SOURCE: National Bankshares, Inc.

National Bankshares, Inc.

February 25, 2016 16:30 ET

National Bankshares, Inc. Announces Earnings for 2015

BLACKSBURG, VA--(Marketwired - Feb 25, 2016) - National Bankshares, Inc. (NASDAQ: NKSH) today announced its results of operations for the three and twelve months ended December 31, 2015. The Company reported net income of $15.83 million for the twelve months ended December 31, 2015, a decrease from the $16.91 million earned in 2014. The 2015 return on average assets and return on average equity were 1.37% and 9.22%, respectively. Basic earnings per share in 2015 were $2.28. National Bankshares, Inc. ended 2015 with total assets of almost $1.20 billion.

Commenting on the Company's financial results, National Bankshares Chairman, President & CEO James G. Rakes said, "As National Bank enters its 125th year, we continue to deliver on our promise of successful community banking to our customers, employees and stockholders. In the fourth quarter of 2015, we experienced unanticipated write downs in loans that contributed to the lower net income. Among other expenses, we had increased employee benefit expenses, mostly the result of pension related costs. We are working hard to deploy our capital in the communities we serve while preserving asset quality and our strong capital legacy."

Mr. Rakes continued, "We were pleased to return profits to our stockholders in the form of dividends of $1.14 per share in 2015. This per share dividend payment amount resulted in a dividend payout ratio of 50.09% in 2015 compared to 46.43% in 2014 and 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 26 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, 2015     December 31, 2014  
Assets                
Cash and due from banks   $ 12,152     $ 12,894  
Interest-bearing deposits     130,811       102,548  
Federal funds sold     ---       ---  
Securities available for sale, at fair value     236,131       222,844  
Securities held to maturity     152,028       161,452  
Restricted stock     1,129       1,089  
  Total securities     389,288       385,385  
Mortgage loans held for sale     634       291  
Loans:                
  Loans, net of unearned income and deferred fees     619,008       605,466  
  Less: allowance for loan losses     (8,297 )     (8,263 )
    Loans, net     610,711       597,203  
Premises and equipment, net     9,020       9,131  
Accrued interest receivable     5,769       5,748  
Other real estate owned     4,165       4,744  
Intangible assets and goodwill     6,224       7,223  
Bank-owned life insurance     22,401       21,797  
Other assets     8,564       7,767  
    Total assets   $ 1,199,739     $ 1,154,731  
                 
Liabilities and Stockholders' Equity                
Noninterest-bearing deposits   $ 166,453     $ 150,744  
Interest-bearing demand deposits     569,787       533,641  
Savings deposits     90,236       81,297  
Time deposits     192,383       216,746  
    Total deposits     1,018,859       982,428  
Other borrowed funds     ---       ---  
Accrued interest payable     56       68  
Other liabilities     8,710       5,932  
    Total liabilities     1,027,625       988,428  
                 
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, 6,957,974 shares at December 31, 2015 and 6,950,474 shares at December 31, 2014.     8,698       8,688  
Retained earnings     171,353       163,287  
Accumulated other comprehensive loss, net     (7,937 )     (5,672 )
    Total stockholders' equity     172,114       166,303  
    Total liabilities and stockholders' equity   $ 1,199,739     $ 1,154,731  
                 
                 
   
National Bankshares, Inc. and Subsidiaries  
Consolidated Statements of Income  
(Unaudited)  
   
    Three Months Ending     Twelve Months Ending  
($ in thousands, except for share and per share
data)
  December 31, 2015   December 31, 2014     December 31, 2015     December 31, 2014  
Interest Income                              
Interest and fees on loans   $ 7,560   $ 7,652     $ 30,446     $ 31,058  
Interest on federal funds     ---     ---       ---       ---  
Interest on interest-bearing deposits     81     69       254       262  
Interest on securities - taxable     1,652     1,730       6,776       6,798  
Interest on securities - nontaxable     1,343     1,416       5,438       5,826  
  Total interest income     10,636     10,867       42,914       43,944  
Interest Expense                              
Interest on time deposits     290     346       1,233       1,479  
Interest on other deposits     746     796       2,950       3,420  
Interest on borrowed funds     ---     ---       ---       ---  
  Total interest expense     1,036     1,142       4,183       4,899  
  Net interest income     9,600     9,725       38,731       39,045  
Provision for loan losses     1,275     481       2,009       1,641  
  Net income after provision for loan losses     8,325     9,244       36,722       37,404  
Noninterest Income                              
Service charges on deposit accounts     574     601       2,250       2,434  
Other service charges and fees     51     42       215       187  
Credit card fees     1,018     944       3,861       3,631  
Trust income     327     292       1,229       1,213  
Bank-owned life insurance     152     154       603       616  
Other income     318     254       1,295       1,037  
Realized securities gain (loss), net     28     (3 )     33       2  
  Total noninterest income     2,468     2,284       9,486       9,120  
Noninterest Expense                              
Salaries and employee benefits     3,089     2,716       12,522       11,606  
Occupancy and furniture and fixtures     432     453       1,728       1,703  
Data processing and ATM     427     461       1,657       1,650  
FDIC assessment     138     122       546       533  
Credit card processing     706     706       2,692       2,593  
Intangibles and goodwill amortization     192     268       999       1,075  
Net cost of other real estate owned     39     110       608       369  
Franchise taxes     329     308       1,288       1,182  
Other operating expenses     905     974       3,595       3,721  
  Total noninterest expense     6,257     6,118       25,635       24,432  
Income before income tax expense     4,536     5,410       20,573       22,092  
Income tax expense     978     1,272       4,740       5,178  
  Net income   $ 3,558   $ 4,138     $ 15,833     $ 16,914  
Basic net income per share   $ 0.51   $ 0.60     $ 2.28     $ 2.43  
Fully diluted net income per share   $ 0.51   $ 0.59     $ 2.28     $ 2.43  
Weighted average number of common shares outstanding                              
  Basic     6,957,213     6,950,474       6,953,849       6,948,789  
  Diluted     6,959,049     6,955,157       6,957,094       6,959,134  
Dividends declared per share   $ 0.61   $ 0.58     $ 1.14     $ 1.13  
Dividend payout ratio     ---     ---       50.09 %     46.43 %
Book value per share     ---     ---     $ 24.74     $ 23.93  
   
National Bankshares, Inc. and Subsidiaries  
Consolidated Statements of Comprehensive Income  
(Unaudited)  
   
    Three Month Ended  
($ in thousands)   December 31, 2015     December 31, 2014  
Net income   $ 3,558     $ 4,138  
Other Comprehensive Income (Loss), net of tax                
Unrealized holding gains (losses) on available for sale securities net of deferred tax of ($237) in 2015 and $2,428 in 2014     (440 )     4,511  
Reclassification adjustment, net of tax of ($10) in 2015 and $1 in 2014     (18 )     1  
Net pension loss arising during the period, net of tax of ($597) in 2015 and ($574) in 2014     (1,108 )     (1,066 )
Less: amortization of prior service cost included in net periodic pension cost net of tax of ($38) in 2015 and ($39) in 2014     (72 )     (71 )
Other comprehensive income (loss), net of tax of ($882) in 2015 and $1,816 in 2014   $ (1,638 )   $ 3,375  
Total Comprehensive Income (Loss)   $ 1,920     $ 7,513  
                 
       
    Twelve Month Ended  
($ in thousands)   December 31, 2015     December 31, 2014  
Net income   $ 15,833     $ 16,914  
Other Comprehensive Income, net of tax                
Unrealized holding gains (losses) on available for sale securities net of deferred tax of ($571) in 2015 and $6,693 in 2014     (1,064 )     12,430  
Reclassification adjustment, net of tax of ($12) in 2015 and ($1) in 2014     (21 )     (1 )
Net pension loss arising during the period, net of tax of ($597) in 2015 and ($574) in 2014     (1,108 )     (1,066 )
Less: amortization of prior service cost included in net periodic pension cost net of tax of ($38) in 2015 and ($39) in 2014     (72 )     (71 )
Other comprehensive income (loss), net of tax of ($1,218) in 2015 and $6,079 in 2014   $ (2,265 )   $ 11,292  
Total Comprehensive Income   $ 13,568     $ 28,206  
                 
                 
   
Key Ratios and Other Data  
(Unaudited)  
   
($ in thousands)   Three Month Ended     Twelve Month Ended  
Average Balances   December 31, 2015     December 31, 2014     December 31, 2015     December 31, 2014  
Cash and due from banks   $ 12,166     $ 12,050     $ 11,672     $ 11,872  
Interest-bearing deposits     111,162       107,512       96,677       103,320  
Securities available for sale     223,245       207,081       222,937       196,960  
Securities held to maturity     152,977       161,823       155,747       162,906  
Restricted stock     1,129       1,089       1,121       1,162  
Mortgage loans held for sale     861       453       802       383  
Gross loans     624,754       597,690       620,594       593,829  
Loans, net     615,801       588,819       611,554       584,857  
Intangible assets     6,319       7,376       6,707       7,778  
Total assets     1,172,071       1,136,287       1,155,594       1,120,848  
Total deposits     989,853       965,415       976,597       957,684  
Other borrowings     ---       ---       ---       ---  
Stockholders' equity     174,258       164,907     $ 171,732       157,832  
Interest-earning assets     1,116,759       1,081,536       1,099,517       1,069,940  
Interest-bearing liabilities     822,540       812,171       816,768       811,152  
                                 
Financial ratios                                
Return on average assets     1.20 %     1.44 %     1.37 %     1.51 %
Return on average equity     8.10 %     9.96 %     9.22 %     10.72 %
Net interest margin     3.74 %     3.90 %     3.86 %     4.00 %
Net interest income-fully taxable equivalent   $ 10,514     $ 10,631     $ 42,394     $ 42,771  
Efficiency ratio     48.20 %     47.37 %     49.41 %     47.08 %
Average equity to average assets     14.87 %     14.51 %     14.86 %     14.08 %
                                 
Allowance for loan losses                                
Beginning balance   $ 8,117     $ 8,031     $ 8,263     $ 8,227  
Provision for losses     1,275       481       2,009       1,641  
Charge-offs     (1,118 )     (292 )     (2,120 )     (1,860 )
Recoveries     23       43       145       255  
Ending balance   $ 8,297     $ 8,263     $ 8,297     $ 8,263  
                                 
                                 
   
Asset Quality Data  
(Unaudited)  
   
$ in thousands   December 31, 2015     December 31, 2014  
Asset Quality                
Nonaccrual loans   $ 2,043     $ 3,999  
Nonaccrual restructured loans     4,639       5,288  
Total nonperforming loans   $ 6,682     $ 9,287  
Other real estate owned   $ 4,165     $ 4,744  
Total nonperforming assets   $ 10,847     $ 14,031  
                 
Accruing restructured loans   $ 8,814     $ 6,040  
Loans 90 days or more past due   $ 156     $ 207  
                 
Asset quality ratios                
Nonperforming assets to loans net of unearned income and deferred fees, plus other real estate owned     1.74 %     2.30 %
Allowance for loans losses to total loans     1.34 %     1.36 %
Allowance for loan losses to nonperforming loans     124.17 %     88.97 %
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