Pinnacle Bancshares Announces Results for First Quarter Ended March 31, 2019 - Pinnacle Bancshares (OTC:PCLB)

Robert B. Nolen, Jr., President and Chief Executive Officer of Pinnacle Bancshares, Inc. PCLB, today announced Pinnacle's results of operations for the first quarter ended March 31, 2019:

For the three months ended March 31, 2019, Pinnacle reported net income of $665,000, compared to $613,000 for the three months ended March 31, 2018.
Net interest income after the provision for loan losses for the three months ended March 31, 2019, was $1,944,000, compared with $1,868,000 in the same period last year.
For the three months ended March 31, 2019, basic and diluted earnings per share were each $0.64. For the same period in 2018 basic and diluted earnings per share were each $0.59.
For the three months ended March 31, 2019, return on average assets was 1.20%, compared to 1.11% in the comparable 2018 period.

The Company's net interest margin was 3.81% for the three months March 31, 2019, compared to 3.63% for the three months ended March 31, 2018.

At March 31, 2019, Pinnacle's allowance for loan losses as a percent of total loans was 1.50%, compared to 1.53% at December 31, 2018. At March 31, 2019, the allowance for loan losses as a percent of nonperforming loans was 495.68%, compared to 596.28% at December 31, 2018. Nonperforming assets were $324,000 at March 31, 2019, compared to $269,000 at December 31, 2018. The ratio of nonperforming assets to total loans was .30% at March 31, 2019, compared to .26% at December 31, 2018.

Pinnacle was classified as "well capitalized" at March 31, 2019. All capital ratios are significantly higher than the requirements for a well-capitalized institution.

Dividends of $.19 per share were paid to shareholders during the first quarter of 2019 and $.11 per share during the first quarter of 2018.

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.
AND SUBSIDIARY

UNAUDITED FINANCIAL HIGHLIGHTS

	Three Months Ended March 31,
	2019			2018
Net Income	$	665,000		$	613,000
Weighted average basic shares outstanding		1,039,479			1,043,505
Weighted average diluted shares outstanding		1,039,479			1,043,505
Dividend per share	$	.19		$	.11
Provision for loan losses	$	-		$	-
Basic and diluted earnings per share	$	0.64		$	0.59
Performance Ratios: (annualized)
Return on average assets		1.20	%		1.11	%
Return on average equity		9.48	%		9.42	%
Interest rate spread		3.59	%		3.53	%
Net interest margin		3.81	%		3.63	%
Operating cost to assets		2.81	%		2.80	%

				(Audited)
	March 31, 2019			December 31, 2018
Total assets	$	227,514,000		$	221,755,000
Loans receivable, net	$	105,700,000		$	103,282,000
Deposits	$	194,220,000		$	185,329,000
Brokered CD's included in deposits	$	2,031,000		$	2,999,000
Other borrowings	$	-		$	4,500,000
Total stockholders' equity	$	28,594,000		$	27,207,000
Book value per share	$	27.53		$	26.07
Total average stockholders' equity to asset ratio		12.47	%		12.17	%
Asset Quality Ratios:
Nonperforming loans as a percent of total loans		.30	%		.26	%
Nonperforming assets as a percent of total loans		.30	%		.26	%
Allowance for loan losses as a percent of total loans		1.50	%		1.53	%
Allowance for loan losses as a percent of nonperforming loans		495.68	%		596.28	%


PINNACLE BANCSHARES, INC.
AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF CONDITION

	(Unaudited)			(Audited)
	March 31,			December 31,
	2019			2018
Assets
Cash and cash equivalents	$	1,687,968		$	1,611,283
Interest bearing deposits in banks		5,776,076			1,704,572
Securities available for sale		95,109,181			95,246,509
Restricted equity securities		723,800			912,300

Loans		107,306,200			104,885,961
Less allowance for loan losses		1,605,926			1,604,052
Loans, net		105,700,274			103,281,909

Premises and equipment, net		6,440,522			6,375,898
Right-of-use lease assets – operating		750,697			773,944
Goodwill		306,488			306,488
Bank owned life insurance		9,650,103			9,560,097
Accrued interest receivable		1,044,041			1,285,517
Other assets		325,070			696,784
Total assets	$	227,514,220		$	221,755,301

Liabilities and Stockholders' Equity
Deposits:
Noninterest-bearing	$	55,137,647		$	52,221,831
Interest-bearing		139,082,063			133,107,273
Total deposits		194,219,710			185,329,104

Other borrowings		-			4,500,000
Long term lease obligations – operating		750,697			773,944
Subordinated debentures		3,093,000			3,093,000
Accrued interest payable		139,188			146,848
Other liabilities		717,811			705,806
Total liabilities		198,920,406			194,548,702

Stockholders' equity
Common stock, $.01 par value, 2,400,000 shares authorized; 1,872,313 shares issued; 1,037,905 and 1,043,505 shares outstanding, respectively		18,723			18,723
Additional paid-in capital		8,923,223			8,923,223
Treasury stock, at cost (834,408 and 828,808 shares, respectively)		(11,594,382	)		(11,464,104	)
Retained earnings		30,811,129			30,343,475
Accumulated other comprehensive income (loss), net of tax		435,121			(614,718	)
Total stockholders' equity		28,593,814			27,206,599

Total liabilities and stockholders' equity	$	227,514,220		$	221,755,301


PINNACLE BANCSHARES, INC.
AND SUBSIDIARY

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended March 31, 2019 and 2018


	2019		2018
Interest income
Loans, including fees	$	1,429,293	$	1,257,993
Taxable securities		562,848		528,877
Nontaxable securities		159,498		197,505
Other interest		41,655		30,062
Total interest income		2,193,294		2,014,437

Interest expense
Deposits		188,069		90,748
Borrowings and repurchase agreements		17,312		19,552
Subordinated debentures		44,000		36,500
Total interest expense		249,381		147,780

Net interest income		1,943,913		1,867,657
Provision for loan losses		-		-
Net interest income after provision for loan losses		1,943,913		1,867,657

Other income
Fees and service charges on deposit accounts		327,284		328,043
Servicing fee income, net		1,714		2,203
Bank owned life insurance		90,006		83,595
Mortgage fee income		7,569		4,999
Net gain on sale of other real estate owed		967		-
Net gain on sale of securities available for sale		-		1,689
Total other income		427,540		420,529

Other expenses
Salaries and employee benefits		914,824		889,138
Occupancy expenses		197,299		223,856
Marketing and professional expenses		63,977		41,031
Other operating expenses		384,403		400,394
Total other expenses		1,560,503		1,554,419

Income before income taxes		810,950		753,767

Income tax expense		145,961		120,315

Net income	$	664,989	$	613,452

Basic and diluted earnings per share	$	0.64	$	0.59

Cash dividends per share	$	0.19	$	0.11
Weighted-average basic and diluted shares outstanding		1,039,479		1,043,505


PINNACLE BANCSHARES, INC.
AND SUBSIDIARY

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Three Months Ended March 31, 2019 and 2018


												Accumulated
				Additional								Other			Total
	Common Stock			Paid-in		Treasury			Retained			Comprehensive			Stockholders'
	Shares	Par Value		Capital		Stock			Earnings			Income (Loss)			Equity

Balance, December 31, 2017	1,872,313	$	18,723	$	8,923,223	$	(11,464,104	)	$	28,206,925		$	328,381		$	26,013,148
Net income	-		-		-		-			613,452			-			613,452
Cash dividends declared, $0.11 per share	-		-		-		-			(114,786	)		-			(114,786	)
Other comprehensive loss	-		-		-		-			-			(1,114,404	)		(1,114,404	)
Balance, March 31, 2018	1,872,313	$	18,723	$	8,923,223	$	(11,464,104	)	$	28,705,591		$	(786,023	)	$	25,397,410

Balance, December 31, 2018	1,872,313	$	18,723	$	8,923,223	$	(11,464,104	)	$	30,343,475		$	(614,718	)	$	27,206,599
Net income	-		-		-		-			664,989			-			664,989
Cash dividends declared, $0.19 per share	-		-		-		-			(197,335	)		-			(197,335	)
Purchase of treasury stock							(130,278	)								(130,278	)
Other comprehensive income	-		-		-		-			-			1,049,839			1,049,839
Balance, March 31, 2019	1,872,313	$	18,723	$	8,923,223	$	(11,594,382	)	$	30,811,129		$	435,121		$	28,593,814


PINNACLE BANCSHARES, INC.
AND SUBSIDIARY

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended March 31, 2019 and 2018

	2019			2018
OPERATING ACTIVITIES
Net income	$	664,989		$	613,452
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		83,553			92,926
Net amortization of securities		88,940			107,815
Gain on sale of securities available for sale		-			(1,689	)
Gain on sale of other real estate owned		(967	)		-
Bank owned life insurance		(90,006	)		(83,595	)
Decrease in accrued interest receivable		241,476			211,238
Increase (decrease) in accrued interest payable		(7,660	)		13,140
Net other operating activities		14,856			(20,043	)
Net cash provided by operating activities		995,181			933,244
INVESTING ACTIVITIES
Net increase in loans		(2,427,397	)		(5,509,242	)
Net increase in interest-bearing deposits in banks		(4,071,504	)		(10,781,345	)
Purchase of securities available for sale		-			(2,035,720	)
Proceeds from sales of securities available for sale		-			501,689
Proceeds from maturing or callable securities available for sale		1,467,090			4,312,589
Net (purchase) redemption of restricted equity securities		188,500			(170,500	)
Proceeds from sale of other real estate owned, net of expenses		9,999			-
Purchase of premises and equipment		(148,177	)		(193,188	)
Net cash used in investing activities		(4,981,489	)		(13,875,717	)

FINANCING ACTIVITIES
Net increase in deposits		8,890,606			8,547,849
Net increase (decrease) in other borrowings		(4,500,000	)		4,500,000
Net decrease in federal funds purchased		-			(100,000	)
Purchase of treasury stock		(130,278	)		-
Payments of cash dividends		(197,335	)		(114,786	)
Net cash provided by financing activities		4,062,993			12,833,063

Net increase (decrease) in cash and cash equivalents		76,685			(109,410	)

Cash and cash equivalents at beginning of year		1,611,283			1,871,452

Cash and cash equivalents at end of year	$	1,687,968		$	1,762,042

SUPPLEMENTAL DISCLOSURE
Cash paid during the year for:
Interest	$	257,041		$	133,640
Taxes	$	-		$	-
OTHER NONCASH TRANSACTIONS
Real estate acquired through foreclosure	$	9,032		$	-

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