Pinnacle Bancshares Announces Results for Third Quarter |
Robert B. Nolen, Jr., President and Chief Executive Officer of Pinnacle Bancshares, Inc. (OTCBB:PCLB), today announced Pinnacle's third quarter results of operations.
Mr. Nolen stated: "We are pleased with the results for the third quarter which showed an increase in net income of 35%. For the three months ended September 30, 2009, net income was $453,000, compared with net income of $335,000 for the three months ended September 30, 2009. Net interest income before the provision for loan losses increased 9% or $159,000 which was the principal reason for the increase in net income."
For the nine months ended September 30, 2009, net loss was $(114,000), compared with net income of $916,000 for the nine months ended September 30, 2008. Net interest income before the provision for loan losses for the nine months ended September 30, 2009 was $5,619,000, compared with $5,129,000 in the same period last year.
The net interest margin was 3.93% and 3.80% for the three and nine months ended September 30, 2009, respectively, compared to 3.43% and 3.31% for the three and six months ended September 30, 2008, respectively.
Mr. Nolen also stated: "While we are pleased with our results for the third quarter and are optimistic about the prospect for improvements in the future, we continue to have significant concerns for weakening commercial real estate markets and the overall economy. The provision for loan losses increased from $226,000 and $727,000 in the three and nine months ended September 30, 2008, respectively, to $281,000 and $2,552,000 in the three and nine months ended September 30, 2009, respectively. The increase in the provision is primarily related to three credits totaling approximately $6,000,000, which relate to participations in commercial real estate loans. Although each of these loans is currently performing, our management determined that weaknesses in these credits, due principally to significant declines in real estate values, supported a decision to establish these additional reserves."
At September 30, 2009, the Company's allowance for loan losses as a percent of total loans was 2.84%, compared to 1.21% at September 30, 2008 and 1.19% at December 31, 2008. At September 30, 2009, the Company's allowance for loan losses as a percent of nonperforming loans was 624.24%, compared to 909.04% at September 30, 2008 and 971.18% at December 31, 2008. Based on current real estate valuations, Pinnacle believes its allowance for loan losses is adequate. If economic conditions do not improve, additional charge-offs and further significant increases in the allowance may be necessary.
Net charge-offs were $491,000 and $779,000 for the three and nine months ended September 30, 2009, respectively, compared to $143,000 and $825,000 in the three and nine months ended September 30, 2008, respectively. Non-performing loans were .45% of loans at September 30, 2009, compared to .13% at September 30, 2008 and .12% at December 31, 2008. Non-performing assets were 0.59% of total assets at September 30, 2009, compared to 1.66% as of September 30, 2008 and 1.20% as of December 31, 2008.
At September 30, 2009, total stockholders' equity and book value per share were $20,851,000 and $16.42 per share, respectively, compared to $20,572,000 and $15.35 per share, respectively, at December 31, 2008. Total assets at September 30, 2009, were $217,053,000, compared to total assets at December 31, 2008, of $225,783,000. Pinnacle's strong equity to assets ratio was 9.61% at September 30, 2009.
Mr. Nolen reminded investors that, although Pinnacle remains well capitalized and has been able to avoid liquidity issues, Pinnacle is operating in a challenging and uncertain economic environment. Financial institutions have been, and continue to be, affected by significant declines in economic conditions and constrained financial markets. Pinnacle retains direct exposure to the residential and commercial real estate markets.
The Company believes declines in economic conditions and financial stresses on borrowers as a result of the uncertain economic environment, including job losses, could have an adverse affect on Pinnacle's borrowers or their customers, which could adversely affect Pinnacle's financial condition and results of operations. In addition, deterioration in local economic conditions in Pinnacle's markets could drive losses beyond those which are provided for in the allowance for loan losses and result in a number of adverse consequences, including increases in loan delinquencies; increases in nonperforming assets; decreases in demand for Pinnacle's products and services, which could affect Pinnacle's liquidity position; and decreases in the value of the collateral securing Pinnacle's loans, which could reduce customers' borrowing power.
Mr. Nolen also observed that on September 29, 2009, the FDIC Board of Directors adopted a notice of proposed rulemaking and request for comment which would require insured depository institutions to repay their quarterly risk-based assessments for the fourth quarter of 2009 and full years 2010 through 2012 on December 29, 2009. This action was taken in connection with the adoption of an Amended Restoration Plan to meet immediate liquidity needs and return the Deposit Insurance Fund to its federally mandated level, without imposing additional special assessments. Further, the prepayment of assessments does not prevent the FDIC from changing assessment rates or revising the risk-based assessment system in future periods.
Pinnacle is generally unable to control the amount of premiums that it is required to pay for FDIC insurance. If there are additional bank or financial institution failures, Pinnacle may be required to pay even higher FDIC premiums than the recently increased levels. Additionally, the FDIC may make material changes to the calculation of the prepaid assessment from the current proposal. Any future changes in the calculation or assessment of FDIC insurance premiums may have a material adverse effect on Pinnacle's results of operations, financial condition and ability to continue to pay dividends on its common shares.
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 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, 2009 2008 Net income $ 453,000 $ 335,000 Basic earnings per share $ 0.36 $ 0.26 Diluted earnings per share $ 0.36 $ 0.26 Performance ratios (annualized): Return on average assets 0.85 % 0.59 % Return on average equity 8.82 % 6.97 % Interest rate spread 3.92 % 3.46 % Net interest margin 3.93 % 3.43 % Operating cost to assets 2.93 % 2.77 % Weighted average basic shares Outstanding 1,270,128 1,312,019 Weighted average diluted shares Outstanding 1,270,128 1,310,396 Dividends per share $ 0.11 $ 0.11 Provision for loan losses $ 281,500 $ 226,000 Nine Months ended September 30, 2009 2008 Net income (loss) $ (114,000 ) $ 916,000 Basic earnings per share $ (0.09 ) $ 0.67 Diluted earnings per share $ (0.09 ) $ 0.67 Performance ratios (annualized): Return on average assets (0.07 %) 0.53 % Return on average equity (0.73 %) 6.10 % Interest rate spread 3.78 % 3.32 % Net interest margin 3.80 % 3.31 % Operating cost to assets 2.95 % 2.65 % Weighted average basic shares Outstanding 1,270,128 1,363,421 Weighted average diluted shares Outstanding 1,270,128 1,363,080 Dividends per share $ 0.33 $ 0.33 Provision for loan losses $ 2,552,400 $ 727,000 ------------------------------------------------------------------------------- September 30, 2009 December 31, 2008 Total assets $ 217,053,000 $ 225,783,000 Loans receivable, net $ 122,507,000 $ 137,001,000 Deposits $ 189,605,000 $ 197,479,000 Total stockholders' equity $ 20,851,000 $ 20,572,000 Book value per share $ 16.42 $ 15.35 Stockholders' equity to assets ratio 9.61 % 9.11 % Asset quality ratios: Nonperforming loans as a percent of total loans 0.45 % 0.12 % Nonperforming assets as a percent of total assets 0.59 % 1.20 % Allowance for loan losses as a percent of total loans 2.84 % 1.19 % Allowance for loan losses as a percent of nonperforming loans 624.24 % 971.18 % ------------------------------------------------------------------------------- FINANCIAL INFORMATION PINNACLE BANCSHARES, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION September 30, December 31, 2009 2008 ASSETS: Cash and cash equivalents $ 4,370,271 $ 3,896,727 Interest-bearing deposits in other banks 530,738 88 Securities available-for-sale 71,060,005 65,495,201 FHLB stock 817,500 424,200 First National Bankers Bancshares stock 525,000 525,000 Loans held for sale 1,356,314 801,390 Loans receivable, net of allowances for loan losses of $3,477,496 and $1,650,705 respectively 122,506,658 137,000,890 Real estate owned, net 733,237 2,542,249 Premises and equipment, net 6,746,346 6,913,553 Goodwill 306,488 306,488 Bank owned life insurance 6,359,974 6,108,755 Accrued interest receivable 1,003,382 1,065,640 Other assets 736,896 702,391 Total assets $ 217,052,809 $ 225,782,572 LIABILITIES AND STOCKHOLDERS' EQUITY: Deposits $ 189,605,415 $ 197,478,504 Subordinated debt 3,093,000 3,093,000 Borrowed funds 1,270,000 2,025,000 Official checks outstanding 733,574 696,324 Accrued interest payable 454,663 844,912 Other liabilities 1,045,425 1,072,441 Total liabilities 196,202,077 205,210,181 STOCKHOLDERS' EQUITY: Common stock, par value $.01 per share; 2,400,000 authorized; 1,872,313 issued at September 30, 2009 and December 31, 2008, respectively; 1,270,128 outstanding at September 30, 2009 and December 31, 2008, respectively 18,723 18,723 Additional paid in capital 8,923,223 8,923,223 Treasury shares, at cost (602,185 shares outstanding at September 30, 2009 and December 31, 2008, respectively) (7,320,909 ) (7,320,909 ) Retained earnings 17,661,236 18,194,136 Accumulated other comprehensive loss, net of tax 1,568,459 757,218 Total stockholders' equity 20,850,732 20,572,391 Total liabilities and stockholders' equity $ 217,052,809 $ 225,782,572 See accompanying notes to these condensed consolidated financial statements. ------------------------------------------------------------------------------- PINNACLE BANCSHARES, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS Three Months Ended Six Months Ended September 30, September 30, 2009 2008 2009 2008 INTEREST REVENUE: Interest on loans $1,961,266 $2,297,016 $5,994,863 $7,148,175 Interest and dividends on securities 670,954 744,050 2,090,023 2,285,437 Other interest 2,668 25,022 5,950 56,619 2,634,888 3,066,088 8,090,836 9,490,231 INTEREST EXPENSE: Interest on deposits 704,104 1,203,856 2,374,388 4,055,759 Interest on subordinated debt 27,054 45,085 89,681 145,149 Interest on borrowed funds 432 72,830 7,461 159,967 731,590 1,321,771 2,471,530 4,360,875 NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES 1,903.298 1,744,317 5,649,306 5,129,356 PROVISION FOR LOAN LOSSES 281,500 226,000 2,552,400 727,300 NET INTEREST INCOME (LOSS) AFTER PROVISION FOR LOAN LOSSES 1,621,798 1,518,317 3,066,906 4,402,056 NONINTEREST INCOME: Fees and service charges on deposit accounts 340,572 233,279 874,291 706,855 Service fee income 19,968 24,277 63,656 75,540 Fees and charges on loans 54,182 47,904 143,820 162,467 Bank owned life insurance 83,740 89,591 251,220 268,773 Net gain (loss) on sale or write-down of: Securities available for sale 3,965 (576 ) 3,965 13,022 Loans held for sale 53,326 94,413 234,294 183,386 Real estate owned 4,722 (1,083 ) (297,545 ) (1,126 ) 560,475 487,805 1,273,701 1,408,917 NONINTEREST EXPENSE: Compensation and benefits 785,516 825,766 2,464,327 2,454,313 Occupancy 347,853 299,839 1,033,259 885,149 Marketing and professional 85,082 97,931 287,987 299,109 Other 347,892 349,377 1,049,124 927,019 1,566,343 1,572,913 4,834,697 4,565,590 INCOME (LOSS) BEFORE INCOME TAXES 615,930 433,209 (494,090 ) 1,245,383 INCOME TAX EXPENSE (CREDIT) 162,757 98,000 (380,331 ) 329,717 NET INCOME (LOSS) $453,173 $335,209 $(113,759 ) $ 915,666 Basic earnings (loss) per share $0.36 $0.26 $(0.09 ) $0.67 Diluted earnings (loss) per share $0.36 $0.26 $(0.09 ) $0.67 Cash dividends per share $0.11 $0.11 $0.33 $0.33 Weighted average basic shares outstanding 1,270,128 1,312,019 1,270,128 1,363,421 Weighted average diluted shares outstanding 1,270,128 1,310,396 1,270,128 1,363,080 ------------------------------------------------------------------------------- PINNACLE BANCSHARES, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2009 AND 2008 Accumulated Additional Other Total Common Stock Paid-in Treasury Retained Comprehensive Stockholders' Shares Amount Capital Stock Earnings (Loss) Income Equity BALANCE, December 31, 2007 1,872,313 $ 18,723 $ 8,923,223 $ (5,317,798 ) $ 17,554,085 $ (244,551 ) $ 20,933,682 Comprehensive income (loss) Net income 0 0 0 0 915,666 0 915,666 Change in fair value of securities available-for-sale, net of tax 0 0 0 0 0 (106,926 ) (106,926 ) Comprehensive income 808,740 Cash dividends declared ($.33 per share) 0 0 0 0 (445,078 ) 0 (445,078 ) Repurchase 192,231 shares of common stock 0 0 0 (2,003,111 ) 0 0 (2,003,111 ) BALANCE, September 30, 2008 1,872,313 $ 18,723 $ 8,923,223 $ (7,320,909 ) $ 18,024,673 $ (351,477 ) $ 19,924,233 BALANCE, December 31, 2008 1,872,313 $ 18,723 $ 8,923,223 $ (7,320,909 ) $ 18,194,136 $ 757,218 $ 20,572,391 Comprehensive income (loss): Net income 0 0 0 0 (113,759 ) 0 (113,759 ) Change in fair value of securities available-for-sale, net of tax 0 0 0 0 0 811,241 811,241 Comprehensive income 697,482 Cash dividends declared ($.33 per share) 0 0 0 0 (419,141 ) 0 (419,141 ) BALANCE September 30, 2009 1,872,313 $ 18,723 $ 8,923,223 $ (7,320,909 ) $ 17,661,236 $ 1,568,459 $ 20,850,732 ------------------------------------------------------------------------------- PINNACLE BANCSHARES, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS For the Six Months Ended September 30, 2009 2008 CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ (113,759 ) $ 915,666 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 369,597 347,579 Provision for loan losses 2,552,400 727,300 Amortization, net (12,202 ) (72,187 ) Bank owned life insurance income (251,219 ) (268,773 ) Net (gain) loss on sale or write-down of: Securities available for sale (3,965 ) (13,023 ) Loans held for sale (234,294 ) (183,386 ) Real estate owned 297,545 1,126 Proceeds from sale of loans 19,913,391 21,115,422 Loans originated for sale (20,234,021 ) (21,358,966 ) Decrease in accrued interest receivable 62,258 424,896 Increase in other assets (33,002 ) (23,926 ) Decrease in accrued interest payable (390,249 ) (325,838 ) Decrease (increase) in other liabilities (524,535 ) 240,420 Net cash used in provided by operating activities 1,397,945 1,526,310 CASH FLOWS FROM INVESTING ACTIVITIES: Net loan (originations) repayments 11,318,539 (5,845,042 Net change in interest bearing deposits in other banks (530,650 ) (2,476,186 ) Purchase of securities available-for-sale (15,471,997 ) (34,670,067 ) Proceeds from maturing, called and payments received on securities available-for-sale 11,191,002 52,552,193 Proceeds from sale of Federal Home Loan Bank stock 369,300 1,642,500 Purchase of Federal Home Loan Bank stock (762,600 ) (1,745,800 ) Purchase of premises and equipment (202,390 ) (218,109 ) Proceeds from sales or capital expenditures related to real estate owned 2,174,375 1,381,368 Net cash provided by investing activities 8,085,579 10,620,857 CASH FLOWS FROM FINANCING ACTIVITIES: Net increase (decrease) in passbook, NOW and money market deposit accounts 5,682,327 (158,225 ) Proceeds from sales of time deposits 18,709,606 14,453,994 Payments on maturing time deposits (32,265,022 ) (24,855,004 ) Decrease (increase) in borrowed funds (755,000 ) 1,150,000 (Increase (decrease) in official checks outstanding 37,250 ) (573,506 ) Repurchase of common stock (0 ) (2,003,111 ) Payments of cash dividends (419,141 ) (445,078 ) Net cash used in financing activities (9,009,980 ) (12,430,930 ) NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 473,544 (283,763 ) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 3,896,727 4,783,834 CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 4,370,271 $ 4,500,071 SUPPLEMENTAL DISCLOSURES: Cash payments for interest on deposits, borrowed funds, and subordinated debentures $ 2,861,779 $ 4,686,483 Cash payments for income taxes 150,000 363,000 Real estate acquired through foreclosure 662,908 2,414,760 ------------------------------------------------------------------------------- A service of YellowBrix, Inc. |
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