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ALTAVISTA, Va., April 23, 2019 (GLOBE NEWSWIRE) -- Net income for Pinnacle Bankshares Corporation (OTCQX:PPBN), the one-bank holding company (the “Company”) for First National Bank (the “Bank”), was $1,301,000 or $0.84 per basic and diluted share for the quarter ended March 31, 2019 compared to net income of $1,072,000 or $0.70 per basic and $0.69 per diluted share for the same period of 2018. Quarterly consolidated results are unaudited.
Net income generated during the first quarter of 2019 represents a $229,000 or 21% increase as compared to the same time period of the prior year, which was driven by higher net interest income and higher noninterest income. The net interest income improvement was due to a 5% increase in loans, a 15% increase in investments and a 39 basis points increase in yield on earning assets from March 31, 2018 to March 31, 2019.
Profitability as measured by the Company’s return on average assets (“ROA”) was 1.10% for the first quarter of 2019, which is a 15 basis points increase over the 0.95% produced in the first quarter of 2018. Correspondingly, return on average equity (“ROE”) also increased in the first quarter of 2019 to 12.11%, compared to 10.96% for the same time period of the prior year.
“We have started 2019 with the highest first quarter net income in Pinnacle Bankshares Corporation’s history,” stated Aubrey H. Hall, III, President and Chief Executive Officer for both the Company and the Bank. Mr. Hall further commented, “Our first quarter 2019 net income was also our second highest quarterly core net income behind only the fourth quarter of last year. Our commitment to strategic planning and the execution of initiatives intended to enhance performance have helped position Pinnacle as one of the premier community banks in Virginia.”
The Company’s net interest income was $4,392,000 for the quarter ended March 31, 2019 compared to $3,836,000 for the quarter ended March 31, 2018. Interest income increased $663,000, or approximately 15%, due to higher loan and investments volume as well as increased yields, while interest expense increased $107,000, or 24%. As a result of a 39 basis point increase in yield on earning assets, which was partially offset by an 8 basis point increase in the cost to fund earning assets, the Company’s net interest margin increased to 4.05% for the first quarter of 2019 as compared to 3.74% for the first quarter of 2018.
The provision for loan losses decreased to ($6,000) in the first quarter of 2019 as compared to $1,000 in the first quarter of 2018. The allowance for loan losses increased $88,000 due to a large recovery of a previously charged off loan to $3,460,000 as of March 31, 2019, representing 0.91% of total loans outstanding. In comparison, the allowance for loan losses was $3,372,000 as of December 31, 2018, which was 0.90% of total loans outstanding. Non-performing loans to total loans increased slightly to 0.28% as of March 31, 2019 compared to 0.24% as of year-end 2018. Allowance coverage of non-performing loans was 323% as of the end of the quarter compared to 367% as of year-end 2018. Management views the allowance balance as being sufficient to offset potential future losses associated with problem loans.
Noninterest income for the quarter ended March 31, 2019 increased $62,000 or 6%, to $1,045,000 from $983,000 for the quarter ended March 31, 2018. The increase was mainly due to a $64,000 increase in fees generated from the sale of mortgage loans. The Bank also experienced increases in loan fees and merchant card fees. These increases were partially offset by decreases in investment and insurance commissions and non-sufficient funds (NSF) fees.
Noninterest expense for the quarter ended March 31, 2019 increased $339,000 or approximately 10%, to $3,833,000 from $3,494,000 for the quarter ended March 31, 2018. The increase is primarily attributed to increases in salaries and benefits as a result of an employee pay improvement plan executed during 2018, which has enabled First National to remain competitive in attracting and retaining top talent in our market. The Company also experienced increases in occupancy expense and core system processing fees associated with growth of the Company.
Total assets as of March 31, 2019 were $488,485,000, up approximately 4% from $470,611,000 as of December 31, 2018. The principal components of the Company’s assets as of March 31, 2019 were $380,528,000 in total loans, $48,809,000 in securities and $31,021,000 in cash and cash equivalents. During the first quarter of 2019, total loans increased approximately 1% or $4,462,000 from $376,066,000 as of December 31, 2018, while securities decreased approximately 2% or $1,017,000 from $49,826,000. Cash and cash equivalents increased 97% or $15,304,000 from $15,717,000 as of December 31, 2018 due to an increase in commercial checking balances.
Total liabilities as of March 31, 2019 were $444,672,000, up $16,172,000 or approximately 4% from $428,500,000 as of December 31, 2018. Higher levels of deposits as mentioned previously drove the increase in liabilities.
Total stockholders’ equity as of March 31, 2019 was $43,813,000 and consisted primarily of $39,961,000 in retained earnings. In comparison, as of December 31, 2018 total stockholders’ equity was $42,111,000. The Company has continued to increase capital while also paying a cash dividend to shareholders in each of the last twenty-six quarters. Both the Company and Bank remain “well capitalized” per all regulatory definitions.
In other news, at the Annual Meeting of Shareholders held on April 9, 2019, Elton W. Blackstock, Jr., Robert L. Finch, Jr., Aubrey H. (Todd) Hall, III, and Dr. Robert L. Johnson, II, were re-elected to the Board of Directors as Class I Directors to serve until the 2022 Annual Meeting of Shareholders.
A copy of the Company’s Shareholder/Investor Presentation has been made available on the Bank’s website at www.1stnatbk.com under the Investor Relations Tab. The Presentation references First National Bank’s employees’ “Quest” to grow the Bank beyond $500 million in assets with achievement of a 1% return on assets.
Finally, as previously announced on March 13, 2019, First National Bank is planning to open a new branch in the downtown area of Lynchburg, Virginia. This part of our market is viewed as the hub of regional commerce and has undergone significant redevelopment. We believe businesses and individuals will continue to migrate downtown based on its convenient location within the Lynchburg region and the steady stream of commercial and residential options becoming available. Regulatory approval has been received for our new downtown branch located at 800 Main Street, which is scheduled to open on May 15, 2019.
Pinnacle Bankshares Corporation is a locally managed community banking organization based in Central Virginia. The one-bank holding company of First National Bank serves an area consisting primarily of all or portions of the Counties of Campbell, Pittsylvania, Bedford, Amherst and the City of Lynchburg. The Company has a total of nine branches with two located in the Town of Altavista, where the Bank was founded. Other branch locations include Village Highway in Rustburg, Wards Road near the Lynchburg Regional Airport, Timberlake Road in Campbell County, South Main Street in the Town of Amherst, Old Forest Road and Odd Fellows Road in the City of Lynchburg and Forest Road in Bedford County. First National Bank is in its 111th year of operation.
Various securities laws regulate the use of financial measures that are not prepared in accordance with GAAP. We believe these non-GAAP measures provide important supplemental information to investors. We use these measures, together with GAAP measures, for internal managerial purposes and as a means to evaluate period-to-period comparisons. However, we do not, and you should not, rely on non-GAAP financial measures alone as measures of our performance. We believe that non-GAAP financial measures reflect an additional way of viewing aspects of our operations that - when taken together with GAAP results as presented in this press release- provide a more complete understanding of factors and trends affecting our business. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures, even if they have similar names.
This press release may contain “forward-looking statements” within the meaning of federal securities laws that involve significant risks and uncertainties. Any statements contained herein that are not historical facts are forward-looking and are based on current assumptions and analysis by the Company. These forward-looking statements may include, but are not limited to, statements regarding the credit quality of our asset portfolio in future periods, the expected losses of nonperforming loans in future periods, returns and capital accretion during future periods, the lowering of our cost of funds, the maintenance of our net interest margin, the continuation of improved returns, the cost savings related to the deregistration of our common stock, and future operating results and business performance. Although we believe our plans and expectations reflected in these forward-looking statements are reasonable, our ability to predict results or the actual effect of future plans or strategies is inherently uncertain, and we can give no assurance that these plans or expectations will be achieved. Factors that could cause actual results to differ materially from management's expectations include, but are not limited to, the effectiveness of management’s efforts to improve asset quality, returns, net interest margin and collections and control operating expenses, management’s efforts to minimize losses related to nonperforming loans, management’s efforts to lower our cost of funds, changes in: interest rates, general economic and business conditions, declining collateral values, especially real estate, the real estate market, the legislative/regulatory climate, including the effect that the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and regulations adopted thereunder may have on us, monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Board of Governors of the Federal Reserve System and any policies or programs implemented pursuant to the Emergency Economic Stabilization Act of 2008, the quality or composition of the loan or investment portfolios, demand for loan products, deposit flows and funding costs, competition, demand for financial services in our market area, actual savings related to the deregistration of our common stock and accounting principles, policies and guidelines. These risks and uncertainties should be considered in evaluating the forward-looking statements contained herein, and you should not place undue reliance on such statements, which reflect our views as of the date of this release.
Pinnacle Bankshares Corporation
Selected Financial Highlights
(3/31/2019 and 3/31/2018 results unaudited)
(In thousands, except ratios, share and per share data)
|3 Months Ended||3 Months Ended||3 Months Ended|
|Income Statement Highlights||3/31/2019||12/31/2018||3/31/2018|
|Net Interest Income||4,392||4,392||3,836|
|Provision for Loan Losses||(6)||32||1|
|Earnings Per Share (Basic)||0.84||0.87||0.70|
|Earnings Per Share (Diluted)||0.84||0.86||0.69|
|Balance Sheet Highlights||3/31/2019||12/31/2018||03/31/2018|
|Cash and Cash Equivalents||$31,021||$15,717||$30,007|
|Ratios and Stock Price||3/31/2019||12/31/2018||3/31/2018|
|Gross Loan-to-Deposit Ratio||86.15%||88.38%||87.99%|
|Net Interest Margin (Year-to-date)||4.05%||3.83%||3.74%|
|Return on Average Assets (ROA)||1.10%||0.90%||0.95%|
|Return on Average Equity (ROE)||12.11%||10.33%||10.96%|
|Leverage Ratio (Bank)||9.38%||9.15%||9.07%|
|Tier 1 Risk-based Capital Ratio (Bank)||11.34%||11.14%||10.91%|
|Total Capital Ratio (Bank)||12.25%||12.04%||11.72%|
|Asset Quality Highlights||3/31/2019||12/31/2018||3/31/2018|
|Loans 90 Days or More Past Due and Accruing||217||80||0|
|Total Nonperforming Loans||1,072||919||785|
|Troubled Debt Restructures Accruing||265||267||537|
|Total Impaired Loans||1,377||1,186||1,322|
|Other Real Estate Owned (OREO) (Foreclosed Assets)||644||627||186|
|Total Nonperforming Assets||1,716||1,546||970|
|Nonperforming Loans to Total Loans||0.28%||0.24%||0.22%|
|Nonperforming Assets to Total Assets||0.35%||0.33%||0.21%|
|Allowance for Loan Losses||$3,460||$3,372||$2,967|
|Allowance for Loan Losses to Total Loans||0.91%||0.90%||0.82%|
|Allowance for Loan Losses to Nonperforming Loans||322.85%||366.87%||378.18%|
CONTACT: Pinnacle Bankshares Corporation, Bryan M. Lemley, 434-477-5882 or email@example.com