Pinnacle Bank Announces 2013 Results

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