<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 2000
Commission File Number: 000-23909
PINNACLE BANKSHARES CORPORATION
(Exact name of small business issuer as specified in its charter)
VIRGINIA 54-1832714
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
P.O. Box 29
Altavista, Virginia 24517
(Address of principal executive offices)
(804) 369-3000
(Issuer's telephone number, including area code)
Check whether the issuer (1) has 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 _________
---------
At July 13, 2000, 1,441,340 shares of Pinnacle Bankshares Corporation's common
stock, $3 par value, were outstanding.
Transitional small business disclosure format: Yes No x .
---- ---
<PAGE>
PINNACLE BANKSHARES CORPORATION
FORM 10-QSB
June 30, 2000
INDEX
Part I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets as of June 30, 2000
and December 31, 1999 3
Consolidated Statements of Income and
Comprehensive Income for the three month periods
ended June 30, 2000 and 1999 4
Consolidated Statements of Income and
Comprehensive Income for the six month periods
ended June 30, 2000 and 1999 5
Consolidated Statements of Cash Flows for the six
month periods ended June 30, 2000 and 1999 6
Notes to Consolidated Financial Statements 7-10
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 10-14
Part II. OTHER INFORMATION
Item 1. Legal Proceedings 15
Item 4. Submission of Matters to a Vote of
Security Holders 15
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
PINNACLE BANKSHARES CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands of dollars)
<TABLE>
<CAPTION>
Assets June 30, 2000 December 31,1999
(Unaudited) (Audited)
----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Cash and cash equivalents: (note 2)
Cash and due from banks $ 4,401 $ 5,362
Federal funds sold - 2,768
------------------------------
Total cash and cash equivalents 4,401 8,130
Securities (note 3):
Available-for-sale, at fair value 20,927 21,920
Held-to-maturity, at amortized cost 15,423 15,340
Federal Reserve Bank stock, at cost 75 75
Federal Home Loan Bank Stock, at cost 427 427
Loans, net (note 4) 107,821 100,737
Bank Premises and equipment, net 4,048 4,084
Accrued income receivable 1,260 1,227
Other assets 2,241 2,016
------------------------------
Total assets $ 156,623 $ 153,956
----------------------------------------------------------------------------------------------------------
Liabilities and Stockholders' Equity
Liabilities:
Deposits:
Demand 11,725 11,595
Savings and NOW accounts 40,329 43,770
Time 82,739 81,024
------------------------------
Total deposits 134,793 136,389
------------------------------
Federal funds purchased 3,612 -
Note payable to Federal Home Loan Bank 750 800
Accrued interest payable 613 602
Other liabilities 659 575
------------------------------
Total liabilities 140,427 138,366
------------------------------
Stockholders' equity:
Common stock, $3 par value. Authorized 3,000,000 shares,
issued and outstanding 1,441,340 shares in 2000 and
719,925 shares in 1999 4,324 2,160
Capital surplus 390 367
Retained earnings 11,886 13,460
Accumulated other comprehensive loss (404) (397)
------------------------------
Total stockholders' equity 16,196 15,590
------------------------------
Total liabilities and stockholders' equity $ 156,623 $ 153,956
----------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
3
<PAGE>
PINNACLE BANKSHARES CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(Unaudited)
(Amounts in thousands of dollars, except for per share amounts)
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------
Three Months Three Months
Ended Ended
June 30,2000 June 30,1999
<S> <C> <C>
Interest Income:
Interest and fees on loans $ 2,445 $ 2,103
Interest on securities:
U.S. Treasury 54 52
U.S. Government agencies 251 261
Corporate 76 73
States and political subdivisions (tax exempt) 154 156
Other 11 9
Interest on federal funds sold 19 74
--------------------------------------------
Total interest income 3,010 2,728
--------------------------------------------
Interest expense:
Interest on deposits:
Savings and NOW accounts 298 315
Time - other 900 889
Time - $100,000 and over 204 179
Other interest expense 23 13
--------------------------------------------
Total interest expense 1,425 1,396
--------------------------------------------
Net interest income 1,585 1,332
Provision for loan losses 90 75
--------------------------------------------
Net interest income after provision for loan losses 1,495 1,257
Noninterest income:
Service charges on deposit accounts 114 71
Net gain on calls and sales of securities - 4
Other operating income 110 46
Commissions and Fees 45 67
--------------------------------------------
Total noninterest income 269 188
--------------------------------------------
Noninterest expense:
Salaries and employee benefits 596 529
Occupancy expense 73 47
Furniture and equipment 102 83
Other operating expenses 376 308
--------------------------------------------
Total noninterest expense 1,147 967
--------------------------------------------
Income before income tax expense 617 478
Income tax expense 167 119
--------------------------------------------
Net income 450 359
Other comprehensive loss, net of income tax benefit:
Net unrealized losses on securities available for sale (5) (248)
--------------------------------------------
Comprehensive income $ 445 $ 111
------------------------------------------------------------------------------------------------------------------------------
Net income per share (note 5):
Basic $ 0.31 $ 0.25
Diluted $ 0.31 $ 0.25
------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
4
<PAGE>
PINNACLE BANKSHARES CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(Unaudited)
(Amounts in thousands of dollars, except for per share amounts)
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------------
Six Months Six Months
Ended Ended
June 30,2000 June 30,1999
<S> <C> <C>
Interest Income:
Interest and fees on loans $4,780 $4,180
Interest on securities:
U.S. Treasury 108 108
U.S. Government agencies 506 501
Corporate 153 143
States and political subdivisions (tax exempt) 310 307
Other 20 19
Interest on federal funds sold 49 198
--------------------------------------------
Total interest income 5,926 5,456
--------------------------------------------
Interest expense:
Interest on deposits:
Savings and NOW accounts 608 625
Time - other 1,774 1,778
Time - $100,000 and over 395 380
Other interest expense 35 27
--------------------------------------------
Total interest expense 2,812 2,810
--------------------------------------------
Net interest income 3,114 2,646
Provision for loan losses 180 150
--------------------------------------------
Net interest income after provision for loan losses 2,934 2,496
Noninterest income:
Service charges on deposit accounts 204 132
Net gain on calls and sales of securities - 4
Other operating income 177 115
Commissions and fees 79 119
--------------------------------------------
Total noninterest income 460 370
--------------------------------------------
Noninterest expense:
Salaries and employee benefits 1,171 1,028
Occupancy expense 130 95
Furniture and equipment 205 160
Other operating expenses 723 573
--------------------------------------------
Total noninterest expense 2,229 1,856
Income before income tax expense 1,165 1,010
--------------------------------------------
Income tax expense 310 258
--------------------------------------------
Net income $855 $752
----------------------------------------------------------------------------------------------------------------------------------
Other comprehensive loss, net of income tax benefit:
Net unrealized losses on securities available for sale (7) (365)
--------------------------------------------
Comprehensive income $848 $387
----------------------------------------------------------------------------------------------------------------------------------
Net income per share (note 5):
Basic $0.59 $0.52
Diluted $0.59 $0.52
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
5
<PAGE>
PINNACLE BANKSHARES CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Amounts in thousands of dollars)
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------------
Six Months Six Months
Ended Ended
June 30,2000 June 30,1999
<S> <C> <C>
Cash flows from operating activities:
Net income $855 $752
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation of bank premises and equipment 162 119
Amortization of core deposit premium 6 6
Amortization of net unearned fees (40) (66)
Net amortization (accretion) of premiums and
discounts on securities 8 17
Provision for loan losses 180 150
Provision for deferred income taxes 8 47
Net gain on calls and sales of securities - (4)
Net (increase) decrease in:
Accrued income receivable (33) (122)
Other assets (209) 8
Net increase (decrease) in:
Accrued interest payable 11 3
Other liabilities 84 (56)
----------------------------------
Net cash provided by operating activities 1,032 854
-------------------------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
Purchases of held-to-maturity securities (660) (2,875)
Purchases of available-for-sale securities (1,456) (5,497)
Proceeds from maturities and calls of held-to-maturity securities 565 1,700
Proceeds from paydowns and maturities of held-to-maturity
mortgage-backed securities 1 2
Proceeds from maturities and calls of available-for-sale
securities 2,000 2,200
Proceeds from paydowns and maturities of available-for-sale
mortgage-backed securities 441 1,188
Purchase of Federal Home Loan Bank stock - (18)
Net increase in loans (7,312) (6,103)
Recoveries on loans charged off 62 84
Purchases of bank premises and equipment (126) (1,033)
Proceeds from sale of foreclosed properties - 48
----------------------------------
Net cash used in investing activities (6,485) (10,304)
-------------------------------------------------------------------------------------------------------------------------
Cash flows from financing activites:
Net increase in demand, savings and NOW deposits (3,311) 2,774
Net increase in time deposits 1,715 2,416
Proceeds from federal funds purchased 3,612 -
Dividends paid (267) (260)
Proceeds from issuance of common stock 25 32
Repayment of note payable to Federal Home Loan Bank (50) (50)
----------------------------------
Net cash provided by financing activities 1,724 4,912
-------------------------------------------------------------------------------------------------------------------------
Net decrease in cash and cash equivalents (3,729) (4,538)
Cash and cash equivalents, beginning of period 8,130 10,682
----------------------------------
Cash and cash equivalents, end of period $4,401 $6,144
-------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
6
<PAGE>
Item 6. Exhibits and Reports on Form 8-K 16
SIGNATURES 16
PINNACLE BANKSHARES CORPORATION AND SUBSIDIARY
Notes to Consolidated Financial Statements
June 30, 2000
(Unaudited)
(In thousands, except for share data)
(1) General
The consolidated financial statements include the accounts of Pinnacle
Bankshares Corporation ("Bankshares") and its wholly-owned subsidiary, The First
National Bank of Altavista (the "Bank"),(collectively the "Company"). All
material intercompany accounts and transactions have been eliminated. The
consolidated financial statements conform to generally accepted accounting
principles and to general banking industry practices. In the opinion of the
Company's management, the accompanying unaudited consolidated financial
statements contain all adjustments of a normal recurring nature, necessary to
present fairly the financial position as of June 30, 2000, the results of
operations for the three-month and six-month periods ended June 30, 2000 and
1999, and cash flows for the six-month periods ended June 30, 2000 and 1999.
These interim period consolidated financial statements and financial
information should be read in conjunction with the consolidated financial
statements and notes thereto included in Pinnacle Bankshares Corporation's 1999
Annual Report and additional information supplied in the 1999 Form 10-KSB.
The results of operations for the interim periods are not necessarily
indicative of the results to be expected for the full year ending December 31,
2000.
(2) Cash and Cash Equivalents
For purposes of reporting cash flows, cash and cash equivalents include
cash on hand, amounts due from banks, interest-bearing deposits, and federal
funds sold.
7
<PAGE>
(3) Securities
The amortized costs, gross unrealized gains, gross unrealized losses, and
fair values for securities at June 30, 2000, are shown in the table below. As
of June 30, 2000, securities with amortized costs of $973 and fair values of
$969 were pledged as collateral for public deposits.
<TABLE>
<CAPTION>
(3) (Continued)
<S> <C> <C> <C> <C>
Gross Gross
Amortized Unrealized Unrealized Fair
Available-for-Sale: Costs Gains Losses Values
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Treasury securities
and obligations of U.S.
Government corporations
and agencies $15,453 - (554) 14,899
Obligations of states and
political subdivisions 4,192 21 ( 57) 4,156
Mortgage-backed securities-
Government 1,844 9 ( 31) 1,822
Other securities 50 - - 50
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Totals $21,539 30 (642) 20,927
-----------------------------------------------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Fair
Held-to-Maturity: Costs Gains Losses Values
-----------------------------------------------------------------------------------
U.S. Treasury securities
and obligations of U.S.
Government corporations
and agencies $ 1,675 - ( 50) 1,625
Obligations of states and
political subdivisions 13,746 23 (482) 13,287
Mortgage-backed securities-
Private 2 - - 2
-----------------------------------------------------------------------------------
Totals $15,423 23 (532) 14,914
-----------------------------------------------------------------------------------
</TABLE>
(4) Allowance for Loan Losses
Changes in the allowance for loan losses are as follows:
8
<PAGE>
<TABLE>
<CAPTION>
2000 1999
----- ------
<S> <C> <C>
Balance at January 1, $ 938 $ 877
Provision for loan losses 180 150
Loans charged off (149) (167)
Recoveries 62 84
------ -----
Balance at June 30, $1,031 $ 944
====== =====
</TABLE>
(5) Net Income Per Share
Basic net income per share excludes dilution and is computed by dividing
income available to common stockholders by the weighted-average number of common
shares outstanding for the period. Diluted net income per share reflects the
potential dilution that could occur if securities or other contracts to issue
common stock were exercised or converted into common stock or resulted in the
issuance of common stock that then shared in the earnings of the entity.
The following is a reconciliation of the numerators and denominators of the
basic and diluted net income per share computations for the periods indicated:
<TABLE>
<CAPTION>
Net Income Shares Per Share
Three Months Ended June 30, 2000 (Numerator) (Denominator) Amount
---------------------------------- ----------- ------------- ---------
<S> <C> <C> <C>
Basic net income per share $450 1,441,088 $0.31
=====
Effect of dilutive stock options - 5,596
---- ---------
Diluted net income per share $450 1,446,684 $0.31
==== ========= =====
Three Months Ended June 30, 1999
----------------------------------
Basic net income per share $359 1,439,414 $0.25
=====
Effect of dilutive stock options - 12,316
---- ---------
Diluted net income per share $359 1,451,730 $0.25
==== ========= =====
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
Net Income Shares Per Share
Six Months Ended June 30, 2000 (Numerator) (Denominator) Amount
---------------------------------- ---------- ------------ ---------
<S> <C> <C> <C>
Basic net income per share $855 1,440,602 $0.59
=====
Effect of dilutive stock options - 5,808
---- ---------
Diluted net income per share $855 1,446,410 $0.59
==== ========= =====
Six Months Ended June 30, 1999
----------------------------------
Basic net income per share $752 1,438,736 $0.52
=====
Effect of dilutive stock options - 12,186
---- ---------
Diluted net income per share $752 1,450,922 $0.52
==== ========= =====
</TABLE>
(6) Stock Split
On May 19, 2000, the Board of Directors authorized a 2 for 1 stock split
effected in the form of a 100% stock dividend paid on June 16, 2000 to the
stockholders of record at the close of business on May 19, 2000 of the Company's
$3 par value common stock. As a result of the split 720,670 additional shares
were issued, and retained earnings were reduced by $2,162. All references in the
accompanying consolidated financial statements to the number of common shares
and per-share amounts for 1999 have been restated to reflect this stock split
effected in the form of a dividend.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS(Amounts in 000's)
The following discussion supplements and provides information about the
major components of the results of operations and financial condition, liquidity
and capital resources of Pinnacle Bankshares Corporation and subsidiary (the
"Company"). This discussion and analysis should be read in conjunction with the
Company's Consolidated Financial Statements, and supplemental financial data.
OVERVIEW
Total assets at June 30, 2000 were $156,623, up 1.73% from $153,956 at
December 31, 1999. The principal components of the Company's assets at the end
of the period were $36,350 in securities and $107,821 in net loans. During the
six month period, net loans increased 7.03% or $7,084. The Company's lending
activities are a principal source of income.
10
<PAGE>
Total liabilities at June 30, 2000 were $140,427, up from $138,366 at
December 31, 1999, with a decrease in deposits of $1,596 or 1.15%. Non-interest
bearing demand deposits decreased $130 or 1.12% and represented 8.70% of total
deposits. The Company's deposits are provided by individuals and businesses
located within the communities served.
Total stockholders' equity at June 30, 2000 was $16,196 consisting of
$11,886 in retained earnings and $404 of net unrealized losses on securities
available for sale. At December 31, 1999, total shareholder's equity was
$15,590.
The Company had net income of $855 for the six months ended June 30, 2000,
compared with net income of $752 for the comparable period in 1999, an increase
of 13.70%. The Company had net income of $450 for the three months ended June
30, 2000, compared with net income of $359 for the comparable period in 1999, an
increase of 25.35%. The results of operations for the six month period ended
June 30, 2000 are not necessarily indicative of the results to be expected for
the full year ending December 31, 2000.
Profitability as measured by the Company's return on average assets (ROA)
was 1.10% for the six months ended June 30, 2000, up from 1.01% for the same
period of 1999. Another key indicator of performance, the return on average
equity (ROE) for the six months ended June 30, 2000 was 10.76%, compared to
9.88% for the six months ended June 30, 1999.
NET INTEREST INCOME
Net interest income represents the principal source of earnings for the
Company. Changes in the volume and mix of interest-earning assets and interest-
bearing liabilities, as well as their respective rates and yields, have a
significant impact on the level of net interest income.
The net interest margin increased from 4.02% for the six months ended June
30, 1999, to 4.53% for the six months ended June 30, 2000. Net interest income
was $3,114 for the six months ended June 30, 2000 and is attributable to
interest income from loans and securities exceeding the cost associated with
interest paid on deposits.
11
<PAGE>
Interest expense on deposits increased 2.08% in the second quarter of 2000
over the second quarter of 1999. Interest income on loans and securities
increased 10.34% in the second quarter of 2000 over the second quarter of 1999.
Interest and fees on loans was $4,780 for the six month period ended June 30,
2000, up from $4,180 at June 30, 1999.
NON-INTEREST INCOME
Non-interest income increased $90 or 24.32% for the six month period ended
June 30, 2000 over the same period of 1999. Non-interest income increased $81,
or 43.09% when comparing the three months ended June 30, 2000 to the same period
of 1999. The Company's principal sources of non-interest income are service
charges and fees on deposit accounts, particularly transaction accounts, and
fees from loans. Finance charges on the Business Manager Receivables Financing
Program was another source of the increase. Fees from this program increased
$52 for the six months ended June 30, 2000 compared to the same period in 1999.
NON-INTEREST EXPENSE
Non-interest expense increased $373 or 20.10%, for the six month period
ended June 30, 2000 over the same period of 1999. An increase of $180 or 18.61%
is reflected when comparing the three month period ended June 30, 2000 to the
same period of 1999. The increase in non-interest expense when comparing the two
periods is attributed to the effect of overall growth of the Company on
personnel expenses, fixed asset costs associated with bank premises additions
and other operating expenses. The new Airport Branch facility, which opened in
late June, 1999, also contributed to the current year's expense increase.
ALLOWANCE AND PROVISION FOR LOAN LOSSES
A provision for loan losses of $180 was expensed in the first six months of
2000 in recognition of management's estimate of risks inherent with lending
activities. Among other factors, management considers the Company's historical
loss experience, the size and composition of the loan portfolio, the value and
adequacy of collateral and guarantors, non-performing credits, and current and
anticipated economic conditions. There are additional risks of future loan
losses that cannot be precisely quantified or attributed to particular loans or
classes of loans. Since those risks include general economic trends as well as
12
<PAGE>
conditions affecting individual borrowers, the allowance for loan losses is an
estimate. The allowance is also subject to regulatory examinations and
determination as to adequacy, which may take into account such factors as the
methodology used to calculate the allowance. The allowance for loan losses was
$1,031 as of June 30, 2000, and represents approximately .95% of total loans
outstanding. Management believes the allowance was adequate as of June 30,
2000. Management evaluates the reasonableness of the allowance for loan losses
on a quarterly basis and adjusts the provision as deemed necessary.
NON-PERFORMING ASSETS AND IMPAIRED LOANS
Nonperforming assets, which consist of nonaccrual loans and foreclosed
properties, were $48 at June 30, 2000 and December 31, 1999. There were no
foreclosed properties as of June 30, 2000 nor as of December 31,1999. Nonaccrual
loans were $48 at June 30, 2000 and at December 31, 1999. Loans are generally
placed in nonaccrual status when the collection of principal and interest is 90
days or more past due, unless the obligation is both well-secured and in the
process of collection. Impaired loans equaled nonaccrual loans at June 30,
2000.
LIQUIDITY
Liquidity represents an institution's ability to meet present and future
financial obligations through either the sale or maturity of existing assets or
the acquisition of additional funds from alternative funding sources. The
Company's liquidity is provided by cash and due from banks, federal funds sold,
investments available for sale, managing investment maturities, interest-earning
deposits in other financial institutions and loan repayments. The Company's
ability to obtain deposits and purchase funds at favorable rates also affects it
liquidity. As a result of the Company's management of liquid assets and the
ability to generate liquidity through alternative funding sources, management
believes that the bank maintains overall liquidity that is sufficient to satisfy
its depositors' requirements and to meet customers' credit needs. The Company's
ratio of liquid assets to deposits and short-term borrowings was 18.30% as of
June 30, 2000 as compared to 22.03% as of December 31,1999. Additional sources
of liquidity available to the Company include its capacity to borrow additional
funds through correspondent banks. The Company derives cash flows from its
operating, investing, and financing activities. Cash flows of the Company are
13
<PAGE>
primarily used to fund loans and securities and are provided by the deposits and
borrowings of the Company.
CAPITAL
The Company's financial position at June 30, 2000 reflects liquidity and
capital levels currently adequate to fund anticipated future business expansion.
Capital ratios are well in excess of required regulatory minimums for a well-
capitalized institution. The assessment of capital adequacy depends on a number
of factors such as asset quality, liquidity, earnings performance, and changing
competitive conditions and economic forces. The adequacy of the Company's
capital is reviewed by management on an ongoing basis. Management seeks to
maintain a capital structure that will assure an adequate level of capital to
support anticipated asset growth and to absorb potential losses.
Stockholders' equity reached $16,196 at the end of the second quarter of
2000 compared to $15,590 at December 31, 1999. The leverage ratio consists of
Tier I capital divided by quarterly average assets. At June 30, 2000, the
Company's leverage ratio was 10.68% compared to 10.47% at December 31, 1999.
Each of these exceeds the required minimum leverage ratio of 4%.
PENDING ACQUISITION OF BRANCHES
On May 5, 2000, the Company entered into a Purchase and Assumption
Agreement with One Valley Bank, Central Virginia, N.A. ("One Valley") under
which One Valley will sell to the Company two branches in the Lynchburg,
Virginia area. Under this transaction, the Company will purchase the assets,
including loans in excess of $4,000, and assume the liabilities of the branches,
including depository liabilities of approximately $27,000. This transaction is
expected to be consummated at the close of business on August 11, 2000. The
transaction is contingent upon regulatory approval and conditions contained in
the agreement.
OTHER
The Company has not experienced any significant disruptions to our financial or
operating activities caused by failure of our computerized systems resulting
from Year 2000 issues. Management does not expect Year 2000 issues to have a
14
<PAGE>
material adverse effect on the Company's operations or financial results in
2000.
The Company was prepared for the millennium change and continues to successfully
operate and handle the transactions of our customers subsequent to December 31,
1999.
PART II - OTHER INFORMATION
Item 1 - LEGAL PROCEEDINGS
There are no material pending legal proceedings to which the Company is a
party or of which the property of the Company is subject.
15
<PAGE>
Item 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) The 2000 Annual Meeting of Shareholders of Pinnacle Bankshares
Corporation was held on April 11, 2000.
(b) The April 11, 2000, annual meeting of the shareholders of the Company
involved the election of directors. The following persons were elected to serve
as Class III Directors, serving until the 2003 Annual Meeting.
<TABLE>
<CAPTION>
Name For Against Abstain
---- --- ------- -------
<S> <C> <C> <C>
Warren G. Lowder 578,421 0 10,444
Herman P. Rogers, Jr. 578,421 0 10,444
Carroll E. Shelton 579,749 0 9,117
John L. Waller 577,417 0 11,448
</TABLE>
Class I and III directors will continue in office until the 2001 and 2002
Annual Meetings of Shareholders, respectively.
Class I Class II
-------- --------
A. Willard Arthur
John P. Erb Alvah P. Bohannon, III
Robert L. Finch James E. Burton, IV
Robert H. Gilliam, Jr. James P. Kent, Jr.
R.B. Hancock, Jr. Percy O. Moore
(c) None
(d) None
Item 6 - EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit 27-Financial Data Schedule
(b) Reports on Form 8-K
None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
16
<PAGE>
PINNACLE BANKSHARES CORPORATION
AUGUST 3, 2000 /s/ Robert H. Gilliam, Jr.
-------------------- ------------------------------------
Date Robert H. Gilliam, Jr., President and
Chief Executive Officer
AUGUST 3, 2000 /s/ Bryan M. Lemley
-------------------- --------------------------------
Date Bryan M. Lemley, Secretary,
Treasurer and Chief Financial Officer
