U.S. SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                   FORM 10-QSB

(Mark one)

|X| Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of
    1934

For the quarterly period ended September 30, 2000

| | Transition report under Section 13 or 15(d) of the Exchange Act

For the transition period from               to
                               -------------    --------------

Commission file number 1-12707

                            Pinnacle Bancshares, Inc.
                            -------------------------
        (Exact Name of Small Business Issuer as Specified in Its Charter)


                Delaware                                      72-1370314
             --------------                                -------------
    (State or Other Jurisdiction of                        (I.R.S. Employer)
     Incorporation or Organization)                      (Identification No.)


                 1811 Second Avenue, Jasper, Alabama 35502-1388
                 ----------------------------------------------
                    (Address of Principal Executive Offices)

                                 (205) 221-4111
                                 --------------
                (Issuer's Telephone Number, Including Area Code)

         (Former Name, Former Address and Former Fiscal Year, if Changed
                               Since Last Report)

         Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or for such
shorter period that the  registrant was required to file such reports),  and (2)
has been subject to such filing requirements for the past 90 days.

Yes    X          No
     -----           -----

     As of November 13, 2000,  1,780,384  shares of Common Stock were issued and
outstanding.

         Transitional Small Business Disclosure Format (check one):
Yes               No
     ------          -----
<PAGE>
                                     PART I
                              FINANCIAL INFORMATION


                                                                            PAGE
ITEM 1.  FINANCIAL STATEMENTS

Condensed Consolidated Statements of Financial Condition at September 30, 2000
(Unaudited) and December 31, 1999.                                             3

Condensed  Consolidated  Statements of Financial Operations for the three months
ended September 30, 2000 and 1999 and for the nine months ended
September 30, 2000 and 1999 (unaudited).                                       4

Condensed Consolidated Statements of Stockholders Equity for the nine
months ended  September 30, 2000 and 1999 (Unaudited).                         5

Condensed Consolidated Statements of Cash Flows for the nine months
ended September  30, 2000 and 1999 (Unaudited).                                6

Notes to Unaudited Condensed Consolidated Financial Statements.                7

The Condensed  Consolidated Financial Statements furnished have not been audited
by independent  certified  public  accountants,  but reflect,  in the opinion of
management,  all  adjustments  necessary  for a fair  presentation  of financial
condition and the results for the periods presented.


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION              9


                                     PART II
                                OTHER INFORMATION

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K                                     12

Signatures                                                                    13

                                       2
<PAGE>
                         PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                            PINNACLE BANCSHARES, INC.
       UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
<TABLE>
<CAPTION>
                                                                                          September 30,        December 31,
                                                                                              2000                1999
                                                                                              ----                ----
ASSETS:
<S>                                                                                      <C>                <C>
    Cash on hand and in banks                                                            $   3,686,432      $    5,289,619
    Interest-bearing deposits in other banks                                                 1,835,924           2,177,294
    Securities available-for-sale                                                           62,466,887          64,599,164
    Loans held for sale                                                                        902,118             893,733
    Loans receivable, net of allowance for loan losses
       of $1,243,476 and $1,222,978 respectively                                           151,820,117         146,429,690
    Real estate owned, net                                                                   1,944,003           1,521,533
    Premises and equipment, net                                                              6,605,300           6,995,375
    Excess cost over net assets acquired                                                       357,571             388,220
    Accrued interest receivable                                                              2,085,677           1,982,134
    Other assets                                                                               620,303             754,801
                                                                                          ------------        ------------
              Total assets                                                                $232,324,332        $231,031,563
                                                                                          ============        ============

LIABILITIES AND STOCKHOLDERS' EQUITY:
    Deposits                                                                              $190,121,965        $189,174,804
    Borrowed funds                                                                          20,750,000          21,890,000
    Official checks outstanding                                                              1,634,606           1,529,946
    Other liabilities                                                                          968,947             588,051
                                                                                          ------------        ------------
                                                                                           213,475,518         213,182,801
                                                                                          ------------        ------------
STOCKHOLDERS' EQUITY:
    Preferred stock, par value $.01 per share, no shares issued,
       100,000 authorized                                                                            0                  0
    Common stock, par value $.01 per share, 1,791,684 and 1,792,086
       outstanding at September 30, 2000 and December 31, 1999, 10,000,000
       authorized                                                                               17,921              17,921
    Treasury stock , at cost, 402 shares                                                        (3,403)                  0
    Additional paid-in capital                                                               8,131,746           8,131,746
    Retained earnings                                                                       11,241,662          10,414,858
    Accumulated other comprehensive income, net of tax                                        (539,112)           (715,763)
                                                                                          ------------        ------------
    Total stockholders' equity                                                              18,848,814          17,848,762
                                                                                          ------------        ------------
              Total liabilities and stockholders' equity                                  $232,324,332        $231,031,563
                                                                                          ============        ============
See accompanying notes to condensed consolidated financial statements.
</TABLE>
                                       3

<PAGE>
                            PINNACLE BANCSHARES, INC.
       UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL OPERATIONS
<TABLE>
<CAPTION>

                                                   Three Months Ended               Nine Months Ended
                                                      September 30,                   September 30,
                                                      ------------                    -------------
                                                  2000             1999            2000            1999
                                                  ----             ----            ----            ----
INTEREST REVENUES:
<S>                                           <C>             <C>              <C>            <C>
  Interest on loans                           $  3,576,154    $  3,036,220     $10,283,048    $  8,813,003
  Interest and dividends on securities             950,962         974,315       2,865,821       2,747,932
  Other interest                                    42,460          29,850         136,793         306,371
                                              ------------    ------------    ------------    ------------
                                                 4,569,576       4,040,385      13,285,662      11,867,306
INTEREST EXPENSE:
  Interest on deposits                           2,386,270       2,193,012       6,834,768       6,644,569
  Interest on borrowed funds                       345,244          68,323       1,006,209         164,284
                                              ------------    ------------    ------------    ------------
                                                 2,731,514       2,261,335       7,840,977       6,808,853
                                              ------------    ------------    ------------    ------------
NET INTEREST INCOME BEFORE PROVISION FOR
    LOAN LOSSES                                  1,838,062       1,779,050       5,444,685       5,058,453
PROVISION FOR LOAN LOSSES                          170,000          20,000         410,000         267,000
                                              ------------    ------------    ------------    ------------

NET INTEREST INCOME AFTER PROVISION FOR
    LOAN LOSSES                                  1,668,062       1,759,050       5,034,685       4,791,453
                                              ------------    ------------    ------------    ------------
NON-INTEREST INCOME:
  Fees and service charges                         186,203         172,586         544,330         519,454
  Service fee income, net                           42,361          47,327         130,128         144,583
  Real estate operations, net                       21,985          42,137          46,221         114,494
  Net gain (loss) on sale or write-down of:
     Loans held for sale                           109,076         100,833         281,481         367,583
     Assets                                              0             500               0             500
     Investments                                         0               0               0             (93)
     Real estate owned                             (13,069)       (100,428)        (18,621)       (102,215)
                                              ------------    ------------    ------------    ------------
                                                   346,556         262,955         983,539       1,044,306
                                              ------------    ------------    ------------    ------------
NON-INTEREST EXPENSE:
Compensation and benefits                          722,587         685,289       2,133,970       2,092,540
Occupancy                                          307,021         291,151         905,965         855,293
Marketing and professional                          46,046          39,353         118,343         112,854
Other                                              204,195         226,658         669,531         718,662
                                              ------------    ------------    ------------    ------------
                                                 1,279,849       1,242,451       3,827,809       3,779,349
                                              ------------    ------------    ------------    ------------
INCOME BEFORE INCOME TAX EXPENSE                   734,769         779,554       2,190,415       2,056,410

INCOME TAX EXPENSE                                 276,768         290,899         826,001         770,826
                                              ------------    ------------    ------------    ------------
NET INCOME                                    $    458,001    $    488,655    $  1,364,414    $  1,285,584
                                              ============    ============    ============    ============
BASIC EARNINGS PER SHARE                      $       0.26    $       0.27    $       0.76    $       0.72
DILUTED EARNINGS PER SHARE                    $       0.26    $       0.27    $       0.76    $       0.72
CASH DIVIDENDS PER SHARE                      $       0.10    $       0.10    $       0.10    $       0.10
WEIGHTED AVERAGE SHARES OUTSTANDING              1,792,034       1,792,086       1,792,068       1,790,740
WEIGHTED AVERAGE DILUTED SHARES                  1,792,034       1,796,247       1,792,068       1,797,816
</TABLE>
See accompanying notes to condensed consolidated financial statements.

                                       4
<PAGE>
                            PINNACLE BANCSHARES, INC.

       UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

              FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 2000
<TABLE>
<CAPTION>
                                                                                               Accumulated
                                                                      Additional                  Other          Total
                                            Common Stock    Treasury   Paid-in    Retained    Comprehensive   Stockholders'
                                          Shares    Amount    Stock    Capital    Earnings        Income         Equity
                                          ------    ------    -----    -------    --------        ------         ------

<S>                                      <C>       <C>      <C>       <C>         <C>          <C>            <C>
BALANCE, December 31, 1998               1,789,586 $17,895  $     0   $8,109,740  $ 9,453,693  $  30,779      $17,612,107
                                                                                                              -----------
    Comprehensive Income:
    Net income                                   0       0                     0    1,285,584          0        1,285,584
    Change in unrealized gain (loss)
      on securities available-
      For-sale, net of tax of $298,685           0       0        0            0            0   (579,801)        (579,801)
                                                                                                               ----------
    Comprehensive Income                                                                                          705,783
    Exercise of stock options                2,500      26                22,006                                   22,032
    Cash dividends declared
      ($.10 per share)                           0       0                     0    (537,354)                    (537,354)
                                         --------------------------------------------------------------------------------
BALANCE, September 30, 1999              1,792,086 $17,921  $     0   $8,131,746  $10,201,923  $(549,022)     $17,802,568
                                         ========= =======  =======   ==========  ===========  =========      ===========

BALANCE, December 31, 1999               1,792,086 $17,921  $     0   $8,131,746  $10,414,858  $(715,763)     $17,848,762
                                                                                                              -----------
    Comprehensive Income:
    Net income                                   0       0                     0    1,364,414          0        1,364,414
    Change in unrealized gain (loss)
      on securities available-
      for-sale, net of tax of $120,242           0       0        0            0            0    176,651          176,651
                                                                                                              -----------
    Comprehensive Income                                                                                        1,541,065
    Repurchases of  402 shares of
       common stock                           (402)          (3,403)                                               (3,403)
    Cash dividends declared
       ($.10 per share)                          0       0                     0     (537,610)         0         (537,610)
                                         --------------------------------------------------------------------------------
BALANCE, September 30, 2000              1,791,684 $17,921  $(3,403)  $8,131,746  $11,241,662  $(539,112)     $18,848,814
                                         ========= =======  =======   ==========  ===========  =========      ===========
</TABLE>
See accompanying notes to condensed consolidated financial statements.

                                       5
<PAGE>
                            PINNACLE BANCSHARES, INC,
            UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                                      FOR THE NINE MONTHS ENDED
                                                                             SEPTEMBER 30,
                                                                             -------------
                                                                         2000            1999
                                                                         ----            ----
<S>                                                                 <C>             <C>
    CASH FLOWS FROM OPERATING ACTIVITIES:
    Net income                                                      $  1,364,414    $  1,285,584
    Adjustment to reconcile net  income to
        net cash provided by operating
        activities:
       Depreciation                                                      444,784         415,601
       Provision for loan losses                                         410,000         267,000
       Net (gain) loss on sale and write down  of:
          Loans held for sale                                           (281,481)       (367,583)
          Securities available for sale                                        0              93
          Assets                                                               0            (500)
          Real estate owned                                               18,621         102,215
       Amortization, net                                                (303,194)       (362,895)
    Proceeds from sale of  loans                                      27,908,527      37,512,419
    Loans originated for sale                                        (27,635,431)    (35,557,110)
    (Increase) decrease in accrued interest receivable                  (103,543)       (356,339)
    (Increase) decrease in  other assets                                  44,905          28,442
    Increase (decrease) in other liabilities                             380,896        (377,068)
                                                                     -----------     -----------
              Net cash provided by operating activities                2,248,498       2,589,859
                                                                     -----------     -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
    Principal collected on loans and securities                       67,018,110      76,860,046
    Loans originated for portfolio                                   (71,927,691)    (81,336,431)
    Net change in interest bearing deposits at other banks               341,370      29,446,160
    Purchase of securities available-for-sale                            (50,000)    (46,920,911)
    Proceeds from maturing and callable securities                             0      11,000,000
    Proceeds from the sale of securities available-for-sale               12,017       4,619,700
    Purchase of premises and equipment                                   (74,163)       (586,456)
    Proceeds from the sale of premises and equipment                      19,454               0
    Proceeds from sales of real estate owned                           1,438,410         501,818
                                                                     -----------     -----------
              Net cash used in investing activities                   (3,222,493)     (6,416,074)
                                                                     -----------     -----------
CASH FLOWS FROM  FINANCING ACTIVITIES:
    Net (increase) decrease in passbook, NOW and
        money market deposit accounts                                 (2,078,893)     (1,273,184)
    Proceeds from sales of time deposits                              23,120,770      19,458,547
    Payments on maturing time deposits                               (20,094,716)    (20,178,923)
    Payments on borrowed funds                                       (31,040,000)    (10,230,000)
    Proceeds from borrowed funds                                      29,900,000      16,100,000
    Increase(decrease) in official checks outstanding                    104,660          78,637
    Repurchases of shares of common stock                                 (3,403)              0
    Proceeds from stock options exercised                                      0          22,032
    Payments of cash dividends                                          (537,610)       (537,354)
                                                                     -----------     -----------
              Net cash provided by (used in) financing activities       (629,192)      3,439,755
                                                                     -----------     -----------
NET DECREASE IN CASH                                                  (1,603,187)       (386,460)

CASH AT BEGINNING OF PERIOD                                            5,289,619       3,960,991
                                                                    ------------    ------------
CASH AT END OF PERIOD                                               $  3,686,432    $  3,574,531
                                                                    ============    ============
SUPPLEMENTAL DISCLOSURES:
    Cash payments for interest on deposits and borrowed funds       $  6,982,041       6,186,689
    Cash payments for income taxes                                       466,000         993,579
    Other real estate acquired through foreclosure                     1,879,501         144,425
</TABLE>
See accompanying notes to condensed consolidated financial statements.

                                       6
<PAGE>
                            PINNACLE BANCSHARES, INC.

         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.       BASIS OF PRESENTATION:
         ---------------------

The accompanying  unaudited interim condensed  consolidated financial statements
include the accounts of Pinnacle  Bancshares,  Inc. (the "Company") and Pinnacle
Bank (the "Bank"). All significant  intercompany  transactions and accounts have
been eliminated in consolidation.

In the  opinion of  management,  all  adjustments  (none of which are other than
normal recurring  accruals)  necessary for a fair presentation of the results of
such  interim  periods have been  included.  The results of  operations  for the
nine-month  period ended September 30, 2000, are not  necessarily  indicative of
the results of operations which may be expected for the entire year.

These unaudited interim condensed  consolidated  financial  statements should be
read in conjunction with the audited financial  statements and the notes thereto
included  in the  Company's  Annual  Report on Form  10-KSB  for the year  ended
December 31, 1999. The accounting policies followed by the Company are set forth
in the  summary of  Significant  Accounting  Policies in the  Company's  audited
financial statements.

                                       7
<PAGE>
2.       EARNINGS PER SHARE:
         ------------------
The following table represents the earnings per share calculations for the three
and nine-month periods ended September 30, 2000:

                                                                    PER
                                                                   SHARE
 FOR THE THREE MONTHS ENDED           NET INCOME       SHARES      AMOUNT
 --------------------------           ----------       ------      ------
 SEPTEMBER 30, 2000
     Basic earnings per share         $  458,001     1,792,034     $0.26
     Dilutive securities                      --            --        --
                                      ----------     ---------     -----
     Diluted earnings per share       $  458,001     1,792,034     $0.26
                                      ==========     =========     =====

 SEPTEMBER 30, 1999
     Basic earnings per share         $  488,655     1,792,086     $0.27
     Dilutive securities                      --         4,161        --
                                      ----------     ---------     -----
     Diluted earnings per share       $  488,655     1,796,247     $0.27
                                      ==========     =========     =====

                                                                    PER
                                                                   SHARE
 FOR THE NINE MONTHS ENDED           NET INCOME        SHARES      AMOUNT
 -------------------------           ----------        ------      ------
 SEPTEMBER 30, 2000
     Basic earnings per share         $1,364,414     1,792,068     $0.76
     Dilutive securities                      --            --        --
                                      ----------     ---------     -----
     Diluted earnings per share       $1,364,414     1,792,068     $0.76
                                      ==========     =========     =====
 SEPTEMBER 30, 1999
     Basic earnings per share         $1,285,584     1,790,740     $0.72
     Dilutive securities                      --         7,076        --
                                      ----------     ---------     -----
     Diluted earnings per share       $1,285,584     1,797,816     $0.72
                                      ==========     =========     =====

Options to  purchase  48,500  shares of common  stock at  $10.125  per share and
options to  purchase  54,560  shares of common  stock at $8.8125  per share were
outstanding  during all three quarters of 2000.  These options were not included
in the  computations  of diluted EPS because the options'  exercise  prices were
greater than the average market price of the common shares.  The options,  which
expire on August 28, 2006 and May 26, 2009, respectively, were still outstanding
at September 30, 2000.

                                       8
<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

                    PINNACLE BANCSHARES, INC. AND SUBSIDIARY

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS

FORWARD-LOOKING  STATEMENTS:  This  Quarterly  Report  on Form  10-QSB  contains
forward-looking   statements.   Additional   written  or  oral   forward-looking
statements  may be made by the  Company  from time to time in  filings  with the
Securities and Exchange Commission or otherwise.  The words "believe," "expect,"
"seek"  and  "intend,"  and  similar   expressions,   identify   forward-looking
statements,  which  speak  only as of the  date  the  statement  is  made.  Such
forward-looking statements are within the meaning of that term in Section 27A of
the  Securities  Act of 1933,  as amended,  and  Section  21E of the  Securities
Exchange Act of 1934,  as amended.  Such  statements  may  include,  but are not
limited to, projections of income or loss, expenditures, acquisitions, plans for
future operations, financing needs or plans relating to services of the Company,
as well as assumptions relating to the foregoing. Forward-looking statements are
inherently subject to risk and uncertainties,  some of which cannot be predicted
or qualified.  Future events and actual  results  could differ  materially  from
those  set  forth  in,   contemplated  by  or  underlying  the   forward-looking
statements.

The Company does not undertake,  and specifically  disclaims,  any obligation to
publicly  release the results of revisions which may be made to  forward-looking
statements to reflect the occurrence of anticipated or  unanticipated  events or
circumstances after the date of such statements.

COMPARISON  OF FINANCIAL  CONDITION  AS OF  SEPTEMBER  30, 2000 AND DECEMBER 31,
1999. Total assets increased to $232.3 million at September 30, 2000 as compared
to $231.0  million at December 31, 1999.  This  increase was due primarily to an
increase in loans and loans held for sale of  approximately  $5.4 million.  This
increase  was  off-set by  decreases  in cash and  interest-bearing  deposits of
approximately  $1.9 million which were  primarily used to fund loan growth and a
decrease in securities  available-for-sale  of approximately $2.1 million due to
principal  repayments.  Total deposits  increased to $190.1 million at September
30, 2000 as compared to $189.2 million at December 31, 1999.

At September  30, 2000,  the  Company's  investment  portfolio of $62.5  million
consisted  primarily of U. S. agency securities and  mortgage-backed-securities.
The entire investment portfolio is classified as "available-for-sale,"  which is
marked-to-market  with the  unrealized  gains/losses  reflected  directly in the
stockholders' equity.

RESULTS OF  OPERATIONS-COMPARISON  OF THE THREE AND NINE MONTHS ENDED  SEPTEMBER
30, 2000.  Net interest  income after the  provision  for loan losses  decreased
$90,988  or 5.17% for the  three-month  period  ended  September  30,  2000,  as
compared to the  corresponding  period in the previous  year.  This decrease was
primarily due to an increase in interest expense of $470,179, and an increase in
the  provision  for loan loss of  $150,000,  and was  offset by an  increase  in
interest on loans and  securities of $516,581 and an increase in other  interest
income of $12,610.  Net  interest  income  after the  provision  for loan losses
increased  $243,232 or 5.08% for the nine-month period ended September 30, 2000,
as compared to the corresponding  period in the previous year. This increase was
primarily  due to an increase in interest on loans and  securities of $1,587,934
and was offset by a decrease in other interest  income of $169,578,  an increase
in the provision  for loan loss of $143,000 and an increase in interest  expense
of $1,032,124.

If rates were to rise  rapidly,  net income may be adversely  affected.  Under a
scenario  simulating a hypothetical 100 basis point rate increase applied to all
fixed rate interest-

                                       9
<PAGE>

earning assets and interest-bearing  liabilities, the Company would expect a net
loss in the fair value of the underlying  instruments of approximately  $76,000.
This hypothetical loss is not a precise indicator of future events.  Instead, it
is  believed to be a  reasonable  estimate  of the  results  anticipated  if the
assumptions used in the modeling techniques were to occur.

The Bank's yield on  interest-earning  assets increased from approximately 7.94%
in the three-month period ended September 30, 1999 to approximately 8.47% in the
current  three-month  period.  This  increase was due to an increase in interest
rates as well as an increase in the average balance of  interest-earning  assets
of  approximately  $11.2 million.  The Bank's yield on  interest-earning  assets
increased from approximately  7.76% in the nine-month period ended September 30,
1999 to approximately  8.24% in the current nine-month period. This increase was
due to an  increase  in  interest  rates as well as an  increase  in the average
balance of interest-earning  assets of approximately  $10.0 million.  The Bank's
cost of funds increased from 4.56% at September 30, 1999 to 5.27% in the current
year period.  This increase was due to an increase in interest  rates as well as
an  increase  in  the  average  balance  of   interest-bearing   liabilities  of
approximately $11.2 million.

Non-interest  income,  which  includes  fees and  service  charges,  real estate
operations, net gain (loss) on sale of loans and other income, increased $83,601
in  the  three-month  period  ended  September  30,  2000.  Non-interest  income
decreased  $60,767 in the nine-month period ended September 30, 2000 as compared
to the corresponding  prior year period.  The increase in the three-month period
ended  September 30, 2000,  was due primarily to an decrease in the loss on sale
and write down of other real  estate  owned of $87,359 and by  decreases  in all
other non-interest income of $3,758. The decrease in the nine-month period ended
September  30,  2000  was due  primarily  to a  decrease  in the gain on sale of
mortgage loans of $86,102, a decrease in real estate operations, net of $68,273.
This  decrease  was offset by a  decrease  in the loss on sale and write down of
other real estate  owned of $83,594  and an  increase on all other  non-interest
income of $10,014.

Provisions for loan losses are made to maintain the allowance for loan losses at
an  adequate  level.  The  allowance  for  loan  losses  reflects   management's
estimates,  which  take  into  account  historical  experience,  the  amount  of
non-performing  assets, and general economic conditions.  The Bank determined an
additional  $170,000 was required for the three month period ended September 30,
2000 and an  additional  $410,000  was  required for the nine month period ended
September  30, 2000.  This increase was primarily due to an increase of $232,000
in charge-offs.

Non-interest  expense  increased $37,398 and $48,460 in the three and nine-month
periods ended September 30, 2000, respectively, as compared to the corresponding
prior year periods.  The increase in the three month period ended  September 30,
2000 was primarily due to an increase in compensation  expense of $37,298 and an
increase in occupancy  expense of $15,870 which was off-set by slight  decreases
in all other  non-interest  expense of $15,770.  The  increase  in  non-interest
expense for the nine-month  period ended September 30, 2000 was primarily due to
an increase  in  compensation  expense of $41,430  and an increase in  occupancy
expense of $50,672  which was  off-set by a decrease  in all other  non-interest
income of $43,642.

NET INCOME:  The Company  reported  net income for the three month  period ended
September 30, 2000 of $458,001,  or $0.26 per share, compared with net income of
$488,655,  or $0.27 per share,  for the three- month period ended  September 30,
1999. The Company reported net income for the nine-month  period ended September
30,  2000 of  $1,364,414,  or $0.76  per  share,  compared  with net  income  of
$1,285,584,  or $0.72 per share,  for the nine-month  period ended September 30,
1999.  The  decrease in the  three-month  period  ended  September  30, 2000 was
primarily  attributable to a $150,000 increase in the provision for loan losses.
The increase in the  nine-month  period ended  September  30, 2000 was primarily
attributable  to an increase in

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<PAGE>

interest  income of $1,418,356.  This increase  exceeded an increase in interest
expense of $1,032,124, an increase in the provision for loan loss of $143,000, a
decrease  in  non-interest  income of $60,767,  and an increase in  non-interest
expense of $48,460.

CAPITAL  RESOURCES:  Historically,  funds provided by operations,  mortgage loan
principal  repayments,  savings deposits and short-term borrowings have been the
Bank's  principal  sources of funds.  In  addition,  the Bank has the ability to
obtain funds through the sale of mortgage  loans,  through  borrowings  from the
Federal Home Bank of Atlanta and other borrowing sources. At September 30, 2000,
the Bank's total loan commitments,  including  construction loans in process and
unused lines of credit,  were approximately  $22.9 million.  Management believes
that the Bank's  liquidity and other sources of funds are sufficient to fund all
commitments  outstanding  and other cash  needs.  The  Company  and the Bank are
required to maintain certain levels of regulatory capital. At September 30, 2000
the Company and the Bank exceeded all regulatory capital requirements.

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<PAGE>
                           PART II - OTHER INFORMATION


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)   Exhibit 27- Financial Data Schedule (SEC use only)

         (b)   No reports on Form 8-K were filed

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<PAGE>
                                   SIGNATURES
                                   ----------

In accordance  with the  requirements  of the Exchange Act, the  registrant  has
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.


                                         PINNACLE BANCSHARES, INC


DATE:   November 14, 2000                BY: /s/ Robert B. Nolen Jr.
     ------------------------                ----------------------------
                                             Robert B. Nolen, Jr.
                                             President and Chief
                                             Executive Officer
                                             (Principal Executive Officer and
                                             Principal Financial Officer)


                                         BY: /s/ Marie Guthrie
                                             ------------------------------
                                             Marie Guthrie
                                             Treasurer
                                             (Principal Accounting Officer)

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