First quarter profits were down for Altavista's First National Bank, President and CEO Aubrey Hall, III announced in a news release on Friday. “First quarter 2020 returns were lower due mainly to merger-related expenses and higher non-interest expense associated with growth initiatives,” stated Hall, who is also President-CEO of the bank's parent holding company, Pinnacle Bankshares.
Hall further commented, “Overall, we were pleased with our operating performance. First National has been consumed over the last thirty days by the COVID-19 pandemic and the resulting changes to our operation. We continue to monitor the pandemic and its effects on our economy, while taking steps to safeguard our customers, employees and shareholders during this difficult time. Fortunately, Pinnacle was in a strong position at the beginning of the crisis and stands ready to weather this storm.”
Pinnacle Bankshares, is preparing for a merger with Virginia Bank Bankshares (Danville-based Virginia Bank & Trust), and merger-related expenses (primarily legal and consulting fees) cost Pinnacle $550,000.
Also factoring into the profit decrease were "higher salaries and employee benefits related to strategic growth initiatives to include a new Branch in Downtown Lynchburg and a new Loan Production Office in Charlottesville," the bank's press release noted.
First-quarter net income was $448,000 (or $0.29 per basic and diluted share); last year's figure for the same period was $1.301 million ($0.84 per basic and diluted share).
"Total assets as of March 31, 2020 were $502,817,000," the bank reported, up almost a half a percent from last year's closing figures.
The finalization of the merger with the Danville bank has been postponed because of the coronavirus. The two banks jointly announced that "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."