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

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

$

-

 

 

$

-

 

 

Contacts

Joe B. Adams, III

Chief Financial Officer

(205) 221-8866

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