<PAGE>

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

                                  FORM 10-KSB

(Mark One)

     [X]  ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE
          SECURITIES EXCHANGE ACT OF 1934

                  For the fiscal year ended December 31, 2000
                                       OR

     [_]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF
          THE SECURITIES EXCHANGE ACT OF 1934

                       Commission File Number: 000-23909

                        PINNACLE BANKSHARES CORPORATION
                 (Name of small business issuer 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                           24517-0029
------------------------------------------                   ----------
 (Address of principal executive offices)                    (ZIP CODE)

Issuer's telephone number (804) 369-3000
                          --------------

Securities registered pursuant to Section 12(b) of the Exchange Act: None

Securities registered pursuant to Section 12(g) of the Act:

                         Common Stock, par value $3.00
                         -----------------------------
                               (Title of Class)

     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 _____

     Check if disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB.[X]

     State issuer's revenues for its most recent fiscal year: $13,738,000
                                                              -----------

     The aggregate market value of the voting stock held by nonaffiliates as of
February 8, 2001: $21,720,210.00
                  ----------------

The number of shares outstanding of Common Stock as of March 10, 2001: 1,448,014
                                                                      ----------
Shares
------

                      DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant's 2000 Annual Report to Shareholders is incorporated
in Part II of this report, which is attached hereto as Exhibit 13.  Portions of
the Proxy Statement for the Company's Annual Meeting of Shareholders to be held
on April 10, 2001 are incorporated in Part III of this report.

Transitional small business disclosure format: Yes___ No x .
                                                        ---
<PAGE>

                        PINNACLE BANKSHARES CORPORATION
                         2000 FORM 10-KSB ANNUAL REPORT
                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                            Page
                                                                            ----
<S>                                                                         <C>
                                     PART I

Item 1.   Description of Business                                              3
               General Development of Business
               Competition
               Supervision and Regulation
               Employees
Item 2.   Description of Property                                              7
Item 3.   Legal Proceedings                                                    8
Item 4.   Submission of Matters to a Vote of Security Holders                  8

                                    PART II

Item 5.   Market for Common Equity and Related Stockholder Matters             9
Item 6.   Management's Discussion and Analysis or Plan of Operation            9
Item 7.   Financial Statements                                                 9
Item 8.   Changes in and Disagreements with Accountants on Accounting
           and Financial Disclosure                                            9

                                    PART III

Item 9.   Directors, Executive Officers, Promoters and Persons;
           Control Persons Compliance with Section 16(a)
           of the Exchange Act                                                 9
Item 10.  Executive Compensation                                               9
Item 11.  Security Ownership of Certain Beneficial Owners and Management       9
Item 12.  Certain Relationships and Related Transactions                      10
Item 13.  Exhibits and Reports on Form 8-K                                    10

SIGNATURES                                                                    11

Index to Attached Exhibits                                                    12
</TABLE>
<PAGE>

                                     PART I

Item 1.   Description of Business.
-------   ------------------------

General Development of Business

     Pinnacle Bankshares Corporation, a Virginia corporation (the "Company"),
was organized in 1997 and is registered as a bank holding company under the Bank
Holding Company Act of 1956, as amended. The Company is headquartered in
Altavista, Virginia.  The Company conducts all of its business activities
through offices of its wholly-owned subsidiary bank, The First National Bank of
Altavista (the "Bank").  The Company exists primarily for the purpose of holding
the stock of its subsidiary, the Bank, and of such other subsidiaries as it may
acquire or establish. The Company's administrative offices are located at 622
Broad Street, Altavista, Virginia.

     The Bank was organized as a national bank in 1908 and commenced its general
banking operations in December of that year, providing services to commercial
and agricultural businesses and individuals in the Altavista area.  With an
emphasis on personal service, the Bank today offers a broad range of commercial
and retail banking products and services including checking, savings and time
deposits, individual retirement accounts, merchant bankcard processing,
residential and commercial mortgages, home equity loans, consumer installment
loans, agricultural loans, investment loans, small business loans, commercial
lines of credit and letters of credit.

     The Bank serves a trade area consisting primarily of Campbell County,
northern Pittsylvania County, southeastern Bedford County, and the city of
Lynchburg from facilities located in the town of Altavista and the city of
Lynchburg, Virginia. In October, 1998, a mortgage loan production office was
opened in Forest, Virginia. The Airport facility, located just outside the
Lynchburg city limits, opened in June, 1999. The Old Forest Road facility,
located on Old Forest Road in Lynchburg, and the Brookville Plaza facility,
located on Timberlake Road in Lynchburg, were opened in August, 2000.  These
offices were opened to better serve the Lynchburg and northern Campbell County
area.

     The Bank owns two wholly-owned subsidiaries. FNB Property Corp., which is
incorporated under the laws of the Commonwealth of Virginia, was formed to hold
title to Bank premises real estate. First Properties, Inc., which is
incorporated under the laws of the Commonwealth of Virginia, was formed to hold
title to other real estate owned.

Competition

     In general, the banking business in central Virginia is highly competitive
with respect to both loans and deposits and is dominated by a number of major
banks that have offices operating throughout the state and in the Company's
market area.  The Company actively competes for all types of deposits and loans
with other banks and with nonbank financial institutions, including savings and
loan associations, finance companies, credit unions, mortgage companies,
insurance companies and other lending institutions.

     Institutions such as brokerage firms, credit card companies and even retail
establishments offer alternative investment vehicles such as money market funds
and traditional banking services.  Other entities (both public and private)
seeking to raise capital through the issuance and sale of debt or equity
securities also represent a source of competition for the Company with respect
to acquisition of deposits.  Among the advantages that the major banks have over
the Company is their ability to finance extensive advertising campaigns and to
allocate their investment assets to regions of highest yield and demand, and
over a more diverse geographic area.  Although major banks have some competitive
advantages over small independent banks, the Bank has actively tried to make the
loss of local independent banks a competitive advantage by soliciting customers
who prefer the personal service offered by the Bank.

     The Company does not have a dependency upon a single customer or industry,
the loss of which would have a material adverse effect.  The Company believes
the prompt response

                                       3
<PAGE>

to lending requests is a positive contributing factor to the Company's
competitive position in its area. The accessibility of senior management to
customers and local decision-making also distinguish the Company from other
financial institutions.

     In order to compete with the other financial institutions in its primary
service area, the Company relies principally upon local promotional activities,
personal contact by its officers, directors, employees and stockholders and
specialized services that it offers to customers.  The Company's promotional
activities emphasize the advantages of dealing with a local bank attuned to the
particular needs of the community.

Regulation and Supervision

     The following discussion of statutes and regulations is only a summary and
does not purport to be complete.  This discussion is qualified in its entirety
by reference to such statutes and regulations.  No assurance can be given that
such statutes or regulations will not change in the future.

     General.  The Company is subject to the periodic reporting requirements of
the Securities and Exchange Act of 1934, as amended (the "Exchange Act"), which
include, but are not limited to, the filing of annual, quarterly and other
reports with the Securities and Exchange Commission (the "SEC").

     The Company is a bank holding company within the meaning of the Bank
Holding Company Act, and is registered as such with and is subject to the
supervision of the Federal Reserve Bank of Richmond (the "FRB").  Generally, a
bank holding company is required to obtain the approval of the FRB before it may
acquire all or substantially all of the assets of any bank, or ownership or
control of the voting shares of any bank if, after giving effect to such
acquisition of shares, the bank holding company would own or control more than
5% of the voting shares of such bank.  The FRB's approval is also required for
the merger or consolidation of bank holding companies.

     The Company is required to file reports with the FRB and provide such
additional information as the FRB may require.  The FRB also has the authority
to examine the Company and the Bank, as well as any arrangements between the
Company and the Bank, with the cost of any such examination to be borne by the
Company.

     Banking subsidiaries of bank holding companies are also subject to certain
restrictions imposed by Federal law in dealings with their holding companies and
other affiliates.  Subject to certain restrictions set forth in the Federal
Reserve Act, a bank can loan or extend credit to an affiliate, purchase or
invest in the securities of an affiliate, purchase assets from an affiliate or
issue a guarantee, acceptance or letter of credit on behalf of an affiliate;
provided that the aggregate amount of the above transactions of a bank and its
subsidiaries does not exceed 10% of the capital stock and surplus of the bank on
a per affiliate basis or 20% of the capital stock and surplus of the bank on an
aggregate affiliate basis.  In addition, such transactions must be on terms and
conditions that are consistent with safe and sound banking practices and, in
particular, a bank and its subsidiaries generally may not purchase from an
affiliate a low-quality asset, as defined in the Federal Reserve act.  Such
restrictions also prevent a bank holding company and its other affiliates from
borrowing from a banking subsidiary of the bank holding company unless the loans
are secured by marketable collateral of designated amounts. Further, the Company
and its subsidiary are prohibited from engaging in certain tie-in arrangements
in connection with any extension of credit, sale or lease of property or
furnishing of services.

     A bank holding company is prohibited from engaging in or acquiring direct
or indirect ownership or control of more than 5% of the voting shares of any
company engaged in nonbanking activities.  One of the principal exceptions to
this prohibition is for activities found by the FRB by order or regulation to be
so closely related to banking or managing or controlling banks as to be proper
incident thereto.  In making these determinations, the FRB considers whether the
performance of such activities by a bank holding company would offer advantages
to the public that outweigh possible adverse effects.

                                       4
<PAGE>

     As a national bank, the Bank is subject to regulation, supervision and
regular examination by the Office of the Comptroller of the Currency
("Comptroller").  Each depositor's account with the Bank is insured by the
Federal Deposit Insurance Corporation (the "FDIC") to the maximum amount
permitted by law, which is currently $100,000 for each insured deposit.  The
Bank is also subject to certain regulations promulgated by the FRB and
applicable provisions of Virginia law, insofar as they do not conflict with or
are not preempted by Federal banking law.

     The regulations of the FDIC, the Comptroller and FRB govern most aspects of
the Company's business, including deposit reserve requirements, investments,
loans, certain check clearing activities, issuance of securities, payment of
dividends, branching, deposit interest rate ceilings and numerous other matters.
As a consequence of the extensive regulation of commercial banking activities in
the United States, the Company's business is particularly susceptible to changes
in state and Federal legislation and regulations, which may have the effect of
increasing the cost of doing business, limiting permissible activities or
increasing competition.

     Governmental Policies and Legislation.  Banking is a business that depends
primarily on rate differentials.  In general, the difference between the
interest rates paid by the Company on its deposits and its other borrowings and
the interest rates received by the Company on loans extended to its customers
and securities held in its portfolio, comprise the major portion of the
Company's net revenues.  These rates are highly sensitive to many factors that
are beyond the Company's control.  Accordingly, the Company's growth and
earnings are subject to the influence of domestic and foreign economic
conditions, including inflation, recession and unemployment.

     The commercial banking business is affected not only by general economic
conditions, but is also influenced by the monetary and fiscal policies of the
Federal government and the policies of regulatory agencies, particularly the
FRB.  The FRB implements national monetary policies (with objectives such as
curbing inflation and combating recession) by its open-market operations in U.S.
Government securities, by adjusting the required level of reserves for financial
institutions subject to its reserve requirements and by varying the discount
rates applicable to borrowings by depository institutions.  The actions of the
FRB in these areas influence the growth of bank loans, investments and deposits,
and also affect interest rates charged on loans and paid on deposits.  The
nature and impact of any future changes in monetary policies cannot be
predicted.

     From time to time, legislation is enacted which has the effect of
increasing the cost of doing business, limiting or expanding permissible
activities or affecting the competitive balance between banks and other
financial institutions.  Proposals to change the laws and regulations governing
the operations and taxation of bank holding companies, banks and other financial
institutions are frequently made in Congress, in the Virginia Legislature and
before various bank holding company and bank regulatory agencies.  The
likelihood of any major changes and the impact such changes might have are
impossible to predict.  Certain of the potentially significant changes that have
been enacted recently by Congress or various regulatory or professional agencies
are discussed below.

     Capital Requirements.  The FRB, the Comptroller and the FDIC have adopted
risk-based capital adequacy guidelines for bank holding companies and banks.
The risk-based capital adequacy guidelines establish a risk-based capital ratio
based on the overall risk of the entity determined by (I) assigning weighted
risks to each balance sheet asset and certain off-balance sheet commitments and
(II) adding up all of the weighted risks of all assets and includable off-
balance sheet commitments to obtain the total risk.  The guidelines generally
require banks to maintain a total qualifying capital to weighted risk assets
level of 8% (the "Risk-based Capital Ratio").  Of the total 8%, at least 4% of
the total qualifying capital to weighted risk assets (the "Tier 1 Risk-based
Capital Ratio") must be Tier 1 or core capital consisting primarily of equity
stock.  Tier 2 capital, which is to make up the remainder of total capital,
consists of (I) loan loss allowance, up to 1.25% of weighted risk assets (II)
mandatory convertible debentures and (III) other forms of capital.  Qualified
preferred capital stock may be considered core capital up to 25% of all core
capital elements.

                                       5
<PAGE>

     The FRB, the Comptroller and the FDIC have adopted leverage requirements
that apply in addition to the risk-based capital requirements. Under these
requirements, bank holding companies and bank are required to maintain core
capital of at least 3% of their assets (the "Leverage Ratio"). However, an
institution may be required to maintain core capital of at least 4% or 5%, or
possibly higher, depending upon the activities, risks, rate of growth, and other
factors deemed material by regulatory authorities. As of December 31, 2000, the
Company and Bank both met all applicable capital requirements imposed by
regulation. See "Item 6. Management's Discussion and Analysis--Capital
Resources."

     Dividends.  There are regulatory restrictions on dividend payments by both
the Bank and the Company that may affect the Company's ability to pay dividends
on its Common Stock. See "Item 5. Market for Common Equity and Related
Stockholder Matters."

     Federal Deposit Insurance Corporation Improvement Act of 1991.  On December
19, 1991, the Federal Deposit Insurance Corporation Improvement Act of 1991
("FDICIA") was signed into law.  FDICIA is an omnibus banking reform bill that
added new regulation and made changes in existing regulation of the operations,
procedures and regulatory reporting of insured institutions, bank holding
companies and affiliates.  Among other things, FDICIA establishes five capital
categories applicable to insured institutions, each with specific regulatory
consequences.  If the appropriate Federal banking agency determines, after
notice and an opportunity for hearing, that an insured institution is in an
unsafe or unsound condition, it may reclassify the institution to the next lower
capital category (other than critically undercapitalized) and require the
submission of a plan to correct the unsafe or unsound condition.  The
Comptroller has issued regulations (the "Prompt Corrective Action Regulation")
to implement these provisions.  Under the regulations, the categories are:

     a.   Well Capitalized -- The institution exceeds the required minimum level
for each relevant capital measure.  A well capitalized institution is one (I)
having a Risk-based Capital Ratio of 10% or greater, (II) having a Tier 1 Risk-
based Capital Ratio of 6% or greater, (III) having a Leverage Ratio of 5% or
greater and (IV) not being subject to any order or written directive to meet and
maintain a specific capital level for any capital measure.

     b.   Adequately Capitalized -- The institution meets the required minimum
level for each relevant capital measure.  No capital distribution may be made
that would result in the institution becoming undercapitalized.  An adequately
capitalized institution is one (I) having a Risk-based Capital Ratio of 8% or
greater, (II) having a Tier 1 Risk-based Capital Ratio of less than 4% or (III)
having a Leverage Ratio of 4% or greater or a Leverage Ratio of 3% or greater if
the institution is rated composite 1 under the CAMEL rating system.

     c.   Undercapitalized -- The institution fails to meet the required minimum
level for any relevant capital measure.  An undercapitalized institution is one
(I) having a Risk-based Capital Ratio of less than 8% or (II) having a Tier 1
Risk-based Capital Ratio of less than 4% or (III) having a Leverage Ratio of
less than 4%, or if the institution is rated a composite 1 under the CAMEL
rating system, a Leverage Ratio of less than 3%.

     The appropriate federal banking agency must closely monitor an
undercapitalized institution and the institution must submit an acceptable
capital restoration plan.  Each company having control over the undercapitalized
institution must provide a limited guarantee that the institution will comply
with its capital restoration plan.  Except under limited circumstances
consistent with an accepted capital restoration plan, an undercapitalized
institution may not grow.  An undercapitalized institution may not acquire
another institution, establish additional branch offices or engage in any new
line of business unless determined by the appropriate Federal banking agency to
be consistent with an accepted capital restoration plan or the FDIC determines
that the proposed action will further the purpose of prompt corrective action.
The appropriate federal banking agency may take any action authorized for a
significantly undercapitalized institution if an undercapitalized institution
fails to submit an acceptable capital restoration plan or fails in any material
respect to implement a plan accepted by the agency.

                                       6
<PAGE>

     An insured depository institution may not pay a management fee to a bank
holding company controlling that institution or any other person having control
of the institution if, after making the payment, the institution, would be
undercapitalized.  In addition, an institution cannot make a capital
distribution, such as a dividend or other distribution that is in substance a
distribution of capital to the owners of the institution if following such a
distribution the institution would be undercapitalized.  Thus, if payment of
such a management fee or the making of such would cause the Bank to become
undercapitalized, it could not pay a management fee or dividend to the Company.

     d.  Significantly Undercapitalized -- The institution is significantly
below the required minimum level for any relevant capital measure.  A
significantly undercapitalized institution is one (I) having a Risk-based
Capital Ratio of less than 6% or (II) having a Tier 1 Risk-based Capital Ratio
of less than 4% or (III) having a Leverage Ratio of less than 3%.

     e.  Critically Undercapitalized -- The institution fails to meet a critical
capital level set by the appropriate federal banking agency.  A critically
undercapitalized institution is one having a ratio of tangible equity to total
assets that is equal to or less than 2%.

     As of December 31, 2000, the Company was considered "well capitalized" and
the Bank was considered "well capitalized."  See "Item 6. Management's
Discussion and Analysis--Capital Resources."

     An institution that is classified as adequately capitalized or higher may
not pay a management fee to its holding company or other controlling person or
make capital distributions that in either case would cause it to be less than
adequately capitalized.

     An institution which is less than adequately capitalized must adopt an
acceptable capital restoration plan, is subject to increased regulatory
oversight, and is increasingly restricted in the scope of its permissible
activities.  A critically undercapitalized institution is subject to having a
receiver or conservator appointed to manage its affairs and for loss of its
charter to conduct banking activities.

     Deposit Insurance Assessments.  FDICIA also requires the FDIC to implement
a risk-based assessment system in which the insurance premium relates to the
probability that the deposit insurance fund will incur a loss and directs the
FDIC to set semi-annual assessments in an amount necessary to increase the
reserve ratio of the Bank Insurance Fund (the "BIF") to at least 1.25% of
insured deposits or a higher percentage as determined to be justified by the
FDIC

     The FDIC has promulgated implementing regulations that base an
institution's risk category partly upon whether the institution is well
capitalized ("1"), adequately capitalized ("2") or less than adequately
capitalized ("3"), as defined under the Prompt Corrective Action Regulations
described above.  In addition, each insured depository institution is assigned
to one of three "supervisory subgroups."  Subgroup "A" institutions are
financially sound institutions with few minor weaknesses, subgroup "B"
institutions demonstrate weaknesses which, if not corrected, could result in
significant deterioration and subgroup "C" institutions are those as to which
there is a substantial probability that the FDIC will suffer a loss in
connection with the institution unless effective action is taken to correct the
areas of weakness.  Based on the current capital levels the Company is
categorized as a well-capitalized institution.

Employees

     As of December 31, 2000, the Company had 75 full-time employees.  The
Company's Management believes that its employee relations are satisfactory.

Item 2.  Description of Property.
-------  ------------------------

     The Company's main office and corporate headquarters are located at 622
Broad Street in downtown Altavista, Virginia, which is owned and occupied
principally by the Bank.

                                       7
<PAGE>

     The Vista Office, located at 1301 N. Main Street in Altavista, Virginia,
consists of a single-story building owned by the Bank.

     First National Mortgage, located at 17841 Forest Road in Forest, Virginia,
consists of a single-story building leased by the Bank.

     The Airport Office, located at 14580 Wards Road in Campbell County,
Virginia, consists of a single-story building owned by the Bank.

     The Old Forest Road Office, located at 3309 Old Forest Road in Lynchburg,
Virginia, consists of a single-story building owned by the Bank,

     The Brookville Plaza Office, located at 7805 Timberlake Road in Lynchburg,
Virginia, consists of office space leased by the Bank in a local supermarket.

     The Company maintains comprehensive general liability and casualty loss
insurance covering its properties and activities conducted in or about its
properties.  The Company believes such insurance provides adequate protection
for liabilities or losses that might arise out of the ownership and use of such
properties.

Item 3.   Legal Proceedings.
-------   ------------------

     The Company is not involved in any pending legal proceedings other than
nonmaterial proceedings arising in the ordinary course of its business.

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

     No matters were submitted to a vote of security holders during the fourth
quarter of the Company's fiscal year ended December 31, 2000.

                                       8
<PAGE>

                                    PART II

Item 5.   Market for Common Equity and Related Stockholder Matters.
------    --------------------------------------------------------

     The information contained on page 54 of the 2000 Annual Report to
Shareholders, under the caption, "Market for Common Equity and Related
Stockholder Matters", is incorporated herein by reference.

Item 6.   Management's Discussion and Analysis or Plan of Operation.
-------   ----------------------------------------------------------

     The information presented under the caption "Management's Discussion and
Analysis of Financial Condition and Results of Operations" on pages 4 through 21
of the 2000 Annual Report to Shareholders is incorporated herein by reference.

Item 7.   Financial Statements.
-------   ---------------------

     The consolidated financial statements of the Registrant and its subsidiary
and independent auditors' report thereon contained on pages 22 through 51 of the
2000 Annual Report to Shareholders are incorporated herein by reference.


Item 8.   Changes in and Disagreements with Accountants on Accounting
-------   -----------------------------------------------------------
          and Financial Disclosure.
          -------------------------

          None.


                                    PART III


     Except as otherwise indicated, information called for by the following
items under Part III is contained in the Proxy Statement for the Company's 2001
Annual Meeting of Shareholders ("Proxy Statement") mailed to Shareholders on or
about March 10, 2001.

Item 9.   Directors, Executive Officers, Promoters and Control Persons;
-------   -------------------------------------------------------------
          Compliance with Section 16(a) of the Exchange Act.
          --------------------------------------------------

     In response to this item, Registrant hereby incorporates by references the
section entitled "Election of Directors," at page 2 thru 5 of the Proxy
Statement for the Annual Meeting of Shareholders to be held on April 10, 2001.
The Registrant hereby incorporates by reference the section entitled "Officers-
Pinnacle Bankshares Corporation," as set forth on page 52 of the 2000 Annual
Report to Shareholders. The Registrant hereby incorporates by reference the
Section 16(a) Beneficial Ownership Reporting Compliance at page 8 of the Proxy
Statement.

Item 10.  Executive Compensation.
--------  -----------------------

     Information on Executive Compensation is contained on pages 6 through 7 of
the Proxy Statement and is incorporated herein by reference.

Item 11.  Security Ownership of Certain Beneficial Owners and Management.
--------  ---------------------------------------------------------------

     Information on Security Ownership of Certain Beneficial Owners and
Management is contained on pages 2 through 4 of the Proxy Statement and is
incorporated herein by reference.

                                       9
<PAGE>

Item 12.  Certain Relationships and Related Transactions.
--------  -----------------------------------------------

     Information on Certain Relationships and Related Transactions is contained
on page 5 of the Proxy Statement and is incorporated herein by reference.

Item 13.  Exhibits and Reports on Form 8-K
--------  --------------------------------

     (a)  Exhibits List

          Exhibit 13-2000 Annual Report to Shareholders (Such report except to
          the extent incorporated herein by reference, is being furnished for
          the information of the Commission only and is not deemed to be filed
          as part of this report on Form 10-KSB.)

          Exhibit 23-Consent of KPMG LLP to incorporation by reference of
          independent auditors' report incorporated by reference in this Form
          10-KSB, into registrant's registration statement on Form S-8 and
          registration statement on Form S-3.

     (b)  Reports on Form 8-K

          No reports on Form 8-K were filed during the fourth quarter of the
          Company's fiscal year ended December 31, 2000.

                                       10
<PAGE>

                                   SIGNATURES

In accordance with Section 13 or 15(d) 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


MARCH 13, 2001                     /s/ Robert H. Gilliam, Jr.
--------------------               ------------------------------------
Date                               Robert H. Gilliam Jr., President and
                                   Chief Executive Officer



MARCH 13, 2001                     /s/ Bryan M. Lemley
--------------------               ------------------------------------
Date                               Bryan M. Lemley, Secretary,Treasurer
                                   and Chief Financial Officer

     In accordance with the Securities Exchange Act, this report has been signed
below by the following persons on behalf of the registrant and in the capacities
and on the dates indicated.

Signature                               Title                        Date
---------                               -----                        ----

/s/ A. Willard Arthur           Director                        March 13, 2001
---------------------------
A. Willard Arthur

/s/ Alvah P. Bohannon, III      Director                        March 13, 2001
---------------------------
Alvah P. Bohannon, III

/s/ James E. Burton, IV         Director                        March 13, 2001
---------------------------
James E. Burton, IV

/s/ John P. Erb                 Director                        March 13, 2001
---------------------------
John P. Erb

/s/ Robert H. Gilliam, Jr.      President, Chief Executive      March 13, 2001
---------------------------
Robert H. Gilliam, Jr.          Officer and Director

/s/ R.B. Hancock, Jr.           Director                        March 13, 2001
---------------------------
R.B. Hancock, Jr.

/s/ James P. Kent, Jr.          Director                        March 13, 2001
---------------------------
James P. Kent, Jr.

/s/ Warren G. Lowder            Director                        March 13, 2001
---------------------------
Warren G. Lowder

/s/ Percy O. Moore              Director                        March 13, 2001
---------------------------
Percy O. Moore

/s/ Herman P. Rogers, Jr.       Director                        March 13, 2001
---------------------------
Herman P. Rogers, Jr.

/s/ Carroll E. Shelton          Vice President and Director     March 13, 2001
---------------------------
Carroll E. Shelton

/s/ John L. Waller              Director                        March 13, 2001
---------------------------
John L. Waller

                                       11
<PAGE>

                           INDEX TO ATTACHED EXHIBITS

Exhibit Number                        Description
--------------                        -----------

     13           2000 Annual Report to Shareholders (such report except to the
                  extent incorporated herein by reference, is being furnished
                  for the information of the Commission only and is not deemed
                  to be filed as part of this report on Form 10-KSB).

     23           Consent of KPMG LLP to incorporation by reference of
                  independent auditors' report incorporated by reference in this
                  Form 10-KSB, into registrant's registration statement on Form
                  S-8 and registration statement on Form S-3.

                                       12