SCHEDULE 14A

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934

Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]

Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14 a-11(c) or ss. 240.14a-12

PINNACLE BANKSHARES CORPORATION
(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, If Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and O-11.

1) Title of each class of securities to which transaction applies:

2) Aggregate number of securities to which transaction applies:

3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule O-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):

4) Proposed maximum aggregate value of transaction:

5) Total fee paid:

[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
O-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.

1) Amount Previously Paid:

2) Form, Schedule or Registration Statement No.:

3) Filing Party:

4) Date Filed:

[LOGO]

Dear Fellow Shareholders:

You are cordially invited to attend the 1999 Annual Meeting of
Shareholders of Pinnacle Bankshares Corporation, the holding company
for The First National Bank of Altavista. The meeting will be held on
Tuesday, April 13, 1999, at 11:30 a.m. at the Fellowship Hall of
Altavista Presbyterian Church, located at 707 Broad Street, Altavista,
Virginia. The accompanying Notice and Proxy Statement describe the
matters to be presented at the meeting. Enclosed is our 1998 Annual
Report to Shareholders that will be reviewed at the Annual Meeting.

PLEASE COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD
AS SOON AS POSSIBLE. Whether or not you will be able to attend the
Annual Meeting, it is important that your shares be represented and
your vote recorded. The proxy may be revoked at any time before it is
voted at the Annual Meeting.

We appreciate your continuing loyalty and support of The First
National Bank of Altavista and Pinnacle Bankshares Corporation.

Sincerely,

/s/ Robert H. Gilliam, Jr.
--------------------------
Robert H. Gilliam, Jr.
PRESIDENT &
CHIEF EXECUTIVE OFFICER
Altavista, Virginia
March 12, 1999

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PINNACLE BANKSHARES CORPORATION
622 BROAD STREET
ALTAVISTA, VIRGINIA 24517

NOTICE OF 1999 ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD APRIL 13, 1999

The 1999 Annual Meeting of Shareholders of Pinnacle Bankshares
Corporation (the "Company") will be held at the Fellowship Hall of Altavista
Presbyterian Church, located at 707 Broad Street, Altavista, Virginia, on
Tuesday, April 13, 1999, at 11:30 a.m. for the following purposes:

1. To elect four Class II directors to serve until the 2002
Annual Meeting of Shareholders and one Class I director to
serve until the 2001 Annual Meeting of Shareholders, as
described in the Proxy Statement accompanying this notice.

2. To transact such other business as may properly come before
the meeting or any adjournment thereof.

Shareholders of record at the close of business on February 22, 1999,
are entitled to notice of and to vote at the Annual Meeting or any adjournment
thereof.

By Order of the Board of Directors

/s/ Dawn P. Crusinberry
-----------------------
Dawn P. Crusinberry
SECRETARY

March 12, 1999

IMPORTANT NOTICE

PLEASE COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD IN THE
ACCOMPANYING POSTAGE PAID ENVELOPE SO THAT YOUR SHARES WILL BE REPRESENTED AT
THE MEETING. SHAREHOLDERS ATTENDING THE MEETING MAY PERSONALLY VOTE ON ALL
MATTERS WHICH ARE CONSIDERED, IN WHICH EVENT THE SIGNED PROXIES ARE REVOKED.

PINNACLE BANKSHARES CORPORATION
622 BROAD STREET
ALTAVISTA, VIRGINIA 24517

PROXY STATEMENT
1999 ANNUAL MEETING OF SHAREHOLDERS
APRIL 13, 1999

GENERAL

The following information is furnished in connection with the
solicitation by and on behalf of the Board of Directors of the enclosed proxy to
be used at the 1999 Annual Meeting of Shareholders (the "Annual Meeting") of
Pinnacle Bankshares Corporation (the "Company") to be held Tuesday, April 13,
1999, at 11:30 a.m. at the Fellowship Hall of Altavista Presbyterian Church,
located at 707 Broad Street, Altavista, Virginia. The approximate mailing date
of this Proxy Statement and accompanying proxy is March 12, 1999.

REVOCATION AND VOTING OF PROXIES

Execution of a proxy will not affect a shareholder's right to attend
the Annual Meeting and to vote in person. Any shareholder who has executed and
returned a proxy may revoke it by attending the Annual Meeting and requesting to
vote in person. A shareholder may also revoke his proxy at any time before it is
exercised by filing a written notice with the Company or by submitting a proxy
bearing a later date. Proxies will extend to, and will be voted at, any properly
adjourned session of the Annual Meeting. If a shareholder specifies how the
proxy is to be voted with respect to any proposals for which a choice is
provided, the proxy will be voted in accordance with such specifications. If a
shareholder fails to specify with respect to such proposals, the proxy will be
voted FOR proposal 1, as set forth in the accompanying notice and further
described herein.

VOTING RIGHTS OF SHAREHOLDERS

Only those shareholders of record at the close of business on
February 22, 1999, are entitled to notice of and to vote at the Annual Meeting,
or any adjournments thereof. The number of shares of common stock of the Company
outstanding and entitled to vote at the Annual Meeting is 719,025. The Company
has no other class of stock outstanding. A majority of the votes entitled to be
cast, represented in person or by proxy, will constitute a quorum for the
transaction of business. Each share of Company Common Stock entitles the record
holder thereof to one vote upon each matter to be voted upon at the Annual
Meeting.

With regard to the election of directors, votes may be cast in favor
or withheld. If a quorum is present, the nominees receiving a plurality of the
votes cast at the Annual Meeting will be elected directors; therefore, votes
withheld will have no effect. Thus, although abstentions and broker non-votes
(shares held by customers which may not be voted on certain matters because the
broker has not received specific instructions from the customer) are counted for
purposes of determining the presence or absence of a quorum for the transaction
of business, they are generally not counted for purposes of determining whether
such proposals have been approved and therefore have no effect.

SOLICITATION OF PROXIES

The cost of solicitation of proxies will be borne by the Company.
Solicitations will be made only by the use of the mails, except that officers
and regular employees of the Company and The First National Bank of Altavista
(the "Bank") may make solicitations of proxies by telephone, telegram, special
letter, or by special call, acting without compensation other than regular
compensation. It is contemplated that brokerage houses and other nominees,
custodians, and fiduciaries will be requested to forward the proxy soliciting
material to the beneficial owners of the stock held of record by such persons,
and the Company will reimburse them for their charges and expenses in this
connection.

SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

To the Company's knowledge, no shareholder of the Company owns 5% or
more of the outstanding common stock. For information regarding securities
ownership by members of the Company's Board of Directors and management, please
see "Election of Directors" below.

PROPOSAL ONE
ELECTION OF DIRECTORS

The Company's Board is divided into three classes (I, II, and III) of
directors. The term of office for Class II directors will expire at the Annual
Meeting. Four persons named below, each of whom currently serves as a director
of the Company, will be nominated to serve as a Class II director and one person
named below, who currently serves as a director of the Company, will be
nominated to serve as a Class I director. If elected, the Class II nominees will
serve until the 2002 Annual Meeting of Shareholders and the Class I director
will serve until the 2001 Annual Meeting of Shareholders. The persons named in
the proxy will vote for the election of the nominees named below unless
authority is withheld. The Company's Board believes that the nominees will be
available and able to serve as directors, but if any of these persons should not
be available or able to serve, the proxies may exercise discretionary authority
to vote for a substitute proposed by the Company's Board.

Certain information concerning the nominees for election at the
Annual Meeting is set forth below, as well as certain information about the
Class I and Class III directors who will continue in office.

-2-

COMMON
SHARES OF OWNERSHIP AS A
DIRECTOR OF COMPANY PERCENTAGE OF
NAME (AGE) AND PRINCIPAL OCCUPATION COMPANY BENEFICIALLY COMMON STOCK
ADDRESS LAST FIVE YEARS SINCE (1) OWNED (2)(3) OUTSTANDING
------- --------------- --------- ------------ -----------

CLASS II DIRECTORS (NOMINEES) (SERVING UNTIL THE 2002 ANNUAL MEETING)

Alvah P. Bohannon, III (51) President 1985 1,920 *
Altavista, Virginia Altavista Motors, Inc.

James E. Burton, IV (42) Vice President, Operations 1998(5) 4,575(4) *
Lynchburg, Virginia Marvin V. Templeton & Sons, Inc.

James P. Kent, Jr. (59) Partner 1980 10,402(6) 1%
Hurt, Virginia Kent & Kent

Percy O. Moore (65) Retired 1989 1,701(7) *
Altavista, Virginia Customer Service
Supervisor

CLASS III DIRECTORS (SERVING UNTIL THE 2000 ANNUAL MEETING)

Herman P. Rogers, Jr. (55) Plant Manager 1997 1,560(7) *
Altavista, Virginia BGF Industries, Inc.

Carroll E. Shelton (48) Senior Vice President 1990 3,911(8) *
Hurt, Virginia The First National Bank
of Altavista

Kenneth S. Tyler, Jr. (58) Retired President & CEO 1976 1,791 *
Altavista, Virginia The Lane Company, Inc.

John L. Waller (55) Owner & Operator 1989 1,701(9) *
Hurt, Virginia Waller Farms, Inc.

CLASS I DIRECTORS (SERVING UNTIL THE 2001 ANNUAL MEETING)

A. Willard Arthur (53) Chairman and Secretary 1998(5) 400 *
Rustburg, Virginia Marvin V. Templeton & Sons, Inc.
(NOMINEE)

John P. Erb (55) Assistant Superintendent 1989 1,951(7) *
Altavista, Virginia Campbell County Schools

Robert L. Finch (69) Former 1986 8,052(10) 1%
Altavista, Virginia President & Treasurer
Finch & Finch, Inc.

-3-

Robert H. Gilliam, Jr. (53) President & CEO 1979 5,909(11) *
Lynch Station, Virginia The First National Bank
Of Altavista

R. B. Hancock, Jr. (48) President & Owner 1994 2,155(12) *
Huddleston, Virginia R.B.H., Inc. d/b/a Napa
Auto Parts

All directors and executive 46,960 6.5%
officers as a group (14 persons)

- ------------------
* Less than 1.0%; based on total outstanding shares of 719,025 shares as
of the date of this Proxy Statement.
(1) Reflects year that director initially served on the Board of the Bank,
the Company's sole subsidiary. Effective May 1, 1997, the Company
became the holding company for Bank.
(2) For purposes of this table, beneficial ownership has been determined in
accordance with the provision of Rule 13d-3 of the Securities Exchange
Act of 1934 under which, in general, a person is deemed to be the
beneficial owner of a security if he has or shares the power to vote or
direct the voting of the security or the power to dispose of or direct
the disposition of the security, or if he has the right to acquire
beneficial ownership of the security within sixty days.
(3) Includes shares held by affiliated corporations, close relatives, and
children, and shares held jointly with spouses or as custodians or
trustees for children.
(4) 315 of the reported shares held solely in spouse's name and 3,012
shares held as custodian for minor children.
(5) Pursuant to the Bylaws of the Company and the Bank, Messrs. Burton and
Arthur were elected to the respective Boards as a Director of the
Company and the Bank on August 11, 1998.
(6) 925 of the reported shares held solely in spouse's name.
(7) Shares held jointly with spouse.
(8) 3,111 shares are held jointly with spouse; and includes 800 shares
which represents shares that Mr. Shelton has the option to purchase as
of May 1, 1998 under the 1997 Incentive Stock Option.
(9) 78 of the reported shares held in name of majority children living at
home.
(10) 462 of the reported shares as held jointly with spouse, 15 shares held
solely in spouse's name and 795 shares held indirectly by Finch &
Finch, Inc., of which Mr. Finch is a majority shareholder.
(11) Includes 1,200 shares which represents shares that Mr. Gilliam has the
option to purchase as of May 1, 1998 under the 1997 Incentive Stock
Option.
(12) 1,675 of the reported shares held jointly with spouse and 180 shares
held as custodian for minor child; 100 of the reported shares held in
name of majority child living at home.

MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS.

The Board of Directors conducts its business through meetings of the
Company's Board and through committees of the Bank's Board, certain of which are
set forth below. The Company became the holding company for the Bank in May
1997, and currently, the Bank's committees make recommendations to the Company's
Board regarding the audit, personnel and nominating functions. During calendar
year 1998, the Company's Board of Directors held 11 meetings and the Bank's
Board of Directors held 18 meetings. No director attended fewer than 75 percent
of the total meetings of the Company's and the Bank's Boards of Directors and
the Bank committees on which he or she served during this period.

-4-

AUDIT COMMITTEE. The Bank's Audit Committee meets to review reports of
the Bank's internal auditor who reports directly to the Audit Committee and
reviews the annual report of the Bank's independent auditors. Members of the
Audit Committee are Messrs. Bohannon, Finch, Hancock, Moore and Waller, and they
met 4 times in 1998.

PERSONNEL COMMITTEE. The Bank's Personnel Committee reviews officer and
employee compensation and employee benefit plans and makes recommendations to
the Board concerning such matters. The Personnel Committee makes recommendations
as to the employment of officers of the Bank. Members of the Personnel Committee
are Messrs. Erb, Hancock, Moore, Rogers, Tyler and Gilliam, and they met 3 times
in 1998.

NOMINATING COMMITTEE. The Nominating Committee's duties include
consideration of candidates for board election. The Nominating Committee makes a
recommendation to the Board concerning candidates for any vacancy that may occur
and the entire Board then determines which candidate(s) should be nominated for
the shareholders' approval. Members of the Nominating Committee are Messrs. Erb,
Kent, Tyler and Gilliam, and they met 2 times in 1998. While the Board of
Directors will consider nominees recommended by shareholders, it has not
actively solicited recommendations from the Bank's shareholders for nominees,
nor has it established any procedures for this purpose.

TRANSACTIONS WITH MANAGEMENT

Directors and officers of the Bank and persons with whom they are
associated have had, and expect to have in the future, banking transactions with
the Bank in the ordinary course of their businesses. In the opinion of
management of the Bank, all such loans and commitments for loans were made on
substantially the same terms, including interest rates, collateral and repayment
terms as those prevailing at the same time for comparable transactions with
other persons, were made in the ordinary course of business, and do not involve
more than a normal risk of collectibility or present other unfavorable features.

DIRECTORS' FEES

All directors of the Company received an annual retainer of $1,000 in
1998. Directors of the Bank received an annual retainer of $3,250 in 1998 and,
in addition, the outside directors received $175.00 for each committee meeting
attended.

INTEREST OF MANAGEMENT IN CERTAIN TRANSACTIONS

As of December 31, 1998, borrowing by all policy-making officers,
directors, principal shareholders and their associates amounted to $2,101,000 or
14%, of total capital. The maximum aggregate amount of such indebtedness during
1998 was $2,340,000, or 15% of total year-end capital. These loans were made in
the ordinary course of the Bank's business, on the same terms, including
interest rates and collateral, as those prevailing at the same time for
comparable transactions with others, and do not involve more than the normal
risks of collectibility or present other unfavorable features. The Bank expects
to have in the future similar banking transactions with officers, directors,
principal shareholders and their associates.

EXECUTIVE COMPENSATION

The following table provides information concerning Mr. Gilliam,
President and CEO, the only executive officer of the Company whose compensation
exceeded $100,000 for any of the three years ended December 31, 1998. All
compensation, other than director fees for members of the Company's Board of
Directors, was paid by the Bank, the Company's wholly-owned subsidiary.

-5-

SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
-------------------
NAME AND PRINCIPAL ALL OTHER
POSITION YEAR SALARY($)(1) BONUS($) COMPENSATION($)(2)
-------- ---- ------------ -------- ------------------

Robert H. Gilliam, Jr. 1998 124,250 12,000 2,087
PRESIDENT & CHIEF 1997 118,250 13,800 1,724
EXECUTIVE OFFICER 1996 106,150 12,378 1,855

(1) Includes a Board retainer of $4,250 in 1998, $3,250 in 1997, and $3,000
in 1996.
(2) Cost (based on IRS uniform cost table) of more than $50,000 of
group-term life insurance provided by employer.

STOCK OPTIONS

No options were granted to Mr. Gilliam during fiscal year 1998. Mr.
Gilliam was granted 6,000 options during fiscal year 1997. These options vest
over a five year period, have an exercise price of $20 per share and expire
December 30, 2007.

The following table reflects certain information regarding the
exercise of stock options during the fiscal year ended December 31, 1998, as
well as information with respect to unexpected options held at such date by Mr.
Gilliam.

VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED "IN THE MONEY" OPTIONS
NUMBER OF OPTIONS AT FISCAL YEAR AT FISCAL YEAR END
SHARES ACQUIRED VALUE END(#) EXERCISABLE/ ($)(1) EXERCISABLE/
NAME ON EXERCISE(#) REALIZED($) UNEXERCISABLE UNEXERCISABLE
---- -------------- ----------- ------------- -------------

Robert H. Gilliam, Jr. 0 0 1,200/4,800 15,975/63,900

(1) Calculated as the difference between the current market value and the
exercise price of the options. Assumes a current market value of
$33.3125 per share, as of March 1, 1999.

EMPLOYEE BENEFIT PLANS

RETIREMENT PLAN. The Bank maintains a Non-Contributory Defined
Benefit Retirement Plan (the "Retirement Plan") covering substantially all
employees who have reached the age of 21 and have been fully employed for at
least one year. The Retirement Plan, sponsored by the Virginia Bankers
Association, provides participants with retirement benefits related to salary
and years of credited service. Employees become vested after five plan years of
service, and the normal retirement date is the plan anniversary date nearest the
employee's 65th birthday. The Retirement Plan does not cover directors

-6-

who are not active officers. The amount expensed for the Retirement Plan during
the year ended December 31, 1998, was $108,076.

The following table shows the estimated annual retirement benefits
payable to employees in the average annual salary and years of service
classifications set forth below assuming retirement at the normal retirement age
of 65.

Years of Credited Service
Consecutive Five-Year
Average Salary 15 20 25 30 35
-------------- ------ ------ ------ ------ ----

$ 25,000 $ 5,625 $ 7,500 $ 9,375 $ 11,250 $ 12,188
40,000 $ 9,990 $13,320 $ 16,650 $ 19,980 $ 21,810
55,000 $15,053 $20,070 $ 25,088 $ 30,105 $ 33,060
75,000 $21,803 $29,070 $ 36,358 $ 43,605 $ 48,060
100,000 $30,240 $40,320 $ 50,400 $ 60,480 $ 66,810
125,000 $38,678 $51,570 $ 64,463 $ 77,355 $ 85,560
150,000 $47,115 $62,820 $ 78,525 $ 94,230 $104,310
175,000 $55,553 $74,070 $ 92,588 $111,105 $123,060
200,000 $63,990 $85,320 $106,650 $127,980 $141,810

Benefits under the Retirement Plan are based on a straight life
annuity assuming full benefit at age 65, no offsets, and covered compensation of
$31,200 for a person age 65 in 1998. Compensation is currently limited to
$160,000 by Internal Revenue Code. The estimated annual benefit payable under
the Retirement Plan upon retirement is $73,087 for Mr. Gilliam, credited with 40
years of service. Benefits are estimated on the basis that he will continue to
receive, until age 65, covered salary in the same amount paid in 1998.

PROFIT SHARING/401(K) PLAN. The Bank adopted a Defined Contribution
Profit Sharing Thrift Plan (the "Thrift Plan") effective January 1, 1997. The
Thrift Plan, sponsored by the Virginia Bankers Association, includes a 401(k)
savings provision which authorizes a maximum voluntary salary deferral of up to
15% of compensation, subject to statutory limitations. All full-time employees
who have reached the age of 21 with at least six months of service are eligible
to participate. Contributions and earnings, which are tax-deferred, may be
invested in various investment vehicles offered through the Virginia Bankers
Association. The profit sharing arrangement allows for employer contributions in
such amount, if any, which the Board of Directors shall determine. Employees
become 100% vested in any employer contributions which may be made after five
plan years of service. The Bank made no contributions to the Thrift Plan for the
year ended December 31, 1998.

INCENTIVE STOCK OPTION PLAN. The Company adopted the 1997 Incentive
Stock Plan (the "Incentive Plan") effective May 1, 1997. The Incentive Plan
makes available up to 25,000 shares of common stock for awards to key employees
of the Company and its subsidiaries in the form of stock options, stock
appreciation rights, and restricted stock (collectively, "Awards"). The purpose
of the Incentive Plan is to promote the success of the Company and its
subsidiaries by providing incentives to key employees that will promote the
identification of their personal interests with the long-term financial success
of the Company and with growth in shareholder value. The Incentive Plan is
designed to provide flexibility to the Company in its ability to motivate,
attract, and retain the services of key employees upon whose judgment, interest,
and special effort the successful conduct of its operation is largely dependent.

-7-

Under the terms of the Incentive Plan, the non-employee directors of
the Personnel Committee of the Board of Directors of the Bank (the "Committee")
will administer the plan. No director may serve as a member of the Committee if
he is eligible to participate in the Incentive Plan or was at any time within
one year prior to his appointment to the Committee eligible to participate in
the Incentive Plan. The Committee will have the power to determine the key
employees to whom Awards shall be made.

Each Award under the Incentive Plan will be made pursuant to a
written agreement between the Company and the recipient of the Award (the
"Agreement"). In administering the Incentive Plan, the Committee will have the
authority, subject to approval, amendment and modification by the Board of
Directors of the Company, to determine the terms and conditions upon which
Awards may be made and exercised, to determine terms and provisions of each
Agreement, to construe and interpret the Incentive Plan and the Agreements, to
establish, amend, or waive rules or regulations for the Incentive Plan's
administration, to accelerate the exercisability of any Award, the end of any
performance period, or termination of any period of restriction, and to make all
other determinations and take all other actions necessary or advisable for the
administration of the Incentive Plan.

The Board may terminate, amend, or modify the Incentive Plan from
time to time in any respect without shareholder approval, unless the particular
amendment or modification requires shareholder approval under the Internal
Revenue Code of 1986, as amended (the "Code"), the rules and regulations under
Section 16 of the Securities Exchange Act of 1934 or pursuant to any other
applicable laws, rules, or regulations.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act requires directors, executive
officers and 10% beneficial owners of the Company's Common Stock to file reports
concerning their ownership of Common Stock. The Company believes that its
officers and directors complied with all filing requirements under Section 16(a)
of the Securities Exchange Act of 1934 during 1998.

THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE
ELECTION OF THE NOMINEES LISTED ABOVE.

INDEPENDENT PUBLIC ACCOUNTANTS

KPMG LLP, served as the Company's principal independent certified
public accountants for the fiscal year ended December 31, 1998. No company has
been selected by the Board of Directors to act as the Company's independent
certified public accountants for the current fiscal year. The Board will make
this decision later in the year. A representative of KPMG LLP will be present at
the Annual Meeting and will be given the opportunity to make a statement and
respond to appropriate questions from the shareholders.

OTHER BUSINESS

As of the date of this Proxy Statement, management of the Company has
no knowledge of any matters to be presented for consideration at the Annual
Meeting other than those referred to above. If any other matters properly come
before the Annual Meeting, the persons named in the accompanying proxy intend to
vote such proxy, to the extent entitled, in accordance with their best judgment.

-8-

SHAREHOLDER PROPOSALS FOR 2000 ANNUAL MEETING

Proposals of shareholders intended to be presented at the 2000 Annual
Meeting must be received by the Company no later than November 5, 1999. Under
applicable law, the Board of Directors need not include an otherwise appropriate
shareholder proposal (including any shareholder nominations for director
candidates) in its proxy statement or form of proxy for that meeting unless the
proposal is received by the Company's Secretary, at the Company's principal
office in Altavista, Virginia, on or before the date set forth above.

By Order of the Board of Directors

/s/ Dawn P. Crusinberry
-----------------------
Dawn P. Crusinberry
SECRETARY

Altavista, Virginia
March 12, 1999

A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB REPORT
(INCLUDING EXHIBITS) AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION FOR
THE YEAR ENDED DECEMBER 31, 1998, WILL BE FURNISHED WITHOUT CHARGE TO
SHAREHOLDERS UPON WRITTEN REQUEST DIRECTED TO THE COMPANY'S SECRETARY AS SET
FORTH ON THE FIRST PAGE OF THIS PROXY STATEMENT.

-9-

APPENDIX

PROXY
PINNACLE BANKSHARES CORPORATION
1999 Annual Meeting of Shareholders
Held April 13, 1999

THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS

The undersigned Shareholder hereby constitutes and appoints William R.
Martin, Jr., Robert I. Steele and Claude N. Woodson, or any of them, proxies of
the undersigned, with full power of substitution, to vote the shares of common
stock of Pinnacle Bankshares Corporation, outstanding in the name of the
undersigned, at the 1999 Annual Meeting of Shareholders of Pinnacle Bankshares
Corporation to be held at the Fellowship Hall of Altavista Presbyterian Church,
located at 707 Broad Street, Altavista, Virginia, on the 13th day of April,
1999, at 11:30 a.m., and at any adjournment of adjournments thereof, with all
powers the undersigned would possess if personally present:

ITEM 1: To elect the four (4) nominees listed below as Class II Directors to
serve until the 2002 Annual Meeting of Shareholders and the one (1) Class I
director to serve until the 2001 Annual Meeting of Shareholders, as further
described in the Proxy Statement accompanying this Proxy.

_____FOR all nominees listed below _____WITHHOLD AUTHORITY
(except as marked to the contrary below) to vote for all
nominees listed below

CLASS II
Alvah P. Bohannon, III James P. Kent, Jr.
James E. Burton, IV Percy O. Moore
CLASS I
A. Willard Arthur

(INSTRUCTION: To withhold authority to vote for any individual nominee, write
the nominee's name on the space provided below.)

I withhold authority for _______________________________________________________

ITEM 2: To take action upon such other matters as may properly come before the
meeting or any adjournment of adjournments thereof.

YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ON ITEM 1 LISTED ABOVE, AND YOUR
PROXY WILL BE VOTED FOR ITEM 1 IF NO SPECIFICATION IS MADE. IF ANY OTHER MATTERS
COME BEFORE THE MEETING, THIS PROXY WILL BE VOTED WITH RESPECT THERETO IN THE
INTEREST OF THE COMPANY ACCORDING TO THE BEST JUDGMENT OF THE PERSON OR PERSONS
VOTING THE PROXY.

(OVER)

This proxy is revocable by you at any time prior to the voting of the
shares represented, by notifying the Secretary of the Company in writing before
such vote or by filing another proxy with the Secretary bearing a later date.
Shareholders who are present at the meeting may withdraw their proxy and vote in
person. When signing as attorney, executor, administrator, trustee or guardian,
please give your full title as such. All joint holders should sign.

Dated __________________________, 1999 ____________________________(SEAL)

Number of Shares ___________
____________________________(SEAL)

____________________________(SEAL)

Return to:
Pinnacle Bankshares Corporation
P. O. Box 29
Altavista, Virginia 24517-0029
603436