PBNK Pinnacle Bank (QB)

PBNK - Pinnacle Bank, headquartered in Gilroy, California, announced today unaudited net income for 2013 of $6,450,000 compared to $190,000 in 2012. The 2013 net income included an income tax credit of $5,697,000 related to the reversal of the valuation allowance for deferred tax assets.

As of December 31, 2013, total assets were $189.7 million, an 11% increase from the $170.2 million at December 31, 2012.

Loans were $147.2 million at December 31, 2013, an increase of $9.1 million (7%) from the December 31, 2012 balance of $138.0 million. The allowance for loan losses at December 31, 2013 was $3.5 million or 2.35% of loans compared to $3.6 million or 2.6% of loans at December 31, 2012. Nonperforming assets were reduced to $2.8 million (1.48% of assets) at December 31, 2013 from $5.1 million (3.02% of assets) a year earlier.

Non-interest bearing deposits at December 31, 2013, increased 21% to $59.4 million from $49.0 million at December 31, 2012. Total deposits at December 31, 2013, were $166.1 million compared to $152.5 million at December 31, 2012, a 9% increase.

“Our 2013 results reflect major milestones in our evolution with new highs in revenue, assets, loans and deposits, as well as recognizing our deferred tax assets. These results also demonstrate the success achieved since the financial downturn began a few years ago by our team of directors, advisors, management and employees. Local market conditions continue to show measured and uneven economic improvement. We believe our markets continue to bear opportunities for organic growth with high quality loan demand and core deposits,” stated Susan K. Black, President and CEO. “The 21% year-over-year growth in non-interest bearing deposits highlights the local core business banking relationships we have added in the last year,” added Ms. Black. “Our new Salinas location which opened in the second quarter enhances our visibility and reinforces our commitment to Monterey County. While the environment for community banks remains challenging, 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 December 31, 2013, the Bank had a total risk based capital ratio of 11.47%. Book value per share at December 31, 2013 was $7.02. Net interest margin in the fourth quarter of 2013 was 4.19%.

For more information please go to www.pinnaclebankonline.com click on Investor Relations and December 2013 call report.

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 December 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 Sheet Year over year change (Unaudited, dollars in thousands) 12/31/2013   9/30/2013   12/31/2012   $   % Total assets $ 189,728 $ 188,594 $ 170,195 $ 19,533   11% Gross loans $ 147,199 $ 141,253 $ 138,018 $ 9,181 7% Allowance for loan losses $ (3,460) $ (3,419) $ (3,611) $ 151 -4% Deposits Non-interest bearing $ 59,436 $ 54,884 $ 48,961 $ 10,475 21% Interest-bearing $ 106,687 $ 109,935 $ 103,519 $ 3,168 3% Total deposits $ 166,123 $ 164,819 $ 152,480 $ 13,643 9% Shareholders' equity $ 22,963 $ 22,774 $ 16,627 $ 6,336 38%         Summary Income Statement (Unaudited, dollars in thousands Year ended Year ended Year over Year Change except per share data) 12/31/2013   12/31/2012   $   % Interest income $ 7,676 $ 7,356 $ 321 4% Interest expense   333     497     (164) -33% Net interest income 7,344 6,859 485 7% Provision for loan losses 173 1,438 (1,265) -88% Non-interest income 854 824 30 4% Non-interest expense 7,271 6,028 1,243 21% Income tax expense   (5,697)     27     (5,724) -21199% Net income (loss) $ 6,450   $ 190   $ 6,260 3289%   Earnings (loss) per share $ 1.96 $ 0.06 $ 1.90 3288% Book value per share $ 7.02 $ 5.05         Capital Ratios 12/31/2013   9/30/2013   12/31/2012   Minimumrequired to bewell-capitalized Tier 1 leverage ratio 9.54% 10.00% 9.80% 5.00% Tier 1 risk-based capital ratio 10.21% 10.45% 10.47% 6.00% Total risk-based capital ratio 11.47% 11.71% 11.74% 10.00%       Nonperforming assets 12/31/2013   9/30/2013   12/31/2012 Nonperforming assets $ 2,802 $ 2,908 $ 5,145 Nonperforming assets to total assets 1.48% 1.54% 3.02% Allowance for loan losses to nonperforming loans 238% 219% 110%

Pinnacle BankSusan K. Black, 408-762-7140President & CEO