Pinnacle Bankshares Corporation (OTCBB:PPBN), the one-bank holding company (the “Company”) of First National Bank (the “Bank”) (first quarter 2011 consolidated results unaudited) reported today net income after taxes of $126,000 or $0.08 per basic share and diluted share for the quarter ended March 31, 2011 compared to a net income after taxes of $183,000 or $0.12 per basic share and diluted share for the same period in 2010.
Profitability as measured by the Company’s annualized return on average assets (“ROA”) was 0.15% for the quarter ended March 31, 2011, compared to 0.22% for the same period in 2010. Annualized return on average equity (“ROE”) for the quarter ended March 31, 2011 was 1.90%, compared to 2.82% for the same period in 2010.
“Although returns were below first quarter 2010 levels due to an increase in provision for loan losses, we experienced nice expansion in our net interest margin, increased liquidity and better capital ratios,” commented Bryan M. Lemley, Chief Financial Officer for both Pinnacle Bankshares and First National Bank.
Net interest income was $2,899,000 for the three months ended March 31, 2011 compared to $2,563,000 for the three months ended March 31, 2010. The net interest margin increased to 3.65% for the three months ended March 31, 2011, from 3.38% for the same period in 2010. Over the past twelve months, rates paid to fund earning assets have fallen at a faster pace than the yield received on earnings assets.Interest income increased 1% to $4,116,000 in the first quarter of 2011 compared to $4,084,000 in the first quarter of 2010 as net loans outstanding decreased by $1,314,000 and securities increased by $11,886,000 since March 31, 2010. Yield on earning assets decreased by 15 basis points in the same time period. Interest expense decreased 20% to $1,217,000 in the first quarter of 2011 compared to $1,521,000 in the first quarter of 2010 as deposits increased by $8,722,000 in the past twelve months; however, the rate paid to fund earning assets has fallen by 49 basis points in the same time period.
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