Communicating with Shareholders

Pinnacle Bankshares Corp. filed a form 15 deregistration, just as Princeton National Bancorp, Inc. did recently. However, Pinnacle also filed an 8-k AND a Letter To Shareholders  at the same time. Apparently they thought it was important to inform their shareholders.

Here is the letter:

EX-99.1 2 d414509dex991.htm LETTER TO SHAREHOLDERS

Exhibit 99.1

September 21, 2012

Dear Shareholder,

I am writing to notify you that at its regularly scheduled meeting on September 11, 2012 the Board of Directors for Pinnacle Bankshares Corporation (the “Company”), the holding company for First National Bank (the “Bank”), approved the deregistration of the Company’s common shares under the Securities Exchange Act of 1934 (“the Exchange Act”). Once the deregistration process is complete, the Company will cease filing reports with the Securities and Exchange Commission (“SEC”). This decision was prompted by the Jumpstart Our Business Startups Act, which was signed into law on April 5, 2012 and increased the threshold for deregistration under Section 12(g) of the Exchange Act from three hundred (300) shareholders of record to one thousand two hundred (1,200) shareholders of record. The Company’s current shareholders of record are less than four hundred (400). A Form 15 has been filed with the SEC, with deregistration becoming effective ninety (90) days after filing.

In making the decision to deregister, the Board of Directors concluded that the benefits of remaining an SEC-reporting company did not justify the significant associated compliance and administrative costs. The primary benefits of filing reports with the SEC have included the potential for increased liquidity in the Company’s stock and access to broader capital markets. In the past, filing reports with the SEC was a requirement for the Company’s stock to be traded on the over the counter Bulletin Board. However, the trading of the Company’s stock has migrated to the OTC Markets Group – QB Tier, which is available to nonregistered banks and bank holding companies. Therefore, the current trading platform for the Company’s stock is not expected to change with deregistration. Regarding capital, the Company continues to remain well capitalized by all regulatory definitions, and the Board of Directors does not anticipate a need to raise additional capital in the near future. One consequence of deregistration, however, will be the elimination of our Dividend Reinvestment Plan going forward.

The Company is committed to providing its shareholders with important financial information on a quarterly and annual basis. This information will be mailed to shareholders and posted on the Bank’s website at http://www.1stnatbk.com under the Investor Relations tab. Additionally, quarterly call reports will continue to be filed with the Bank’s primary regulator, the Office of the Comptroller of the Currency. Call reports are available for review on the Federal Deposit Insurance Corporation’s website at http://www.fdic.gov.

In closing, the Board of Directors believes that the significant cost savings and elimination of administrative burden associated with deregistration will help improve the Company’s profitability and ultimately returns to its shareholders. As always, your support and confidence are appreciated, and I would encourage you to contact me if you have any questions.

Sincerely,

Aubrey H. Hall, III “Todd”

President & Chief Executive Officer

Nice Letter. Effective communication.

19 comments on “Communicating with Shareholders

  1. In the event of a Citizens bankruptcy, insured deposits will be guaranteed by the FDIC. After that, first in line, I believe, would be salaries owed to employees, with stockholders coming in last.

    My question is about the bank’s various commercial creditors – suppliers, vendors, utilities, repairmen, and landlords. I doubt that the FDIC will provide any security for them? Will such vendors begin demanding cash-and-carry terms – or have they already?

      • OK, based on that link, if there are enough assets left over, the FDIC will try to take care of the bank’s trade creditors. I would assume that the $25M TARP would receive pretty high priority?

        I was once working for a company that was serving TWA, an airline that was on the verge of bankruptcy (more than once, I think). We and other vendors finally required them to pay us up-front, in cash. It makes it awkward for the prospective bankruptee to have to pay cash, in advance, to get a photocopy machine repaired.

  2. Aren’t the sharholders about due to receive a status report on Tom Ogaard’s touted “roadmap” for raising capital, staving off the failure of the bank, and it’s seizure by the feds?

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