Pinnacle Bank Announces 2012 Results

Pinnacle Bank Announces 2012 Results

GILROY, Calif.--(BUSINESS WIRE)-- PBNK.OB - Pinnacle Bank, headquartered in Gilroy, California, announced today net income for 2012 was $190,000 compared to $551,000 in 2011. The 2012 provision for loan losses was $1,438,000, an increase of $1,205,000 from $233,000 in 2011. Pre-provision, pre-tax earnings of $1,655,000 for 2012 compared to $784,000 in 2011.

As of December 31, 2012, total assets were $170.2 million, a 10% increase from the $154.9 million at December 31, 2011.

Loans were $138.0 million at December 31, 2012, a 5% increase or $6.2 million from the December 31, 2011, balance of $131.8 million. The allowance for loan losses at December 31, 2012, was $3.6 million or 2.6% of loans compared to $2.8 million or 2.1% at December 31, 2011.

Non-interest bearing deposits at December 31, 2012, increased 37% to $49.0 million from $35.7 million at December 31, 2011. Total deposits at December 31, 2012, were $152.5 million compared to $137.7 million at December 31, 2011, an 11% increase.

"We had a very strong year in 2012 with double digit asset growth and revenue at an all time high. We are also proactively and aggressively addressing a small number of loans made early in the Bank's history which were adversely impacted by the recession. Reducing the carrying values of these loans led to the increase in the provision for loan losses," stated Susan K. Black, President and CEO. "Despite the impact on earnings, we believe these writedowns strengthen our balance sheet and provide a solid footing for 2013. In addition, substantial recoveries are possible."

"We are pleased by growth in loans and deposits during 2012 as we execute our strategy of increasing franchise value by careful controlled growth. We are particularly pleased with the growth in core business banking relationships as reflected by the 37% growth in non-interest bearing deposits," 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 December 31, 2012, the Bank had a total risk based capital ratio of 11.74%.

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 towww.pinnaclebankonline.comclick on Investor Relations and December 2012 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
(Unaudited, dollars in thousands)12/31/201212/31/2011


$ Change

% Change
Total assets$170,195$154,911$15,28410%
Gross loans138,018131,8006,2185%
Allowance for loan losses(3,611)(2,771)(840)30%
Non-interest bearing48,96135,67513,28637%
Total deposits152,480137,71714,76311%
Shareholders' equity16,62716,3822451%


Summary Income Statement
(Unaudited, dollars in thousandsYear endedYear ended
except per share data)12/31/201212/31/2011


$ Change

% Change
Interest income$7,356$7,268$881.2%
Interest expense497753(256)-34.0%
Net interest income6,8596,5153445.3%
Provision for loan losses1,4382331,205517.2%
Non-interest income82459722738.0%
Non-interest expense6,0286,328(300)-4.7%
Income tax expense27027
Net income (loss)$190$551$(361)-65.5%
Basic earnings per share$0.06$0.20
Diluted earnings per share$0.04$0.20
Income before provision and taxes$1,655$784$871111.1%
Net interest margin4.54%4.50%
required to be
Capital Ratios12/31/2012  12/31/2011  well-capitalized
Tier 1 leverage ratio9.80%10.11%5.00%
Tier 1 risk-based capital ratio10.47%11.18%6.00%
Total risk-based capital ratio11.74%12.43%10.00%

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

KEYWORDS:   United States  North America  California


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