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): February 17, 2010

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 February 16, 2010, Pinnacle Bankshares Corporation issued the press release attached hereto as Exhibit 99.1 announcing fourth quarter 2009 and 2009 financial results (unaudited).

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 February 16, 2010 announcing fourth quarter 2009 and 2009 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: February 17, 2010	By:	/s/ Bryan M. Lemley
		Bryan M. Lemley
		Treasurer and Chief Financial Officer

Exhibit Index

Exhibit
99.1	Press Release dated February 16, 2010 announcing fourth quarter 2009 and 2009 financial results (unaudited).

EX-99.1

Exhibit 99.1

Altavista, VA February 16, 2010 — Pinnacle Bankshares Corporation (OTCBB:PPBN), the one-bank holding company (the Company) of First National Bank (quarterly consolidated results unaudited) reported today net income after taxes of $78,000 or $0.05 per basic and diluted share for the quarter ended December 31, 2009, and $351,000 or $0.24 per basic and diluted share for the year ended December 31, 2009 compared to a net loss after taxes of $1,201,000 or ($0.80) per basic and diluted share and net income of 306,000 or $0.21 per basic and diluted share, respectively, for the same periods of 2008.

“We continue to report positive earnings despite the current economic climate and have exceeded 2008 income in 2009. We continue striving to achieve better returns in this challenging environment,” stated Bryan Lemley, Chief Financial Officer for both the Company and First National Bank.

Net interest income was $10,004,000 for the year ended December 31, 2009 compared to $10,209,000 for the year ended December 31, 2008. Net interest income was $2,648,000 for the three months ended December 31, 2009 compared to $2,500,000 for the three months ended December 31, 2008. The net interest margin decreased to 3.24% for the year ended December 31, 2009, from 3.60% for the year ended December 31, 2008, although the net interest margin increased in the fourth quarter of 2009 to 3.49% as compared to 3.29% in the third quarter of 2009.

Provision for loan losses was $501,000 in the fourth quarter of 2009 compared to $2,338,000 in the fourth quarter of 2008. Provision for loan losses was $1,530,000 in 2009 compared with $2,881,000 in 2008.

Noninterest income for the year ended December 31, 2009 increased $252,000 or 8.70% in 2009 compared to 2008. Noninterest income increased $75,000 or 10.65% for the three months ended December 31, 2009 compared to the same period of 2008. The increases from the twelve-month and three-month periods in 2008 were due mainly to 109.58% and 42.03% increases, respectively, in fees on sales of mortgage loans.

Noninterest expense for the year ended December 31, 2009 increased $1,325,000 or 13.46% in 2009 compared to 2008. Noninterest expense increased $118,000 or 4.37% for the three months ended December 31, 2009 compared to the same period of 2008. The increase in noninterest expense for the year and three-month periods is attributed primarily to personnel expenses, an increase in expenses associated with our new Rustburg branch and a significant increase in FDIC premiums and a special FDIC assessment. The Bank expensed $621,000 in FDIC premiums and assessments in 2009, to replenish the FDIC insurance fund after many bank failures, as compared to $77,000 in 2008.

Total assets at December 31, 2009 were $322,210,000, up 3.41% from $321,243,000 at December 31, 2008. The principal components of the Company’s assets at the end of the period were $265,904,000 in net loans, $32,060,000 in cash and cash equivalents and $20,156,000 in securities. During 2009, net loans decreased 4.76% or $13,295,000 from $279,199,000 at December 31, 2008. Also during 2009, securities increased 44.68% or $6,225,000.

Total liabilities at December 31, 2009 were $306,359,000, up 3.39% from $296,324,000 at December 31, 2008, as a result of an increase in savings and NOW accounts of $15,613,000 or 17.78% and demand deposits of $4,545,000 or 16.39%, partially offset by a decrease in time deposits of $5,272,000 or 3.07%. The increase in deposits is mainly attributable to the success of our “KaChing! Checking” product which offers rates comparable to certificates of deposit with the freedom of having access to your funds at any time.

Total stockholders’ equity at December 31, 2009 was $25,851,000 including $21,306,000 in retained earnings and $697,000 of accumulated other comprehensive losses net of the related deferred tax asset, which represents net unrealized gains on available-for-sale securities and net unrealized losses on the funded status of the Company’s defined benefit retirement plan. At December 31, 2008, total stockholders’ equity was $24,919,000.

The allowance for loan losses was $3,723,000 as of December 31, 2009, representing approximately 1.38% of total loans outstanding compared to $3,969,000 or 1.40% of total loans outstanding as of December 31, 2008.

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 First National Bank serves an area consisting primarily of all or portions of the Counties of Campbell, Pittsylvania, Franklin, Bedford, Amherst and the City of Lynchburg. The Company operates two branches in the Town of Altavista, one branch in the Town of Amherst, three branches in Campbell County, one branch in the City of Lynchburg, one branch in Bedford County at Forest and a loan production office at Smith Mountain Lake in Franklin County at Moneta. The Company’s newest branch opened February 12, 2009 in the Town of Rustburg. First National Bank is celebrating its 101^st year in operation.

This press release may contain “forward-looking statements” within the meaning of federal securities laws that involve significant risks and uncertainties All statements contained herein that are not historical facts, such as statements regarding the Company’s future plans and performance, are forward-looking and are based on current assumptions and analysis by the Company. 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 and business conditions, the real estate market, 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 and any policies or programs implemented pursuant to the Emergency Economic Stabilization Act of 2008, the quality or composition of the loan or investment portfolios, demand for loan products, deposit flows and funding costs, competition, demand for financial services in our market area and accounting principles, policies and guidelines. These risks and uncertainties should be considered in evaluating the forward-looking statements contained herein, and you should not place undue reliance on such statements, which reflect our views as of the date of this release.

Pinnacle Bankshares Corporation

Selected Financial Highlights

(Dollar Amounts in thousands)

Income Statement Highlights

	3 Months Ended 12/31/2009		3 Months Ended 9/30/2009		3 Months Ended 12/31/2008
	(Unaudited)		(Unaudited)		(Audited)
Interest Income	$	4,311	$	4,360	$	4,623
Interest Expense		1,663		1,821		2,123
Net Interest Income		2,648		2,539		2,500
Provision for Loan Losses		501		188		2,338
Noninterest Income		779		867		704
Noninterest Expense		2,819		2,880		2,701
Net Income (Loss)		78		237		(1,201	)

Income Statement Highlights

	Year Ended 12/31/2009		Year Ended 12/31/2008		Year Ended 12/31/2007
	(Unaudited)		(Audited)		(Unaudited)
Interest Income	$	17,316	$	18,555	$	18,359
Interest Expense		7,312		8,346		8,178
Net Interest Income		10,004		10,209		10,181
Provision for Loan Losses		1,530		2,881		462
Noninterest Income		3,148		2,896		2,632
Noninterest Expense		11,171		9,846		8,524
Net Income		351		306		2,600

Balance Sheet Highlights

	12/31/2009		12/31/2008		12/31/2007
	(Unaudited)		(Audited)		(Audited)
Cash and Cash Equivalents	$	32,060	$	15,926	$	18,344
Net Loans		265,904		279,199		232,752
Total Securities		20,156		13,931		19,635
Total Assets		332,210		321,243		279,913
Total Deposits		302,119		287,233		251,866
Total Liabilities		306,359		296,324		253,097
Stockholders’ Equity		25,851		24,919		26,816

Asset Quality Highlights

	12/31/2009			9/30/2009			12/31/2008			12/31/2007
	(Unaudited)			(Unaudited)			(Audited)			(Audited)
Nonaccrual Loans to Total Loans		0.97	%		0.76	%		0.81	%		0.27	%
Allowance for Loan Losses to Total Loans		1.38	%		1.39	%		1.40	%		0.73	%
Allowance for Loan Losses to Nonaccrual Loans		142.15	%		182.18	%		173.17	%		271.29	%
Nonaccrual Loans	$	2,619		$	2,082		$	2,292		$	634
Other Real Estate Owned (OREO)		461			125			300			0
Allowance For Loan Losses		3,723			3,793			3,969			1,720

CONTACT: Pinnacle Bankshares Corporation, Bryan M. Lemley, 434-477-5882 bryanlemley@1stnatbk.com