Pinnacle Bankshares Corporation and Virginia Bank Bankshares, Inc. Announce Strategic Merger

Pinnacle Bankshares Corporation (OTCQX: PPBN) (“Pinnacle”) and Virginia Bank Bankshares, Inc. (OTC Pink: VABB) (“Virginia Bank”) today jointly announced the signing of a definitive agreement to combine in a strategic merger.  The combined company would have approximately $703 million in total assets, $624 million in total deposits, and $537 million in loans based upon reported amounts as of September 30, 2019.

The merger agreement was approved by the boards of directors of both companies and has unanimous support from all directors. Under the terms of the agreement, Virginia Bank shareholders will have the opportunity to elect to receive either $16.00 of cash (the “Cash Consideration”) or 0.5000 shares of Pinnacle common stock (the “Stock Consideration”) for each share of Virginia Bank common stock held, subject to the limitation that 70% of the shares will be exchanged for the Stock Consideration and 30% of the shares will be exchanged for the Cash Consideration.  After the merger of Virginia Bank into Pinnacle, Pinnacle shareholders will own 71% of the combined company, and Virginia Bank shareholders will own approximately 29%.

The merger creates a larger and stronger institution with a significantly higher lending limit, expanded product offering and access to new markets. Both management teams anticipate that such enhanced scale and efficiency will create meaningful opportunities to drive further growth, profitability and long-term value creation for employees, customers and shareholders.

Aubrey H. “Todd” Hall, III, Pinnacle President and Chief Executive Officer, stated, "This is a tremendous opportunity to combine two neighboring community banks with similar cultures and philosophies in a transformational merger. We have a strong team of experienced personnel throughout the organization and I am honored and proud to lead us in this new endeavor. Together, we will leverage our resources for the benefit of all stakeholders and are committed more than ever to our community bank strategy."

Donald W. Merricks, Chairman and Chief Executive Officer of Virginia Bank, said, "We believe that Pinnacle is the ideal partner for our bank. Merging these financially sound institutions is a natural fit. Both banks are led by seasoned teams of community bankers who make local decisions to serve the communities in which we operate. This merger will allow us to better provide quality banking services to our customers, a rewarding workplace for our employees, and superior value to our shareholders."

Upon consummation of the transaction, Virginia Bank will merge into Pinnacle and Pinnacle will be the surviving holding company.  Following the holding company merger, Virginia Bank and Trust Company will merge into First National Bank and First National Bank will be the surviving bank.  Offices of Virginia Bank and Trust Company will be rebranded as First National Bank offices as systems are integrated.  No office closures are expected as a result of the merger.

Following the mergers, the boards of directors of Pinnacle and First National Bank will include the current 13 members of the Pinnacle and First National Bank boards and five directors from Virginia Bank.  Following the mergers, Pinnacle Chairman Jeb Burton will continue to serve as the Chairman of the boards of directors of Pinnacle and First National Bank, and Virginia Bank Chairman and Chief Executive Officer Donald W. Merricks will serve as Vice Chairman of the boards of directors of Pinnacle and First National Bank.  Pinnacle President and Chief Executive Officer Todd Hall will continue to serve as President and Chief Executive Officer of Pinnacle and First National Bank, while Virginia Bank and Trust Company President Jerry Oakes will become the Danville market president for First National Bank, following the mergers.

The transaction is expected to be completed in the third quarter of 2020, subject to approval of both companies’ shareholders, regulatory approvals and other customary closing conditions.

Bank Street Partners, a Performance Trust Company is acting as financial advisor to Pinnacle and Troutman Sanders LLP is acting as its legal advisor in the transaction.  Janney Montgomery Scott LLC is acting as financial advisor to Virginia Bank and Williams Mullen is acting as its legal advisor in the transaction.

About Pinnacle

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, Bedford, Amherst and the City of Lynchburg.  The Company has a total of 10 branches with two located in the Town of Altavista, where the Bank was founded.  Other branch locations include Village Highway in Rustburg, Wards Road near the Lynchburg Regional Airport, Timberlake Road in Campbell County, South Main Street in the Town of Amherst, Old Forest Road, Odd Fellows Road and Main Street in the City of Lynchburg and Forest Road in Bedford County. First National Bank is in its 112th year of operation.

About Virginia Bank

Virginia Bank Bankshares, Inc. is the bank holding company for Virginia Bank and Trust Company. Founded in 1945, Virginia Bank and Trust Company is a state-chartered commercial bank headquartered in Danville, Virginia, with seven banking offices located in Danville and Chatham, Virginia. The bank serves businesses, professionals and consumers with a wide variety of financial services, including retail and commercial banking.