Pinnacle Bankshares Corporation Announces Completion of $8.0 Million Subordinated Notes Offering

ALTAVISTA, Va., Sept. 21, 2020 (GLOBE NEWSWIRE) -- Pinnacle Bankshares Corporation (OTCQX: PPBN) (“Pinnacle” or the “Company”), the holding company for First National Bank, today announced that it has completed a private placement of $8.0 million in fixed-to-floating rate subordinated notes due 2030 (the “Notes”). The Notes have been structured to qualify as Tier 2 capital under bank regulatory guidelines, and the proceeds from the sale of the Notes will be utilized to pay a portion of the cash consideration to be paid by the Company in connection with its pending merger with Virginia Bank Bankshares, Inc., if consummated, and to provide optionality for various growth opportunities and for general corporate purposes. In connection with the Notes offering, the Company was advised by Performance Trust Capital Partners, LLC as placement agent and Troutman Pepper Hamilton Sanders LLP as legal counsel. Wyrick Robbins Yates & Ponton LLP served as legal counsel to the placement agent.

The Notes will initially bear interest at 5.25% per annum, beginning September 18, 2020 to but excluding September 30, 2025, payable quarterly in arrears. From September 30, 2025 to but excluding September 30, 2030, or up to an early redemption date, the interest rate shall reset quarterly to an interest rate per annum equal to the then current three-month SOFR plus 513 basis points, payable quarterly in arrears. Beginning on September 30, 2025 through maturity, the Notes may be redeemed, at the Company’s option and subject to any required regulatory approval, on any scheduled interest payment date. The Notes will mature on September 30, 2030.

The Notes have not been registered under the Securities Act of 1933, as amended, or any state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. This press release does not constitute an offer to sell, or the solicitation of an offer to buy, any security.

“We are pleased with the positive response to Pinnacle Bankshares Corporation’s subordinated notes offering, which positions us to move forward with our strategic partnership with Virginia Bank Bankshares, Inc.,” stated Aubrey H. Hall, III, President and Chief Executive Officer for both the Company and its wholly-owned subsidiary, First National Bank. Mr. Hall further commented, “We are excited about our Company’s future and the steps being taken to ensure long-term viability while enhancing shareholder value.”