SOURCE: National Bankshares, Inc.

National Bankshares, Inc.

February 19, 2015 16:30 ET

National Bankshares, Inc. Announces Earnings for 2014

BLACKSBURG, VA--(Marketwired - Feb 19, 2015) -  National Bankshares, Inc. (NASDAQ: NKSH) today announced its results of operations for the three and twelve months ended December 31, 2014. The Company reported net income of $16.91 million for the twelve months ended December 31, 2014, a decrease from the $17.79 million earned in 2013. The 2014 return on average assets and return on average equity were 1.51% and 10.72%, respectively. Basic earnings per share in 2014 were $2.43. National Bankshares, Inc. ended 2014 with total assets of over $1.15 billion.

Commenting on the Company's financial results, National Bankshares Chairman, President & CEO James G. Rakes said, "We are well aware of the many challenges facing our industry and parts of our market area. The low interest rate environment and relatively flat loan demand continue to compress our margins which impact our bottom-line. We remain focused on expense containment, asset quality and continuing to be true to our community banking roots by providing our customers with the very best products and services we can offer. The Company remains a strong performing institution as we look toward the future."

Mr. Rakes continued, "We were pleased to return profits to our stockholders in the form of dividends of $1.13 per share in 2014. This per share dividend payment amount resulted in a dividend payout ratio of 46.43% in 2014 compared to 43.74% in 2013."

National Bankshares, Inc., headquartered in Blacksburg, Virginia, is the parent company of The National Bank of Blacksburg, which does business as National Bank, and of National Bankshares Financial Services, Inc. National Bank is a community bank operating from 25 offices throughout Southwest Virginia. National Bankshares Financial Services, Inc. is an investment and insurance subsidiary in the same trade area. The Company's stock is traded on the NASDAQ Capital Market under the symbol "NKSH." Additional information is available at www.nationalbankshares.com.

Forward-Looking Statements

Certain statements in this press release may be "forward-looking statements." Forward-looking statements are statements that include projections, predictions, expectations or beliefs about future events or results that are not statements of historical fact and that involve significant risks and uncertainties. Although the Company believes that its expectations with regard to forward-looking statements are based upon reasonable assumptions within the bounds of its existing knowledge of its business and operations, there can be no assurance that actual Company results will not differ materially from any future results implied by the forward-looking statements. Actual results may be materially different from past or anticipated results because of many factors, some of which may include changes in economic conditions, the interest rate environment, legislative and regulatory requirements, new products, competition, changes in the stock and bond markets and technology. The Company does not update any forward-looking statements that it may make.

 
 
National Bankshares, Inc. and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
 
($ in thousands, except for share and per share data)   December 31, 2014     December 31, 2013  
Assets                
Cash and due from banks   $ 12,894     $ 13,283  
Interest-bearing deposits     102,548       98,066  
Federal funds sold     ---       ---  
Securities available for sale, at fair value     222,844       181,712  
Securities held to maturity     161,452       163,983  
Restricted stock     1,089       1,414  
  Total securities     385,385       347,109  
Mortgage loans held for sale     291       1,276  
Loans:                
  Loans, net of unearned income and deferred fees     605,466       595,690  
  Less: allowance for loan losses     (8,263 )     (8,227 )
    Loans, net     597,203       587,463  
Premises and equipment, net     9,131       9,951  
Accrued interest receivable     5,748       5,949  
Other real estate owned     4,744       4,712  
Intangible assets and goodwill     7,223       8,299  
Bank-owned life insurance     21,797       21,181  
Other assets     7,767       13,341  
    Total assets   $ 1,154,731     $ 1,110,630  
                 
Liabilities and Stockholders' Equity                
Noninterest-bearing deposits   $ 150,744     $ 142,645  
Interest-bearing demand deposits     533,641       501,541  
Savings deposits     81,297       74,141  
Time deposits     216,746       241,709  
    Total deposits     982,428       960,036  
Other borrowed funds     ---       ---  
Accrued interest payable     68       92  
Other liabilities     5,932       4,610  
    Total liabilities     988,428       964,738  
                 
Stockholders' Equity                
Preferred stock, no par value, 5,000,000 shares authorized; none issued and outstanding     ---       ---  
Common stock of $1.25 par value. Authorized 10,000,000 shares; issued and outstanding, 6,950,474 shares in 2014 and 6,947,974 shares in 2013     8,688       8,685  
Retained earnings     163,287       154,171  
Accumulated other comprehensive loss, net     (5,672 )     (16,964 )
    Total stockholders' equity     166,303       145,892  
    Total liabilities and stockholders' equity   $ 1,154,731     $ 1,110,630  
                     
 
 
National Bankshares, Inc. and Subsidiaries
Consolidated Statements of Income
(Unaudited)
 
    Three Month Ending     Twelve Month Ending  
($ in thousands, except for share and per share data)   December 31, 2014     December 31, 2013     December 31, 2014     December 31, 2013  
Interest Income                                
Interest and fees on loans   $ 7,697     $ 8,112     $ 31,217     $ 32,819  
Interest on federal funds     ---       ---       ---       ---  
Interest on interest-bearing deposits     69       52       262       213  
Interest on securities - taxable     1,730       1,657       6,798       6,585  
Interest on securities - nontaxable     1,416       1,541       5,826       6,388  
    Total interest income     10,912       11,362       44,103       46,005  
Interest Expense                                
Interest on time deposits of $100 or more     133       171       570       865  
Interest on other deposits     1,009       1,169       4,329       5,090  
Interest on borrowed funds     ---       ---       ---       ---  
    Total interest expense     1,142       1,340       4,899       5,955  
    Net interest income     9,770       10,022       39,204       40,050  
Provision for loan losses     481       202       1,641       1,531  
    Net income after provision for loan losses     9,289       9,820       37,563       38,519  
Noninterest Income                                
Service charges on deposit accounts     601       641       2,434       2,563  
Other service charges and fees     42       86       187       225  
Credit card fees     944       903       3,631       3,330  
Trust Income     292       283       1,213       1,150  
Bank-owned life insurance     185       193       711       739  
Other income     199       310       868       997  
Realized securities gains (losses), net     (3 )     (2 )     2       (46 )
    Total noninterest income     2,260       2,414       9,046       8,958  
Noninterest Expense                                
Salaries and employee benefits     2,737       3,015       11,691       11,978  
Occupancy and furniture and fixtures     457       386       1,722       1,616  
Data processing and ATM     460       412       1,643       1,700  
FDIC assessment     122       146       533       554  
Credit card processing     706       692       2,593       2,546  
Intangibles and goodwill amortization     268       269       1,075       1,078  
Net cost of other real estate owned     110       104       369       296  
Franchise taxes     308       280       1,182       1,083  
Other operating expenses     971       822       3,709       3,519  
    Total noninterest expense     6,139       6,126       24,517       24,370  
Income before income tax expense     5,410       6,108       22,092       23,107  
Income tax expense     1,272       1,486       5,178       5,317  
    Net income   $ 4,138     $ 4,622     $ 16,914     $ 17,790  
Basic net income per share   $ 0.60     $ 0.66     $ 2.43     $ 2.56  
Fully diluted net income per share   $ 0.59     $ 0.66     $ 2.43     $ 2.55  
Weighted average number of common shares outstanding                                
    Basic     6,950,474       6,947,974       6,948,789       6,947,974  
    Diluted     6,955,157       6,963,381       6,959,134       6,968,393  
Dividends declared per share   $ 0.58     $ 0.58     $ 1.13     $ 1.12  
Dividend payout ratio     ---       ---       46.43 %     43.74 %
Book value per share   $ ---     $ ---     $ 23.93     $ 21.00  
                                 
 
 
National Bankshares, Inc. and Subsidiaries
Consolidated Statements of Comprehensive Income
(Unaudited)
 
    Three Month Ended  
($ in thousands)   December 31, 2014     December 31, 2013  
Net income   $ 4,138     $ 4,622  
                 
Other Comprehensive Income (Loss), net of tax                
Unrealized holding gains (losses) on available for sale securities net of deferred tax of $2,428 in 2014 and ($1,524) in 2013     4,511       (2,827 )
Reclassification adjustment, net of income tax (benefit) of $1 in 2014 and $1 in 2013     1       1  
Net pension gain (loss) arising during the period net of taxes of $ (574) in 2014 and $1,022 in 2013     (1,066 )     1,898  
Less: amortization of prior service cost included in net periodic pension cost net of taxes of $(39) in 2014 and ($35) in 2013     (71 )     (66 )
Other comprehensive income (loss), net of tax of $1,816 in 2014 and ($536) in 2013   $ 3,375     $ (994 )
Total Comprehensive Income   $ 7,513     $ 3,628  
                 
       
       
    Twelve Month Ended  
($ in thousands)   December 31, 2014     December 31, 2013  
Net income   $ 16,914     $ 17,790  
                 
Other Comprehensive Income (Loss), net of tax                
Unrealized holding gains (losses) on available for sale securities net of deferred tax of $6,693 in 2014 and ($8,665) in 2013     12,430       (16,091 )
Reclassification adjustment, net of income tax (benefit) of ($1) in 2014 and $19 in 2013     (1 )     33  
Net pension gain (loss) arising during the period net of taxes of $(574) in 2014 and $1,022 in 2013     (1,066 )     1,898  
Less: amortization of prior service cost included in net periodic pension cost net of taxes of $(39) in 2014 and ($35) in 2013     (71 )     (66 )
Other comprehensive income (loss), net of tax of $6,079 in 2014 and ($7,659) in 2013   $ 11,292     $ (14,226 )
Total Comprehensive Income   $ 28,206     $ 3,564  
                 
 
 
Key Ratios and Other Data
(Unaudited)
 
($ in thousands)   Three Month Ended     Twelve Month Ended  
Average Balances   December 31, 2014     December 31, 2013     December 31, 2014     December 31, 2013  
Cash and due from banks   $ 12,050     $ 12,453     $ 11,872     $ 12,022  
Interest-bearing deposits     107,512       81,513       103,320       80,690  
Securities available for sale     207,081       187,375       196,960       195,970  
Securities held to maturity     161,823       164,512       162,906       164,888  
Restricted stock     1,089       1,414       1,162       1,477  
Mortgage loans held for sale     453       411       383       1,016  
Gross Loans     597,690       592,768       593,829       586,898  
Loans, net     588,819       583,699       584,857       577,746  
Intangible assets     7,376       8,452       7,778       8,854  
Total assets     1,136,287       1,090,932       1,120,848       1,090,703  
Total deposits     965,415       936,048       957,684       933,482  
Other borrowings     ---       ---       ---       ---  
Stockholders' equity     164,907       146,716       157,832       149,491  
Interest-earning assets     1,081,536       1,044,90       1,069,940       1,037,445  
Interest-bearing liabilities     812,171       792,328       811,152       792,037  
                                 
Financial ratios                                
Return on average assets     1.44 %     1.68 %     1.51 %     1.63 %
Return on average equity     9.96 %     12.50 %     10.72 %     11.90 %
Net interest margin     3.92 %     4.17 %     4.01 %     4.24 %
Net interest income-fully taxable equivalent   $ 10,677     $ 10,992     $ 42,930     $ 44,037  
Efficiency ratio     47.45 %     45.70 %     47.17 %     45.99 %
Average equity to average assets     14.51 %     13.45 %     14.08 %     13.71 %
                                 
Allowance for loan losses                                
Beginning balance   $ 8,031     $ 8,090     $ 8,227     $ 8,349  
Provision for losses     481       202       1,641       1,531  
Charge-offs     (292 )     (140 )     (1,860 )     (1,820 )
Recoveries     43       75       255       167  
Ending balance   $ 8,263     $ 8,227     $ 8,263     $ 8,227  
                                 
 
 
Asset Quality Data
(Unaudited)
 
($ in thousands)   December 31, 2014     December 31, 2013  
Nonperforming assets                
Nonaccrual loans   $ 3,999     $ 5,732  
Nonaccrual restructured loans     5,288       852  
Total nonperforming loans     9,287       6,584  
Other real estate owned     4,744       4,712  
Total nonperforming assets   $ 14,031     $ 11,296  
Accruing restructured loans     6,040       6,191  
Loans 90 days or more past due   $ 207     $ 190  
                 
Asset quality ratios                
Nonperforming assets to loans net of unearned income and deferred fees, plus other real estate owned     2.30 %     1.88 %
Allowance for loans losses to total loans     1.36 %     1.38 %
Allowance for loan losses to nonperforming loans     88.97 %     124.95 %
Loans past due 90 days or more to loans net of unearned income and deferred fees     0.03 %     0.03 %
                 

Contact Information

  • Contacts:

    James G. Rakes
    Chairman, President & CEO
    (540) 951-6236
    Email Contact

    David K. Skeens
    Treasurer & CFO
    (540) 951-6347
    Email Contact