U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB


                   QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934


                  For the Quarterly Period Ended June 30, 1997


                        Commission File Number: 333-20399


                         PINNACLE BANKSHARES CORPORATION
        (Exact name of small business issuer as specified in its charter)


          VIRGINIA                                             54-1832714
(State or other jurisdiction of                             (I.R.S. Employer
 incorporation or organization)                           Identification Number)


                                   P.O. Box 29
                            Altavista, Virginia 24517
                    (Address of principal executive offices)


                                 (804) 369-3000
                (Issuer's telephone number, including area code)

Check  whether  the issuer  (1) has 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
             ---------                                      ---------

At July 8, 1997,  719,025  shares of Pinnacle  Bankshares  Corporation's  common
stock, $3 par value, were outstanding.

Transitional small business disclosure format: Yes    No x .
                                                  ---   ---

<PAGE>




                         PINNACLE BANKSHARES CORPORATION
                                   FORM 10-QSB
                                  June 30, 1997

                                      INDEX


Part I.   FINANCIAL INFORMATION


   Item 1.  Financial Statements

            Consolidated Balance Sheets as of June 30, 1997
             and December 31, 1996                                   3

            Consolidated Statements of Income for the three
             month periods ended June 30, 1997 and 1996              4


            Consolidated Statements of Income for the six
             month periods ended June 30, 1997 and 1996              5

            Consolidated Statements of Cash Flows for the
             periods ended June 30, 1997 and 1996                    6

            Notes to Consolidated Financial Statements               7-8


   Item 2.           Management's Discussion and Analysis or Plan
                     of Operations                                   9


Part II.          OTHER INFORMATION

   Item 1.           Legal Proceedings                               13

   Item 4.           Submission of Matters to a Vote of
                     Security Holders                                13

   Item 6.           Exhibits and Reports on Form 8-K                14


   SIGNATURES









                                        2

<PAGE>
<TABLE>
                                            PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements.

                                            PINNACLE BANKSHARES CORPORATION
                                              CONSOLIDATED BALANCE SHEETS
                                                      (Unaudited)
                                           (Amounts in thousands of dollars)
<CAPTION>
<S> <C>
----------------------------------------------------------------------------------------------------------------------
Assets                                                                        June 30, 1997         December 31, 1996

Cash and cash equivalents:  (note 2)
                 Cash and due from banks                                             $3,355                    $3,159
                 Federal funds sold                                                      --                     2,585
                                                                                   --------                  --------
Total cash and cash equivalents                                                       3,355                     5,744

Securities  (note 3):
                 Available-for-sale, at fair value                                   22,686                    23,861
                 Held-to-maturity, at amortized cost                                 11,333                    11,905
Federal Reserve Bank stock, at cost                                                      75                        75
Federal Home Loan Bank Stock, at cost                                                   409                       403
Loans, net (note 4)                                                                  83,692                    79,842
Bank premises and equipment, net                                                      1,590                     1,216
Other real estate owned                                                                 150                       156
Accrued income receivable                                                             1,034                     1,066  
Other assets                                                                            725                       683  
                                                                                   --------                  --------
Total assets                                                                       $125,049                  $124,951
=====================================================================================================================


Liabilities and Stockholders' Equity

Liabilities:
                 Deposits:
                      Demand                                                          9,568                     9,830
                      Savings and NOW accounts                                       36,522                    36,322
                      Time                                                           63,993                    65,052
                                                                                   --------                  --------
                 Total deposits                                                     110,083                   111,204

                 Accrued interest payable                                               502                       537
                 Federal funds purchased                                                644                        --
                 Other liabilities                                                      534                       553
                                                                                   --------                  --------
Total liabilities                                                                   111,763                   112,294
                                                                                   --------                  --------
Stockholders' equity:
                 Common stock, $3 par value. Authorized 3,000,000 shares,
                      issued and outstanding 719,025 shares in 1997 and 1996          2,157                     2,157
                 Capital surplus                                                        338                       338  
                 Retained earnings                                                   10,772                    10,174  
                 Unrealized gains(losses) on available-for-sale securities,                  
                      net of deferred tax expense (benefit)                              19                       (12)
                                                                                   --------                  --------
Total stockholders' equity                                                           13,286                    12,657

Total liabilities and stockholders'  equity                                        $125,049                  $124,951
=====================================================================================================================

See accompanying notes to financial statements.                                                  



                                                           3
<PAGE>
 
                                           PINNACLE BANKSHARES CORPORATION
                                          CONSOLIDATED STATEMENTS OF INCOME
                                                     (Unaudited)
                           (Amounts in thousands of dollars, except for per share amounts)
 
<CAPTION>
====================================================================================================================
                                                                           For the Period             For the Period
                                                                            April 1, 1997              April 1, 1996
                                                                               Through                    Through
                                                                            June 30, 1997              June 30, 1996
                                                                            -------------              -------------
                                                                                                       
Interest Income:
                 Interest and fees on loans                                        $1,931                    $1,733  
                 Interest on securities:                                                   
                                 U.S. Treasury                                         64                        58
                                 U.S. Government agencies                             286                       321
                                 Corporate                                             43                        42
                                 States and political subdivisions (tax exempt)       130                       139
                                 Other                                                 20                         2
                 Interest on federal funds sold                                        16                        59
                                                                                ---------                 ---------
Total interest income                                                               2,490                     2,354
                                                                                ---------                 ---------

Interest expense:
                 Interest on deposits:
                                 Savings and NOW accounts                             279                       282  
                                 Time - other                                         780                       765  
                                 Time - $100,000 and over                             122                       137
                 Interest on federal funds purchased                                    5                        --
                                                                                ---------                 ---------
Total interest expense                                                              1,186                     1,184
                                                                                ---------                 ---------
Net interest income                                                                 1,304                     1,170

Provision for loan losses                                                             150                        45
                                                                                ---------                 ---------
Net interest income after provision for loan losses                                 1,154                     1,125

Noninterest income:
                 Service charges on deposit accounts                                   63                        59
                 Net gain(loss) on calls and sales of securities                       --                        --
                 Other operating income                                                38                        25  
                                                                                ---------                 ---------
Total noninterest income                                                              101                        84
                                                                                ---------                 ---------
Noninterest expense:
                 Salaries and employee benefits                                       407                       388
                 Occupancy expense                                                     24                        23  
                 Furniture and equipment                                               79                        75  
                 FDIC assessment                                                        6                        10
                 Other operating expenses                                             198                       159  
                                                                                ---------                 ---------

Total noninterest expense                                                             714                       655  
                                                                                ---------                 ---------
Income before income tax expense                                                      541                       554

Income tax expense                                                                    149                       149
                                                                                ---------                 ---------
Net income                                                                           $392                      $405
===================================================================================================================
Net income per share (note 5)                                                       $0.55                     $0.56
===================================================================================================================

See accompanying notes to financial statements.



                                                          4


<PAGE>

                                          PINNACLE BANKSHARES CORPORATION
                                         CONSOLIDATED STATEMENTS OF INCOME
                                                    (Unaudited)
                          (Amounts in thousands of dollars, except for per share amounts)
<CAPTION>

====================================================================================================================
                                                                           For the Period            For the Period
                                                                          January 1, 1997            January 1, 1996
                                                                              Through                    Through
                                                                           June 30, 1997              June 30, 1996
                                                                           -------------              -------------
Interest Income:
                 Interest and fees on loans                                       $3,802                    $3,480  
                 Interest on securities:                                                  
                                 U.S. Treasury                                       129                       105
                                 U.S. Government agencies                            582                       643
                                 Corporate                                            86                        81
                                 States and political subdivisions (tax exempt)      266                       278
                                 Other                                                32                         2
                 Interest on federal funds sold                                       46                       109
                                                                               ---------                 ---------
Total interest income                                                              4,943                     4,698
                                                                               ---------                 ---------
Interest expense:
                 Interest on deposits:
                                 Savings and NOW accounts                            555                       562  
                                 Time - other                                      1,554                     1,529  
                                 Time - $100,000 and over                            260                       286
                 Interest on federal funds purchased                                   5                        --
                                                                               ---------                 ---------                  
Total interest expense                                                             2,374                     2,377
                                                                               ---------                 ---------
Net interest income                                                                2,569                     2,321

Provision for loan losses                                                            210                        90
                                                                               ---------                 ---------
Net interest income after provision for loan losses                                2,359                     2,231

Noninterest income:
                 Service charges on deposit accounts                                 124                       117
                 Net gain(loss) on calls and sales of securities                       4                        12
                 Other operating income                                               85                        57  
                                                                               ---------                 ---------
Total noninterest income                                                             213                       186
                                                                               ---------                 ---------
Noninterest expense:
                 Salaries and employee benefits                                      815                       767
                 Occupancy expense                                                    48                        47  
                 Furniture and equipment                                             158                       146  
                 FDIC assessment                                                      11                        20
                 Other operating expenses                                            388                       336  
                                                                               ---------                 ---------
Total noninterest expense                                                          1,420                     1,316  
                                                                               ---------                 ---------
Income before income tax expense                                                   1,152                     1,101

Income tax expense                                                                   318                       296
                                                                               ---------                 ---------
Net income                                                                          $834                      $805
==================================================================================================================
Net income per share (note 5)                                                      $1.16                     $1.12
==================================================================================================================

See accompanying notes to financial statements.



                                                         5


<PAGE>

                                          PINNACLE BANKSHARES CORPORATION
                                       CONSOLIDATED STATEMENTS ON CASH FLOWS
                                                    (Unaudited)
                                         (Amounts in thousands of dollars)
 
==================================================================================================================
<CAPTION>
                                                                           For the Period            For the Period
                                                                          January 1, 1997            January 1, 1996
                                                                              Through                    Through
                                                                           June 30, 1997              June 30, 1996
                                                                           -------------              -------------
                                                                                                                            
Cash flows from operating activities:
          Net income                                                                $834                      $805
          Adjustments to reconcile net income to net cash provided
                    by operating activities:
                 Depreciation of bank premises and equipment                         106                        99
                 Amortization of core deposit premium                                  8                         9
                 Amortization of organization costs                                    1                       ---
                 Amortization of net unearned fees                                   (50)                      (48)
                 Net amortization (accretion) of premiums and
                         discounts on securities                                       3                       (10)
                 Provision for loan losses                                           210                        90
                 Provision for deferred income taxes                                  52                       (21)
                 Net (gain) loss on calls and sales of securities                     (4)                      (10)
                 Net (increase) decrease in:
                         Accrued income receivable                                    32                       (81)
                         Other assets                                               (174)                       21
                 Net increase (decrease) in:
                         Accrued interest payable                                    (35)                       (3)
                         Other liabilities                                           (18)                       48
                                                                               ---------                 ---------
Net cash provided by operating activities                                            965                       899
==================================================================================================================

Cash flows from investing activities:
          Purchases of held-to-maturity securities                                   ---                    (1,531)
          Purchases of available-for-sale securities                                (217)                   (5,460)
          Proceeds from maturities and calls of held-to-maturity securities          573                     1,403
          Proceeds from sale, maturities and calls of available-for-sale
                    securities                                                     1,440                     3,878
          Purchase of Federal Home Loan Bank stock                                    (6)                      ---
          Net increase in loans                                                   (4,038)                     (801)
          Recoveries on loans charged off                                             81                        87
          Increase in federal funds purchased                                        644                       ---
          Purchases of bank premises and equipment                                  (480)                      (99)
          Rent payments on other real estate owned                                     6                         1
                                                                               ---------                 ---------                  
Net cash used in investing activities                                             (1,997)                   (2,522)
==================================================================================================================

Cash flows from financing activites:
          Net increase (decrease) in demand, savings and NOW deposits                (62)                      866
          Net increase (decrease) in time deposits                                (1,059)                      306
          Dividends paid                                                            (236)                     (206)
                                                                               ---------                 ---------
Net cash provided by financing activities                                         (1,357)                      966
==================================================================================================================

Net increase in cash and cash equivalents                                         (2,389)                     (657)

Cash and cash equivalents, beginning of year                                       5,744                     6,165
                                                                               ---------                 ---------
Cash and cash equivalents, end of year                                            $3,355                    $5,508
==================================================================================================================

See accompanying notes to financial statements.
</TABLE>



                                                         6


<PAGE>




                         PINNACLE BANKSHARES CORPORATION

                   Notes to Consolidated Financial Statements
                                  June 30, 1997
                                   (Unaudited)
                      (In thousands, except for share data)


(1)      General

         The consolidated  financial statements include the accounts of Pinnacle
Bankshares  Corporation  (the "Company") and its  wholly-owned  subsidiary,  The
First National Bank of Altavista ("FNBA").  All material  intercompany  accounts
and  transactions  have been  eliminated.  The financial  statements  conform to
generally  accepted  accounting  principles  and  to  general  banking  industry
practices.  In  the  opinion  of  the  company's  management,  the  accompanying
unaudited  consolidated financial statements contain all adjustments of a normal
recurring nature,  necessary to present fairly the financial position as of June
30, 1997, the results of operations for the  three-month  and six-month  periods
ended June 30, 1997 and 1996,  and cash flows for the  six-month  periods  ended
June 30, 1997 and 1996.

         These consolidated  financial  statements should be read in conjunction
with the  consolidated  financial  statements and notes thereto  included in The
First National Bank of Altavista's Annual Report for the year ended December 31,
1996.

         The results of operations for the interim  periods are not  necessarily
indicative  of the results to be expected for the full year ending  December 31,
1997.

(2)      Cash and Cash Equivalents

         For purposes of reporting cash flows, cash and cash equivalents include
cash on hand,  amounts due from banks (with original  maturities of three months
or less), and federal funds sold.

(3)  Securities

         The amortized costs,  gross unrealized gains,  gross unrealized losses,
and fair values for  securities at June 30, 1997,  are shown in the table below.
As of June 30, 1997,  securities  with amortized costs of $3,150 and fair values
of $3,165 were pledged as collateral for public deposits.




                                        7

<PAGE>



(3) (Continued)
<TABLE>
<CAPTION>
<S> <C>
                                                                    Gross           Gross
                                               Amortized       Unrealized      Unrealized          Fair
         Available-for-Sale:                       Costs            Gains          Losses        Values
         ------------------------------------------------------------------------------------------------
         U.S. Treasury securities
          and obligations of U.S.
           Government corporations
           and agencies                        $ 11,339               43            ( 81)        11,301
         Obligations of states and
           political subdivisions                 3,749               92            (  7)         3,834
         Mortgage-backed securities-
           Government                             6,693               48            ( 77)         6,664
         Other securities                           107                -               -            107
         Corporate securities                       768               12               -            780
         ------------------------------------------------------------------------------------------------

         Totals                                $ 22,656              195            (165)        22,686
         ------------------------------------------------------------------------------------------------

                                                                    Gross           Gross
                                               Amortized       Unrealized      Unrealized          Fair
         Held-to-Maturity:                         Costs            Gains          Losses        Values
         ------------------------------------------------------------------------------------------------
         U.S. Treasury securities
          and obligations of U.S.
           Government corporations
           and agencies                        $  3,638               11            ( 10)         3,639
         Obligations of states and
           political subdivisions                 7,681              106            ( 23)         7,764
         Mortgage-backed securities-
           Private                                   14                -               -             14
         ------------------------------------------------------------------------------------------------

         Totals                                $ 11,333              117            ( 33)        11,417
         ------------------------------------------------------------------------------------------------
</TABLE>

(4)      Allowance for Loan Losses

         Changes in the allowance for loan losses are as follows:

         Balance at January 1, 1997                           $674

         Provision for loan losses                             210

         Loans charged off                                    (264)

         Recoveries                                             81
                                                              ----
         Balance at June 30, 1997                             $701
                                                              ====



(5)      Net Income Per Share

         Net  income  per share is based  upon the  weighted  average  number of
common stock shares  outstanding  during the period.  Shares outstanding for all
periods presented were 719,025.




                                        8

<PAGE>



ITEM 2.           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                  CONDITION AND RESULTS OF OPERATIONS(Amounts in 000's)

         The following discussion supplements and provides information about the
major components of the results of operations and financial condition, liquidity
and capital resources of Pinnacle Bankshares  Corporation (the "Company").  This
discussion  and analysis  should be read in  conjunction  with the  Consolidated
Financial Statements, and supplemental financial data.

OVERVIEW

         Total assets at June 30, 1997 were  $125,049,  up .07% from $124,951 at
December 31, 1996. The principal  components of the Company's  assets at the end
of the period were $34,019 in  securities  and $83,692 in net loans.  During the
six month period,  gross loans increased 4.73% or $3,830.  The Company's lending
activities  are a  principal  source  of  income.  The  Company's  premises  and
equipment  grew  26.87%,  basically  due  to  contracts-in-progress  related  to
construction of an addition to the main office facility.

         Total liabilities at June 30, 1997 were $111,763, down from $112,294 at
December 31,  1996,  with the  decrease  reflective  of a decline in deposits of
1,121 or 1.01%. Non-interest bearing demand deposits decreased $262 or 2.67% and
represented  8.69% of total  deposits.  The  Company's  deposits are provided by
individuals and businesses located within the communities  served. The growth in
loans and decrease in deposits  resulted in federal funds being  purchased as of
June 30, 1997.

         Total  shareholders'  equity at June 30, 1997 was $13,286.  At December
31, 1996, total shareholder's equity was $12,657.

         The  Company  had net income of $834 for the six months  ended June 30,
1997,  compared  with net income of $805 for the  comparable  period in 1996, an
increase of 3.60%.  The results of  operations  for the six month  periods ended
June 30,  1997 and 1996 are not  necessarily  indicative  of the  results  to be
expected for the full year.

         Profitability  as measured by the  Company's  return on average  assets
(ROA) was 1.34%  for the  second  quarter  of 1997,  up from  1.33% for the same
period of 1996.  Another key  indicator  of  performance,  the return on average
equity (ROE) for June 30, 1997 was 13.29%, compared to 14.09% for June 30, 1996.

NET INTEREST INCOME

         Net interest income represents the principal source of earnings for the
Company.  Net interest income equals the amount by which interest income exceeds
interest  expense.  Changes  in  the  volume  and  mix  of  earning  assets  and


                                        9

<PAGE>


interest-bearing liabilities, as well as their respective yields and rates, have
a  significant  impact  on the  level of net  interest  income.  Changes  in the
interest  rate  environment  and the  Company's  cost of funds also affected net
interest income.

          The net interest margin increased from 4.28% for the six months ending
June 30, 1996,  to 4.55% for the six months  ending June 30, 1997.  Net interest
income was $2,569 for the six months ended June 30, 1997 and is  attributable to
interest  income from loans and securities  exceeding the cost  associated  with
interest paid on deposits.  The Company  benefitted from lower interest  expense
due to certain deposits repricing at lower rates.

         Net  interest  income  for the three  months  ended  June 30,  1997 was
$1,304, up $134, or 11.45% from $1,170 for the same three months of 1996.

NON-INTEREST INCOME

         The  Company's  principal  sources of  non-interest  income are service
charges and fees on deposits accounts,  particularly  transaction accounts,  and
fees from loans.  Non-interest  income increased $27 or 14.52% for the six month
period  ending June 30, 1997 over the same period of 1996.  Non-interest  income
increased  $17, or 20.24% when comparing the three months ended June 30, 1997 to
the same period of 1996.  The majority of this  increase is attributed to income
generated from loan fees and commissions on credit insurance.

NON-INTEREST EXPENSE

         Non-interest expense increased $104 or 7.90%, for the six months period
ending June 30, 1997 over the same period of 1996. The increase in  non-interest
expense when  comparing the two periods is  attributed to overall  growth of the
Company and expenses connected with repossessed  vehicles.  An increase of 9.01%
is reflected  when  comparing  the three month period ended June 30, 1997 to the
same period of 1996.

ALLOWANCE AND PROVISION FOR LOAN LOSSES

         A  provision  for loan losses of $210 was made for the first six months
of 1997 in recognition of  management's  estimate of risks inherent with lending
activities.  Among other factors,  management considers the Company's historical
loss experience,  the size and composition of the loan portfolio,  the value and
adequacy of collateral and guarantors,  non-performing  credits, and current and
anticipated  economic  conditions.  There are  additional  risks of future  loan
losses which cannot be precisely quantified or attributed to particular loans or
classes of loans.  Since those risks include general  economic trends as well as
conditions affecting individual borrowers, the allowance for loan losses is an

                                       10

<PAGE>



estimate.  The  allowance  is  also  subject  to  regulatory   examinations  and
determination  as to  adequacy,  which may take into account such factors as the
methodology  used to calculate the allowance.  The allowance for loan losses was
$701 as of June 30,  1997,  and  represents  approximately  .83% of gross  loans
outstanding. Management believes the allowance was adequate as of June 30, 1997.
Management  evaluates the  reasonableness  of the allowance for loan losses on a
quarterly basis and adjusts the provision as deemed necessary.

NON-PERFORMING ASSETS

         Total nonperforming assets, which consist of nonaccrual loans, were $80
at June 30, 1997 and December 31, 1996. Management believes losses, if any, will
be minimal.  Loans are generally placed in nonaccrual status when the collection
of principal and interest is 90 days or more past due,  unless the obligation is
both well-secured and in the process of collection.

LIQUIDITY

         Liquidity  measures  the  ability of the  Company to meet its  maturing
obligations  and  existing  commitments,  to withstand  fluctuations  in deposit
levels,  to fund its  operations,  and to provide for  customers'  credit needs.
Liquidity  represents  an  institution's  ability  to meet  present  and  future
financial  obligations through either the sale or maturity of existing assets or
the acquisition of additional  funds from alternative  funding  sources.  Liquid
assets include cash,  interest bearing deposits with banks,  federal funds sold,
and investments and loans maturing within one year. As a result of the Company's
management  of liquid  assets and the  ability  to  generate  liquidity  through
alternative funding sources, management believes that the bank maintains overall
liquidity  which is sufficient to satisfy its  depositors'  requirements  and to
meet customers' credit needs. At June 30, 1997, cash,  securities  classified as
available for sale and federal  funds sold were 21.82% of total  earning  assets
compared to 24.71% at December  31,1996.  Liquidity is also provided by managing
the  investment  maturities.  Additional  sources of liquidity  available to the
Company include its capacity to borrow  additional  funds through  correspondent
banks.


CAPITAL

         The Company's  financial  position at June 30, 1997 reflects  liquidity
and capital  levels  currently  adequate  to fund  anticipated  future  business
expansion. Capital ratios are well in excess of required regulatory minimums for
a well-capitalized  institution. The assessment of capital adequacy depends on a
number of factors such as asset quality,  liquidity,  earnings performance,  and
changing competitive conditions and economic forces. The adequacy

                                       11

<PAGE>



of the  Company's  capital  is  reviewed  by  management  on an  ongoing  basis.
Management  seeks to maintain a capital  structure  that will assure an adequate
level of capital to support  anticipated  asset  growth and to absorb  potential
losses.

         Shareholders'  equity reached  $13,286 at the end of the second quarter
of 1997 compared to $12,657 at December 31, 1996. The leverage ratio consists of
Tier I capital  divided by  quarterly  average  assets.  At June 30,  1997,  the
Company's  leverage  ratio was 10.54%  compared to 10.14% at December  31, 1996.
Each of these exceeds the required minimum leverage ratio of 3%.

EFFECTS OF INFLATION

         The effect of changing  prices on financial  institutions  is typically
different  from other  industries  as the  Bank's  assets  and  liabilities  are
monetary in nature. Interest rates are significantly impacted by inflation,  but
neither the timing nor the  magnitude  of the changes  are  directly  related to
price level indices.  Impacts of inflation on interest rates,  loan demand,  and
deposits are reflected in the financial statements.
































                                       12

<PAGE>



PART II - OTHER INFORMATION


Item 1 - LEGAL PROCEEDINGS

         There are no material pending legal  proceedings to which the Bank is a
party or of which the property of the Bank is subject.


Item 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         (a)  The   consummation   of  the  formation  of  Pinnacle   Bankshares
Corporation (the "Registrant") as the holding company of The First National Bank
of Altavista  (the "Bank")  became  effective on May 1, 1997, as reported  under
Item 5 of the  Registrant's  Form 10-QSB filed with the  Securities and Exchange
Commission  on  May  9,  1997.  The  information  relating  to  the  meeting  of
shareholders  of the  Bank  held on April 8,  1997,  contained  in Item 5 of the
previously  filed Form 10-QSB is hereby  incorporated by reference into the Form
10- QSB filed herewith.

         (b) The April 8, 1997,  annual meeting of the  shareholders of the Bank
involved the election of directors.  The names of each  director  elected to the
Board of the Bank at the meeting are as follows:

   Alvah P. Bohannon, III  John P. Erb      Herman P. Rogers, Jr.
   Robert L. Finch         Percy O. Moore   Carroll E. Shelton
   Robert H. Gilliam, Jr.  John L. Waller   Kenneth S. Tyler, Jr.
   James P. Kent, Jr.                       R.B. Hancock, Jr.

         (c) The votes cast for, against or withheld for the  Reorganization  of
the Bank into a holding company structure were as follows:
                  (1) To  approve  the  Agreement  and  Plan of  Reorganization,
including the designation of the individuals listed above in item (b) into Class
I, Class II and Class III directors, respectively, as follows:

      Class I                       Class II                    Class III
      -------                       --------                    ---------
 John P. Erb                  Alvah P. Bohannon, III       Herman P. Rogers, Jr.
 Robert L. Finch              James P. Kent, Jr.           Carroll E. Shelton
 Robert H. Gilliam, Jr.       Percy O. Moore               Kenneth S. Tyler, Jr.
 R.B. Hancock, Jr.                                         John L. Waller

        For                         Against                   Abstentions
        ---                         -------                   -----------
      184,000                         985                         203





                                       13

<PAGE>



                  (2) Election of Directors of the Bank.

    Name                          For          Against        Abstain
    ----                          ---          -------        -------

John P. Erb                     213,689           0              0
Robert L. Finch                 213,689           0              0
Robert H. Gilliam, Jr.          213,689           0              0
R.B. Hancock, Jr.               213,689           0              0
Alvah P. Bohannon, III          213,689           0              0
James P. Kent, Jr.              213,689           0              0
Percy O. Moore                  213,689           0              0
Herman P. Rogers, Jr.           213,689           0              0
Carroll E. Shelton              213,689           0              0
Kenneth S. Tyler, Jr.           213,689           0              0
John L. Waller                  213,689           0              0

         (d)      None

Item 6 - EXHIBITS AND REPORTS ON FORM 8-K

         (a)      Exhibits

                           Exhibit  10-Pinnacle   Bankshares   Corporation  1997
                                    Incentive  Stock Plan.  The Plan was adopted
                                    by the Board of  Directors of the Company on
                                    April 8, 1997.

                           Exhibit 27-Financial Data Schedule


         (b)      Reports on Form 8-K

                  None.




















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<PAGE>


                                   SIGNATURES


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


                                    PINNACLE BANKSHARES CORPORATION



AUGUST 5, 1997                      /s/ Robert H. Gilliam Jr.
--------------------                -------------------------------------
Date                                Robert H. Gilliam Jr., President and
                                    Chief Executive Officer



AUGUST 5, 1997                      /s/ Dawn P. Crusinberry
--------------------                -------------------------------------
Date                                Dawn P. Crusinberry, Secretary,
                                    Treasurer and Chief Financial Officer











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