8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form 8-K

CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): April 28, 2006

PINNACLE BANKSHARES CORPORATION

(Exact name of registrant as specified in its charter)

Virginia	000-23909	54-1832714
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

622 Broad Street, Altavista, Virginia	24517
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (434) 369-3000

N/A

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

On April 28, 2006, Pinnacle Bankshares Corporation issued the press release attached hereto as Exhibit 99.1 announcing first quarter 2006 financial results.

The information in this Form 8-K, and Exhibit 99.1 hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

99.1 Press Release dated April 28, 2006 announcing first quarter 2006 financial results unaudited.

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	PINNACLE BANKSHARES CORPORATION
Date: April 28, 2006	By:	/s/ Bryan M. Lemley
		Bryan M. Lemley
		Treasurer and Chief Financial Officer

Exhibit Index

Exhibit
99.1	Press Release dated April 28, 2006 announcing first quarter 2006 financial results unaudited.

EX-99.1

EXHIBIT 99.1

Altavista, VA (April 28, 2006) — Pinnacle Bankshares Corporation (OTCBB:PPBN), the one-bank holding company (the “Company”) of The First National Bank of Altavista (quarterly consolidated results unaudited) reported today net income after taxes of $576,000 or $0.39 per basic share for the quarter ended March 31, 2006, a 20.76% increase when compared to net income after taxes of $477,000 or $0.33 per basic share for the same period of 2005.

The 20.76% increase in net income after taxes for the quarter ended March 31, 2006 was primarily driven by an increase in net interest income after provision for loan losses as interest income increased by $645,000 and the provision for loan losses increased by $5,000 compared to the same time period in 2005. Net chargeoffs totaled $38,000 in the first quarter of 2006 as compared to $80,000 in the first quarter of 2005.

Profitability as measured by the Company’s return on average assets (ROA) was 0.98% for the three months ended March 31, 2006, up from 0.86% for the same period of 2005. Another key indicator of performance, the return on average equity (ROE), for the three months ended March 31, 2006 was 9.86%, up from 8.59% for the three months ended March 31, 2005.

The net interest margin increased to 3.99% for the three months ended March 31, 2006, from 3.76% for the three months ended March 31, 2005. The increase was attributable to the upward repricing of variable rate loans due to increases in the Prime Rate during 2005 and the first quarter of 2006. Overall loan yield growth exceeded the growth in the rate paid for deposits in the past year. Also, the gross loan to deposit ratio increased from 80.41% to 88.08%. As a result of these factors, net interest income was $2,166,000 for the three months ended March 31, 2006 compared to $1,880,000 for the three months ended March 31, 2005.

Interest income on loans and securities increased 21.99% in the first quarter of 2006 compared to the first quarter of 2005 due to the impact of upward repricing of variable rate loans as the Prime Rate has increased 2.00% since March 31, 2005. Interest and fees on loans was $3,115,000 for the three-month period ended March 31, 2006, up from $2,431,000 for the same period in 2005.

Total interest expense increased 34.09% in the first quarter of 2006 compared to the first quarter of 2005 due to the impact of the upward repricing of deposit liabilities during 2005 and the first quarter of 2006 noted above.

Noninterest income increased $12,000 or 2.19% for the three-month period ended March 31, 2006 compared to the same period of 2005. The increase from 2005 was due to a $28,000 or 51.85% increase in commissions and fees, mainly from investment sales, partially offset by a $9,000 decrease in service charges on deposit accounts and a $5,000 decrease in fees on sales of mortgage loans. The decrease in fees on the sale of mortgage loans is due to an increase in mortgage rates, fewer refinancings and the lack of growth in the mortgage loan market in the first quarter of 2006.

Noninterest expense increased $124,000 or 7.30%, for the three-month period ended March 31, 2006 compared to the same period of 2005. The increase in non-interest expense is primarily attributable to the growth of the Company’s personnel expenses due to adding a commercial loan officer and staffing the bank’s loan production office at Smith Mountain Lake, which opened in June 2005. The Company also experienced an 8.62% increase in furniture and equipment expense primarily attributable to furnishings and equipment at the loan production office and other upgrades.

Total assets at March 31, 2006 were $238,663,000 up 2.22% from $233,490,000 at December 31, 2005. The principal components of the Company’s assets at the end of the period were $27,684,000 in securities and $186,473,000 in net loans. During the three month period ended March 31, 2006, net loans increased 3.13% or $5,662,000 from $180,811,000 at December 31, 2005. Also during the three-month period, securities decreased 5.39% or $1,577,000 from December 31, 2005.

Total liabilities at March 31, 2006 were $215,123,000, up 2.30% from $210,278,000 at December 31, 2005, primarily as a result of an increase in demand deposits from December 31, 2005 of $3,446,000 or 15.73% and an increase in savings and NOW accounts from December 31, 2005 of $997,000 or 1.54%.

Total stockholders’ equity at March 31, 2006 was $23,540,000, including $18,748,000 in retained earnings and $169,000 of accumulated other comprehensive losses, which represents net unrealized losses on available-for-sale securities. At December 31, 2005, total stockholders’ equity was $23,212,000.

Selected financial highlights are shown below.

Pinnacle Bankshares Corporation is a locally managed community banking organization based in Central Virginia. The one-bank holding company of The First National Bank of Altavista serves an area consisting primarily of Campbell County, northern Pittsylvania County, eastern Bedford County, northern Franklin County and the city of Lynchburg from two branches located in the town of Altavista, four branches located within or near the city of Lynchburg, Virginia, and one branch in Forest, Bedford County. A loan production office at Smith Mountain Lake in Moneta, Franklin County, Virginia opened in May 2005. The Brookville office currently located in a Kroger grocery store on Timberlake Road in Lynchburg will relocate approximately 1.5 miles to a new full service branch at 20865 Timberlake Road in Lynchburg in May 2006.

This press release may contain “forward-looking statements” within the meaning of federal securities laws that involve significant risks and uncertainties. These statements are based on certain assumptions and analyses by the Company and may relate to the Company’s future plans and performance. 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: interest rates, general economic conditions, the legislative/regulatory climate, monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Board of Governors of the Federal Reserve System, the quality or composition of the loan or investment portfolios, demand for loan products, deposit flows, competition, demand for financial services in our market area and accounting principles, policies and guidelines. These risks and uncertainties should be considered in evaluating forward-looking statements contained herein, and you should not place undue reliance on such statements, which reflect our position as of the date of this release.

Pinnacle Bankshares Corporation

Selected Financial Highlights

(Unaudited)

(Amounts in thousands)

Income Statement Highlights	3 Months Ended 3/31/2006		Year Ended 12/31/2005		3 Months Ended 3/31/2005
Net Interest Income	$	2,166	$	7,983	$	1,880
Provision for Loan Losses		65		230		60
Noninterest Income		561		2,396		549
Noninterest Expense		1,823		7,166		1,699
Net Income		576		2,107		477

Balance Sheet Highlights	3/31/2006		12/31/2005		3/31/2005
Net Loans	$	186,473	$	180,811	$	160,442
Total Investments		27,684		29,261		33,333
Total Assets		238,663		233,490		224,670
Total Deposits		214,040		209,246		201,535
Stockholder’s Equity		23,540		23,212		22,238

CONTACT: Pinnacle Bankshares Corporation, Bryan M. Lemley, 434-369-3036 bryanlemley@1stnatbk.com