Pinnacle Bank Announces Second Profitable Quarter

Pinnacle Bank (OTCBB:PBNK), headquartered in Gilroy, California, announced today its second profitable quarter. For the three months ended December 31, 2010, the Bank reported net income of $92,000 compared to a loss of $495,000 in the comparable quarter of 2009. Net loss for the year ended December 31, 2010, was $1,296,000 as compared to a loss of $5,421,000 for the year ended December 31, 2009.

As of December 31, 2010, total assets were $146.1 million, a 1% increase from the $144.6 million at December 31, 2009.

Loans were $120.7 million at December 31, 2010, an increase of $3.7 million from the December 31, 2009, balance of $117.0 million, a 3% increase. The allowance for loan losses at December 31, 2010, was $2.6 million or 2.2% of loans.

Deposits at December 31, 2010, grew to $128.5 million, a 1% increase over $127.4 million at December 31, 2009. Year end 2010 non-interest bearing deposits increased 50% year over year.

“We have achieved profitability in consecutive quarters which demonstrates the substantial progress we have made since the onset of the disruptions in the financial markets in 2008. Continued profitability is a result of our ongoing focus on cost control and improvements in our core deposits and asset quality. The significant increase in non-interest bearing deposits is a direct 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, “We are pleased to have achieved profitability during these challenging economic times and without government stimulus dollars. Now more than ever, clients value relationships with community bankers and are choosing the service and stability of our brand of banking”. 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.”

The bank’s capital position remains above regulatory guidelines for well capitalized banks. At December 31, 2010, the Bank had a total risk based capital ratio of 12.71%.

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

Summary Balance Sheet

        
        
           
        
        
        
        
           
        
        
        
        
           
        
        
        
      
      
        
          (Unaudited, dollars in thousands)
        
        
        
        
          12/31/2010
        
        
        
        
          12/31/2009
        
        
        
        
          

%Change

        
      
      
        
          Total assets
        
        
        
        
          $
        
        
          146,098
        
        
        
        
        
        
          $
        
        
          144,587
        
        
        
        
        
        
          1
        
        
          %
        
      
      
        
          Gross loans
        
        
        
        
        
        
          120,352
        
        
        
        
        
        
        
        
          116,962
        
        
        
        
        
        
          3
        
        
          %
        
      
      
        
          Allowance for loan losses
        
        
        
        
        
        
          (2,605
        
        
          )
        
        
        
        
        
        
          (2,896
        
        
          )
        
        
        
        
          -10
        
        
          %
        
      
      
        
          Deposits
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Non-interest bearing
        
        
        
        
        
        
          29,900
        
        
        
        
        
        
        
        
          19,952
        
        
        
        
        
        
          50
        
        
          %
        
      
      
        
          Interest-bearing
        
        
        
        
        
        
          98,561
        
        
        
        
        
        
        
        
          107,460
        
        
        
        
        
        
          -8
        
        
          %
        
      
      
        
          Total deposits
        
        
        
        
        
        
          128,461
        
        
        
        
        
        
        
        
          127,412
        
        
        
        
        
        
          1
        
        
          %
        
      
      
        
          Shareholders' equity
        
        
        
        
        
        
          15,604
        
        
        
        
        
        
        
        
          16,655
        
        
        
        
        
        
          -6
        
        
          %
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
    
    
      
        
          

Summary Income Statement

        
        
           
        
        
        
        
           
        
        
        
      
      
        
          (Unaudited, dollars in thousands
        
        
        
        
          Year ended
        
        
        
        
          Year ended
        
      
      
        
          except per share data)
        
        
        
        
          12/31/2010
        
        
           
        
        
          12/31/2009
        
      
      
        
          Interest income
        
        
        
        
          $
        
        
          7,150
        
        
        
        
        
        
          $
        
        
          7,178
        
        
        
      
      
        
          Interest expense
        
        
        
        
           
        
        
          1,268
        
        
           
        
        
           
        
        
           
        
        
          2,208
        
        
           
        
      
      
        
          Net interest income
        
        
        
        
        
        
          5,882
        
        
        
        
        
        
        
        
          4,970
        
        
        
      
      
        
          Provision for loan losses
        
        
        
        
        
        
          1,492
        
        
        
        
        
        
        
        
          4,621
        
        
        
      
      
        
          Non-interest income
        
        
        
        
        
        
          444
        
        
        
        
        
        
        
        
          137
        
        
        
      
      
        
          Non-interest expense
        
        
        
        
           
        
        
          6,130
        
        
           
        
        
           
        
        
           
        
        
          5,908
        
        
           
        
      
      
        
          Net income (loss)
        
        
        
        
           
        
        
          ($1,296
        
        
          )
        
        
           
        
        
           
        
        
          ($5,422
        
        
          )
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Earnings (loss) per share
        
        
        
        
        
        
          ($0.21
        
        
          )
        
        
        
        
        
        
          ($1.97
        
        
          )
        
      
      
        
          Net interest margin
        
        
        
        
        
        
          4.22
        
        
          %
        
        
        
        
        
        
          3.94
        
        
          %
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
    
    
      
        
          

Summary Income Statement

        
        
           
        
        
        
        
           
        
        
        
        
           
        
        
        
        
           
        
        
        
        
           
        
        
        
      
      
        
          (Unaudited, dollars in thousands
        
        
        
        
          

Quarterended

Quarterended

Quarterended

Quarterended

Quarterended

        
      
      
        
          except per share data)
        
        
        
        
          12/31/2010
        
        
           
        
        
          9/30/2010
        
        
           
        
        
          6/30/2010
        
        
           
        
        
          3/31/2010
        
        
           
        
        
          12/31/2009
        
      
      
        
          Interest income
        
        
        
        
          $
        
        
          1,789
        
        
        
        
        
        
          $
        
        
          1,784
        
        
        
        
        
        
          $
        
        
          1,797
        
        
        
        
        
        
          $
        
        
          1,780
        
        
        
        
        
        
          $
        
        
          1,802
        
        
        
      
      
        
          Interest expense
        
        
        
        
           
        
        
          279
        
        
           
        
        
           
        
        
           
        
        
          298
        
        
           
        
        
           
        
        
           
        
        
          314
        
        
           
        
        
           
        
        
           
        
        
          377
        
        
           
        
        
           
        
        
           
        
        
          444
        
        
           
        
      
      
        
          Net interest income
        
        
        
        
        
        
          1,510
        
        
        
        
        
        
        
        
          1,486
        
        
        
        
        
        
        
        
          1,483
        
        
        
        
        
        
        
        
          1,403
        
        
        
        
        
        
        
        
          1,358
        
        
        
      
      
        
          Provision for loan losses
        
        
        
        
        
        
          168
        
        
        
        
        
        
        
        
          87
        
        
        
        
        
        
        
        
          670
        
        
        
        
        
        
        
        
          567
        
        
        
        
        
        
        
        
          389
        
        
        
      
      
        
          Non-interest income
        
        
        
        
        
        
          175
        
        
        
        
        
        
        
        
          175
        
        
        
        
        
        
        
        
          49
        
        
        
        
        
        
        
        
          50
        
        
        
        
        
        
        
        
          19
        
        
        
      
      
        
          Non-interest expense
        
        
        
        
           
        
        
          1,425
        
        
           
        
        
           
        
        
           
        
        
          1,516
        
        
           
        
        
           
        
        
           
        
        
          1,613
        
        
           
        
        
           
        
        
           
        
        
          1,580
        
        
           
        
        
           
        
        
           
        
        
          1,483
        
        
           
        
      
      
        
          Net income (loss)
        
        
        
        
          $
        
        
          92
        
        
           
        
        
           
        
        
          $
        
        
          58
        
        
           
        
        
           
        
        
           
        
        
          ($751
        
        
          )
        
        
           
        
        
           
        
        
          ($694
        
        
          )
        
        
           
        
        
           
        
        
          ($495
        
        
          )
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Earnings (loss) per share
        
        
        
        
          $
        
        
          0.03
        
        
        
        
        
        
          $
        
        
          0.02
        
        
        
        
        
        
        
        
          ($0.23
        
        
          )
        
        
        
        
        
        
          ($0.21
        
        
          )
        
        
        
        
        
        
          ($0.18
        
        
          )
        
      
      
        
          Net interest margin
        
        
        
        
        
        
          4.17
        
        
          %
        
        
        
        
        
        
          4.24
        
        
          %
        
        
        
        
        
        
          4.90
        
        
          %
        
        
        
        
        
        
          4.56
        
        
          %
        
        
        
        
        
        
          3.86
        
        
          %
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
    
    
      
        
          

Capital Ratios

        
        
           
        
        
          12/31/2010
        
        
           
        
        
          9/30/2010
        
        
           
        
        
          6/30/2010
        
        
           
        
        
          3/31/2010
        
        
           
        
        
          12/31/2009
        
        
           
        
        
          

Minimumrequired to bewell-capitalized

        
      
      
        
          Tier 1 leverage ratio
        
        
        
        
          10.26%
        
        
           
        
        
          10.52%
        
        
           
        
        
          10.61%
        
        
           
        
        
          11.06%
        
        
           
        
        
          11.70%
        
        
           
        
        
          5.00%
        
      
      
        
          Tier 1 risk-based capital ratio
        
        
        
        
          11.48%
        
        
        
        
          11.51%
        
        
        
        
          11.41%
        
        
        
        
          11.88%
        
        
        
        
          12.10%
        
        
        
        
          6.00%
        
      
      
        
          Total risk-based capital ratio
        
        
        
        
          12.71%
        
        
        
        
          12.78%
        
        
        
        
          12.68%
        
        
        
        
          13.14%
        
        
        
        
          13.40%
        
        
        
        
          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 December 2010 call report.