SOURCE: National Bankshares, Inc.

National Bankshares, Inc.

February 09, 2012 16:30 ET

National Bankshares, Inc. Posts Record Earnings for 2011

BLACKSBURG, VA--(Marketwire - Feb 9, 2012) - National Bankshares, Inc. (NASDAQ: NKSH) today announced that it had record net income approaching $17.64 million for the twelve months ended December 31, 2011, a 13.29% increase over the nearly $15.57 million earned in 2010. The return on average assets for 2011 was 1.71% and the return on average equity was 12.89%. This compares to 1.57% and 12.07%, respectively, for 2010. Basic earnings per share were $2.54 in 2011 compared to $2.25 for 2010. National Bankshares, Inc. ended 2011 with total assets of almost $1.07 billion, up by 4.39% over the roughly $1.02 billion in total assets reported at December 31, 2010.

For the three months ended December 31, 2011, National Bankshares, Inc. had net income of close to $4.89 million, up from the nearly $3.81 million for the same three month period of 2010. Net interest income increased from $9.66 million for the fourth quarter of 2010 compared to $10.25 million for the last three months of 2011.

Commenting on the Company's financial results for 2011, National Bankshares Chairman, President & CEO James G. Rakes said, "During our 120th anniversary year of the founding of National Bank, we were able to maintain strong core earnings despite continued challenges in the national and local economies that affect loan growth. Our subsidiary bank maintained its traditional community bank values and focus while finding ways to control costs despite the increased regulatory burden resulting from compliance with additional laws and regulations. Our 2011 record earnings were enhanced by an increase in net interest income, which was driven by an improved net interest margin. Equally important, the quality of our loan portfolio has shown improvement in 2011."

Mr. Rakes continued, "In 2011, we were pleased to be able to share the Company's positive operating results with our shareholders in the form of dividends of $1.00 per share in 2011 compared to $0.91 in 2010. We remain committed to serving our customers and communities in 2012 and continue working hard to find ways to increase yields on earning assets while containing controllable costs."

National Bankshares, Inc., headquartered in Blacksburg, Virginia, is the parent company of 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 Sheet
(Unaudited)
($ in thousands, except for per share data) December 31, 2011 December 31, 2010
Assets
Cash and due from banks $ 11,897 $ 9,858
Interest-bearing deposits 98,355 69,400
Federal funds sold --- ---
Securities available for sale 174,918 184,907
Securities held to maturity 143,995 131,000
Total securities 318,913 315,907
Mortgage loans held for sale 2,623 2,460
Loans:
Real estate construction loans 48,531 46,169
Consumer real estate loans 150,224 153,405
Commercial real estate loans 303,192 293,171
Commercial non-real estate loans 39,274 37,547
Public sector IDA 15,571 12,553
Consumer non-real estate loans 33,072 34,543
Total loans 589,864 577,388
Less: unearned income and deferred fees (952 ) (945 )
Loans, net of unearned income and deferred fees 588,912 576,443
Less: allowance for loan losses (8,510 ) (7,664 )
Loans, net 580,402 568,779
Bank premises and equipment, net 10,393 10,470
Accrued interest receivable 6,304 6,016
Other real estate owned 1,489 1,723
Intangible assets 10,460 11,543
Other assets 26,266 26,082
Total assets $ 1,067,102 $ 1,022,238
Liabilities and Stockholders' Equity
Noninterest-bearing deposits $ 142,163 $ 131,540
Interest-bearing demand deposits 404,801 365,040
Savings deposits 61,298 55,800
Time deposits 311,071 332,203
Total deposits 919,333 884,583
Other borrowed funds --- ---
Accrued interest payable 206 257
Other liabilities 6,264 8,211
Total liabilities 925,803 893,051
Stockholders' Equity
Preferred stock of no par value.
Authorized 5,000,000 shares; none issued and outstanding --- ---
Common stock of $1.25 par value.
Authorized 10,000,000 shares; issued and outstanding 6,939,974 shares at December 31, 2011 and 6,933,474 at December 31, 2010 8,675 8,667
Retained earnings 133,945 123,161
Accumulated other comprehensive gain, net (1,321 ) (2,641 )
Total stockholders' equity 141,299 129,187
Total liabilities and stockholders' equity $ 1,067,102 $ 1,022,238
National Bankshares, Inc. and Subsidiaries
Consolidated Statements of Income
(Unaudited)
Three Months Ended Twelve Months Ended
December 31, 2011 December 31, 2010 December 31, 2011 December 31, 2010
($ in thousands, except for per share data)
Interest Income
Interest and fees on loans $ 9,128 $ 9,199 $ 36,514 $ 36,919
Interest on federal funds --- --- --- ---
Interest on interest-bearing deposits 51 43 155 128
Interest on securities - taxable 1,630 1,354 6,745 5,588
Interest on securities - nontaxable 1,620 1,669 6,532 6,504
Total interest income 12,429 12,265 49,946 49,139
Interest Expense
Interest on time deposits of $100,000 or more 468 744 2,019 3,439
Interest on other deposits 1,709 1,859 7,165 7,719
Interest on borrowed funds --- --- --- ---
Total interest expense 2,177 2,603 9,184 11,158
Net interest income 10,252 9,662 40,762 37,981
Provision for loan losses 753 1,200 2,949 3,409
Net interest income after provision for loan losses 9,499 8,462 37,813 34,572
Noninterest Income
Service charges on deposit accounts 665 666 2,617 2,858
Other service charges and fees 113 103 287 317
Credit card fees 832 783 3,197 2,954
Trust income 270 272 1,087 1,118
Bank-owned life insurance 203 202 762 760
Other income 156 139 449 354
Realized securities gains (losses), net 18 (13 ) 11 (14 )
Total noninterest income 2,257 2,152 8,410 8,347
Noninterest Expense
Salaries and employee benefits 2,796 2,758 11,357 10,963
Occupancy and furniture and fixtures 392 456 1,599 1,875
Data processing and ATM 412 379 1,701 1,499
FDIC assessment (372 ) 275 677 1,080
Credit card processing 614 620 2,485 2,300
Intangibles and goodwill amortization 270 271 1,083 1,083
Net costs of other real estate owned 237 34 518 214
Franchise taxes 161 241 780 963
Other operating expenses 832 786 3,138 3,150
Total noninterest expense 5,342 5,820 23,338 23,127
Income before income tax expense 6,414 4,794 22,885 19,792
Income tax expense 1,525 987 5,247 4,223
Net income $ 4,889 $ 3,807 $ 17,638 $ 15,569
Basic net income per share $ 0.70 $ 0.55 $ 2.54 $ 2.25
Fully diluted net income per share $ 0.70 $ 0.55 $ 2.54 $ 2.24
Weighted average outstanding number of common shares
Basic 6,939,148 6,933,474 6,936,869 6,933,474
Diluted 6,949,660 6,957,364 6,950,788 6,949,936
Dividends declared per share $ 0.52 $ 0.47 $ 1.00 $ 0.91
Dividend payout ratio --- --- 39.34 40.52
Book value per share $ --- $ --- $ 20.36 $ 18.63
Key Ratios and Other Data
(Unaudited)
Three Months Ended Twelve Months Ended
Average Balances December 31, 2011 December 31, 2010 December 31, 2011 December 31, 2010
Cash and due from banks $ 12,548 $ 12,186 $ 11,654 $ 11,862
Interest-bearing deposits 87,266 73,785 64,977 55,477
Securities available for sale 177,387 164,993 186,296 161,504
Securities held to maturity 139,318 129,123 134,612 128,028
Mortgage loans held for sale 1,411 1,811 818 1,339
Gross loans 590,425 580,533 589,414 585,604
Loans, net 580,766 571,961 580,037 577,210
Intangible assets 10,614 11,698 11,019 12,102
Total assets 1,050,417 1,007,740 1,031,899 989,952
Total deposits 902,055 866,988 888,044 852,953
Other borrowings --- --- --- ---
Stockholders' equity 142,292 133,122 136,794 129,003
Interest-earning assets 990,999 944,837 973,171 926,901
Interest-bearing liabilities 760,567 740,745 752,164 730,135
Financial ratios
Return on average assets 1.85 % 1.50 % 1.71 % 1.57 %
Return on average equity 13.63 % 11.35 % 12.89 % 12.07 %
Net interest margin 4.50 % 4.47 % 4.59 % 4.52 %
Net interest income - fully taxable equivalent $ 11,230 $ 10,654 $ 44,635 $ 41,914
Efficiency ratio 39.66 % 45.40 % 44.00 % 46.01 %
Average equity to average assets 13.55 % 13.21 % 13.26 % 13.03 %
Allowance for loan losses
Beginning balance $ 8,719 $ 7,794 $ 7,664 $ 6,926
Provision for losses 753 1,200 2,949 3,409
Charge-offs (983 ) (1,351 ) (2,186 ) (2,810 )
Recoveries 21 21 83 139
Ending balance $ 8,510 $ 7,664 $ 8,510 $ 7,664
Asset Quality Data
(Unaudited)
Nonperforming assets December 31, 2011 December 31, 2010
Nonaccrual loans $ 1,229 $ 1,938
Nonaccrual restructured loans 2,742 6,133
Total nonperforming loans 3,971 8,071
Other real estate owned 1,489 1,723
Total nonperforming assets $ 5,460 $ 9,794
Accruing restructured loans $ 4,820 $ 350
Loans 90 days or more past due $ 766 $ 1,336
Asset quality ratios
Nonperforming assets to loans net of unearned income and deferred fees, plus other real estate owned 0.92 % 1.69 %
Allowance for loan losses to total loans 1.45 % 1.33 %
Allowance for loan losses to nonperforming loans 214.30 % 94.96 %
Loans past due 90 days or more to loans net of unearned income and deferred fees 0.13 % 0.23 %

Contact Information

  • CONTACTS:
    JAMES G. RAKES
    CHAIRMAN, PRESIDENT & CEO
    (540) 951-6236
    Email Contact

    DAVID K. SKEENS
    TREASURER & CFO
    (540) 951-6347
    Email Contact