ALTAVISTA, Va., July 28, 2026 (GLOBE NEWSWIRE) -- Pinnacle Bankshares Corporation (OTCQX:PPBN), the one-bank holding company for First National Bank, reported net income of $6,453,000, or $2.97 per basic and diluted share, for the second quarter of 2026 and $9,514,000, or $4.36 per basic and diluted share, for the six months ended June 30, 2026.

In the same periods of 2025, net income was $2,690,000, or $1.21 per basic and diluted share, and $4,951,000, or $2.23 per basic and diluted share, respectively. Results in both 2026 periods benefited from the sale of the bank’s ownership interest in Bearing Insurance, LLC, which generated a pretax gain of $3,752,000, or $2,964,000 after tax. Consolidated results for the quarter and year-to-date period are unaudited.

Second-Quarter and Year-to-Date Highlights

For the second quarter of 2026, net income rose 140% to $6,453,000, including the Bearing Sale. Core second-quarter net income increased 30% to $3,489,000, excluding the Bearing Sale, which the company said was a record quarterly high.

For the first half of 2026, net income increased 92% to $9,514,000, including the Bearing Sale, producing a return on assets of 1.74%. Core net income increased 32% to $6,550,000, excluding the Bearing Sale, producing a return on assets of 1.20%.

Net interest income increased 9.5%, driven mainly by higher earning assets and an 11-basis-point expansion in net interest margin to 4.16%. Provision for credit losses rose $196,000, primarily because of loan growth. Noninterest income improved 111%, largely because of the Bearing Sale, while core noninterest income increased 13% excluding the gain. Noninterest expense increased 1%.

Balance Sheet and Capital

As of June 30, 2026, total assets increased $76.6 million, or 7%, to $1.142 billion from $1.065 billion at December 31, 2025. Loans rose $8.6 million, or 1%, to $749 million. Securities increased $35.5 million, or 23%, to $188 million. Deposits increased $76.6 million, or 7%, to $1.042 billion.

The company said its liquidity ratio increased to 36%, or 16% excluding available-for-sale securities. The Bank’s leverage ratio decreased slightly to 8.84%, while its total risk-based capital ratio increased to 13.76%. The stock ended the quarter at $55.10 per share, based on the last trade, up $9.60, or 21%.

Profitability

Net income for the second quarter of 2026 increased $3,763,000, or 140%, from the same quarter of 2025. First-half net income increased $4,563,000, or 92%, from the same period of 2025. Pinnacle said the increase was driven by higher noninterest income, including the $2,964,000 after-tax gain from the Bearing Sale, and higher net interest income, partially offset by higher provision for credit losses and higher noninterest expense. The results also show how a community bank can see earnings swings from a one-time asset sale, even as recurring operating performance continues to strengthen.

Return on average assets was 1.74% for the six months ended June 30, 2026, compared with 0.97% for the same period of 2025. Return on average equity was 21.04%, or 14.48% excluding the Bearing Sale, compared with 12.16% for the same period of 2025.

Aubrey H. Hall, III, President and Chief Executive Officer of both the Company and the Bank, said: “We are very pleased with Pinnacle’s enhanced profitability thus far in 2026.” He added that core net income increased more than 30% year to date, supported by further expansion of net interest margin, higher core noninterest income, and controlled noninterest expense. Hall said Pinnacle remains in a sound financial position with ample liquidity from deposit growth and strong asset quality.

Net Interest Income and Margin

The company generated $11,051,000 in net interest income in the second quarter of 2026, up $984,000, or 10%, from $10,067,000 in the second quarter of 2025. Interest income increased $995,000, or 8%, due to higher average earning assets, while interest expense increased only $11,000, or less than 1%.

For the first half of 2026, net interest income totaled $21,408,000, up $1,862,000, or 9.5%, from $19,546,000 in the same period of 2025. Net interest margin increased 11 basis points to 4.16%. Interest income rose $1,682,000, or 7%, as the yield on earning assets remained 5.20% and average earning assets increased 6% year over year. Interest expense declined $180,000, or 3%, as lower deposit rates reduced the cost of funding earning assets by 11 basis points to 1.04%.

Credit Losses and Asset Quality

Provision for credit losses was $229,000 in the second quarter of 2026, compared with $73,000 in the second quarter of 2025. For the first half of 2026, provision for credit losses was $307,000, compared with $110,000 in the same period of 2025. Pinnacle said the increase was mainly due to loan growth, while asset quality remained strong.

The allowance for credit losses was $5,288,000 as of June 30, 2026, equal to 0.71% of total loans outstanding. That compared with $5,235,000, also 0.71% of total loans outstanding, at December 31, 2025. Non-performing loans as a percentage of total loans fell to 0.17% from 0.20% at year-end 2025. Coverage of non-performing loans by the allowance for credit losses rose to 415% from 349% at year-end 2025. Management said the allowance is sufficient to offset potential future losses in the loan portfolio.

Noninterest Income and Expense

Noninterest income increased to $6,165,000 in the second quarter of 2026 from $2,085,000 in the second quarter of 2025, a rise of $4,080,000, or 196%. The increase was primarily due to $3,752,000 in revenue from the Bearing Sale. Service charges on deposit accounts, including debit card interchange fees, also increased $113,000, or 13%.

For the first half of 2026, noninterest income rose $4,247,000, or 111%, to $8,077,000 from $3,830,000 in the same period of 2025. The increase was mainly due to the Bearing Sale, a $190,000, or 11%, increase in service charges on deposit accounts, including debit card interchange fees, and smaller increases in bank-owned life insurance income, merchant card fees, loan fee income, and commissions from investment and insurance sales.

Noninterest expense increased $146,000, or 2%, to $8,941,000 in the second quarter of 2026 from $8,795,000 in the second quarter of 2025. The increase reflected higher operating costs tied to company growth, including a $278,000, or 6%, increase in salaries and benefits, partly offset by a $131,000 decline in subordinated debt expense and smaller decreases in other operating expense categories. The company noted that it paid off outstanding subordinated debt last year.

For the first half of 2026, noninterest expense increased $219,000, or 1%, to $17,374,000 from $17,155,000 in the same period of 2025. That increase was mainly due to a $385,000, or 4%, increase in salaries and benefits, partly offset by a $263,000 decline in subordinated debt expense and smaller decreases in audit and accounting fees, office supplies and printing, and postage.

Balance Sheet and Liquidity

Total assets at June 30, 2026 were $1,141,859,000, up 7% from $1,065,228,000 at December 31, 2025. The principal asset categories were $748,947,000 in total loans, $187,938,000 in securities, and $152,249,000 in cash and cash equivalents.

Total loans increased $8,619,000, or 1%, from $740,328,000 at December 31, 2025. Pinnacle said loan growth has been challenging this year because of the interest-rate environment and uncertainty about the direction of the economy.

Securities increased $35,486,000, or 23%, from $152,452,000 at December 31, 2025, mainly because of limited loan growth. The company said 40% of its securities portfolio is invested in U.S. Treasuries with an average maturity of 0.85 years, and $49,000,000 matures over the next six months. The entire securities portfolio was classified as available for sale on June 30, 2026, providing transparency regarding unrealized losses.

Unrealized losses on the available-for-sale securities portfolio were $8,463,000 at June 30, 2026, or 4% of book value, compared with $7,452,000, or 5% of book value, at December 31, 2025.

Cash and cash equivalents increased $29,987,000, or 25%, to $152,249,000 from $122,261,000 at December 31, 2025, due to deposit growth. The company said its liquidity ratio was 36% at June 30, 2026, and 16% excluding the available-for-sale securities portfolio. Pinnacle said it also has access to multiple liquidity lines of credit through correspondent banking relationships and the Federal Home Loan Bank, and that none of those contingency funding sources have been used in the past year.

Total liabilities were $1,048,020,000 at June 30, 2026, up $72,200,000, or 7%, from $975,820,000 at December 31, 2025, as deposits increased $70,364,000, or 7%, to $1,041,674,000 from $971,311,000. Pinnacle said it retains and acquires customer relationships through a community bank approach focused on personalized service while capitalizing on market disruption from further bank consolidation and large national bank branch closures.

Total stockholders’ equity was $93,839,000 at June 30, 2026, compared with $89,408,000 at December 31, 2025. Equity consisted primarily of $85,692,000 in retained earnings. The increase in equity was driven mainly by year-to-date 2026 net income, partly offset by dividends paid to shareholders, the repurchase of 70,710 shares of the company’s stock during the first quarter of 2026, and an increase in unrealized losses on the securities portfolio. The Company and the Bank both remain well capitalized under all regulatory definitions.

Annual Meeting of Shareholders

At the Annual Meeting of Shareholders held on May 12, 2026, James E. Burton, IV, Judson H. Dalton, Robert Hurt, Donald W. Merricks, and Ramsey W. Yeatts were re-elected to the Board of Directors as Class II directors to serve until the 2029 Annual Meeting of Shareholders.

Hall also presented his Annual Report to Shareholders, which covered Pinnacle’s performance for 2025 and the first quarter of 2026. He also discussed the economy, the banking industry, peer rankings, Pinnacle’s Share Repurchase Plan, and the company’s strategic initiatives. Hall’s PowerPoint presentation is available on the company’s website at www.1stnatbk.com under the Investor Relations tab by clicking Financial Information, then 2026 Annual Shareholders’ Meeting Presentation.

Company Information

Pinnacle is a locally managed community banking organization serving Central and Southern Virginia. The one-bank holding company of First National Bank serves market areas consisting primarily of all or portions of Amherst, Bedford, Campbell, Halifax, and Pittsylvania counties, and the cities of Charlottesville, Danville, and Lynchburg.

The company has 19 branches, including one in Amherst County within the Town of Amherst; two in Bedford County; five in Campbell County, including two in the Town of Altavista, where the bank was founded; one in the City of Charlottesville; three in the City of Danville; one branch and a commercial loan production office in Halifax County within the Town of South Boston; three in the City of Lynchburg; and three in Pittsylvania County, including one in the Town of Chatham. First National Bank is celebrating its 118th year of operation in 2026.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of federal securities laws, which involve significant risks and uncertainties. Any statements that are not historical facts are forward-looking and are based on current assumptions and analysis by the company.

These statements, including statements in Hall’s quotes, may include but are not limited to expectations regarding the credit quality of the asset portfolio in future periods, expected losses on non-performing loans, future returns and capital accretion, cost of funds, maintenance of net interest margin, future operating results and business performance, and growth initiatives.

Although the company believes its plans and expectations are reasonable, actual results may differ materially. Factors that could cause actual results to differ include changes in consumer spending and saving habits, including increased inflation; changes in general business, economic and market conditions; difficulties attracting, hiring, training, motivating, and retaining qualified employees; changes in fiscal and monetary policy, laws and regulations; changes in interest rates, inflation rates, deposit flows, loan demand, and real estate values; changes in the quality or composition of the loan portfolio and the value of collateral securing loans; macroeconomic trends and uncertainty, including liquidity concerns at other financial institutions and the potential for local and/or global recession; changes in demand for financial services in Pinnacle’s market areas; increased competition from banks and non-banks; deterioration in credit quality and/or reduced demand for, or supply of, credit; increased information security risk, including cybersecurity risk; volatility in securities markets, including in the value of securities in the company’s portfolio or in the market price of Pinnacle common stock; and other factors.

These risks and uncertainties should be considered when evaluating the forward-looking statements in this release. Investors should not place undue reliance on them, as they reflect the company’s views as of the date of the release.

Selected Financial Highlights are shown on the next page.

CONTACT: Pinnacle Bankshares Corporation, Bryan M. Lemley, 434-477-5882 or [email protected]