Pinnacle Bankshares Corp. and Virginia Bank Bankshares today jointly announced that consummation of the previously announced strategic merger of Virginia Bank with and into Pinnacle will be delayed.
Pinnacle and Virginia Bank have jointly concluded that a delay is necessary due to near-term operational challenges as both institutions respond to the COVID-19 outbreak and the resulting volatility in U.S. financial markets as well as the impact on their local communities and economies.
Pinnacle and Virginia Bank remain fully committed to completing this transaction once the uncertainty surrounding this pandemic subsides.
Pinnacle and Virginia Bank feel strongly that each bank must prioritize its efforts and resources to focus on the needs of customers, employees and local communities as they address COVID-19, and that attempting to complete the merger during this time of economic uncertainty and market volatility could strain the ability of each bank to meet those needs.
Both believe that the merits of the proposed merger remain intact and will survive the COVID-19 outbreak.
The steps taken by government bodies to limit social interaction in response to the COVID-19 outbreak have created significant business disruption, and adversely affected customers, employees, and shareholders of both Pinnacle and Virginia Bank.
In addition, both are focused on working with the federal government on the administration of the Paycheck Protection Program created by the Coronavirus Aid, Relief, and Economic Security Act signed into law on March 27.
Although the impacts of the COVID-19 outbreak are rapidly developing, based upon currently available information Pinnacle and Virginia Bank now anticipate the closing of the merger is more likely to occur at the end of the third quarter or in the fourth quarter of 2020.
However, the closing could occur earlier or later depending on how the COVID-19 outbreak develops and on conditions in Pinnacle’s and Virginia Bank’s markets and the national economy and financial markets.
“We continue to believe this transformational merger with Virginia Bank remains an important strategic initiative for the customers and employees of both banks and is financially attractive to our shareholders,” said Aubrey H. “Todd” Hall, III, President and Chief Executive Officer of Pinnacle. “The merger is still a tremendous opportunity to combine two neighboring community banks with similar cultures and philosophies to create an even stronger entity. We remain committed to the merger and believe pursuing the merger’s completion is in the best interest of Pinnacle and Virginia Bank.”
“The outbreak of COVID-19 brings many challenges to us as an institution and our community. We believe these events demonstrate the value creation opportunities of merging with Pinnacle. As one entity, we will be stronger and more prepared to weather adverse economic environments while enhancing shareholder value,” said Donald W. Merricks, Chairman and Chief Executive Officer of Virginia Bank.
As part of the merger’s delay, filings with federal and state banking regulators and the Securities and Exchange Commission and Pinnacle’s and Virginia Bank’s respective shareholder meetings will be delayed. Both management teams will communicate updates regarding the merger, including dates for the meetings of shareholders, when that information is available.
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