Contact: Joe B. Adams, III Chief Financial Officer (205) 221-8866 PINNACLE BANCSHARES ANNOUNCES RESULTS FOR FIRST QUARTER ENDED MARCH 31, 2017 Jasper, Alabama (April 19, 2017) Robert B. Nolen, Jr., President and Chief Executive Officer of Pinnacle Bancshares, Inc. (OTC Pink: PCLB), today announced Pinnacle s results of operations for the first quarter ended March 31, 2017: For the three months ended March 31, 2017, Pinnacle reported net income of $538,000, compared to $639,000 for the three months ended March 31, 2016. Included in net income for the three months ended March 31, 2016 was $149,980 in gains from sale of securities available for sale. There were no sales of securities during the three months ended March 31, 2017. Net interest income after the provision for loan losses for the three months ended March 31, 2017, was $1,778,000, compared with $1,752,000 in the same period last year. For the three months ended March 31, 2017, basic and diluted earnings per share were each $0.52. For the same period in 2016 basic and diluted earnings per share were each $0.55. The basic and diluted earnings per share would have been $.45 if the net-tax effect of the gain on sales were excluded for the three months ended March 31, 2016. For the three months ended March 31, 2017, return on average assets was.99%, compared to 1.16% in the comparable 2016 period. The Company s net interest margin was 3.49% for the three months March 31, 2017, compared to 3.46% for the three months ended March 31, 2016. At March 31, 2017, Pinnacle s allowance for loan losses as a percent of total loans was 1.80%, compared to 1.77% at December 31, 2016. At March 31, 2017, the allowance for loan losses as a percent of nonperforming loans was 954.71%, compared to 471.72% at December 31, 2016. Nonperforming assets were $171,000 at March 31, 2017, compared to $344,000 at December 31, 2016. The ratio of nonperforming assets to total loans was.19% at March 31, 2017, compared to.38% at December 31, 2016. Pinnacle was classified as well capitalized at March 31, 2017. Total risk-based capital was 19.26% for the subsidiary bank. Tier 1 risk-based capital and Tier 1 leverage capital ratios for the subsidiary bank were 18.09% and 11.37%, respectively. All capital ratios are significantly higher than the requirements for a well-capitalized institution. Dividends of $.11 per share were paid to shareholders during the first quarter of 2017 as well as the first quarter of 2016. Despite the Company s good financial performance during the last several years, Mr. Nolen cautioned investors that any negative changes to economic conditions could have an adverse effect on
Pinnacle s borrowers and their customers, which could adversely affect Pinnacle s financial condition and results of operations. 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. 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 Three Months Ended March 31, Net Income $ 538,000 $ 639,000 Weighted average basic shares outstanding 1,043,505 1,165,647 Weighted average diluted shares outstanding 1,043,505 1,165,647 Dividend per share $.11 $.11 Provision for loan losses $ - $ - Basic and diluted earnings per share $ 0.52 $ 0.55 Performance Ratios: (annualized) Return on average assets.99% 1.16% Return on average equity 8.90% 10.10% Interest rate spread 3.41% 3.35% Net interest margin 3.49% 3.46% Operating cost to assets 2.74% 2.67% March 31, 2017 (Audited) December 31, 2016 Total assets $ 225,302,000 $ 216,561,000 Loans receivable, net $ 88,734,000 $ 89,651,000 Deposits $ 195,182,000 $ 189,525,000 Other borrowings $ 2,000,000 $ - Total stockholders' equity $ 24,684,000 $ 23,758,000 Book value per share $ 23.65 $ 22.90 Total stockholders' equity to asset ratio 10.93% 11.44% Asset Quality Ratios: Nonperforming loans as a percent of total loans.19%.38% Nonperforming assets as a percent of total Loans.19%.38% Allowance for loan losses as a percent of total loans 1.80% 1.77% Allowance for loan losses as a percent of 954.71% 471.72% nonperforming loans
CONDENSED CONSOLIDATED STATEMENTS OF CONDITION (Unaudited) March 31, December Assets Cash and cash equivalents $ 1,751,106 $ 1,698,936 Interest bearing deposits in banks 13,160,756 3,035,346 Securities available for sale 104,511,475 105,551,083 Restricted equity securities 805,500 722,100 Loans 90,356,872 91,268,924 Less allowance for loan losses 1,622,727 1,617,620 Loans, net 88,734,145 89,651,304 Premises and equipment, net 5,694,372 5,222,947 Goodwill 306,488 306,488 Bank owned life insurance 8,970,602 8,887,416 Accrued interest receivable 1,031,431 1,197,974 Other assets 336,172 287,692 Total assets $ 225,302,047 $ 216,561,286 Liabilities and Stockholders Equity Deposits: Noninterest-bearing $ 53,748,798 $ 53,279,880 Interest-bearing 141,432,720 136,244,690 Total deposits 195,181,518 189,524,570 Other borrowings 2,000,000 - Subordinated debentures 3,093,000 3,093,000 Accrued interest payable 78,623 81,023 Other liabilities 265,279 104,336 Total liabilities 200,618,420 192,802,929 Stockholders equity Common stock, $.01 par value, 2,400,000 shares authorized; 1,872,313 shares issued; 1,043,505 shares outstanding 18,723 18,723 Additional paid-in capital 8,923,223 8,923,223 Treasury stock, at cost (828,808 shares) (11,464,104) (11,464,104) Retained earnings 26,840,840 26,417,216 Accumulated other comprehensive income (loss), net of tax 364,945 (136,701) Total stockholders equity 24,683,627 23,758,357 Total liabilities and stockholders equity $ 225,302,047 $ 216,561,286
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME Three Months Ended March 31, 2017 and 2016 Interest income Loans, including fees $ 1,120,954 $ 1,099,073 Taxable securities 539,925 487,266 Nontaxable securities 239,277 290,361 Other interest 19,355 14,831 Total interest income 1,919,511 1,891,531 Interest expense Deposits 104,144 108,997 Borrowings and repurchase agreements 6,348 4,497 Subordinated debentures 30,800 25,700 Total interest expense 141,292 139,194 Net interest income 1,778,219 1,752,337 Provision for loan losses - - Net interest income after provision for loan losses 1,778,219 1,752,337 Other income Fees and service charges on deposit accounts 301,986 286,730 Servicing fee income, net 3,325 4,345 Bank owned life insurance 83,186 91,315 Mortgage fee income - 8,408 Net gain on sale of securities available for sale - 149,980 Total other income 388,497 540,778 Other expenses Salaries and employee benefits 842,172 784,630 Occupancy expenses 221,515 228,307 Marketing and professional expenses 43,730 77,047 Net loss on sales of other real estate owned - 4,167 Other operating expenses 388,368 387,686 Total other expenses 1,495,785 1,481,837 Income before income taxes 670,931 811,278 Income tax expense 132,521 172,777 Net income $ 538,410 $ 638,501 Basic and diluted earnings per share $ 0.52 $ 0.55 Cash dividends per share $ 0.11 $ 0.11 Weighted-average basic and diluted shares outstanding 1,043,505 1,165,647
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY Three Months Ended March 31, 2017 and 2016 Accumulated Additional Other Total Common Stock Paid-in Treasury Retained Comprehensive Stockholders Shares Par Value Capital Stock Earnings Income (loss) Equity Balance, December 31, 2015 1,872,313 18,723 $ 8,923,223 $ (8,532,831) $ 24,640,492 $ 788,330 $ 25,837,937 Net income - - - - 638,501-638,501 Cash dividends declared, $0.11 per share (128,082) (128,082) Purchase of treasury stock - - - (165,419) - - (165,419) Other comprehensive income - - - - - 487,081 $ 487,081 Balance, March 31, 2016 1,872,313 18,723 $ 8,923,223 $ (8,698,250) $ 25,150,911 $ 1,275,411 $ 26,670,018 Balance, December 31, 2016 1,872,313 $ 18,723 $ 8,923,223 $ (11,464,104) $ 26,417,216 $ (136,701) $ 23,758,357 Net income - - - - 538,410-538,410 Cash dividends declared, $0.11 per share - - - - (114,786) - (114,786) Other comprehensive income - - - - - 501,646 501,646 Balance, March 31, 2017 1,872,313 $ 18,723 $ 8,923,223 $ (11,464,104) $ 26,840,840 $ 364,945 $ 24,683,627
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Three Months Ended March 31, 2017 and 2016 OPERATING ACTIVITIES Net income $ 538,410 $ 638,501 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 88,636 92,702 Net amortization of securities 125,311 169,977 Gain on sale of securities available for sale - (149,980) Bank owned life insurance (83,186) (91,315) Loss on sale and write down of real estate owned - 4,167 Decrease in accrued interest receivable 166,543 98,742 Decrease in accrued interest payable (2,400) (4,129) Net other operating activities (194,997) (10,250) Net cash provided by operating activities 638,317 748,415 INVESTING ACTIVITIES Net decrease in loans 917,159 1,405,273 Net increase in interest-bearing deposits in banks (10,125,410) (5,441,217) Purchase of securities available for sale - (6,178,874) Proceeds from sales of securities available for sale - 2,565,254 Proceeds from maturing or callable securities available for sale 1,723,403 3,851,250 Net purchase of restricted equity securities (83,400) (500) Purchase of premises and equipment (560,061) (65,285) Proceeds from sales of other real estate owned - 64,017 Net cash used in investing activities (8,128,309) (3,800,082) FINANCING ACTIVITIES Net increase in deposits 5,656,948 3,590,315 Net increase in other borrowings 2,000,000 - Purchase of treasury stock - (165,419) Payments of cash dividends (114,786) (128,082) Net cash provided by financing activities 7,542,162 3,296,814 Net increase in cash and cash equivalents 52,170 245,147 Cash and cash equivalents at beginning of year 1,698,936 1,718,147 Cash and cash equivalents at end of year $ 1,751,106 $ 1,963,294 SUPPLEMENTAL DISCLOSURE Cash paid during the year for: Interest $ 143,692 $ 143,323 Taxes $ - $ - OTHER NONCASH TRANSACTIONS Internally financed sales of other real estate owned $ - $ -