PBNK Pinnacle Bank (QB)

Pinnacle Bank (OTCBB:PBNK), headquartered in Gilroy, California, announced today its fifth consecutive profitable quarter. For the three months ended September 30, 2011, the Bank reported net income of $188,000 compared to $58,000 in the comparable quarter of 2010. Year-to-date net income through September 30, 2011 was $454,000 compared to a loss of $1,388,000 in the same period last year.

As of September 30, 2011, total assets were $159.3 million, a 9% increase from the $146.1 million at December 31, 2010.

Loans were $126.5 million at September 30, 2011, an increase of $6.2 million (5%) from the December 31, 2010, balance of $120.4 million. The allowance for loan losses at September 30, 2011, was $2.8 million or 2.2% of loans. Nonaccrual loans at September 30, 2011 were $1.8 million, a reduction of $4.5 million from $6.3 million at December 31, 2010.

Deposits at September 30, 2011, were $142.0 million compared to $128.5 million at year end, an 11% increase. September 30, 2011 non-interest bearing deposits increased 14% over December 31, 2010 from $29.9 million to $34.1 million.

“We are very pleased to report 15 straight months of profitability, a solid capital base and an improved balance sheet,” said Susan K. Black, President and CEO. Ms. Black further stated, “We continue to build the Bank by growing core relationships. More and more businesses and professionals in Santa Clara, Monterey and San Benito counties are choosing to work with our team of professional bankers and are enjoying the Pinnacle brand of community banking. We are committed to expanding our franchise and are optimistic about future opportunities.”

The bank’s capital position remains above regulatory guidelines for well capitalized banks. At September 30, 2011, the Bank had a total risk based capital ratio of 11.38%.

In September 2011, Pinnacle Bank completed a value-for-value option exchange under the Bank’s 2006 Equity Incentive Plan. Approximately 82% of the holders of eligible options participated in the exchange and surrendered options for 672,650 underlying shares in exchange for the grant of new options for 374,168 underlying shares at $2.71 per share. The Bank will not recognize compensation expense for the exchange in accordance with applicable accounting rules.

For more information please go to www.pinnaclebankonline.com click on Investor Relations and September 2011 call report.

Summary Balance Sheet   Change (Unaudited, dollars in thousands)   9/30/2011   12/31/2010   $   % Total assets $ 159,289   $ 146,098 $ 13,191   9 % Gross loans 126,547 120,352 6,195 5 % Allowance for loan losses (2,764 ) (2,605 ) (159 ) 6 % Deposits Non-interest bearing 34,145 29,900 4,245 14 % Interest-bearing 107,874 98,561 9,313 9 % Total deposits 142,019 128,461 13,558 11 % Shareholders' equity 16,268 15,604 664 4 %   Summary Income Statement

 

(Unaudited, dollars in thousands except per share data)

  Quarter ended   Quarter ended   Change 9/30/2011   6/30/2011   $   % Interest income $ 1,826 $ 1,750 $ 76   4 % Interest expense   173       192       (19 ) -7 % Net interest income 1,653 1,558 95 6 % Provision for loan losses 146 65 81 48 % Non-interest income 126 165 (39 ) -22 % Non-interest expense   1,445       1,510       (65 ) -5 % Net income (loss) $ 188     $ 148     $ 40   43 %   Earnings (loss) per share $ 0.06 $ 0.04 Net interest margin 4.54 % 4.51 %         Minimum required to be Capital Ratios 9/30/2011   12/31/2010   well-capitalized Tier 1 leverage ratio 10.54 % 10.26 % 5.00 % Tier 1 risk-based capital ratio 12.63 % 11.45 % 6.00 % Total risk-based capital ratio 11.38 % 12.71 % 10.00 %  

About Pinnacle Bank

Pinnacle Bank is a full-service business bank dedicated to providing quality depository and credit services in Santa Clara, San Benito and Monterey counties. The bank focuses on commercial banking services for small to medium-sized businesses, offering a variety of products and services that combine the best of personal touch with convenient technology-based client service. Pinnacle Bank has locations in Morgan Hill, Gilroy and Salinas. For more information please go to www.pinnaclebankonline.com click on Investor Relations and September 2011 call report.