SOURCE: National Bankshares, Inc.

April 15, 2005 14:00 ET

National Bankshares, Inc. Announces First Quarter Earnings

BLACKSBURG, VA -- (MARKET WIRE) -- April 15, 2005 -- National Bankshares, Inc. (NASDAQ: NKSH) today announced first quarter net income of $2.99 million, or basic net income of $0.85 per share. This is a 1.11% increase over the $2.96 million, or $0.84 per share, that was earned in the first quarter of 2004. At March 31, National Bankshares, Inc., the parent company of the National Bank of Blacksburg, Bank of Tazewell County and National Bankshares Financial Services, had total assets of $816.99 million, 15.37% higher than the $708.14 million on March 31, 2004.

In making the earnings announcement, Chairman, President & CEO James G. Rakes said, "We are pleased to maintain solid earnings for the quarter, despite higher noninterest expense that is largely attributable to acquisitions that were completed in the last half of 2004 and early in 2005. In late February, Bank of Tazewell County completed the purchase of two bank offices. With this purchase, the two banks operate a total of 27 offices throughout Southwest Virginia, and we have increased market share in our primary service area."

National Bankshares, Inc. is a financial holding company with headquarters in Blacksburg, Virginia. It has two community bank subsidiaries, The National Bank, headquartered in Blacksburg, and Bank of Tazewell County, with its main office in Tazewell, Virginia. The company also operates a non-bank subsidiary, National Bankshares Financial Services, Inc., which does business as National Bankshares Investment Services and National Bankshares Insurance Services. National Bankshares, Inc. stock trades on the Nasdaq Stock Market under the symbol "NKSH". Additional information is available on the company's web site at www.nationalbankshares.com.

                       (unaudited tables follow)


              National Bankshares, Inc. And Subsidiaries

(000's), except ratios            Three months     Three months
 and percent data                    ending           ending
Selected Consolidated Data:      March 31, 2005   March 31, 2004   Change
                                 --------------   --------------   ------
Interest income                  $       11,035   $        9,797    12.64%
Interest expense                          3,043            2,599    17.08%
Net interest income                       7,992            7,198    11.03%
Provision for loan losses                   190              288   -34.03%
Noninterest income                        1,768            1,739     1.67%
Noninterest expense                       5,689            4,820    18.03%
Income taxes                               -888             -869     2.19%
Net income                       $        2,993   $        2,960     1.11%
Basic net income per share       $         0.85   $         0.84    $0.01
Fully diluted net income
 per share                                    -                -        -
Dividends per share                           -                -        -
Dividend payout ratio                         -                -        -
Book value per share                          -                -        -

Balance sheet at period-end:
Loans, net                                    -                -        -
Total securities                              -                -        -
Total deposits                                -                -        -
Other borrowings                              -                -        -
Stockholders' equity                          -                -        -
Total Assets                                  -                -        -

Daily averages:
Loans,net                        $      477,992   $      403,213    18.55%
Total securities                        256,117          240,522     6.48%
Total deposits                          707,254          623,655    13.40%
Other borrowings                            204              135    51.11%
Stockholders' equity                     88,109           83,290     5.79%
Interest-earning assets                 753,895          676,478    11.44%
Interest-bearing liabilities            592,287          540,307     9.62%
Total Assets                            802,861          710,067    13.07%

Financial ratios: Note (1)
Return on average assets                   1.51%            1.68%   -0.17
Return on average equity                  13.78%           14.29%   -0.51
Net interest margin                        4.71%            4.77%       -
Efficiency ratio                              -                -        -
Average equity to average assets          10.97%           11.73%   -0.76
 Note (1) Ratio change measured in bp

Allowance for loan losses:
Beginning balance                $        5,729   $        5,369     6.71%
Provision for losses                        190              288   -34.03%
Charge-offs                                -253             -285   -11.23%
Recoveries                                   46               48    -4.17%
Acquisition of C.N.B.                         0                -   100.00%
Ending balance                   $        5,712   $        5,420     5.39%

Nonperforming assets:
Nonaccrual loans                              -                -        -
Restructured loans                            -                -        -
Total nonperforming loans                     -                -        -
Other real estate owned                       -                -        -
Total nonperforming assets                    -                -        -

Asset quality ratios: Note (2)
Nonperforming loans to total
 loans                                        -                -        -
Allowance for loan losses to
 total loans                                  -                -        -
Allowance for loan losses
 to nonperforming loans                       -                -        -
 Note (2) Ratio change measured in bp


(000's), except ratios
 and percent data                 Year-to-date     Year-to-date
Selected Consolidated Data:      March 31, 2005   March 31, 2004  Change
                                 --------------   --------------   ------
Interest income                  $       11,035   $        9,797    12.64%
Interest expense                          3,043            2,599    17.08%
Net interest income                       7,992            7,198    11.03%
Provision for loan losses                   190              288   -34.03%
Noninterest income                        1,768            1,739     1.67%
Noninterest expense                       5,689            4,820    18.03%
Income taxes                               -888             -869     2.19%
Net income                       $        2,993   $        2,960     1.11%
Basic net income per share       $         0.85   $         0.84    $0.01
Fully diluted net income
 per share                                    -                -        -
Dividends per share                           -                -        -
Dividend payout ratio                         -                -        -
Book value per share             $        25.22   $        24.11    $1.11

Balance sheet at period-end:
Loans, net                       $      488,735   $      406,894    20.11%
Total securities                        262,204          246,795     6.24%
Total deposits                          723,873          619,920    16.77%
Other borrowings                            431               77   459.74%
Stockholders' equity                     88,793           84,754     4.77%
Total Assets                            816,988          708,142    15.37%

Daily averages:
Loans,net                        $      477,992   $      403,213    18.55%
Total securities                        256,117          240,522     6.48%
Total deposits                          707,254          623,655    13.40%
Other borrowings                            204              135    51.11%
Stockholders' equity                     88,109           83,290     5.79%
Interest-earning assets                 753,895          676,478    11.44%
Interest-bearing liabilities            592,287          540,307     9.62%
Total Assets                            802,861          710,067    13.07%

Financial ratios: Note (1)
Return on average assets                   1.51%            1.68%   -0.17
Return on average equity                  13.78%           14.29%   -0.51
Net interest margin                        4.71%            4.77%   -0.06
Efficiency ratio                          54.12%           49.70%    4.42
Average equity to average assets          10.97%           11.73%   -0.76
 Note (1)  Ratio change measured in bp

Allowance for loan losses:
Beginning balance                $        5,729   $        5,369     6.71%
Provision for losses                        190              288   -34.03%
Charge-offs                                -253             -285   -11.23%
Recoveries                                   46               48    -4.17%
Acquisition of C.N.B.                         0                -   100.00%
Ending balance                   $        5,712   $        5,420     5.39%

Nonperforming assets:
Nonaccrual loans                 $          347   $          324     7.10%
Restructured loans                            -                -        -
Total nonperforming loans                   347              324     7.10%
Other real estate owned                     715            1,470   -51.36%
Total nonperforming assets       $        1,062   $        1,794   -40.80%

Asset quality ratios: Note (2)
Nonperforming loans to total
 loans                                     0.07%            0.08%   -0.01
Allowance for loan losses to
 total loans                               1.16%            1.31%   -0.15
Allowance for loan losses
 to nonperforming loans                 1646.11%         1672.84%  -26.73
 Note (2)  Ratio change measured in bp

Contact Information

  • CONTACTS:

    James G. Rakes
    President & CEO
    (540) 951-6236

    J. Robert Buchanan
    Treasurer
    (276) 979-0341