PBNK Pinnacle Bank (QB)

Pinnacle Bank (OTCBB:PBNK), headquartered in Gilroy, California, announced today its first profitable quarter. For the three months ended September 30, 2010, the Bank reported net income of $58,000 compared to a loss of $219,000 in the comparable quarter of 2009. Year-to-date net loss through September 30, 2010, was $1,388,000 as compared to a loss of $4,928,000 for the nine months ended September 30, 2009.

As of September 30, 2010, total assets increased to $152.5 million, a 5% increase over the $144.6 million at December 31, 2009. The September 30, 2010, total assets represent a 9% increase over the $140.3 million in total assets at September 30, 2009.

Loans were $118.8 million at September 30, 2010, an increase of $1.8 million from the December 31, 2009, balance of $117.0 million, a 2% increase in the first nine months of 2010. The September 30, 2010, loans decreased $2.9 million or 2.0% compared to $121.3 million one year earlier.

Deposits at September 30, 2010, grew to $134.2 million, a 5% increase over $127.4 million at December 31, 2009. September 30, 2010, deposits were $9.7 million more than the $124.5 million at September 30, 2009, an 8% increase.

“The profitable quarter demonstrates the substantial progress we have made since the onset of the disruptions in the financial markets in 2008. Our improvements in core deposits and asset quality are the result of our strategic emphasis on relationship banking,” said Susan K. Black, President and CEO. Ms. Black further stated, “our quality client relationships allow us to maintain net interest margin and asset quality with safe, controlled growth and a strong balance sheet.”

Ms. Black added, “Achieving profitability is always a critical milestone for a start-up and we are especially pleased we were able to reach this objective through these challenging economic times. Now more than ever, clients value relationships with community bankers and are choosing our brand of banking over other offerings in the market.” Ms. Black further stated, “We continue to support our communities by actively lending to local businesses, individuals and nonprofit organizations. The ongoing support of our organizers, shareholders and clients is a key factor in our success.”

During the third quarter of 2010, the Bank had $88,000 in net loan chargeoffs compared to $177,000 in the third quarter of 2009. The allowance for loan losses at September 30, 2010, was $3.6 million or 3.0% of loans.

The bank’s capital position remains above regulatory guidelines for well capitalized banks. At September 30, 2010, the Bank had a total risk based capital ratio of 12.78%.

For more information please go to www.pinnaclebankonline.com click on Investor Relations and September 2010 call report.

                    Summary Balance Sheet (Unaudited, dollars in thousands)

9/30/2010

    12/31/2009    

%Change

    9/30/2009    

%Change

Total assets $152,463 $144,587 5% $140,307 9% Gross loans 118,752 116,962 2% 121,293 -2% Allowance for loan losses (3,588) (2,896) 24% (2,904) 24% Deposits Non-interest bearing 29,388 19,952 47% 14,109 108% Interest-bearing 104,822     107,460 -2% 110,407 -5% Total deposits 134,210 127,412 5% 124,516 8% Shareholders' equity 15,533 16,655 -7% 15,233 2%                       Summary Income Statement

(Unaudited, dollars in thousandsexcept per share data)

Quarterended9/30/2010

   

Quarterended6/30/2010

   

Quarterended3/31/2010

   

Quarterended12/31/2009

   

Year ended12/31/2009

Interest income $1,784 $1,797 $1,780 $1,802 $7,178 Interest expense 298 314 377 444 2,208 Net interest income 1,486 1,483 1,403 1,358 4,970 Provision for loan losses 87 670 567 389 4,621 Non-interest income 175 49 50 19 137 Non-interest expense 1,516 1,613 1,580 1,483 5,908 Net income (loss) $58 ($751) ($694) ($495) ($5,422)   Earnings (loss) per share $0.02 ($0.23) ($0.21) ($0.18) ($1.97) Net interest margin 4.24% 4.76% 4.11% 3.95% 3.88%   9/30/2010     6/30/2010     3/31/2010     12/31/2009    

Minimumrequired to bewell-capitalized

Tier 1 leverage ratio 10.52% 10.61% 11.06% 11.70% 5.00% Tier 1 risk-based capital ratio 11.51% 11.41% 11.88% 12.10% 6.00% Total risk-based capital ratio 12.78% 12.68% 13.14% 13.40% 10.00%  

(dollars in thousands)

9/30/2010

   

12/31/2009

   

9/30/2009

Nonperforming assets

$9,048

$5,931

$6,990

Nonperforming assets to total assets

5.93%

4.10%

4.98%

Allowance for loan losses to total loans

3.02%

2.48%

2.39%

 

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.