Filed by Pinnacle
Bankshares Corporation
pursuant to
Rule 425 under the Securities Act of 1933
and deemed
filed pursuant to Rule 14a-12
under the
Securities Exchange Act of 1934
Subject Company:
Virginia Bank
Bankshares, Inc.
Pinnacle
Bankshares Corporation and Virginia Bank Bankshares, Inc. Announce Strategic Merger
ALTAVISTA, Va. and DANVILLE, Va., January 21, 2020/Globe Newswire/
-- 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.
Caution
Regarding Forward-Looking Statements
This
press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements include, but are not limited to, statements about (i) the benefits and impact of the proposed merger
between Pinnacle and Virginia Bank, (ii) Pinnacle’s and Virginia Bank’s plans, obligations, expectations, beliefs
and intentions and (iii) other statements in the press release that are not historical facts. Words such as “anticipates,”
“believes,” “projects,” “potential,” “intends,” “should,” “expects,”
“will,” “may,” and variations of similar expressions often accompany forward-looking statements. These
statements are based on the beliefs of the respective managements of Pinnacle and Virginia Bank as to the expected outcome of
future events as of the date hereof and are not guarantees of future performance. These statements involve certain risks, uncertainties
and assumptions that are difficult to predict with regard to timing, extent, and degree of occurrence. Results and outcomes may
differ materially from what may be expressed or forecasted in or implied by forward-looking statements. Factors that could cause
results and outcomes to differ materially include, among others, the ability to obtain required regulatory and shareholder approvals
and meet other closing conditions to the transaction; the ability to complete the merger as expected and within the expected timeframe;
disruptions to customer and employee relationships and business operations caused by the merger; the ability to implement integration
plans associated with the transaction, which integration may be more difficult, time-consuming or costly than expected; the ability
to achieve the cost savings and synergies contemplated by the merger within the expected timeframe, or at all; changes in local
and national economies, or market conditions; changes in interest rates; regulations and accounting principles; changes in policies
or guidelines; loan demand and asset quality, including real estate values and collateral values; deposit flow; the impact of
competition from traditional or new sources, and the other factors.
Forward-looking
statements speak only as of the date of the press release. All of the forward-looking statements made in this press release are
expressly qualified by the cautionary statements contained herein. Readers are cautioned not to rely on the forward-looking statements
contained in this press release, as no assurance can be given that any of the events anticipated by the forward-looking statements
will occur or, if any of them do occur, their ultimate impact on the results of operations or financial condition of Pinnacle
or Virginia Bank. Additional information about the proposed merger and the factors that may impact the forward-looking statements
may be found in the registration statement on Form S-4 that Pinnacle will file with the Securities and Exchange Commission (the
“SEC”), including under the heading “Risk Factors.”
Additional
Information about the Merger and Where to Find It
This
press release does not constitute an offer to sell or the solicitation of an offer to buy any securities, or a solicitation of
any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale
would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer or sale
of securities shall be made except by means of a prospectus meeting the requirements of the Securities Act of 1933, as amended.
In connection with the proposed merger, Pinnacle will file with the SEC a registration statement on Form S-4 with respect to the
offering of Pinnacle common stock as the merger consideration under the Securities Act of 1933, as amended, which will include
a joint proxy statement of Pinnacle and Virginia Bank and a prospectus of Pinnacle. A definitive joint proxy statement/prospectus
will be sent to the shareholders of each company seeking the required shareholder approvals. Investors and security holders
are urged to read the registration statement and joint proxy statement/prospectus and other relevant documents when they become
available because they will contain important information about the merger.
Investors
and security holders may obtain free copies of these documents through the website maintained by the SEC at http://www.sec.gov.
Security holders of Pinnacle may also obtain free copies of these documents by directing a request by telephone or mail to Pinnacle
Bankshares Corporation, 622 Broad Street, Altavista, Virginia 24517; 434-369-3000. Security holders of Virginia Bank may also
obtain free copies of these documents by directing a request by telephone or mail to Virginia Bank Bankshares, Inc., 336 Main
Street, Danville, Virginia 24541; 434-793-6411.
Pinnacle,
Virginia Bank and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies
from the shareholders of Pinnacle and Virginia Bank in connection with the merger. Information about the directors and executive
officers of Pinnacle and Virginia Bank may be obtained by reading the joint proxy statement/prospectus regarding the merger when
it becomes available. Additional information regarding the interests of these participants and other persons who may be deemed
participants in the merger may be obtained by reading the joint proxy statement/prospectus regarding the merger when it becomes
available.
Contacts
Pinnacle
Bankshares Corporation
Aubrey
H. “Todd” Hall, III, President and Chief Executive Officer
434-369-3000
or toddhall@1stnatbk.com
Virginia
Bank Bankshares, Inc.
Donald
W.Merricks, Chairman and Chief Executive Officer
434-793-6411
or dmerricks@vabanktr.com
Pinnacle Bankshares (QX) (USOTC:PPBN)
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Pinnacle Bankshares (QX) (USOTC:PPBN)
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