Pinnacle Bancshares Announces Results for First Quarter Ended March 31, 2025
MWN-AI** Summary
Pinnacle Bancshares, Inc. (OTCBB: PCLB) has announced its financial results for the first quarter ended March 31, 2025. The company recorded a net income of $1,018,000, reflecting an increase from $964,000 in the same quarter of 2024. Earnings per share improved to $1.13, up from $1.06 a year earlier. The return on average assets for the period was 1.16%, slightly ahead of 1.14% in the prior year, while the net interest margin rose to 3.33%, compared to 3.11% in Q1 2024.
Pinnacle's total assets amounted to $360.1 million, a 3.7% increase from $346.5 million at the end of 2024. Deposits grew by approximately $15.8 million, or 5%, compared to the previous quarter. The allowance for loan losses as a percentage of total loans decreased to 1.65%, indicating effective management of credit risk.
The bank maintained "well capitalized" status with capital ratios significantly exceeding regulatory requirements. As of March 31, 2025, both the common equity Tier 1 and Tier 1 risk-based capital ratios stood at 18.86%, with total capital ratio and Tier 1 leverage at 19.89% and 10.96%, respectively. A consistent dividend of $0.27 per share was paid during both the first quarters of 2025 and 2024.
Despite facing challenges from rising inflation and interest rates, Pinnacle Bancshares noted that its unrealized losses on securities were primarily due to macroeconomic conditions rather than credit deterioration. The bank remains confident in its liquidity and operational stability, with a low loan-to-deposit ratio and access to additional funding sources.
MWN-AI** Analysis
Pinnacle Bancshares reported solid financial results for the first quarter of 2025, reflecting a positive trajectory amidst a challenging interest rate environment. The company’s earnings per share increased to $1.13 from $1.06 in Q1 2024, demonstrating its ability to navigate ongoing inflationary pressures. Net income rose to $1,018,000, further validating operational efficiency and growth strategies.
A key highlight is the improvement in the net interest margin, which increased to 3.33% from 3.11% year-over-year. This metric indicates that Pinnacle is managing its interest income effectively, which is crucial, especially given rising interest rates. The return on average assets (ROAA) at 1.16% is also commendable, showing the company's effectiveness in using its assets to generate earnings.
One area of concern, however, is the accumulated other comprehensive loss on securities, which remains substantial at approximately $26.1 million due to previous rising interest rates. Despite these unrealized losses, management believes they do not reflect credit deterioration, suggesting resilience in the underlying loan portfolio.
Investors should note that Pinnacle maintains a "well-capitalized" status, with capital ratios well above regulatory minimums, which provides a cushion against economic uncertainties. Furthermore, the increase in deposits by 4.95% indicates good liquidity and consumer confidence.
Given these results, Pinnacle could be seen as a stable investment choice within the financial sector, presenting an attractive dividend yield of 0.27 per share. However, potential investors should still consider broader market trends, particularly around interest rates and inflation, which could impact future performance.
In conclusion, Pinnacle Bancshares appears to be on solid footing, but staying informed about economic indicators and their possible impacts will be essential for evaluating future investment decisions.
**MWN-AI Summary and Analysis is based on asking OpenAI to summarize and analyze this news release.
Robert B. Nolen, Jr., President and Chief Executive Officer of Pinnacle Bancshares, Inc. (OTCBB: PCLB), today announced the Company’s results of operations for the first quarter ended March 31, 2025:
- For the three months ended March 31, 2025, Pinnacle’s basic/diluted earnings per share was $1.13 as compared to $1.06 per share for the three months ended March 31, 2024. Net income for the three months ended March 31, 2025 was $1,018,000 as compared to $964,000 for the three months ended March 31, 2024.
- For the three months ended March 31, 2025, return on average assets was 1.16%, compared to 1.14% for the three months ended March 31, 2024.
The Company’s net interest margin was 3.33% for the three months March 31, 2025, compared to 3.11% for the three months ended March 31, 2024.
At March 31, 2025, the Company’s allowance for loan losses as a percent of total loans was 1.65%, compared to 1.78% at December 31, 2024. There were no nonperforming assets at March 31, 2025 as well as at December 31, 2024.
Pinnacle Bank was classified as “well capitalized” at March 31, 2025. All capital ratios are significantly higher than the requirements for a well-capitalized institution. As of March 31, 2025, the Bank’s common equity Tier 1 capital and Tier 1 risk-based capital ratios were each 18.86% and its total capital ratio and Tier 1 leverage was 19.89% and 10.96%, respectively.
Dividends of $.27 per share were paid to shareholders during the first quarter of 2025 as well as the first quarter 2024.
Management believes that the Company has sufficient liquidity through its low loan to deposit ratio at March 31, 2025, as well as available funding from outside sources. Our net funding availability, as a percentage of our franchise funding, is 98.63% as compared to our established minimal limit of 25%. In addition, the Bank provides access to additional FDIC insurance coverage for accounts that would otherwise exceed deposit insurance coverage.
The Company’s total deposits as of March 31, 2025 increased $15.8 million (4.95%) as compared to December 31, 2024.
Effects of Inflation
Inflation caused a substantial rise in interest rates during 2023 and 2022 which has had a negative effect in the securities market. As a result of rising interest rates since 2022, the Company has recorded an accumulated other comprehensive loss on securities available for sale of approximately $26.1 million as of March 31, 2025 as compared to $28.7 million as of December 31, 2024. Although these unrealized losses recorded as of March 31, 2025 and December 31, 2024 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. In addition, these losses do not impact our regulatory capital ratios.
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. The Company undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the Company’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, | |||||||
2025 | 2024 | ||||||
Net Income | $ | 1,018,000 | $ | 964,000 | |||
Weighted average basic shares outstanding | 902,414 | 909,534 | |||||
Weighted average diluted shares outstanding | 902,414 | 909,534 | |||||
Dividend per share | $ | .27 | $ | .27 | |||
Provision for loan losses | $ | - | $ | - | |||
Basic and diluted earnings per share | $ | 1.13 | $ | 1.06 | |||
Performance Ratios: (annualized) | |||||||
Return on average assets | 1.16 | % | 1.14 | % | |||
Return on average equity | 9.70 | % | 9.85 | % | |||
Interest rate spread | 2.83 | % | 2.58 | % | |||
Net interest margin | 3.33 | % | 3.11 | % | |||
Operating cost to assets | 2.21 | % | 2.19 | % | |||
(Audited) | |||||||
March 31, 2025 | December 31, 2024 | ||||||
Total assets | $ | 360,125,000 | $ | 346,514,000 | |||
Loans receivable, net | $ | 135,433,000 | $ | 129,437,000 | |||
Deposits | $ | 333,928,000 | $ | 318,169,000 | |||
Brokered CD’s included in deposits | $ | 14,938,000 | $ | 14,917,000 | |||
Total stockholders’ equity | $ | 17,024,000 | $ | 13,861,000 | |||
Book value per share | $ | 18.91 | $ | 15.30 | |||
Book value per share (excluding OCI) | $ | 47.43 | $ | 46.48 | |||
Total average stockholders' equity to asset ratio (excluding OCI) | 11.98 | % | 11.80 | % | |||
Asset Quality Ratios: | |||||||
Nonperforming loans as a percent of total loans | .00 | % | .00 | % | |||
Nonperforming assets as a percent of total loans | .00 | % | .00 | % | |||
Allowance for loan losses as a percent of total loans | 1.65 | % | 1.78 | % |
PINNACLE BANCSHARES, INC. AND SUBSIDIARY | |||||||
CONDENSED CONSOLIDATED STATEMENTS OF CONDITION | |||||||
(Unaudited) | (Audited) | ||||||
March 31, | December 31, | ||||||
2025 | 2024 | ||||||
Assets | |||||||
Cash and cash equivalents | $ | 2,519,182 | $ | 2,406,608 | |||
Interest bearing deposits in banks | 22,058,758 | 17,830,073 | |||||
Securities available for sale | 168,119,506 | 163,442,222 | |||||
Restricted equity securities | 957,000 | 954,300 | |||||
Loans | 137,710,120 | 131,789,490 | |||||
Less allowance for loan losses | 2,277,118 | 2,352,415 | |||||
Loans, net | 135,433,002 | 129,437,075 | |||||
Premises and equipment, net | 8,084,097 | 8,198,615 | |||||
Operating right-of-use lease assets | 249,616 | 260,248 | |||||
Goodwill | 306,488 | 306,488 | |||||
Bank owned life insurance | 11,141,714 | 11,024,493 | |||||
Accrued interest receivable | 1,614,794 | 2,107,432 | |||||
Deferred tax assets, net | 8,841,293 | 9,608,246 | |||||
Other assets | 799,972 | 938,828 | |||||
Total assets | $ | 360,125,422 | $ | 346,514,628 | |||
Liabilities and Stockholders’ Equity | |||||||
Deposits: | |||||||
Noninterest-bearing | $ | 95,433,784 | $ | 90,389,786 | |||
Interest-bearing | 238,493,893 | 227,779,259 | |||||
Total deposits | 333,927,677 | 318,169,045 | |||||
Subordinated debentures | 3,093,000 | 3,093,000 | |||||
Other borrowings | 4,000,000 | 9,000,000 | |||||
Accrued interest payable | 556,809 | 874,774 | |||||
Operating lease liabilities | 249,616 | 260,248 | |||||
Other liabilities | 1,274,559 | 1,256,189 | |||||
Total liabilities | 343,101,661 | 332,653,256 | |||||
Stockholders’ equity | |||||||
Common stock, $.01 par value, 2,400,000 shares authorized; | |||||||
1,872,313 shares issued; 900,336 and 905,786 shares outstanding, respectively | 18,723 | 18,723 | |||||
Additional paid-in capital | 8,923,223 | 8,923,223 | |||||
Treasury stock, at cost (971,977 and 966,527 shares at cost, respectively) | (15,866,469 | ) | (15,698,015 | ) | |||
Retained earnings | 49,631,954 | 48,857,057 | |||||
Accumulated other comprehensive loss, net of tax | (25,683,670 | ) | (28,239,616 | ) | |||
Total stockholders’ equity | 17,023,761 | 13,861,372 | |||||
Total liabilities and stockholders’ equity | $ | 360,125,422 | $ | 346,514,628 |
PINNACLE BANCSHARES, INC. AND SUBSIDIARY | |||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME Three Months Ended March 31, 2025 and 2024 | |||||
2025 | 2024 | ||||
Interest income | |||||
Loans, including fees | $ | 2,290,246 | $ | 2,026,371 | |
Taxable securities | 1,334,545 | 1,296,269 | |||
Nontaxable securities | 34,935 | 40,019 | |||
Other interest | 234,740 | 308,824 | |||
Total interest income | 3,894,466 | 3,671,483 | |||
Interest expense | |||||
Deposits | 923,669 | 760,947 | |||
Subordinated debentures | 39,050 | 39,050 | |||
Other borrowings | 62,345 | 178,803 | |||
Total interest expense | 1,025,064 | 978,800 | |||
Net interest income | 2,869,402 | 2,962,683 | |||
Provision for loan losses | - | - | |||
Net interest income after provision for loan losses | 2,869,402 | 2,962,683 | |||
Other income | |||||
Fees and service charges on deposit accounts | 388,643 | 424,843 | |||
Servicing fee income, net | - | 743 | |||
Bank owned life insurance | 117,221 | 103,672 | |||
Mortgage fee income | - | 2,131 | |||
Total other income | 505,864 | 531,389 | |||
Other expenses | |||||
Salaries and employee benefits | 1,208,948 | 1,137,415 | |||
Occupancy expenses | 314,092 | 312,671 | |||
Marketing and professional expenses | 55,498 | 74,863 | |||
Other operating expenses | 504,932 | 479,823 | |||
Total other expenses | 2,083,470 | 2,004,772 | |||
Income before income taxes | 1,291,796 | 1,219,300 | |||
Income tax expense | 273,809 | 255,730 | |||
Net income | $ | 1,017,987 | $ | 963,570 | |
Basic and diluted earnings per share | $ | 1.13 | $ | 1.06 | |
Cash dividends per share | $ | 0.27 | $ | 0.27 | |
Weighted-average basic and diluted shares outstanding | 902,414 | 909,534 |
PINNACLE BANCSHARES, INC. AND SUBSIDIARY | |||||||||||||||||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY Three Months Ended March 31, 2025 and 2024 | |||||||||||||||||||||||
Accumulated | |||||||||||||||||||||||
Additional | Other | Total | |||||||||||||||||||||
Common Stock | Paid-in | Treasury | Retained | Comprehensive | Stockholders’ | ||||||||||||||||||
Shares | Par Value | Capital | Stock | Earnings | Loss | Equity | |||||||||||||||||
Balance, December 31, 2023 | 1,872,313 | $ | 18,723 | $ | 8,923,223 | $ | (15,588,799 | ) | $ | 45,772,256 | $ | (26,338,862 | ) | $ | 12,786,541 | ||||||||
Net income | - | - | - | - | 963,570 | - | 963,570 | ||||||||||||||||
Cash dividends declared, | |||||||||||||||||||||||
$0.27 per share | - | - | - | - | (245,574 | ) | - | (245,574 | ) | ||||||||||||||
Other comprehensive loss | - | - | - | - | - | (1,378,571 | ) | (1,378,571 | ) | ||||||||||||||
Balance, March 31, 2024 | 1,872,313 | $ | 18,723 | $ | 8,923,223 | $ | (15,588,799 | ) | $ | 46,490,252 | $ | (27,717,433 | ) | $ | 12,125,966 | ||||||||
Balance, December 31, 2024 | 1,872,313 | $ | 18,723 | $ | 8,923,223 | $ | (15,698,015 | ) | $ | 48,857,057 | $ | (28,239,616 | ) | $ | 13,861,372 | ||||||||
Net income | - | - | - | - | 1,017,987 | - | 1,017,987 | ||||||||||||||||
Purchase of treasury stock | - | - | - | (168,454 | ) | - | - | (168,454 | ) | ||||||||||||||
Cash dividends declared, | |||||||||||||||||||||||
$0.27 per share | - | - | - | - | (243,090 | ) | - | (243,090 | ) | ||||||||||||||
Other comprehensive income | - | - | - | - | - | 2,555,946 | 2,555,946 | ||||||||||||||||
Balance, March 31, 2025 | 1,872,313 | $ | 18,723 | $ | 8,923,223 | $ | (15,866,469 | ) | $ | 49,631,954 | $ | (25,683,670 | ) | $ | 17,023,761 |
PINNACLE BANCSHARES, INC. AND SUBSIDIARY | |||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Three Months Ended March 31, 2025 and 2024 | |||||||
2025 | 2024 | ||||||
OPERATING ACTIVITIES | |||||||
Net income | $ | 1,017,987 | $ | 963,570 | |||
Adjustments to reconcile net income to net cash | |||||||
provided by operating activities: | |||||||
Depreciation | 123,701 | 128,826 | |||||
Net amortization of securities | 38,140 | 50,376 | |||||
Bank owned life insurance | (117,221 | ) | (103,672 | ) | |||
Decrease in accrued interest receivable | 492,638 | 574,435 | |||||
Decrease in accrued interest payable | (317,965 | ) | (527,736 | ) | |||
Net other operating activities | (50,614 | ) | 31,716 | ||||
Net cash provided by operating activities | 1,186,666 | 1,117,515 | |||||
INVESTING ACTIVITIES | |||||||
Net (increase) decrease in loans | (5,995,927 | ) | 3,199,779 | ||||
Net increase in interest-bearing deposits in banks | (4,228,685 | ) | (3,306,813 | ) | |||
Purchase of securities available for sale | (3,000,000 | ) | - | ||||
Proceeds from maturing or callable securities available for sale | 1,815,315 | 1,399,125 | |||||
Net purchase of restricted equity securities | (2,700 | ) | (6,900 | ) | |||
Purchase of premises and equipment | (9,183 | ) | (194,533 | ) | |||
Net cash provided by (used in) investing activities | (11,421,180 | ) | 1,090,658 | ||||
FINANCING ACTIVITIES | |||||||
Net increase (decrease) in deposits | 15,758,632 | (2,174,979 | ) | ||||
Repayment of other borrowings | (5,000,000 | ) | - | ||||
Purchase of treasury stock | (168,454 | ) | - | ||||
Payment of cash dividends | (243,090 | ) | (245,574 | ) | |||
Net cash provided by (used in) financing activities | 10,347,088 | (2,420,553 | ) | ||||
Net increase (decrease) in cash and cash equivalents | 112,574 | (212,380 | ) | ||||
Cash and cash equivalents at beginning of year | 2,406,608 | 2,190,793 | |||||
Cash and cash equivalents at end of year | $ | 2,519,182 | $ | 1,978,413 | |||
SUPPLEMENTAL DISCLOSURE | |||||||
Cash paid during the year for: | |||||||
Interest | $ | 1,343,029 | $ | 1,506,536 | |||
Taxes | $ | - | $ | - | |||
OTHER NONCASH TRANSACTIONS | |||||||
Real estate acquired through foreclosure | $ | - | $ | - |
View source version on businesswire.com: https://www.businesswire.com/news/home/20250423677869/en/
Joe B. Adams, III
Chief Financial Officer
(205) 221-8866
FAQ**
How does Pinnacle Bancshares Inc. (PCLB) plan to improve its net interest margin, which increased to 3.33% in Q1 2025, and what strategies are in place to maintain profitability amid rising interest rates?
With Pinnacle Bancshares Inc. (PCLB) reporting an accumulated other comprehensive loss on securities of $26.1 million, how does management anticipate managing these losses in the future?
Given that Pinnacle Bancshares Inc. (PCLB) has maintained a "well capitalized" status, what measures are in place to ensure this classification remains while also addressing potential risks from inflation and interest rate fluctuations?
How does the increase in total deposits by $15.8 million (4.95%) for Pinnacle Bancshares Inc. (PCLB) impact the company's growth strategy and liquidity management in the upcoming quarters?
**MWN-AI FAQ is based on asking OpenAI questions about Pinnacle Bancshares Inc. (OTC: PCLB).
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