PBNK Pinnacle Bank (QB)

Pinnacle Bank (OTCBB:PBNK), headquartered in Gilroy, California, announced today net income for the first quarter of 2013 was $109,000 compared to $297,000 in the same quarter in 2012. The Q1 2013 provision for loan losses was $94,000 while there was no provision in Q1 2012. Pre-provision, pre-tax earnings of $203,000 for Q1 2013 compared to $297,000 in Q1 2012.

As of March 31, 2013, total assets were $175.2 million, a 7% increase from the $163.1 million one year earlier.

Loans were $136.9 million at March 31, 2013, an 8% increase or $10.6 million from the March 31, 2012, balance of $126.3 million. The allowance for loan losses at March 31, 2013, was $2.7 million or 2.0% of loans compared to $2.8 million or 2.2% at March 31, 2012.

Non-interest bearing deposits at March 31, 2013, increased 28% to $46.3 million from $36.2 million at March 31, 2012. Total deposits at March 31, 2012, were $157.3 million compared to $145.3 million at March 31, 2012, an 8% increase.

“We are seeing signs of continued improvement in our local markets in the first quarter of 2013. The improving economy creates opportunities for organic growth in our balance sheet in both our loan and deposit portfolios as well as improved credit quality,” stated Susan K. Black, President and CEO. ““We are particularly pleased with the growth in core business banking relationships as reflected by the 28% increase in non-interest bearing deposits over the last year,” added Ms. Black. “Despite margin compression and competitive pressures, we are building a solid franchise and remain optimistic about future opportunities.”

The bank’s capital position remains above regulatory guidelines for well capitalized banks. At March 31, 2013, the Bank had a total risk based capital ratio of 11.58%.

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 delivery. Pinnacle Bank has locations in Morgan Hill, Gilroy and Salinas. For more information please go to www.pinnaclebankonline.com click on Investor Relations and March 2013 call report.

Forward-Looking Statements

This release may contain forward-looking statements, such as, among others, statements about plans, expectations and goals concerning growth and improvement. Forward-looking statements are subject to risks and uncertainties. Such risks and uncertainties may include, but are not necessarily limited to fluctuations in interest rates, inflation, government regulations and general economic conditions, including the real estate market in our primary service area and more generally in California and other factors beyond the Bank's control. Such risks and uncertainties could cause results for subsequent interim periods or for the entire year to differ materially from those indicated. Readers should not place undue reliance on the forward-looking statements, which reflect management's view only as of the date hereof. Pinnacle Bank undertakes no obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances.

                       

Summary Balance Sheets

(Unaudited, dollars in thousands)

  3/31/2013           12/31/2012           3/31/2012         12 Month % Change Total assets $ 175,150 $ 170,195 $ 163,135 7 % Gross loans $ 136,879 $ 138,018 $ 126,276 8 % Allowance for loan losses $ (2,677 ) $ (3,611 ) $ (2,782 ) -4 % Deposits Non-interest bearing $ 46,258 $ 48,961 $ 36,172 28 % Interest-bearing $ 111,062 $ 103,519 $ 109,107 2 % Total deposits $ 157,320 $ 152,480 $ 145,279 8 % Shareholders' equity $ 16,743 $ 16,627 $ 16,700 0 %                     Summary Income Statement (Unaudited, dollars in thousands except per share data) Quarter ended Quarter ended Quarter ended   3/31/2013           12/31/2012           3/31/2012   Interest income $ 1,833 $ 1,827 $ 1,916 Interest expense   93           106           151   Net interest income 1,740 1,722 1,766 Provision for loan losses 94 1,250 0 Non-interest income 172 360 210 Non-interest expense 1,709 1,282 1,679 Income tax expense   0           27           0   Net income (loss) $ 109         $ (451 )       $ 297     Earnings (loss) per share $ 0.03 ($0.15 ) $ 0.09 Net interest margin 4.54 % 4.40 % 4.72 %                     Minimum required to be Capital Ratios 3/31/2013       12/31/2012       well-capitalized Tier 1 leverage ratio 9.89% 9.80% 5.00% Tier 1 risk-based capital ratio 10.32% 10.47% 6.00% Total risk-based capital ratio 11.58% 11.74% 10.00%