(Source: Business Wire)
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
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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 %
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FINANCIAL INFORMATION
PINNACLE BANCSHARES, INC.