as well as the first quarter 2023.

Effects of Inflation

Inflation caused a substantial rise in interest rates during 2023 and 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 $28.1 million as of March 31, 2024 as compared to $26.7 million as of December 31, 2023. Although these unrealized losses recorded as of March 31, 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. The Company undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the Company’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.

AND SUBSIDIARY

UNAUDITED FINANCIAL HIGHLIGHTS

 

 

Three Months Ended March 31,

 

2024

 

 

2023

 

Net Income

$

964,000

 

 

$

1,180,000

 

Weighted average basic shares outstanding

 

909,534

 

 

 

909,534

 

Weighted average diluted shares outstanding

 

909,534

 

 

 

909,534

 

Dividend per share

$

.27

 

 

$

.27

 

Provision for loan losses

$

-

 

 

$

-

 

Basic and diluted earnings per share

$

1.06

 

 

$

1.30

 

Performance Ratios: (annualized)

 

 

 

 

 

Return on average assets

 

1.14

%

 

 

1.43

%

Return on average equity

 

9.85

%

 

 

13.17

%

Interest rate spread

 

2.58

%

 

 

3.40

%

Net interest margin

 

3.11

%

 

 

3.56

%

Operating cost to assets

 

2.36

%

 

 

2.40

%

 

 

 

 

 

 

 

 

 

 

(Audited)

 

March 31, 2024

 

December 31, 2023

Total assets

$

339,346,000

 

 

$

342,578,000

 

Loans receivable, net

$

119,774,000

 

 

$

122,973,000

 

Deposits

$

309,164,000

 

 

$

311,339,000

 

Brokered CD’s included in deposits

$

11,907,000

 

 

$

11,907,000

 

Total stockholders’ equity

$

12,126,000

 

 

$

12,787,000

 

Weighted average book value per share (excluding OCI)

$

43.81

 

 

$

43.02

 

Total average stockholders' equity to asset ratio (excluding OCI)

 

11.54

%

 

 

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

 

2.02

%

 

 

1.96

%

PINNACLE BANCSHARES, INC.

AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF CONDITION

 

 

(Unaudited)

 

(Audited)

 

March 31,

 

December 31,

 

2024

 

2023

Assets

 

 

 

 

 

 

Cash and cash equivalents

$

1,978,413

 

$

2,190,793

 

Interest bearing deposits in banks

 

22,825,755

 

 

19,518,942

 

Securities available for sale

 

162,136,170

 

 

165,520,025

 

Restricted equity securities

 

843,100

 

 

836,200

 

 

 

 

 

 

 

 

Loans

 

122,199,276

 

 

125,433,112

 

Less allowance for loan losses

 

2,425,315

 

 

2,459,372

 

Loans, net

 

119,773,961

 

 

122,973,740

 

 

 

 

 

 

 

 

Premises and equipment, net

 

8,486,996

 

 

8,421,289

 

Operating right-of-use lease assets

 

291,700

 

 

302,171

 

Goodwill

 

306,488

 

 

306,488

 

Bank owned life insurance

 

10,705,511

 

 

10,601,839

 

Accrued interest receivable

 

1,532,754

 

 

2,107,189

 

Deferred tax assets, net

 

9,584,001

 

 

8,951,799

 

Other assets

 

881,605

 

 

847,912

 

 

 

 

 

 

 

 

Total assets

$

339,346,454

 

$

342,578,387

 

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

Noninterest-bearing

$

90,107,848

 

$

89,518,619

 

Interest-bearing

 

219,056,319

 

 

221,820,527

 

Total deposits

 

309,164,167

 

 

311,339,146

 

 

 

 

 

 

 

 

Subordinated debentures

 

3,093,000

 

 

3,093,000

 

Other borrowings

 

12,500,000

 

 

12,500,000

 

Accrued interest payable

 

864,537

 

 

1,392,273

 

Operating lease liabilities

 

291,700

 

 

302,171

 

Other liabilities

 

1,307,084

 

 

1,165,256

 

Total liabilities

 

327,220,488

 

 

329,791,846

 

 

 

 

 

 

 

 

Stockholders’ equity

 

 

 

 

 

 

Common stock, $.01 par value, 2,400,000 shares authorized;

 

 

 

 

 

 

1,872,313 shares issued; 909,534 shares outstanding

 

18,723

 

 

18,723

 

Additional paid-in capital

 

8,923,223

 

 

8,923,223

 

Treasury stock, at cost (962,779 shares)

 

(15,588,799)

 

 

(15,588,799)

 

Retained earnings

 

46,490,252

 

 

45,772,256

 

Accumulated other comprehensive loss, net of tax

 

(27,717,433)

 

 

(26,338,862)

 

Total stockholders’ equity

 

12,125,966

 

 

12,786,541

 

 

 

 

 

 

 

 

Total liabilities and stockholders’ equity

$

339,346,454

 

$

342,578,387

 

PINNACLE BANCSHARES, INC.

AND SUBSIDIARY

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME

Three Months Ended March 31, 2024 and 2023

 

 

2024

 

2023

Interest income

 

 

 

 

 

Loans, including fees

$

2,026,371

 

$

1,730,118

Taxable securities

 

1,296,269

 

 

1,368,748

Nontaxable securities

 

40,019

 

 

43,741

Other interest

 

308,824

 

 

143,856

Total interest income

 

3,671,483

 

 

3,286,463

 

 

 

 

 

 

Interest expense

 

 

 

 

 

Deposits

 

760,947

 

 

227,051

Subordinated debentures

 

39,050

 

 

39,050

Other borrowings

 

178,803

 

 

2,209

Total interest expense

 

978,800

 

 

268,310

 

 

 

 

 

 

Net interest income

 

2,962,683

 

 

3,018,153

Provision for loan losses

 

-

 

 

-

Net interest income after provision for loan losses

 

2,962,683

 

 

3,018,153

 

 

 

 

 

Other income

 

 

 

 

 

Fees and service charges on deposit accounts

 

424,843

 

 

362,295

Servicing fee income, net

 

743

 

 

771

Bank owned life insurance

 

103,672

 

 

98,806

Mortgage fee income

 

2,131

 

 

5,703

Total other income

 

531,389

 

 

467,575

 

 

 

 

 

 

Other expenses

 

 

 

 

 

Salaries and employee benefits

 

1,137,415

 

 

1,135,798

Occupancy expenses

 

312,671

 

 

240,161

Marketing and professional expenses

 

74,863

 

 

68,819

Other operating expenses

 

479,823

 

 

542,672

Total other expenses

 

2,004,772

 

 

1,987,450

 

 

 

 

 

 

Income before income taxes

 

1,219,300

 

 

1,498,278

 

 

 

 

 

 

Income tax expense

 

255,730

 

 

318,105

 

 

 

 

 

 

Net income

$

963,570

 

$

1,180,173

 

 

 

 

 

 

Basic and diluted earnings per share

$

1.06

 

$

1.30

 

 

 

 

 

 

Cash dividends per share

$

0.27

 

$

0.27

Weighted-average basic and diluted shares outstanding

 

909,534

 

 

909,534

PINNACLE BANCSHARES, INC.

AND SUBSIDIARY

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Three Months Ended March 31, 2024 and 2023

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

Additional

 

 

 

 

Other

Total

 

Common Stock

Paid-in

Treasury

Retained

Comprehensive

Stockholders’

 

Shares

Par Value

Capital

Stock

Earnings

Loss

Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2012

1,872,313

$

18,723

$

8,923,223

$

(15,588,799)

$

42,274,372

$

(29,889,603)

$

5,737,916

Net income

-

 

-

 

-

 

-

 

1,180,173

 

-

 

1,180,173

Cash dividends declared,

 

 

 

 

 

 

 

 

 

 

 

 

 

$0.27 per share

-

 

-

 

-

 

-

 

(245,574)

 

-

 

(245,574)

Other comprehensive income

-

 

-

 

-

 

-

 

-

 

2,594,039

 

2,594,039

Balance, March 31, 2023

1,872,313

$

18,723

$

8,923,223

$

(15,588,799)

$

43,208,971

$

(27,295,564)

$

9,266,554

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

-

 

-

 

-

 

-

 

963,570

 

-

 

963,570

Cash dividends declared,

 

 

 

 

 

 

 

 

 

 

 

 

 

$0.27 per share

-

 

-

 

-

 

-

 

(245,574)

 

-

 

(245,574)

Other comprehensive loss

-

 

-

 

-

 

-

 

-

 

(1,378,571)

 

(1,378,571)

Balance, March 31, 2024

1,872,313

$

18,723

$

8,923,223

$

(15,588,799)

$

46,490,252

$

(27,717,433)

$

12,125,966

PINNACLE BANCSHARES, INC.

AND SUBSIDIARY

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended March 31, 2024 and 2023

 

 

2024

 

2023

OPERATING ACTIVITIES

 

 

 

 

 

Net income

$

963,570

 

$

1,180,173

Adjustments to reconcile net income to net cash

 

 

 

 

 

provided by operating activities:

 

 

 

 

 

Depreciation

 

128,826

 

 

99,981

Net amortization of securities

 

50,376

 

 

41,914

Bank owned life insurance

 

(103,672)

 

 

(98,806)

Decrease in accrued interest receivable

 

574,435

 

 

533,436

Increase (decrease) in accrued interest payable

 

(527,736)

 

 

49,634

Net other operating activities

 

31,716

 

 

86,332

Net cash provided by operating activities

 

1,117,515

 

 

1,892,664

INVESTING ACTIVITIES

 

 

 

 

 

Net (increase) decrease in loans

 

3,199,779

 

 

(1,290,780)

Net increase in interest-bearing deposits in banks

 

(3,306,813)

 

 

(31,166)

Proceeds from maturing or callable securities available for sale

 

1,399,125

 

 

2,473,516

Net (purchase) redemption of restricted equity securities

 

(6,900)

 

 

3,800

Purchase of premises and equipment

 

(194,533)

 

 

(518,500)

Net cash provided by investing activities

 

1,090,658

 

 

636,870

 

 

 

 

 

 

FINANCING ACTIVITIES

 

 

 

 

 

Net decrease in deposits

 

(2,174,979)

 

 

(5,640,004)

Net increase in other borrowings

 

-

 

 

3,600,000

Payment of cash dividends

 

(245,574)

 

 

(245,574)

Net cash used in financing activities

 

(2,420,553)

 

 

(2,285,578)

 

 

 

 

 

 

Net increase (decrease) in cash and cash equivalents

 

(212,380)

 

 

243,956

 

 

 

 

 

 

Cash and cash equivalents at beginning of year

 

2,190,793

 

 

1,742,938

 

 

 

��

 

 

Cash and cash equivalents at end of year

$

1,978,413

 

$

1,986,894

 

 

 

 

 

 

SUPPLEMENTAL DISCLOSURE

 

 

 

 

 

Cash paid during the year for:

 

 

 

 

 

Interest

$

1,506,536

 

$

218,676

Taxes

$

-

 

$

-

OTHER NONCASH TRANSACTIONS

 

 

 

 

 

Real estate acquired through foreclosure

$

-

 

$

-

 

Contacts

Joe B. Adams, III

Chief Financial Officer

(205) 221-8866

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