EXHIBIT 99.1
| | | |
| Contact: | | Robert B. Nolen, Jr. |
| | | President and Chief |
| | | Executive Officer |
| | | (205) 221-4111 |
PINNACLE BANCSHARES ANNOUNCES RESULTS FOR SECOND QUARTER
Jasper, Alabama (August 08, 2006) — Robert B. Nolen, Jr., President and Chief Executive Officer of Pinnacle Bancshares, Inc. (AMEX:PLE), today announced Pinnacle’s second quarter results of operations.
For the three months ended June 30, 2006, net income was $376,000, compared with net income of $407,000 for the three months ended June 30, 2005. Net interest income after the provision for loan losses for the three months ended June 30, 2006, was $1,492,000, compared with $1,573,000 in the same period last year.
For the six months ended June 30, 2006, net income was $667,000, compared with $733,000 for the six months ended June 30, 2005. Net interest income after the provision for loan losses for the six months ended June 30, 3006, was $3,003,000, compared with $3,104,000 in the same period last year.
Basic and diluted earnings per share for the three months ended June 30, 2006 were each $0.25 per share, compared to $0.26 each for the same period last year. For the six months ended June 30, 3006 basic and diluted earnings were $0.44 and $0.43 per share, respectively, compared to $0.47 and $0.46, respectively, for the same period last year.
Mr. Nolen attributed the decreases in net income and net interest income to increases in market interest rates. As market rates continued to rise during the first half of 2006, the Company’s cost of funds increased more rapidly than rates on investments and loans.
For the three months ended June 30, 2006, the Company’s interest income was $3,232,000, compared to $2,814,000 for the three months ended June 30, 2005, an increase of 14.9%. However, for the three months ended June 30, 2006, the Company’s interest expense on deposits and borrowed funds was $1,628,000, compared to $1,095,000 for the three months ended June 30, 2006, an increase of 48.7%. As a result, the Company’s net interest margin was 3.13% and 3.17% for the three and six months ended June 30, 2006, respectively, compared to 3.50% for each of the three and six months ended June 30, 2005. Mr. Nolen reaffirmed his belief that if interest rates continue to increase, the net interest margin will continue to decline.
In recent years, the Company has expanded its operations in the Birmingham, Alabama metropolitan area. A new full-service branch office in Gardendale, Alabama was opened on August 7, 2006. Additional annual expenses associated with the new branch and additional commercial lending personnel were approximately $100,000 in the six months ended June 30, 2006. The Company currently intends to expand further in the Birmingham market and other
markets contiguous with the Company’s current market area as appropriate opportunities become available.
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. Among the key factors that may have a direct bearing on Pinnacle’s operating results, performance or financial condition are competition, the demand for its products and services, the ability to expand, and numerous other factors as set forth in filings with the Securities and Exchange Commission.
Pinnacle Bancshares, Inc.’s wholly owned subsidiary Pinnacle Bank has seven offices located in central and northwest Alabama.
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