Strategic Partnership Between Pinnacle Bankshares Corporation and Virginia Bank Bankshares, Inc. Investor Presentation January 21, 2020
Compliance Disclosures Important Information for Shareholders and Investors This presentation shall not constitute an offer to sell, the solicitation of an offer to sell, or the solicitation of an offer to buy any securities or the solicitation of any vote or approval of the Pinnacle Bankshares Corporation (“PPBN”) or Virginia Bank Bankshares, Inc. (“VABB”) shareholders, nor shall there be any offer or 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 transaction, PPBN will file a registration statement on Form S-4 with the Securities and Exchange Commission (the “SEC”), which will contain the joint proxy statement of PPBN and VABB and a prospectus of PPBN. Shareholders of VABB and PPBN are encouraged to read the registration statement, including the joint proxy statement/prospectus that will be part of the registration statement, because it will contain important information about the proposed transaction, VABB, and PPBN. After the registration statement is filed with the SEC, the definitive joint proxy statement/prospectus and other relevant documents will be mailed to VABB and PPBN shareholders and will be available for free on the SEC’s website (www.sec.gov). The joint proxy statement/prospectus will also be made available for free by contacting Bryan Lemley, PPBN’s Chief Financial Officer, at (434)-477-5882 or Don Merricks, the Chief Executive Officer of VABB, at (434)-793-6411. Participants in the Solicitation PPBN, VABB and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from VABB and PPBN shareholders in connection with the proposed merger. Information about the directors and executive officers of PPBN and VABB will be included in the joint proxy statement/prospectus when it becomes available. Additional information regarding certain interests of those persons and other persons who may be deemed participants in the transaction will also be included in the joint proxy statement/prospectus when it becomes available. You may obtain free copies of the joint proxy statement/prospectus as described in the preceding paragraph. 2
Legal Disclaimer Forward-Looking Statements Certain of the statements made in this investor presentation may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended. The words “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “estimate,” “Project,” “will,” “may,” and “potential,” and similar expressions, often accompany such forward-looking statements, but other statements not based on historical information may also be considered forward-looking, including statements about the benefits to PPBN and VABB of the proposed merger, PPBN’s and VABB’s future financial and operating results and their respective plans, objectives, and intentions. All forward- looking statements are subject to risks, uncertainties, and other factors that may cause the actual results, performance, or achievements of PPBN and VABB to differ materially from any results, performance, or achievements expressed or implied by such forward-looking statements. Such risks, uncertainties, and other factors include, among others, (1) the risk that the cost savings and any revenue synergies from the proposed merger may not be realized or take longer than anticipated to be realized, (2) disruption from the proposed merger, with customer, supplier, or employee relationships, (3) the occurrence of any event, change, or other circumstances that could give rise to the termination of the merger agreement, (4) the failure to obtain necessary shareholder or regulatory approvals for the merger on a timely basis or at all, (5) the possibility that the amount of the costs, fees, expenses, and charges related to the merger may be greater than anticipated, including as a result of unexpected or unknown factors, events, or liabilities, (6) the failure of the conditions to the merger to be satisfied, (7) the risk of successful integration of the two companies’ businesses, including the risk that the integration of VABB’s operations with those of PPBN will be materially delayed or will be more costly or difficult than expected, (8) the risk of expansion into new geographic or product markets, (9) reputational risk and the reaction of the parties’ customers to the merger, (10) the risk of potential litigation or regulatory action related to the merger, (11) the dilution caused by PPBN’s issuance of additional shares of its common stock in the merger, and (12) general competitive, economic, political, and market conditions. PPBN and VABB disclaim any obligation to update or revise any forward-looking statements contained in this communication, which speak only as of the date hereof, whether as a result of new information, future events, or otherwise. Forward-looking statements speak only as of the date of the presentation. All of the forward-looking statements made in this presentation are expressly qualified by the cautionary statements contained herein. Readers are cautioned not to rely on the forward-looking statements contained in this presentation, 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 PPBN or VABB. 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 PPBN will file with the Securities and Exchange Commission, including under the heading “Risk Factors. ” Non-GAAP Financial Measures This presentation contains certain financial information determined by methods other than in accordance with generally accepted accounting principles in the United States (“GAAP”) . Such information includes non-GAAP presentations of net operating income, diluted earnings per share, efficiency ratio, tangible common equity, return on assets, tangible assets, and nonperforming assets excluding troubled debt restructurings. Reconciliations related to these non-GAAP financial measures are included in this presentation and all non-GAAP measures should be read along with such reconciliations. Management of PPBN and VABB believe that these non-GAAP financial measures provide additional useful information to investors and provide meaningful comparisons to the companies’ peers. Non-GAAP financial measures should not be considered as an alternative to any GAAP measure of performance or financial condition, and investors should consider comparable GAAP information when assessing the performance or financial condition of the companies. Non-GAAP financial measures have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for analysis of the results or financial condition as reported under GAAP. 3
Creating a Central Virginia Partnership PPBN’s Strategic Rationale VABB’s Strategic Rationale Maximizing future growth potential as a pro forma Similar culture with a focus on the communities institution with over $700mm in total assets they serve and the relationships they foster Provides an enhanced timeline to achieving Provides additional products, services, and greater than $1B in total assets locations to VABB’s customer base Expected to result in EPS accretion greater than Increased scale and operational efficiencies from (1) 30% once fully integrated the combination of the two organizations Addresses the long-term need to bring on more Provides additional management expertise and human capital in support of organic growth upward mobility for VABB employees Provides optionality and liquidity to shareholders Maintains current corporate growth plans and solid capital positions Increases the current legal lending limit Leverages VABB’s strong core deposit base and Strong EPS accretion for VABB shareholders and enhances the market footprint pro forma board representation The partnership provides operational expertise, greater market presence, and management depth to both parties looking to better service and expand upon their markets in Central Virginia (1) Estimated financial impact is presented solely for illustrative purposes and is not a guarantee of future performance 4
Recommend
More recommend
