SOURCE: National Bankshares, Inc.

National Bankshares, Inc.

February 14, 2013 16:30 ET

National Bankshares, Inc. Posts Record Earnings for 2012

BLACKSBURG, VA--(Marketwire - Feb 14, 2013) - National Bankshares, Inc. (NASDAQ: NKSH) today announced that it had record net income approaching $17.75 million for the twelve months ended December 31, 2012, an increase over the nearly $17.64 million earned in 2011. The 2012 return on average assets and return on average equity was 1.64% and 12.01%, respectively. Basic earnings per share were $2.56 in 2012 compared to $2.54 for 2011. National Bankshares, Inc. ended 2012 with total assets of over $1.10 billion, up by 3.49% over the roughly $1.07 billion in total assets reported at December 31, 2011.

Commenting on the Company's financial results, National Bankshares Chairman, President & CEO James G. Rakes said, "We are pleased with our strong operating results for 2012 and, in 2013, we will continue to focus on banking fundamentals and serving our existing and new customers, as well as our community. We are mindful of controlling costs, but will move forward with our efforts to invest in technology and innovations to enhance our customers' banking experience."

Mr. Rakes continued, "Even with the additional regulatory burdens and economic challenges in our market area, we were able to provide our stockholders dividends of $1.10 per share in 2012 compared to $1.00 in 2011. This per share dividend payment amount resulted in a dividend payout ratio of 43.04% in 2012 compared to 39.34% in 2011."

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,
2012
    December 31,
2011
 
Assets                
Cash and due from banks   $ 14,783     $ 11,897  
Interest-bearing deposits     96,597       98,355  
Federal funds sold     ---       ---  
Securities available for sale     191,504       174,918  
Securities held to maturity     160,539       143,995  
    Total securities     352,043       318,913  
Mortgage loans held for sale     2,796       2,623  
Loans:                
  Loans, net of unearned income and deferred fees     592,162       588,470  
  Less allowance for loan losses     (8,349 )     (8,068 )
    Loans, net     583,813       580,402  
Bank premises and equipment, net     10,401       10,393  
Accrued interest receivable     6,247       6,304  
Other real estate owned     1,435       1,489  
Intangible assets     9,377       10,460  
Bank-owned life insurance     20,523       19,812  
Other assets     6,346       6,454  
    Total assets   $ 1,104,361     $ 1,067,102  
                 
Liabilities and Stockholders' Equity                
Noninterest-bearing deposits   $ 144,252     $ 142,163  
Interest-bearing demand deposits     455,713       404,801  
Savings deposits     69,063       61,298  
Time deposits     277,738       311,071  
    Total deposits     946,766       919,333  
Accrued interest payable     139       206  
Other liabilities     7,347       6,264  
    Total liabilities     954,252       925,803  
                 
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 6,947,974 shares at December 31, 2012 and 6,939,974 at December 31, 2011     8,685       8,675  
Retained earnings     144,162       133,945  
Accumulated other comprehensive loss     (2,738 )     (1,321 )
    Total stockholders' equity     150,109       141,299  
      Total liabilities and stockholders' equity   $ 1,104,361     $ 1,067,102  
                       
                       
National Bankshares, Inc. and Subsidiaries
Consolidated Statements of Income
(Unaudited)
 
    Three Months Ended     Twelve Months Ended
    December 31, 2012     December 31, 2011     December 31, 2012   December 31, 2011
($ in thousands, except for per share data)                            
Interest Income                            
Interest and fees on loans   $ 8,800     $ 9,128     $ 35,354   $ 36,514
Interest on federal funds     ---       ---       ---     ---
Interest on interest-bearing deposits     53       51       240     155
Interest on securities - taxable     1,622       1,630       6,613     6,745
Interest on securities - nontaxable     1,662       1,620       6,463     6,532
  Total interest income     12,137       12,429       48,670     49,946
                             
Interest Expense                            
Interest on time deposits of $100,000 or more     320       468       1,491     2,019
Interest on other deposits     1,496       1,709       6,396     7,165
  Total interest expense     1,816       2,177       7,887     9,184
  Net interest income     10,321       10,252       40,783     40,762
Provision for loan losses     580       753       3,134     2,949
  Net interest income after provision for loan losses     9,741       9,499       37,649     37,813
                             
Noninterest Income                            
Service charges on deposit accounts     638       665       2,594     2,617
Other service charges and fees     113       113       243     287
Credit card fees     837       832       3,278     3,197
Trust income     276       270       1,313     1,087
Bank-owned life insurance     209       203       814     762
Other income     131       156       472     449
Realized securities gains (losses), net     (8 )     18       25     11
  Total noninterest income     2,196       2,257       8,739     8,410
                             
Noninterest Expense                            
Salaries and employee benefits     2,991       2,796       12,005     11,357
Occupancy and furniture and fixtures     408       392       1,589     1,599
Data processing and ATM     387       412       1,593     1,701
FDIC assessment     132       (372 )     475     677
Credit card processing     625       614       2,442     2,485
Intangibles and goodwill amortization     271       270       1,083     1,083
Net costs of other real estate owned     (1 )     237       208     518
Franchise taxes     255       161       901     780
Other operating expenses     798       832       3,100     3,138
  Total noninterest expense     5,866       5,342       23,396     23,338
Income before income tax expense     6,071       6,414       22,992     22,885
Income tax expense     1,386       1,525       5,245     5,247
  Net income   $ 4,685     $ 4,889     $ 17,747   $ 17,638
                             
Basic net income per share   $ 0.67     $ 0.70     $ 2.56   $ 2.54
Fully diluted net income per share   $ 0.67     $ 0.70     $ 2.55   $ 2.54
Weighted average outstanding number of common shares                            
  Basic     6,947,887       6,939,148       6,942,411     6,936,869
  Diluted     6,964,482       6,949,960       6,959,867     6,950,863
Dividends declared per share   $ 0.57     $ 0.52     $ 1.10   $ 1.00
Dividend payout ratio     ---       ---       43.04     39.34
Book value per share   $ ---     $ ---     $ 21.60   $ 20.36
                             
                             
National Bankshares, Inc. and Subsidiaries
Consolidated Statements of Comprehensive Income
(Unaudited)
 
    Three Months Ended  
($ in thousands)   December 31,
2012
    December 31,
2011
 
Net Income   $ 4,685     $ 4,889  
Other Comprehensive Income, Net of Tax                
Unrealized holding losses on available for sale securities net of deferred taxes of ($141) in 2012 and ($222) in 2011     (261 )     (412 )
Reclassification adjustment, net of income taxes of $3 in 2012 and $2 in 2011     6       3  
Net pension loss arising during the period, net of taxes of ($405) in 2012 and ($731) in 2011     (752 )     (1,356 )
Less: amortization of prior service cost included in net periodic pension cost, net taxes of ($35) in 2012 and ($35) in 2011     (66 )     (66 )
Other comprehensive loss, net of tax of ($578) and ($986)   $ (1,073 )   $ (1,831 )
Total Comprehensive Income   $ 3,612     $ 3,058  
       
    Twelve Months Ended  
($ in thousands)   December 31,
2012
    December 31,
2011
 
Net Income   $ 17,747     $ 17,638  
Other Comprehensive Income, Net of Tax                
Unrealized holding gains (losses) on available for sale securities net of deferred taxes of ($320) in 2012 and $1,468 in 2011     (592 )     2,725  
Reclassification adjustment, net of income taxes of ($3) in 2012 and $9 in 2011     (7 )     17  
Net pension loss arising during the period, net of taxes of ($405) in 2012 and ($731) in 2011     (752 )     (1,356 )
Less: amortization of prior service cost included in net periodic pension cost, net taxes of ($35) in 2012 and ($35) in 2011     (66 )     (66 )
Other comprehensive income (loss), net of tax of ($763) and $711   $ (1,417 )   $ 1,320  
Total Comprehensive Income   $ 16,330     $ 18,958  
                 
 
Key Ratios and Other Data
(Unaudited)
 
    Three Months Ended     Twelve Months Ended  
Average Balances   December 31, 2012     December 31, 2011     December 31, 2012     December 31, 2011  
Cash and due from banks   $ 8,958     $ 12,548     $ 11,129     $ 11,654  
Interest-bearing deposits     89,703       87,266       94,724       64,977  
Securities available for sale     192,724       177,387       189,850       186,296  
Securities held to maturity     161,344       139,318       149,566       134,612  
Mortgage loans held for sale     2,543       1,411       1,765       818  
Gross loans     591,604       590,425       589,129       589,414  
Loans, net     582,272       580,766       579,817       580,037  
Intangible assets     9,531       10,614       9,936       11,019  
Total assets     1,091,032       1,050,417       1,080,351       1,031,899  
Total deposits     932,678       902,055       925,986       888,044  
Other borrowings     ---       ---       ---       ---  
Stockholders' equity     151,660       142,292       147,812       136,794  
Interest-earning assets     1,032,929       990,999       1,019,887       973,171  
Interest-bearing liabilities     789,684       760,567       784,717       752,164  
                                 
Financial ratios                                
Return on average assets     1.71 %     1.85 %     1.64 %     1.71 %
Return on average equity     12.29 %     13.63 %     12.01 %     12.89 %
Net interest margin     4.37 %     4.50 %     4.39 %     4.59 %
Net interest income - fully taxable equivalent   $ 11,354     $ 11,230     $ 44,712     $ 41,914  
Efficiency ratio     43.29 %     39.66 %     43.77 %     44.00 %
Average equity to average assets     13.90 %     13.55 %     13.68 %     13.26 %
                                 
Allowance for loan losses                                
Beginning balance   $ 8,254     $ 8,719     $ 8,068     $ 7,664  
Provision for losses     580       753       3,134       2,949  
Charge-offs     (509 )     (1,423 )     (2,953 )     (2,628 )
Recoveries     24       19       100       83  
Ending balance   $ 8,349     $ 8,068     $ 8,349     $ 8,068  
                                 
 
Asset Quality Data
(Unaudited)
 
Nonperforming assets   December 31, 2012     December 31, 2011  
Nonaccrual loans   $ 3,466     $ 1,398  
Nonaccrual restructured loans     2,151       3,806  
Total nonperforming loans     5,617       5,204  
Other real estate owned     1,435       1,489  
Total nonperforming assets   $ 7,052     $ 6,693  
Accruing restructured loans   $ 2,005     $ 3,756  
Loans 90 days or more past due   $ 170     $ 481  
                 
Asset quality ratios                
Nonperforming assets to loans net of unearned income and deferred fees, plus other real estate owned     1.19 %     1.13 %
Allowance for loan losses to total loans     1.41 %     1.37 %
Allowance for loan losses to nonperforming loans     148.64 %     155.03 %
Loans past due 90 days or more to loans net of unearned income and deferred fees     0.03 %     0.08 %
                 

Contact Information

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

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