SOURCE: National Bankshares, Inc.

National Bankshares, Inc.

February 20, 2014 16:30 ET

National Bankshares, Inc. Posts Record Earnings for 2013

BLACKSBURG, VA--(Marketwired - Feb 20, 2014) -  National Bankshares, Inc. (NASDAQ: NKSH) today announced that it had record net income of $17.79 million for the twelve months ended December 31, 2013, an increase over the nearly $17.75 million earned in 2012. The 2013 return on average assets and return on average equity were 1.63% and 11.90%, respectively. Basic earnings per share in 2013 remained consistent with the prior year at $2.56. National Bankshares, Inc. ended 2013 with total assets of over $1.11 billion.

Commenting on the Company's financial results, National Bankshares Chairman, President & CEO James G. Rakes said, "We are pleased to report another year of strong earnings. In 2013, we showed an improvement in credit quality as the decrease in net charge-offs indicates. Growth in quality loans remains the key initiative in what remains a less than vibrant market area economy, but we will continue to focus on that growth as well as credit quality and solid expense management. The Company remains a strong institution and is well-positioned to grow in 2014 and beyond."

Mr. Rakes continued, "We also were pleased to return profits to our stockholders in the form of dividends of $1.12 per share in 2013 compared to $1.10 in 2012. This per share dividend payment amount resulted in a dividend payout ratio of 43.74% in 2013 compared to 43.04% in 2012."

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 share and per share data)   December 31, 2013     December 31, 2012  
Assets                
Cash and due from banks   $ 13,283     $ 14,783  
Interest-bearing deposits     97,376       96,597  
Federal funds sold     --       --  
Securities available for sale, at fair value     183,668       189,815  
Securities held to maturity     163,983       160,539  
Restricted stock     1,414       1,689  
    Total securities     349,065       352,043  
Mortgage loans held for sale     1,276       2,796  
Loans:                
  Loans, net of unearned income and deferred fees     595,690       592,162  
  Less: allowance for loan losses     (8,227 )     (8,349 )
      Loans, net     587,463       583,813  
Premises and equipment, net     9,951       10,401  
Accrued interest receivable     5,949       6,247  
Other real estate owned     4,712       1,435  
Intangible assets and goodwill     8,299       9,377  
Bank-owned life insurance     21,181       20,523  
Other assets     12,075       6,346  
      Total assets   $ 1,110,630     $ 1,104,361  
                 
Liabilities and Stockholders' Equity                
Noninterest-bearing deposits   $ 142,645     $ 144,252  
Interest-bearing demand deposits     501,541       455,713  
Savings deposits     74,141       69,063  
Time deposits     241,709       277,738  
      Total deposits     960,036       946,766  
Other borrowed funds     --       --  
Accrued interest payable     92       139  
Other liabilities     4,610       7,347  
      Total liabilities     964,738       954,252  
                 
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, 6,947,974 shares in 2013 and 2012     8,685       8,685  
Retained earnings     154,171       144,162  
Accumulated other comprehensive loss, net     (16,964 )     (2,738 )
      Total stockholders' equity     145,892       150,109  
      Total liabilities and stockholders' equity   $ 1,110,630     $ 1,104,361  
                 
                 
                 
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, 2013     December 31, 2012     December 31, 2013     December 31, 2012  
Interest Income                                
Interest and fees on loans   $ 8,112     $ 8,800     $ 32,819     $ 35,354  
Interest on federal funds     --       --       --       --  
Interest on interest-bearing deposits     52       53       213       240  
Interest on securities - taxable     1,701       1,622       6,707       6,613  
Interest on securities - nontaxable     1,540       1,662       6,388       6,463  
    Total interest income     11,405       12,137       46,127       48,670  
                                 
Interest Expense                                
Interest on time deposits of $100 or more     171       320       865       1,491  
Interest on other deposits     1,169       1,496       5,090       6,396  
Interest on borrowed funds     --       --       --       --  
    Total interest expense     1,340       1,816       5,955       7,887  
    Net interest income     10,065       10,321       40,172       40,783  
Provision for loan losses     202       580       1,531       3,134  
Net income after provision for loan losses     9,863       9,741       38,641       37,649  
                                 
Noninterest Income                                
Service charges on deposit accounts     641       638       2,563       2,594  
Other service charges and fees     86       113       225       243  
Credit card fees     903       837       3,330       3,278  
Trust Income     283       276       1,150       1,313  
Bank-owned life insurance     193       209       739       814  
Other income     269       131       770       472  
Realized securities gains (losses), net     (1 )     12       59       104  
    Total noninterest income     2,374       2,216       8,836       8,818  
                                 
Noninterest Expense                                
Salaries and employee benefits     3,014       2,991       11,978       12,005  
Occupancy and furniture and fixtures     385       408       1,616       1,589  
Data processing and ATM     412       387       1,700       1,593  
FDIC assessment     147       132       554       475  
Credit card processing     692       625       2,546       2,442  
Intangibles and goodwill amortization     269       271       1,078       1,083  
Net cost of other real estate owned     105       (1 )     296       208  
Franchise taxes     280       255       1,083       901  
Other operating expenses     825       818       3,519       3,179  
    Total noninterest expense     6,129       5,886       24,370       23,475  
Income before income tax expense     6,108       6,071       23,107       22,992  
Income tax expense     1,486       1,386       5,317       5,245  
    Net income   $ 4,622     $ 4,685     $ 17,790     $ 17,747  
                                 
Basic net income per share   $ 0.67     $ 0.67     $ 2.56     $ 2.56  
Fully diluted net income per share   $ 0.66     $ 0.67     $ 2.55     $ 2.55  
Weight average outstanding numbers of common shares                                
    Basic     6,947,974       6,947,887       6,947,974       6,942,411  
    Diluted     6,963,381       6,964,482       6,968,393       6,959,867  
Dividends declared per share   $ 0.58     $ 0.57     $ 1.12     $ 1.10  
Dividends payout ratio     --       --       43.74 %     43.04 %
Book value per share   $ --     $ --     $ 21.00     $ 21.60  
   
   
   
National Bankshares, Inc. and Subsidiaries  
Consolidated Statements of Comprehensive Income  
(Unaudited)  
             
($ in thousands, expect for share and per share data)   Three Months Ended  
    December 31, 2013     December 31, 2012  
Net income   $ 4,622     $ 4,685  
Other Comprehensive Income, net of tax                
Unrealized holding losses on available for sale securities net of deferred taxes of ($1,523) in 2013 and ($141) in 2012     (2,828 )     (261 )
Reclassification adjustment, net income taxes of $1 in 2013 and $3 in 2012     1       6  
Net pension gain (loss) arising during the period, net of taxes of $1,022 in 2013 and ($405) in 2012     1,898       (752 )
Less: amortization of prior service cost included in net periodic pension cost, net of taxes of ($35) in 2013 and ($35) in 2012     (66 )     (66 )
Other comprehensive loss, net of tax of ($535) in 2013 and ($578) in 2012   $ (995 )   $ (1,073 )
Total Comprehensive Income   $ 3,627     $ 3,612  
                 
    Twelve Months Ended  
    December 31, 2013     December 31, 2012  
Net income   $ 17,790     $ 17,747  
Other Comprehensive Income, net of tax                
Unrealized holding losses on available for sale securities net of taxes of ($8,628) in 2013 and ($292) in 2012     (16,023 )     (541 )
Reclassification adjustment for gains included in net income, net of taxes of ($18) in 2013 and ($31) in 2012     (35 )     (58 )
Net pension gain (losses) arising during the period, net of taxes of $1,022 in 2013 and ($405) in 2012     1,898       (752 )
Less: amortization of prior service cost included in net periodic pension cost, net of taxes of ($35) in 2013 and ($35) in 2012     (66 )     (66 )
Other comprehensive loss, net of tax of ($7,659) in 2013 and ($763) in 2012   $ (14,226 )   $ (1,417 )
Total Comprehensive Income   $ 3,564     $ 16,330  
   
   
   
Key Ratios and Other Data  
(Unaudited)  
$ in thousands  
    Three Months Ended     Twelve Months Ended  
    December 31     December 31     December 31     December 31  
    2013     2012     2013     2012  
Average Balances                                
Cash and due from banks   $ 12,453     $ 8,958     $ 12,022     $ 11,129  
Interest-bearing deposits     80,782       89,703       80,044       94,724  
Securities available for sale     189,383       191,037       197,898       188,168  
Securities held to maturity     164,512       161,344       164,888       149,566  
Restricted stock     1,414       1,687       1,477       1,682  
Mortgage loans held for sale     411       2,543       1,016       1,765  
Gross Loans     592,768       591,604       586,898       589,129  
Loans, net     583,699       582,272       577,746       579,817  
Intangible assets     8,452       9,531       8,854       9,936  
Total assets     1,090,932       1,091,032       1,090,703       1,080,351  
Total deposits     936,048       932,678       933,482       925,986  
Other borrowings     --       --       --       --  
Stockholders' equity     146,716       151,660       149,491       147,812  
Interest-earning assets     1,046,181       1,032,929       1,038,727       1,019,887  
Interest-bearing liabilities     792,328       789,684       792,037       784,717  
                                 
Financial ratios                                
Return on average assets     1.68 %     1.71 %     1.63 %     1.64 %
Return on average equity     12.50 %     12.29 %     11.90 %     12.01 %
Net interest margin     4.18 %     4.37 %     4.25 %     4.38 %
Net interest income-fully taxable equivalent   $ 11,035     $ 11,354     $ 44,159     $ 44,712  
Efficiency ratio     45.71 %     43.29 %     45.99 %     43.77 %
Average equity to average assets     13.45 %     13.90 %     13.71 %     13.68 %
                                 
Allowance for loan losses                                
Beginning balance   $ 8,090     $ 8,254     $ 8,349     $ 8,068  
Provision for losses     202       580       1,531       3,134  
Charge-offs     (140 )     (509 )     (1,820 )     (2,953 )
Recoveries     75       24       167       100  
Ending balance   $ 8,227     $ 8,349     $ 8,227     $ 8,349  
   
   
   
Asset Quality Data  
(Unaudited)  
             
$ in thousands            
    December 31, 2013     December 31, 2012  
Nonperforming assets                
Nonaccrual loans   $ 5,732     $ 10,870  
Nonaccrual restructured loans     852       2,151  
Total nonperforming loans     6,584       13,021  
Other real estate owned     4,712       1,435  
Total nonperforming assets   $ 11,296     $ 14,456  
Accruing restructured loans   $ 6,191     $ 2,005  
Loans 90 days or more past due   $ 190     $ 170  
                 
Asset quality ratios                
Nonperforming assets to loans net of unearned income and deferred fees, plus other real estate owned     1.88 %     2.44 %
Allowance for loans losses to total loans     1.38 %     1.41 %
Allowance for loan losses to nonperforming loans     124.95 %     64.12 %
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