Pinnacle Bankshares Corporation Announces First Quarter 2025 Earnings

ALTAVISTA, Va., April 29, 2025 (GLOBE NEWSWIRE) — Net income for Pinnacle Bankshares Corporation (OTCQX:PPBN), the one-bank holding company (“Pinnacle” or the “Company”) for First National Bank (the “Bank”), was $2,261,000, or $1.02 per basic and diluted share, for the quarter ended March 31, 2025 compared to net income of $2,084,000, or $0.95 per basic and diluted share, for the same period of 2024. Quarterly consolidated results are unaudited.

First Quarter 2025 Highlights Income Statement comparisons are to the first quarter of 2024 Balance Sheet, Capital Ratios, and Stock Price comparisons are to December 31, 2024

Income Statement

• Net Income was $2,261,000 and Return on Assets was 0.88%.
• Net Interest Income increased 13% due primarily to increased loan volume and yields on earning assets.   Net Interest Margin increased 36 basis points to 3.92%.
• Provision for Credit Losses was only $37,000 as Asset Quality remains strong with low Nonperforming Loans and no Other Real Estate Owned (OREO).
• Noninterest Income increased 7% primarily due to higher commissions on investment and insurance products sales and fees on sales of mortgage loans.
• Noninterest Expense increased 13% due primarily to higher salaries and benefits, occupancy, and core processing expenses.

Balance Sheet

• Total Assets decreased $5.8 million, or less than 1%, which was driven by a decrease in Deposits.
• Loans increased $8.6 million, or 1%.
• Securities decreased $18 million due to $38 million in maturing U.S. Treasury Securities that yielded approximately 2.13% partially offset by $20 million in purchases of U.S. Treasury Securities yielding approximately 4.13%.  
• Deposits decreased $10.2 million, or 1%, to $941 million.
• The Liquidity Ratio was strong at 31% (13% excluding Available for Sale Securities).

Capital Ratios & Stock Price

• Capital levels are stable as the Bank’s Leverage Ratio increased to 9.35% and the Total Risk-Based Capital Ratio increased to 13.65% due primarily to profitability.
• Our Stock Price ended the quarter at $31.94 per share, based on the last trade, which is an increase of $0.74, or 2%.  

Net Income & Profitability

Net income generated during the first quarter of 2025 represents a $177,000, or 8%, increase as compared to the same time period of the prior year, which was driven by higher net interest income and noninterest income partially offset by higher noninterest expense and slightly higher provision for credit losses.

Profitability as measured by the Company’s return on average assets (“ROA”) was 0.88% for the first quarter of 2025, which is a 4 basis points increase from the 0.84% produced in the first quarter of 2024. Return on average equity (“ROE”) decreased in the first quarter of 2025 to 11.31%, compared to 12.02% for the same time period of the prior year due to higher equity driven by retained earnings and increases in the market value of the Bank’s securities portfolio.

“We are pleased to have generated higher net income for the first quarter of 2025 as compared to the same period of last year. Pinnacle remains well positioned with continued ample liquidity and strong asset quality, which will serve us well we navigate through current economic uncertainties,” stated Aubrey H. Hall, III, President and Chief Executive Officer for both the Company and the Bank.

Net Interest Income & Margin

The Company generated $9,480,000 in net interest income for the first quarter of 2025, which represents a $1,070,000, or 13%, increase as compared to the first quarter of 2024 as net interest margin increased 36 basis points to 3.92%. Interest income increased $1,191,000, or approximately 11%, to $12,375,000 due to an increase in average loan volume as well as increased yield on earning assets, which improved 38 basis points to 5.11%. Interest expense increased $122,000, or 4%, to $2,896,000 as the cost to fund earning assets increased only 2 basis points to 1.19%.

Reserves for Credit Losses & Asset Quality

The provision for credit losses was minimal and increased only $19,000 to $37,000 in the first quarter of 2025 as compared to the same period of the prior year due to continued strong asset quality.

The allowance for credit losses was $5,131,000 as of March 31, 2025, representing 0.71% of total loans outstanding. In comparison, the allowance for credit losses was $5,084,000 as of December 31, 2024, which was also 0.71% of total loans outstanding.   Non-performing loans to total loans were 0.14% as of March 31, 2025, compared to 0.22% at year-end 2024. Allowance coverage of non-performing loans was 519% as of the end of the first quarter of 2025 compared to 321% as of year-end 2024. Management views the allowance balance as being sufficient to offset potential future losses associated with problem loans.

Noninterest Income & Expense

Noninterest income for the first quarter of 2025 was $1,745,000, representing a $122,000, or 7%, increase compared to first quarter of 2024. Higher noninterest income was mainly due to a $78,000 increase in commissions from sales of investment and insurance products and a $59,000 increase in fees on sales of mortgage loans.

Noninterest expense for the first quarter of 2025 was $8,361,000 representing a $959,000, or approximately 13%, increase compared to the first quarter of 2024. Higher operating costs were mainly due to a $625,000 increase in salaries and benefits as we have expanded into a new market and added key operational staff, a $149,000 increase in occupancy expense due to the upgrading and maintenance of our facilities, and a $93,000 increase in core operating system expense due to increased volume of transactions.  

The Balance Sheet & Liquidity

Total assets as of March 31, 2025 were $1,038,147,000, down $5,847,000, or less than 1%, from $1,043,994,000 as of December 31, 2024. The principal components of the Company’s assets as of March 31, 2025 were $720,482,000 in total loans, $157,564,000 in securities, and $109,707,000 in cash and cash equivalents. During the first quarter of 2025, total loans increased $8,564,000, or approximately 1%, from $711,918,000 as of December 31, 2024, while securities decreased $18,252,000, or approximately 10%, from $175,816,000.

The majority of the Company’s securities portfolio is relatively short-term in nature with 43% invested in U.S. Treasury Securities with an average maturity of 1.2 years and $20,000,000 maturing in the second quarter of 2025.   All of the Company’s securities were classified as available for sale as of March 31, 2025, which provides transparency regarding unrealized losses. Unrealized losses associated with the available for sale securities portfolio were $10,250,000 as of March 31, 2025 or 6% of book value, an improvement from $11,817,000 as of December 31, 2024.

Cash and cash equivalents increased $1,494,000, or approximately 1%, to $109,707,000 as of March 31, 2025 from $108,213,000 as of December 31, 2024. The Company had a strong liquidity ratio of 31% as of quarter end. The liquidity ratio excluding the available for sale securities portfolio was 13% providing the opportunity to sell excess funds at an attractive federal funds rate. The Company has access to multiple liquidity lines of credit through its correspondent banking relationships and the Federal Home Loan Bank. None of these contingency funding sources have been utilized over the past year.

Total liabilities as of March 31, 2025 were $956,624,000, down $8,984,000, or 1%, from $965,608,000 as of December 31, 2024 as deposits decreased $10,239,000, or 1%, to $940,680,000 during the first quarter of 2025. The number of deposit accounts grew by less than 1% during the first quarter of 2025. The Bank retains and acquires customer relationships through providing personalized service and utilization of a community bank approach while capitalizing on market disruption caused by further bank consolidation and large national bank branch closures.

Total stockholders’ equity as of March 31, 2025 was $81,523,000, an increase of $3,137,000, or 4%, compared to year-end 2024 and consisted primarily of $70,741,000 in retained earnings. The increase in equity is due to retained earnings and a decrease in unrealized losses associated with the Bank’s securities portfolio.   Both the Company and Bank remain “well capitalized” per all regulatory definitions.

Annual Meeting of Shareholders

As a reminder, Pinnacle Bankshares Corporation’s Annual Meeting of Shareholders will be held at 11:00 AM Eastern Time on Tuesday, May 13, 2025, at Virginia Technical Institute located at 201 Ogden Road, Altavista VA 24517. Please plan to join us as we discuss the Company’s performance and direction moving forward.

Company Information

Pinnacle Bankshares Corporation is a locally managed community banking organization serving Central and Southern Virginia. The one-bank holding company of First National Bank serves market areas consisting primarily of all or portions of the Counties of Amherst, Bedford, Campbell, Halifax, and Pittsylvania, and the Cities of Charlottesville, Danville, and Lynchburg. The Company has a total of nineteen branches with one branch in Amherst County within the Town of Amherst, two branches in Bedford County; five branches in Campbell County, including two within the Town of Altavista, where the Bank was founded; one branch in the City of Charlottesville, three branches in the City of Danville; three branches in the City of Lynchburg; and three branches in Pittsylvania County, including one within the Town of Chatham. A Loan Production Office and a full-service branch have recently been opened in the South Boston area of Halifax County. First National Bank is in its 117^th year of operation.

Cautionary Statement Regarding Forward-Looking Statements

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, including statements made in Mr. Hall’s quotes 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, our cost of funds, the maintenance of our net interest margin, future operating results and business performance and our growth initiatives. 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: changes in consumer spending and saving habits that may occur, including increased inflation; changes in general business, economic and market conditions; attracting, hiring, training, motivating and retaining qualified employees; changes in fiscal and monetary policies, and laws and regulations; changes in interest rates, inflation rates, deposit flows, loan demand and real estate values; changes in the quality or composition of the Company’s loan portfolio and the value of the collateral securing loans; changes in macroeconomic trends and uncertainty, including liquidity concerns at other financial institutions, and the potential for local and/or global economic recession; changes in demand for financial services in Pinnacle’s market areas; increased competition from both banks and non-banks in Pinnacle’s market areas; a deterioration in credit quality and/or a reduced demand for, or supply of, credit; increased information security risk, including cyber security risk, which may lead to potential business disruptions or financial losses; volatility in the securities markets generally, including in the value of securities in the Company’s securities portfolio or in the market price of Pinnacle common stock specifically; and other factors, which could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. 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.

Selected financial highlights are shown below.

Pinnacle Bankshares Corporation
Selected Financial Highlights
(3/31/2025 and 3/31/2024 results unaudited, 12/31/2024 results audited)
(In thousands, except ratios, share and per share data)
		3 Months Ended		3 Months Ended		3 Months Ended
Income Statement Highlights		3/31/2025		12/31/2024		3/31/2024
Interest Income	$12,375			$12,543		$11,184
Interest Expense		2,896		3,264		2,774
Net Interest Income		9,480		9,279		8,410
Provision for Credit Losses		37		356		18
Noninterest Income		1,745		2,681		1,623
Noninterest Expense		8,361		8,373		7,402
Net Income		2,261		2,800		2,084
Earnings Per Share (Basic)		1.02		1.27		0.95
Earnings Per Share (Diluted)		1.02		1.27		0.95
Balance Sheet Highlights		3/31/2025		12/31/2024		3/31/2024
Cash and Cash Equivalents	$109,707			$108,213		$88,502
Total Loans		720,482		711,918		651,593
Total Securities		157,564		175,816		180,196
Total Assets		1,038,147		1,043,994		1,000,006
Total Deposits		940,680		950,919		914,923
Total Liabilities		956,624		965,608		929,448
Stockholders’ Equity		81,523		78,386		70,558
Shares Outstanding		2,216,616		2,212,270		2,205,666
Ratios and Stock Price		3/31/2025		12/31/2024		3/31/2024
Gross Loan-to-Deposit Ratio		76.59%		74.87%		71.22%
Net Interest Margin (Year-to-date)		3.92%		3.70%		3.56%
Liquidity (Liquid assets to liabilities)		30.58%		32.60%		32.08%
Efficiency Ratio		74.45%		72.49%		73.64%
Return on Average Assets (ROA)		0.88%		0.92%		0.84%
Return on Average Equity (ROE)		11.31%		12.49%		12.02%
Leverage Ratio (Bank)		9.35%		9.21%		8.94%
Tier 1 Risk-based Capital Ratio (Bank)		12.94%		12.81%		12.93%
Total Risk-Based Capital Ratio (Bank)		13.65%		13.52%		13.61%
Stock Price	$31.94			$31.20		$28.46
Book Value	$36.78			$35.43		$31.99
Asset Quality Highlights		3/31/2025		12/31/2024		3/31/2024
Nonaccruing Loans	$988			$1,582		$1,270
Loans 90 Days or More Past Due & Accruing		0		0		0
Total Nonperforming Loans		988		1,582		1,270
Loan Modifications		109		109		350
Loans Individually Evaluated		1,097		2,010		1,981
Other Real Estate Owned (OREO) (Foreclosed Assets)		0		0		0
Total Nonperforming Assets		988		1,582		1,270
Nonperforming Loans to Total Loans		0.14%		0.22%		0.19%
Nonperforming Assets to Total Assets		0.10%		0.15%		0.13%
Allowance for Credit Losses	$5,131			$5,084		$4,484
Allowance for Credit Losses to Total Loans		0.71%		0.71%		0.69%
Allowance for Credit Losses to Nonperforming Loans		519%		321%		353%

CONTACT: Pinnacle Bankshares Corporation, Bryan M. Lemley, 434-477-5882 or [email protected]

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