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Pinnacle Bank of Oregon Reports Results for Fourth Quarter 2008

^{Published on 2009-02-06 10:14:45, Last Modified on 2009-02-06 10:16:46 - Market Wire}
 

BEAVERTON, Ore.--([ BUSINESS WIRE ])--Pinnacle Bank of Oregon (OTCBB:PNNB) reports a loss for the quarter ended December 31, 2008 of $2,116,000 compared to a loss of $225,000 for the prior quarter ended September 30, 2008. Total loans at December 31, 2008 were $64.3 million versus $65.7 million at the end of the prior quarter. Total deposits on December 31, 2008 were $64.2 million, which represented a decrease of 1.6% from the prior quarter when deposits totaled $65.2 million. Total assets ended the period at $71.9 million. The Bank is considered to be "adequately capitalized" by regulatory definitions with a Tier One Leverage ratio of 7.97% and a Total Risk-based Capital ratio of 9.96%.

The Bank reported $529,000 in net interest income for the fourth quarter declining from $556,000 for the prior quarter. Non-interest income was $32,000 during the quarter versus $34,000 during the prior period. Non-interest expenses declined to $862,000 in the fourth quarter of 2008 from $953,000 during the prior quarter due to reduced staffing and lower expenses for problem loans. Expenses year-over-year are down $215,000 or almost 6%. Over the course of the last three years, the Bank has been recognizing, as an asset, the amount of tax credit it expected to receive in future years for its loss carryforward. At the end of 2008, the Bank recorded a valuation allowance of $1.9 million against this asset which is reflected in the $1.3 million income tax provision for the year.

The Bank took no loan loss provision in the fourth quarter. Net charge-offs for the year totaled $435,000 at December 31, 2008. The allowance for loan and lease losses was $1.3 million which was 2.09% of total loans. Nonaccrual loans fell to $7.2 from $9.4 million. Some of the improvement was due to loan collections but most of the reduction was due to transferring a $1.8 million borrowing relationship to other real estate owned when the Bank accepted deeds in lieu of foreclosure. The Bank charged off $0.2 million of these loans and moved the remaining $1.6 million to other real estate owned. The properties were immediately put up for sale at reasonable prices given the current market. Subsequent to year-end, the Bank entered into sale agreements or sold half of these properties for $758,000. During the third quarter, the Bank restructured a nonaccrual loan of $2.4 million and the borrower has made timely payments since the restructure. However, the Bank continues to consider the loan nonperforming until a positive pattern of payments is established. There are two other significant nonaccrual loan relationships that are in bankruptcy; one totaling $3.6 million and the other totaling $1.4 million. The bankruptcies are delaying the Bank's ability to collect on the related properties. All loans on nonaccrual are secured and the Bank believes it has adequate reserves to cover these loans.

Pinnacle Bank President Ron May said, "Workout plans are in place for each problem loan on the Bank's books. However, in the current economy, it will take time for borrowers to repay the balances owed or for real estate to be sold to satisfy the debts." Mr. May added, "The Bank continues to have adequate liquidity to meet its needs. The Bank advanced $4.0 million to local businesses in the fourth quarter in the form of new high quality loans."

Pinnacle Bank, in its seventh year of operation, is focused on building sustainable relationships with small to medium-sized businesses, business owners and professionals in the Portland metropolitan area. The Bank's twenty employees serve the community by providing quality business banking services and volunteerism throughout the area.

Pinnacle Bank is FDIC insured and an Equal Housing Lender.

Forward Looking Statements:

Statements in this release regarding future events, performance or results are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 ("PSLRA") and are made pursuant to the safe harbors of the PSLRA. Actual results could be quite different from those expressed or implied by the forward-looking statements. Do not unduly rely on forward-looking statements. They give our expectations about the future and are not guarantees. Forward-looking statements speak only as of the date they are made, and we do not undertake any obligation to update them to reflect changes that occur after that date. A number of factors could cause results to differ significantly from our expectations.

(Balance Sheet and Statements of Income following)