<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
(Mark one)
[X] Quarterly report under Section 13 or 15(d) of the Securities Exchange Act
of 1934
For the quarterly period ended June 30, 1998
[ ] Transition report under Section 13 or 15(d) of the Exchange Act
For the transition period from _________________ to ________________
Commission file number 1-12707
Pinnacle Bancshares, Inc.
- --------------------------------------------------------------------
(Exact Name of Small Business Issuer as Specified in Its Charter)
Delaware 72-1370314
------------------------------------ -----------------------
(State or Other Jurisdiction of (I.R.S. Employer)
Incorporation or Organization) Identification No.)
1811 Second Avenue, Jasper, Alabama 35502-1388
- ------------------------------------------------------------------------
(Address of Principal Executive Offices)
(205) 221-4111
- ------------------------------------------------------------------------
(Issuer's Telephone Number, Including Area Code)
- ------------------------------------------------------------------------
(Former Name, Former Address and Former Fiscal Year, if Changed
Since Last Report)
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes X No
----- -----
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date: 1,786,588
Transitional Small Business Disclosure Format (check one):
Yes No X
----- -----
<PAGE> 2
PART I
FINANCIAL INFORMATION
<TABLE>
<CAPTION>
PAGE
<S> <C>
ITEM 1. FINANCIAL STATEMENTS
Condensed Consolidated Statements of Financial Condition at
June 30, 1998 (Unaudited) and December 31, 1997. 2
Condensed Consolidated Statements of Financial Income
(Unaudited) for the three months ended June 30, 1997 and
1998 and for the six months ended June 30, 1997 and 1998. 3
Condensed Consolidated Statements of Cash Flows (Unaudited)
for the six months ended June 30, 1997 and June 30, 1998. 4
Notes to Condensed Consolidated Financial Statements. 5
The Condensed Consolidated Financial Statements furnished
have not been audited by independent certified public accountants,
but reflect, in the opinion of management, all adjustments necessary
for a fair presentation of financial condition and the results for
the periods presented.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION 9
PART I1
OTHER INFORMATION
Item 3. Submission of Matters to a Vote of Security Holder 12
ITEM 4. EXHIBITS AND REPORTS ON FORM 8-K
Signatures 13
</TABLE>
1
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
PINNACLE BANCSHARES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
<TABLE>
<CAPTION>
December 31, June 30,
1997 1998
---- ----
(Unaudited)
<S> <C> <C>
ASSETS
Cash on hand and in banks $ 2,747,482 $ 3,256,692
Interest-bearing deposits at other banks 4,873,353 16,971,055
Securities available for sale 44,423,262 41,354,817
Accrued interest on securities and deposits 491,104 262,786
Loans receivable, net 137,676,037 129,454,351
Loans held for sale (fair value $1,857,042 and $1,324,294
at December 31, 1997 and June 30, 1998, respectively) 1,857,042 1,324,294
Real estate owned 2,140,003 4,106,531
Premises and equipment, net 5,785,279 5,937,372
Other assets 1,955,466 2,000,774
------------ ------------
$201,949,028 $204,668,672
------------ ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits 179,377,212 181,935,180
Borrowed funds 3,640,000 3,520,000
Official checks outstanding 836,383 596,074
Other liabilities 1,314,305 1,135,190
------------ ------------
185,167,900 187,186,444
------------ ------------
STOCKHOLDERS' EQUITY
Preferred stock, par $.01 per share, no shares issued,
100,000 and 10,000,000 authorized 0 0
Common stock, par $.01 per share, 1,786,586 and
1,786,588 outstanding, 2,400,000 and 10,000,000 authorized 17,865 17,865
Additional paid-in capital 8,083,332 8,083,332
Retained earnings 8,665,499 9,313,423
Unrealized gain on securities for sale, net. 14,432 67,598
------------ ------------
16,781,128 17,482,228
------------ ------------
$201,949,028 $204,668,672
------------ ------------
</TABLE>
See accompanying notes to consolidated financial statements.
2
<PAGE> 4
\
PINNACLE BANCSHARES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
1997 1998 1997 1998
---- ---- ---- ----
INTEREST REVENUE: (unaudited)
<S> <C> <C> <C> <C>
Interest on loans $3,114,052 $3,024,942 $6,111,690 $6,116,110
Interest and dividends on securities 755,471 659,695 1,533,120 1,341,215
Other interest 83,754 255,476 159,039 416,034
---------- ---------- ---------- ----------
3,953,277 3,940,113 7,803,849 7,873,359
INTEREST EXPENSE:
Interest on deposits 2,160,038 2,221,494 4,292,509 4,403,512
Interest on borrowed funds 51,829 50,693 103,659 102,322
---------- ---------- ---------- ----------
2,211,867 2,272,187 4,396,168 4,505,834
---------- ---------- ---------- ----------
Net interest income before provision for
loan losses 1,741,410 1,667,925 3,407,681 3,367,525
Provision for losses on loans 74,274 141,000 149,274 282,000
---------- ---------- ---------- ----------
Net interest income after provision for
losses on loans 1,667,136 1,526,925 3,258,407 3,085,525
---------- ---------- ---------- ----------
NONINTEREST INCOME:
Fees and service charges 219,473 173,279 432,466 333,421
Real estate operations, net 24,046 16,885 59,187 15,439
Net gain on sale of:
Loans 107,960 159,260 177,809 43,467
Real estate 7,152 546 7,152 546
Other income 1,203 54,494 902 111,055
---------- ---------- ---------- ----------
359,834 404,464 677,516 803,928
---------- ---------- ---------- ----------
NONINTEREST EXPENSE:
Compensation and benefits 657,197 656,320 1,257,144 1,312,563
Occupancy 253,784 239,663 519,008 495,708
Marketing and professional 64,814 31,792 98,111 69,985
Other 213,706 235,736 423,065 472,821
---------- ---------- ---------- ----------
1,189,501 1,163,511 2,297,328 2,351,077
---------- ---------- ---------- ----------
Earnings before tax expense 837,469 767,879 1,638,595 1,538,376
Income tax expense 312,572 266,721 611,369 534,125
---------- ---------- ---------- ----------
Net earnings 524,897 501,158 1,027,226 1,004,251
---------- ---------- ---------- ----------
Basic Earnings per share $ 0.30 $ .0.28 $ 0.58 $ 0.56
Diluted Earnings per share $ 0.29 $ .0.28 $ 0.58 $ 0.55
Cash Dividends per share $ 0.10 $ .0.10 $ 0.10 $ 0.10
Weighted average shares outstanding 1,779,648 1,786,588 1,779,646 1,786,587
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE> 5
PINNACLE BANCSHARES, INC,
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Six Months Ended
June 30,
--------
1997 1998
(unaudited)
<S> <C> <C>
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES:
Net earnings $ 1,027,226 $ 1,004,251
Adjustment to reconcile net earnings to net cash flows
provided by operating activities:
Depreciation 237,910 231,186
Provision for losses on loans 149,274 282,000
Net (gain) loss on sale of:
Loans held for sale (177,809) (343,467)
Real estate owned 0 (546)
Amortization, net (116,699) (161,470)
Proceeds from sale of loans 18,205,648 18,901,417
Loans originated for sale (19,531,178) (18,368,669)
Decrease (Increase) in other assets 108,452 183,010
(Increase) decrease in other liabilities (305,593) (206,708)
-------------------------------
Net cash provided by (used in) operating activities (402,769) 1,521,004
-------------------------------
CASH FLOWS PROVIDED BY USED IN INVESTING ACTIVITIES:
Principal collected on loans and securities 45,231,987 55,554,522
Loans originated for portfolio (48,276,684) (45,174,541)
Net change in interest bearing deposits at other banks (1,156,377) (12,097,702)
Proceeds from the purchase of securities (998,852) (7,000,156)
Proceeds from sale of securities 196,000 214,002
Proceeds from maturing securities 2,010,000 8,000,000
Purchase of premises and equipment (363,677) (383,279)
Proceeds from sales of real estate, net 28,354 0
Net change in real estate owned (416,954) (1,965,982)
-------------------------------
Net cash (used in) investing activities (3,746,203) (2,853,136)
-------------------------------
CASH FLOWS USED IN FINANCING ACTIVITIES:
Net increase (decrease) in passbook, NOW, and money
market deposit accounts 2,103,532 779,948
Proceeds from sales of time deposits 14,241,163 17,123,615
Payments from maturing time deposits (12,039,538) (15,345,595)
Payments on borrowed funds (110,000) (120,000)
Increase (decrease) in official checks outstanding 728,400 (240,309)
Proceeds from stock options exercised 0 1,500
Payments of dividends (355,929) (357,817)
-------------------------------
Net cash provided by financing activities 4,567,628 1,841,342
-------------------------------
Net (increase) decrease in cash 418,656 509,210
CASH AT BEGINNING OF PERIOD 2,879,396 2,747,482
-------------------------------
CASH AT END OF PERIOD $ 3,298,052 $ 3,256,692
===============================
SUPPLEMENTAL DISCLOSURES:
Cash payments for interest on deposits and borrowed funds $ 3,937,930 $ 4,025,519
Cash payments for income taxes $ 787,844 $ 662,207
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE> 6
PINNACLE BANCSHARES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION:
The accompanying unaudited interim condensed consolidated financial statements
include the accounts of Pinnacle Bancshares, Inc. (the "Company"), Pinnacle Bank
(the "Bank"), and the Bank's wholly owned subsidiaries First General Services(s)
and First General Ventures. All significant inter company transactions and
accounts have been eliminated in consolidation.
In the opinion of management, all adjustments (none of which are other than
normal recurring accruals) necessary for a fair presentation of the results of
such interim periods have been included. The results of operations for the six
month period ended June 30, 1998, are not necessarily indicative of the results
of operations which may be expected for the entire year.
These condensed consolidated financial statements should be read in conjunction
with the financial statements and the notes thereto included in the Company's
Annual Report on Form 10-KSB for the year ended December 31, 1997. The
accounting policies followed by the Company are set forth in the summary of
Significant Accounting Policies in the Company's financial statements.
2. STOCK SPLIT:
On September 24, 1997, the Company announced that it Board of Directors had
declared a two-for-one stock split to be effected in the form of a 100% stock
dividend payable to shareholders of record on October 15, 1997. All share and
per share information included in these financial statements have been restated
to give effect for the stock split.
3. YEAR 2000 RISK ASSESSMENT AND ACTION PLAN:
The Company is aware of the current concerns throughout the business community
of reliance upon computer software that does not properly recognize the year
2000 in date formats, often referred to as the "Year 2000 Problem." The Year
2000 Problem is the result of software being written using two digits rather
than four digits to define the applicable year (i.e., "98" rather than "1998").
A failure by a business to properly identify and correct a Year 2000 Problem in
its operations could result in system failures or miscalculations. In turn, this
could result in disruptions of operations, including among other things, a
temporary inability to process transactions, or otherwise engage in routine
business transactions on a day-to-day basis.
Operations of the Company depend upon the successful operation on a daily basis
of its computer software programs. The Company relies upon software purchased
from third-party vendors rather than internally generated software. In its
analysis of the software, and based upon its ongoing discussions
5
<PAGE> 7
with these vendors, a plan of action has been put in place by the Company to
minimize its risk exposure to the Year 2000 Problem.
As part of the plan, an oversight management committee has been set up to
monitor vendor compliance, and identify systems and equipment crucial to the
Company's operation. These systems are being tested to assure they will be able
to handle the Year 2000 event, thus minimizing risk to the Company.
4. PENDING ACCOUNTING PRONOUNCEMENTS:
The AICPA has issued Statements of Position 98-1, Accounting for the Costs of
Computer Software Developed or obtained for Internal Use. This statement
requires capitalization of external direct costs of materials and services;
payroll and payroll related costs for employees directly associated; and
interest cost during development of computer software for internal use (planning
and preliminary costs should be amortized on a straight-line basis unless
another systematic and rational basis is more representative of the software's
use.
This statement is effective for financial statements for fiscal years beginning
after December 15, 1998 (prospectively) and is not expected to have a material
effect on the consolidated financial statements.
The Financial Accounting Standards Board ("FASB") has issued Statement of
Financial Accounting Standards No. 133, Accounting for Derivative Instruments
and for Hedging Activities. The statement requires derivatives to be recorded in
the balance sheet as either an asset or liability measured at its fair value.
The Statement also requires that changes in the derivatives' fair value be
recognized currently in earnings unless specified hedge accounting criteria are
met.
This statement is effective for fiscal years beginning after June 15, 1999
(prospectively) and is not expected to have a material effect on the
consolidated financial statements.
6
<PAGE> 8
5. NET INCOME PER SHARE:
Basic net income per share was computed by dividing net income by the weighted
average number of share of common stock outstanding during the three and six
month periods ended June 30, 1998 and 1997, was computed by dividing net income
by the weighted average number of shares of common stock and the dilutive
effects of the shares awarded under the Stock Option plan, based on the treasury
stock method using an average fair market value of the stock during the
respective periods.
In 1997, the Company adopted SFAS No. 128, "Earnings Per Share," effective
December 15,1997. As a result, the Company's reported net income per share for
1996 was restated. The following table represents the net income per share
calculations for the three and six months ended June 30, 1998 and 1997:
<TABLE>
<CAPTION>
Net Income
For the Three Months Ended June 30, 1998: Income Shares Per Share
------------------------------------
<S> <C> <C> <C>
Net Income $ 501,158
------------------------------------
Basic net income per share:
Income available to common shareholders $ 501,158 1,786,587 $.28
------------------------------------
Diluted securities:
Stock option
Dilutive net income per share 0 26,847
Income available to common
shareholders plus assumed conversations $ 501,158 1,813,434 $.28
------------------------------------
For the Three Months Ended June 30, 1997:
Net Income $ 524,847
------------------------------------
Basic net income per share:
Income available to common shareholders $ 524,897 1,779,648 $.30
------------------------------------
Diluted securities:
Stock option
Dilutive net income per share 0 18,140
------------------------------------
Income available to common
shareholders plus assumed conversations $ 524,897 1,797,788 $.29
------------------------------------
<CAPTION>
Net Income
For the Six Months Ended June 30, 1998 Income Shares Per Share
------------------------------------
Net Income $1,004,251
------------------------------------
Basic net income per share:
Income available to common shareholders $1,004,251 1,786,588 $.56
------------------------------------
Diluted securities:
Stock option
Dilutive net income per share 0 28,099
------------------------------------
Income available to common
shareholders plus assumed conversations $1,004,251 1,814,687 $.55
-----------------------------------
For the Six Months Ended June 30, 1997:
Net Income $1,027,226
------------------------------------
Basic net income per share:
Income available to common shareholders $1,027,226 1,779,646 $.58
------------------------------------
Diluted securities:
Stock option
Dilutive net income per share 0 12,606
------------------------------------
Income available to common
shareholders plus assumed conversations $1,027,226 1,792,252 $.58
------------------------------------
</TABLE>
7
<PAGE> 9
6. COMPREHENSIVE INCOME:
The Company adopted SFAS No. 130 on January 1, 1998. SFAS No. 130 established
standards for reporting and display of comprehensive income and its components.
The Company has classified the majority of its securities as available for sale
in accordance with Financial Accounting Standards Board Statement No 115.
Pursuant to Statement No. 115, any unrealized gain or loss activity of available
for sale securities is to be recorded as an adjustment to a separate component
of stockholders' equity, net of income tax effect.
Since comprehensive income is a measure of all changes in equity of an
enterprise that result from transactions and other economic events of the
period, this change in unrealized loss serves to decrease or increase
comprehensive income. The following table represents comprehensive income for
the three and six month periods ended June 30, 1998, and 1997:
<TABLE>
<CAPTION>
For the three months ended 1998 1997
---- ----
<S> <C> <C>
Net income $ 501,158 $ 524,897
Other comprehensive income (loss), net of tax
Unrealized gain (loss) on securities 22,646 146,922
---------- ----------
Comprehensive income $ 523,804 $ 671,819
---------- ----------
<CAPTION>
For the six months ended 1998 1997
---- ----
Net income $1,004,251 $1,027,226
Other comprehensive income (loss), net of tax
Unrealized gain (loss) on securities 53,166 19,521
---------- ----------
Comprehensive income $1,057,417 $1,007,705
---------- ----------
</TABLE>
7. MARKET RISK:
The Company believes that there have been no material changes in reported
market risks since year end.
8
<PAGE> 10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OR PLAN OF OPERATION
PINNACLE BANCSHARES, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
FINANCIAL CONDITION: Total assets increased from $201.9 million as of December
31, 1997 to $204.7 million as of June 30, 1998. This increase was due primarily
to an increase in cash and interest bearing deposits of approximately $12.6
million as well as an increase in real estate owned of approximately $2.0
million. This increase offset by a decrease in securities available for sale of
approximately $3.1 million and a decrease in total loans of approximately $8.8
million.
INVESTMENTS: The Bank's investment portfolio at December 31, 1997 and at June
30, 1998 consisted primarily of U.S. Treasury and Agency securities with a
majority maturing in two years or less. The Bank presently intends to sell most
long-term fixed-rate mortgage loans as they are originated.
RESULTS OF OPERATIONS: Net interest income after the provision for loan losses
on loans showed a decrease of $140,211 or 8.4% for the three month period ended
June 30, 1998 as compared to the corresponding period in the previous year. This
decrease was due to an increase in the provision for loan losses of $66,726,a
decrease in interest income of $13,165 and an increase in interest expense of
$60,320. Net interest income after the provision for loan losses showed a
decrease of $172,883 or 5.3% for the six month period ended June 30, 1998 as
compared to the corresponding period in the previous year. This decrease was due
to an increase in the provision for loan losses of $132,726, an increase in
interest expense of $109,666 and was offset by a increase in interest income of
$69,509. Market interest rates remained relatively steady during the six months
ended June 30, 1998. However, if rates were to rise rapidly, net income may be
adversely affected.
The Bank's yield on interest-bearing assets decreased from approximately 8.22%
in the six month period ended June 30, 1997, to approximately 8.17% in the
current year period. This decrease was due in part to a decrease in interest
rates and an increase in non performing loans. The Bank's cost of funds
increased from 4.89% in the six month period ending June 30, 1997 to 4.93% in
the current year period. This was due in part to an increase in average deposits
of $4.6 million.
Other non interest income, which includes fees and services charges, real estate
operations, net, net gain (loss) on sale of loans and other income increased
approximately $44,630 and $126,412 in the three and six month periods ended June
30, 1998 as compared to the corresponding prior year periods. These
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increases were due primarily to increases in gain on sale of mortgage loans of
approximately $51,300 and $165,658 for the three and six month periods and were
offset by slight decreases in all other non interest income in both periods.
Other non interest expense decreased by approximately $25,990 in the three month
period ended June 30, 1998 and increased approximately $53,749 in the six month
period ended June 30, 1998 as compared to the corresponding prior year periods.
The decrease in the three month period ended June 30, 1998 was due primarily to
an decrease in marketing and professional expense of approximately $33,022, a
decrease in occupancy expense of approximately $14,121 and was offset by slight
increases in other non interest expense. The increase in the six month period
ended June 30 1998 was due to an increase in compensation expense of
approximately $55,419 and was offset by decreases in other noninterest expense.
NET EARNINGS: The Company reported net income for the three months ended June
30, 1998 of $501,158 or $0.28 per share, compared with net income of $524,897 or
$0.28 per share, for the three months ended June 30, 1997. The Company reported
net income for the six months period ended June 30, 1998 of $1,004,251 or $0.56
per share, compared to $1,027,226 or $0.58 per share, for the six month period
ended June 30 1997. This decrease was primarily due to an increase in the
provision for loans losses.
CAPITAL RESOURCES: Historically, funds provided by operations, mortgage loan
principal repayments, savings deposits and short-term borrowings have been the
Bank's principal sources of funds. In addition, the Bank has the ability to
obtain funds through the sale of mortgage loans, through borrowings from the
Federal Home Loan Bank of Atlanta and other borrowings sources. At June 30,
1998, the Bank's total loan commitments, including construction loans in process
and unused lines of credit were approximately $22.8 million. Management believes
that the Bank's liquidity and other sources of funds are sufficient to fund all
commitments outstanding and other cash needs. The Company and the Bank are
required to maintain certain levels of regulatory capital. At June 30, 1998, the
Company and the Bank exceeded all regulatory capital requirements.
YEAR 2000 RISK ASSESSMENT AND ACTION PLAN: See Note 4 of Notes to Condensed
Consolidated Financial Statements.
PENDING ACCOUNTING PRONOUNCEMENTS: See Note 5 of Notes to Condensed Financial
Statements.
FORWARD-LOOKING STATEMENTS: This Quarterly Report on Form 10-QSB contains
forward-looking statements. Additional written or oral forward-looking
statements may be made by the Company from time to time in filings with the
Securities and Exchange Commission or otherwise. The words "believe," "expect,"
"seek" and "intend," and similar expressions identify forward-looking
statements, which speak only as of the date the statement is made. Such
forward-looking statements are within the meaning of that term in Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. Such statements may include, but are not
limited to, projections of income or loss, expenditures, acquisitions, plans for
future operations, financing needs or plans relating
10
<PAGE> 12
to services of the Company, as well as assumptions relating to the foregoing.
Forward-looking statements are inherently subject to risk and uncertainties,
some of which cannot be predicted or qualified. Future events and actual results
could differ materially from those set forth in, contemplated by or underlying
the forward-looking statements.
The Company does not undertake, and specifically disclaims, any obligation to
publicly release the results of revisions which may be made to forward-looking
statements to reflect the occurrence of anticipated or unanticipated events or
circumstances after the date of such statements.
11
<PAGE> 13
PART II - OTHER INFORMATION
ITEM 3. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
ON MAY 27, 1998 THE COMPANY HELD ITS ANNUAL MEETING OF STOCKHOLDERS
AT WHICH THE FOLLOWING MATTER WAS CONSIDERED AND VOTED ON:
PROPOSAL I - ELECTION OF DIRECTORS
<TABLE>
<CAPTION>
NOMINEES FOR WITHHELD
-------- --- --------
<S> <C> <C>
Greg Batchelor 1,454,279 1,002
Melvin R. Kacharos 1,454,270 8,802
</TABLE>
There were no abstentions or broker non-votes.
ITEM 4. EXHIBITS AND REPORTS ON FORM 8-K
(A) Exhibit 27 - Financial Data schedule (SEC use only)
(B) No reports on Form 8-K were filed.
12
<PAGE> 14
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant has
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
PINNACLE BANCSHARES, INC
DATE: August 14, 1998 BY: /s/ Robert B. Nolen Jr.
----------------------- ---------------------------------
Robert B. Nolen, Jr.
President and Chief
Executive Officer
(Principal Executive Officer,
Principal Financial Officer and
Principal Accounting Officer)
13
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF PINNACLE BANCSHARES, INC. FOR THE SIX MONTHS ENDED JUNE
30, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<EXCHANGE-RATE> 1
<CASH> 3,257
<INT-BEARING-DEPOSITS> 16,971
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 41,355
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 130,779
<ALLOWANCE> 1,007
<TOTAL-ASSETS> 204,669
<DEPOSITS> 181,935
<SHORT-TERM> 3,520
<LIABILITIES-OTHER> 1,731
<LONG-TERM> 0
0
0
<COMMON> 18
<OTHER-SE> 17,464
<TOTAL-LIABILITIES-AND-EQUITY> 204,669
<INTEREST-LOAN> 6,116
<INTEREST-INVEST> 1,341
<INTEREST-OTHER> 416
<INTEREST-TOTAL> 7,873
<INTEREST-DEPOSIT> 4,404
<INTEREST-EXPENSE> 4,506
<INTEREST-INCOME-NET> 3,368
<LOAN-LOSSES> 282
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 2,351
<INCOME-PRETAX> 1,538
<INCOME-PRE-EXTRAORDINARY> 1,004
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,004
<EPS-PRIMARY> .56
<EPS-DILUTED> .55
<YIELD-ACTUAL> 8.17
<LOANS-NON> 1,408
<LOANS-PAST> 597
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 1,234
<CHARGE-OFFS> 545
<RECOVERIES> 36
<ALLOWANCE-CLOSE> 1,007
<ALLOWANCE-DOMESTIC> 1,007
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
