3Q Earnings Fall 34% at Pinnacle in Virginia

Flat lending and weaker margins hurt Pinnacle Bankshares (PPBN) in Altavista, Va., in the third quarter.

Earnings fell 34%, to $399 million, from a year earlier, the $347 million-asset company said Monday.

Pinnacle reported loans of $269 million, roughly unchanged from a year earlier. Its interest income was $2.8 million, down 9.7% from the third quarter of 2011. Net interest margin fell 18 basis points, to 3.56%, primarily reflecting lower interest income and declining yields.

Noninterest income fell roughly 0.12%, to $857 million from a year earlier. Noninterest expense rose 7.4%, to $2.9 million.

Pinnacle's provision for loan losses fell 44%, to $174 million. Non-accruing loans fell 20%, to $4.3 million, from the third quarter of 2011.

"Significant improvement in the quality of our loan portfolio combined with a material decline in loan chargeoffs has resulted in a lower provision for loan losses, which has driven these results," Aubrey H. Hall, III, Pinnacle’s chief executive, said in a news release.