SOURCE: National Bankshares, Inc.

National Bankshares, Inc.

April 28, 2016 16:30 ET

National Bankshares, Inc. Reports First Quarter Earnings

BLACKSBURG, VA--(Marketwired - Apr 28, 2016) -  National Bankshares, Inc. (NASDAQ: NKSH) today announced its results of operations for the first quarter of 2016. The Company reported net income of $3.78 million for the quarter ended March 31, 2016 compared to almost $3.97 million at March 31, 2015. Basic earnings per share were $0.54 at March 31, 2016 compared to $0.57 for the same period in 2015. For the first quarter, the return on average assets was 1.28% and the return on average equity was 8.64% compared to 1.40% and 9.50%, respectively, for the first quarter of 2015. At March 31, 2016, the Company had total assets of close to $1.21 billion which was an increase of 3.69% when compared to $1.16 billion at the end of the first quarter of 2015.

Commenting on the Company's financial results, National Bankshares Chairman, President & CEO James G. Rakes said, "We continue to compare very favorably to our peer group in terms of our balance sheet and income statement results. Asset quality remains a priority as nonperforming loans declined over 31% from the first quarter of 2015. In addition, net OREO balances dropped 21% when the same two periods are compared. We still face challenges, such as static loan demand, a low interest rate environment and increased competition, but we are striving to grow loans, manage expenses, and increase noninterest revenue. As we enter our 125th year of banking, we are focused on continuing to provide long-term value to our stockholders and customers through delivery of superior customer service and products."

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 full service offices and one loan production office 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) March 31, 2016     March 31, 2015     December 31, 2015  
Assets                      
Cash and due from banks $ 9,913     $ 12,452     $ 12,152  
Interest-bearing deposits   129,363       87,676       130,811  
Federal funds sold   ---       ---       ---  
Securities available for sale, at fair value   270,094       238,496       236,131  
Securities held to maturity   144,664       156,135       152,028  
Restricted stock   1,170       1,129       1,129  
    Total securities   415,928       395,760       389,288  
Mortgage loans held for sale   63       1,091       634  
Loans:                      
  Loans, net of unearned income and deferred fees   607,643       622,171       619,008  
  Less: allowance for loan losses   (8,107 )     (8,257 )     (8,297 )
    Loans, net   599,536       613,914       610,711  
Premises and equipment, net   8,841       8,998       9,020  
Accrued interest receivable   5,587       5,506       5,769  
Other real estate owned   3,612       4,573       4,165  
Intangible assets and goodwill   6,114       6,954       6,224  
Bank-owned life insurance   22,548       21,946       22,401  
Other assets   6,366       5,975       8,564  
    Total assets $ 1,207,871     $ 1,164,845     $ 1,199,739  
                       
Liabilities and Stockholders' Equity                      
Noninterest-bearing deposits $ 170,207     $ 160,217     $ 166,453  
Interest-bearing demand deposits   570,065       526,388       569,787  
Savings deposits   92,944       85,615       90,236  
    Time deposits   185,296       212,737       192,383  
Total deposits   1,018,512       984,957       1,018,859  
Other borrowed funds   ---       ---       ---  
Accrued interest payable   62       70       56  
Other liabilities   10,061       7,096       8,710  
    Total liabilities   1,028,635       992,123       1,027,625  
                       
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 March 31, 2016 and December 31, 2015 and 6,950,474 shares at March 31, 2015.   8,697       8,688       8,697  
Retained earnings   175,132       167,253       171,353  
Accumulated other comprehensive loss, net   (4,593 )     (3,219 )     (7,936 )
    Total stockholders' equity   179,236       172,722       172,114  
    Total liabilities and stockholders' equity $ 1,207,871     $ 1,164,845     $ 1,199,739  
                       
                       
National Bankshares, Inc. and Subsidiaries  
Consolidated Statements of Income  
(Unaudited)  
   
    Three Months Ending  
($ in thousands, except for share and per share data)   March 31, 2016     March 31, 2015  
Interest Income                
Interest and fees on loans   $ 7,334     $ 7,610  
Interest on federal funds     ---       ---  
Interest on interest-bearing deposits     162       64  
Interest on securities - taxable     1,677       1,734  
Interest on securities - nontaxable     1,311       1,386  
    Total interest income     10,484       10,794  
Interest Expense                
Interest on time deposits     274       327  
Interest on other deposits     794       760  
Interest on borrowed funds     ---       ---  
    Total interest expense     1,068       1,087  
    Net interest income     9,416       9,707  
Provision for loan losses     203       201  
    Net income after provision for loan losses     9,213       9,506  
Noninterest Income                
Service charges on deposit accounts     560       535  
Other service charges and fees     72       71  
Credit card fees     870       895  
Trust Income     323       289  
Bank-owned life insurance     147       149  
Other income     345       314  
Realized securities gains (losses), net     24       (2 )
    Total noninterest income     2,341       2,251  
Noninterest Expense                
Salaries and employee benefits     3,568       3,051  
Occupancy and furniture and fixtures     477       449  
Data processing and ATM     411       435  
FDIC assessment     141       135  
Credit card processing     622       610  
Intangibles and goodwill amortization     110       269  
Net cost of other real estate owned     69       464  
Franchise taxes     331       308  
Other operating expenses     955       959  
    Total noninterest expense     6,684       6,680  
Income before income tax expense     4,870       5,077  
Income tax expense     1,091       1,111  
    Net Income   $ 3,779     $ 3,966  
Basic net income per share   $ 0.54     $ 0.57  
Fully diluted net income per share   $ 0.54     $ 0.57  
Weighted average number of common shares outstanding                
    Basic     6,957,974       6,950,474  
    Diluted     6,957,974       6,955,023  
Dividends declared per share   $ ---     $ ---  
Dividend payout ratio     0.00 %     0.00 %
Book value per share   $ 25.76     $ 24.85  
                 
                 
National Bankshares, Inc. and Subsidiaries
Consolidated Statements of Comprehensive Income
(Unaudited)
 
    Three Months Ended
($ in thousands)   March 31, 2016     March 31, 2015
Net Income   $ 3,779     $ 3,966
               
Other Comprehensive Income, Net of Tax              
Unrealized holding gains on available for sale securities net of tax of $1,809 and $1,320 for the periods ended March 31, 2016 and 2015, respectively     3,359       2,452
Reclassification adjustment for losses (gains) included in net income, net of tax of ($8) and $1 for the periods ended March 31, 2016 and 2015, respectively     (16 )     1
Other comprehensive income, net of tax of $1,801 and $1,321 for the periods ended March 31, 2016 and 2015, respectively   $ 3,343     $ 2,453
Total comprehensive income   $ 7,122     $ 6,419
               
               
Key Ratios and Other Data  
(Unaudited)  
   
    Three Months Ended  
$ in thousands   March 31, 2016     March 31, 2015  
Average Balances                
Cash and due from banks   $ 11,309     $ 11,364  
Interest-bearing deposits     125,849       104,104  
Securities available for sale     245,153       222,161  
Securities held to maturity     149,202       159,376  
Restricted stock     1,133       1,095  
Mortgage loans held for sale     427       460  
Gross Loans     610,979       605,137  
Loans, net     601,557       604,288  
Intangible assets     6,170       7,109  
Total assets     1,188,462       1,149,578  
Total deposits     1,003,136       973,738  
Other borrowings     ---       ---  
Stockholders' equity     175,991       169,289  
Interest-earning assets     1,132,925       1,092,481  
Interest-bearing liabilities     838,943       821,308  
                 
Financial Ratios                
Return on average assets     1.28 %     1.40 %
Return on average equity     8.64 %     9.50 %
Net interest margin     3.66 %     3.94 %
Net interest income-fully taxable equivalent   $ 10,307     $ 10,608  
Efficiency ratio     52.85 %     51.95 %
Average equity to average assets     14.81 %     14.73 %
                 
Allowance for Loan Losses                
Beginning balance   $ 8,297     $ 8,263  
Provision for losses     203       201  
Charge-offs     (453 )     (260 )
Recoveries     60       53  
Ending balance   $ 8,107     $ 8,257  
                 
                 
Asset Quality Data  
(Unaudited)  
   
$ in thousands   March 31, 2016     March 31, 2015  
Nonperforming Assets                
Nonaccrual loans   $ 1,901     $ 3,102  
Nonaccrual restructured loans     4,504       6,123  
Total nonperforming loans     6,405       9,225  
Other real estate owned   $ 3,612     $ 4,573  
Total nonperforming assets   $ 10,017     $ 13,798  
Accruing restructured loans     7,724       5,992  
Loans 90 days or more past due   $ 328     $ 272  
                 
Asset Quality Ratios                
Nonperforming assets to loans net of unearned income and deferred fees, plus other real estate owned     1.64 %     2.20 %
Allowance for loans losses to total loans     1.33 %     1.33 %
Allowance for loan losses to nonperforming loans     126.57 %     89.51 %
Loans past due 90 days or more to loans net of unearned income and deferred fees     0.05 %     0.04 %

Contact Information

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

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