Pinnacle Bankshares Corporation Announces Record High 3rd Quarter/Year to Date 2026 Core Earnings

ALTAVISTA, Va., Oct. 26, 2026 (GLOBE NEWSWIRE) -- Net income for Pinnacle Bankshares Corporation (OTCQX:PPBN), the one-bank holding company (the “Company” or “Pinnacle”) for First National Bank (the “Bank”), was $3,581,000, or $1.66 per basic and diluted share, for the third quarter of 2026, while net income for the nine months ended September 30, 2026, was $13,095,000, or $6.02 per basic and diluted share. In comparison, net income was $2,992,000, or $1.34 per basic and diluted share, and $7,943,000, or $3.58 per basic and diluted share, respectively, for the same periods of 2025. Consolidated results for the quarter and the nine-month periods are unaudited. Net income for the nine months of 2026 was positively impacted by the sale of the Bank’s ownership interest in Bearing Insurance, LLC (Bearing Sale) during the second quarter of 2026, which generated a pretax gain of $3,752,000 ($2,964,000 after tax). Consolidated results for the quarter and the year are unaudited.

3rd Quarter (QTR) & Year-to-Date (YTD) 2026 Highlights

Income Statement (Comparisons are to the Third Quarter and First Nine Months of 2025)

• 3rd QTR 2026
  • Net Income increased 20% to $3,581,000 and exceeded 2nd QTR 2026 core net income of $3,489,000, which was the previous record high.
    
    

• YTD 2026
  • Net Income increased 65% to $13,095,000, including the Bearing Sale, providing a Return on Assets of 1.59%.
  • Core Net Income increased 28% to $10,131,000, excluding the Bearing Sale, providing a Return on Assets of 1.23%.
  • Net Interest Income increased 10% to $32,828,000, primarily due to higher volume of earning assets and a 12-basis point expansion in net interest margin to 4.20%.
  • Provision for Credit Losses increased $395,000 due mainly to loan growth.
  • Noninterest Income improved 74% to $10,233,000 primarily due to the Bearing Sale. Core Noninterest Income improved 10% to $6,481,000, excluding the Bearing Sale.
  • Noninterest Expense increased only 2% to $26,222,000.
    
    

Balance Sheet as of September 30, 2026 (Comparisons are to December 31, 2025)

• Total Assets increased $30.6 million, or 3%, to $1.10 billion.
• Loans increased $32.3 million, or 4%, to $773 million.
• Securities increased $31.6 million, or 21%, to $184 million.
• Deposits increased $25.7 million, or 2.7%, to $997 million.
  
  

Capital Ratios and Stock Price as of September 30, 2026 (Comparisons are to December 31, 2025)

• The Bank’s Leverage Ratio increased to 9.12%, while the Total Risk-Based Capital Ratio increased to 13.69%.
• Pinnacle’s Stock Price ended the quarter at $63.07 per share, based on the last trade, which is an increase of $17.57, or 39%.
  
  

Net Income and Profitability

Net income generated during the third quarter of 2026 represents a $589,000, or 20%, increase compared to the same quarter of 2025, while net income generated through nine months of 2026 represents a $5,152,000, or 65%, increase compared to the same time period of 2025. The increase in net income for the third quarter of 2026 was driven by higher net interest income and higher noninterest income partially offset by higher provision for credit losses and higher noninterest expense. The increase in net income through nine months of 2026 was driven by higher noninterest income, which includes the $2,964,000 after tax gain generated by the Bearing Sale, and higher net interest income partially offset by the same factors stated for the third quarter.

Profitability as measured by the Company’s return on average assets (“ROA”) increased to 1.59% for the nine months ended September 30, 2026, as compared to 1.03% for the same time period of 2025. Correspondingly, return on average equity (“ROE”) increased to 19.11% for the nine months ended September 30, 2026, as compared to 12.76% for the same time period of 2025.

“We continue to be pleased with Pinnacle’s performance in 2026,” stated Aubrey H. Hall, III, President and Chief Executive Officer for both the Company and the Bank. Mr. Hall further commented, “Core net income has increased 28% year over year driven by further expansion of our net interest margin, higher core noninterest income, and controlled noninterest expense. Loan volume has improved, credit quality remains strong, and we have ample liquidity to fund asset growth moving forward.”

Net Interest Income and Margin

The Company generated $11,420,000 in net interest income for the third quarter of 2026, which represents a $1,193,000, or 12%, increase compared to $10,227,000 for the same quarter of 2025. Interest income increased $1,065,000, or 8%, due to higher average earning assets and yield, while interest expense decreased $128,000, or 5%.

Net interest income through nine months of 2026 was $32,828,000, which represents a $3,055,000, or 10%, increase compared to $29,773,000 for the same time period of 2025 as net interest margin increased 12 basis points to 4.20%. Interest income increased $2,747,000, or 7%, as yield on earning assets increased 1 basis point to 5.23% and average earning assets increased by 7% year over year. Interest expense decreased $308,000, or 4%, due to lower interest expense as cost to fund earning assets decreased 11 basis points to 1.03%.

Reserves for Credit Losses and Asset Quality

The provision for credit losses was $227,000 in the third quarter of 2026 compared to $29,000 for the same quarter of 2025. Through nine months of 2026, provision for credit losses was $534,000 compared to $139,000 for the same time period of 2025. Provision expense has increased mainly due to loan growth as credit quality continues to be strong.

The allowance for credit losses (ACL) was $5,489,000 as of September 30, 2026, which represented 0.71% of total loans outstanding. In comparison, the ACL was $5,235,000, or 0.71% of total loans outstanding as of December 31, 2025. Non-performing loans to total loans remained 0.20% as of September 30, 2026, compared to 0.20% as of year-end 2025. ACL coverage of non-performing loans increased slightly to 354% as of September 30, 2026 compared to 349% as of year-end 2025. Management views the allowance balance as being sufficient to offset potential future losses in the loan portfolio.

Noninterest Income and Expense

Noninterest income for the third quarter of 2026 increased $112,000, or 5%, to $2,156,000 compared to $2,044,000 for the same quarter of 2025. Pinnacle experienced a $152,000, or 16%, increase in service charges on deposit accounts, including debit card interchange fees, partially offset by a $90,000, or 53%, decrease in fees on sales of mortgage loans in the third quarter of 2026 compared to the same time period in 2025.

Through nine months of 2026, noninterest income increased $4,359,000, or 74%, to $10,233,000 as compared to $5,874,000 for the same time period of 2025. The increase was primarily due to the Bearing Sale along with a $342,000, or 13%, increase in service charges on deposit accounts, including debit card interchange fees, and smaller increases in bank-owned life insurance (BOLI) income, merchant card fees, loan fee income, and commissions derived from investment and insurance sales commissions.

Noninterest expense for the third quarter of 2026 increased $281,000, or 3%, to $8,848,000 compared to $8,567,000 for the same quarter of 2025. Slightly higher operating costs associated with growth of the Company included a $371,000, or 8%, increase in salaries and benefits partially offset by decreases in legal and core system expenses along with the elimination of interest on subordinated debt paid off in 2025.

Though nine months of 2026, noninterest expense increased only $500,000, or 2%, to $26,222,000, compared to $25,722,000 for the same time period of 2025. The increase was mainly due to a $756,000, or 5.5%, increase in salaries and benefits, partially offset by a $386,000 decrease in subordinated debt interest expense, and smaller decreases in audit expense, core system expense, accounting fees, office supplies, and postage.

The Balance Sheet and Liquidity

Total assets as of September 30, 2026, were $1,095,866,000, up 3%, from $1,065,228,000 as of December 31, 2025. The principal components of the Company’s assets as of September 30, 2026, were $772,647,000 in total loans, $184,044,000 in securities, and $82,892,000 in cash and cash equivalents.

Through nine months of 2026, total loans increased $32,319,000, or 4%, from $740,328,000 as of December 31, 2025. Loan growth was challenging through mid-year 2026; however, volume increased $23,700,000, or 3%, during the third quarter.

Securities have increased $31,592,000, or 21%, from $152,452,000 as of December 31, 2025, which was mainly driven by limited loan growth during the first half of the year. The majority of the Company’s securities portfolio is relatively short-term in nature with 40% of the Company’s securities portfolio invested in U.S. Treasuries with an average maturity of 0.86 years with $39,000,000 maturing in the fourth quarter of 2026. The Company’s entire securities portfolio was classified as available for sale on September 30, 2026, which provides transparency regarding unrealized losses. Unrealized losses associated with the available for sale securities portfolio were $11,811,000 as of September 30, 2026, or 6% of book value, compared to $7,452,000 as of December 31, 2025, or 5% of book value.

Cash and cash equivalents as of September 30, 2026, decreased $39,369,000, or 32%, to $82,892,000 from $122,261,000 as of December 31, 2025, primarily due to a $63,911,000 increase in loans and securities compared to a $25,742,000 increase in deposits. The Company experienced a $44,621,000, or 4%, decrease in deposits during the third quarter primarily due to the cyclical nature of its municipal deposits. The Company continued to maintain a strong liquidity ratio of 29% as of September 30, 2026. The liquidity ratio, excluding the available for sale securities portfolio, was 9% providing the opportunity to sell excess funds at an attractive federal funds rate. The Company has access to multiple liquidity lines of credit through its correspondent banking relationships and the Federal Home Loan Bank. None of these contingency funding sources have been utilized over the past year.
Total liabilities as of September 30, 2026, were $1,001,704,000, up $25,884,000, or 2.7%, from $975,820,000 as of December 31, 2025, as deposits increased $25,742,000, or 2.7%, through nine months of 2026 to $997,053,000 from $971,311,000. The Bank retains and acquires customer relationships through utilization of a community bank approach focused on personalized service and ease of business for customers while capitalizing on market disruption caused by further bank consolidation and large national bank branch closures.

Total stockholders’ equity as of September 30, 2026, was $94,162,000 and consisted primarily of $88,559,000 in retained earnings. In comparison, as of December 31, 2025, total stockholders’ equity was $89,408,000. The increase in stockholders’ equity is due mainly to year-to-date 2026 net income offset by dividends paid to shareholders, a repurchase of 70,710 shares of the Company’s stock during the first quarter of 2026, and an increase in the unrealized losses associated with the securities portfolio due to higher interest rates. Both the Company and Bank remain “well capitalized” per all regulatory definitions.

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

Cautionary Statement Regarding Forward-Looking Statements

This press release may contain “forward-looking statements” within the meaning of federal securities laws that involve significant risks and uncertainties. Any statements contained herein that are not historical facts are forward-looking and are based on current assumptions and analysis by the Company. These forward-looking statements, including statements made in Mr. Hall’s quotes may include, but are not limited to, statements regarding the credit quality of our asset portfolio in future periods, the expected losses of nonperforming loans in future periods, future returns and capital accretion, our cost of funds, the maintenance of our net interest margin, future operating results and business performance and our growth initiatives. Although we believe our plans and expectations reflected in these forward-looking statements are reasonable, our ability to predict results or the actual effect of future plans or strategies is inherently uncertain, and we can give no assurance that these plans or expectations will be achieved. Factors that could cause actual results to differ materially from management's expectations include, but are not limited to: changes in consumer spending and saving habits that may occur, including increased inflation; changes in general business, economic, and market conditions; attracting, hiring, training, motivating, and retaining qualified employees; changes in fiscal and monetary policies, and 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 Company’s loan portfolio and the value of the collateral securing loans; changes in macroeconomic trends and uncertainty, including liquidity concerns at other financial institutions, and the potential for local and/or global economic recession; changes in demand for financial services in Pinnacle’s market areas; increased competition from both banks and non-banks in Pinnacle’s market areas; a deterioration in credit quality and/or a reduced demand for, or supply of, credit; increased information security risk, including cyber security risk, which may lead to potential business disruptions or financial losses; volatility in the securities markets generally, including in the value of securities in the Company’s securities portfolio or in the market price of Pinnacle common stock specifically; and other factors, which could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. These risks and uncertainties should be considered in evaluating the forward-looking statements contained herein, and you should not place undue reliance on such statements, which reflect our views as of the date of this release.

Selected Financial Highlights are shown on the next page.

Pinnacle Bankshares Corporation Selected Financial Highlights (9/30/26, 6/30/26, and 9/30/25 results unaudited) (In thousands, except ratios, share, and per share data)
	3 Months Ended			3 Months Ended			3 Months Ended
Income Statement Highlights	9/30/2026			6/30/2026			9/30/2025
Interest Income	$	14,068		$	13,750		$	13,003
Interest Expense		2,648			2,699			2,776
Net Interest Income		11,420			11,051			10,227
Provision for Credit Losses		227			229			29
Noninterest Income		2,156			6,165			2,044
Noninterest Expense		8,848			8,941			8,567
Net Income		3,581			6,453			2,992
Earnings Per Share (Basic)		1.66			2.97			1.34
Earnings Per Share (Diluted)		1.66			2.97			1.34
	9 Months Ended			Year Ended			9 Months Ended
Income Statement Highlights	9/30/2026			12/31/2025			9/30/2025
Interest Income	$	40,880		$	51,262		$	38,133
Interest Expense		8,052			11,138			8,360
Net Interest Income		32,828			40,124			29,773
Provision for Credit Losses		534			308			139
Noninterest Income		10,233			7,792			5,874
Noninterest Expense		26,222			34,306			25,722
Net Income		13,095			10,772			7,943
Earnings Per Share (Basic)		6.02			4.85			3.58
Earnings Per Share (Diluted)		6.02			4.85			3.58
Balance Sheet Highlights	9/30/2026			12/31/2025			9/30/2025
Cash and Cash Equivalents	$	82,892		$	122,261		$	105,302
Total Loans		772,647			740,328			730,297
Total Securities		184,044			152,452			145,363
Total Assets		1,095,866			1,065,228			1,030,398
Total Deposits		997,053			971,311			938,039
Total Liabilities		1,001,704			975,820			942,706
Stockholders' Equity		94,162			89,408			87,692
Shares Outstanding		2,161,255			2,225,276			2,225,727
Ratios and Stock Price	9/30/2026			12/31/2025			9/30/2025
Gross Loan-to-Deposit Ratio		77.49	%		76.22	%		77.85	%
Net Interest Margin (Year-to-date)		4.20	%		4.09	%		4.08	%
Liquidity		28.82	%		31.02	%		28.33	%
Efficiency Ratio		60.89	%		71.58	%		72.13	%
Return on Average Assets (ROA)		1.59	%		1.05	%		1.03	%
Return on Average Equity (ROE)		19.11	%		12.78	%		12.76	%
Leverage Ratio (Bank)		9.12	%		8.89	%		8.82	%
Tier 1 Capital Ratio (Bank)		12.96	%		12.46	%		12.19	%
Total Capital Ratio (Bank)		13.69	%		13.18	%		12.91	%
Stock Price	$	63.07		$	45.50		$	37.58
Book Value	$	43.57		$	40.18		$	39.40
Tangible Book Value	$	43.02		$	39.59		$	38.79
Asset Quality Highlights	9/30/2026			12/31/2025			9/30/2025
Nonaccruing Loans	$	1,252		$	1,497		$	1,261
Loans 90 Days or More Past Due and Accruing		300			3			42
Total Nonperforming Loans		1,552			1,500			1,303
Loan Modifications		0			105			106
Loans Individually Evaluated		1,461			1,860			1,409
Other Real Estate Owned (OREO) (Foreclosed Assets)		0			0			0
Total Nonperforming Assets		1,552			1,500			1,303
Nonperforming Loans to Total Loans		0.20	%		0.20	%		0.18	%
Nonperforming Assets to Total Assets		0.14	%		0.14	%		0.13	%
Allowance for Credit Losses	$	5,489		$	5,235		$	5,178
Allowance for Credit Losses to Total Loans		0.71	%		0.71	%		0.71	%
Allowance for Credit Losses to Nonperforming Loans		354	%		349	%		397	%

CONTACT: Pinnacle Bankshares Corporation, Bryan M. Lemley, 434-477-5882 or bryanlemley@1stnatbk.com