SOURCE: National Bankshares, Inc.

National Bankshares, Inc.

July 19, 2012 16:30 ET

National Bankshares, Inc. Reports Higher First Half Earnings

BLACKSBURG, VA--(Marketwire - Jul 19, 2012) - Today, National Bankshares, Inc. (NASDAQ: NKSH) announced net income of over $4.34 million for the quarter ended June 30, 2012. Net income was approaching $8.77 million through June 30, 2012, or nearly 6.42% above the total reported for the first half of 2011. Basic earnings per share were $1.26, which compares with $1.19 for the first six months last year. The return on average assets for the first half of 2012 was 1.64%, and it was 1.63% for the six months ended June 30, 2011. The return on average equity was 12.15% and 12.48% for the same two periods. At June 30, 2012, the Company had total assets of almost $1.09 billion, an increase of 5.16% over the end of the first half of 2011 and up slightly from total assets of $1.07 billion at year-end.

National Bankshares' Chairman, President & CEO James G. Rakes commented, "While we expect the second half of 2012 to remain challenging due to economic factors, low rates and regulatory headwinds, we are poised to expand our lending activity as local economic conditions improve. We are working to deliver the best services and products we can to our customers, manage expense growth prudently and focus on asset quality."

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)   June 30, 2012     June 30, 2011     December 31, 2011  
Assets                        
Cash and due from banks   $ 13,140     $ 13,113     $ 11,897  
Interest-bearing deposits     105,102       54,768       98,355  
Federal funds sold     ---       ---       ---  
Securities available for sale     189,768       190,674       174,918  
Securities held to maturity     146,451       136,399       143,995  
    Total securities     336,219       327,073       318,913  
Mortgage loans held for sale     1,395       248       2,623  
Loans:                        
  Loans, net of unearned income and deferred fees     586,223       593,572       588,470  
  Less: allowance for loan losses     (8,168 )     (8,494 )     (8,068 )
    Loans, net     578,055       585,078       580,402  
Bank premises and equipment, net     10,618       10,232       10,393  
Accrued interest receivable     6,273       6,255       6,304  
Other real estate owned     871       1,855       1,489  
Intangible assets     9,918       11,001       10,460  
Bank-owned life insurance     20,170       17,580       19,812  
Other assets     6,507       7,654       6,454  
    Total assets   $ 1,088,268     $ 1,034,857     $ 1,067,102  
                         
Liabilities and Stockholders' Equity                        
Noninterest-bearing deposits   $ 146,899     $ 136,041     $ 142,163  
Interest-bearing demand deposits     423,272       384,329       404,801  
Savings deposits     65,398       59,909       61,298  
Time deposits     299,869       311,908       311,071  
    Total deposits     935,438       892,187       919,333  
Other borrowed funds     ---       ---       ---  
Accrued interest payable     173       237       206  
Other liabilities     5,970       6,125       6,264  
    Total liabilities     941,581       898,549       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 6,939,974 shares at June 30, 2012, 6,937,974 at June 30, 2011 and 6,939,974 at December 31, 2011     8,675       8,672       8,675  
Retained earnings     139,036       128,129       133,945  
Accumulated other comprehensive loss     (1,024 )     (493 )     (1,321 )
    Total stockholders' equity     146,687       136,308       141,299  
      Total liabilities and stockholders' equity   $ 1,088,268     $ 1,034,857     $ 1,067,102  
                               
                               
                               
National Bankshares, Inc. and Subsidiaries  
Consolidated Statements of Income  
(Unaudited)  
   
    Three Months Ended     Six Months Ended  
    June 30, 2012     June 30, 2011     June 30, 2012   June 30, 2011  
($ in thousands, except for per share data)                              
Interest Income                              
Interest and fees on loans   $ 8,753     $ 9,107     $ 17,631   $ 18,202  
Interest on federal funds     ---       ---       ---     ---  
Interest on interest-bearing deposits     56       35       127     67  
Interest on securities - taxable     1,782       1,713       3,371     3,375  
Interest on securities - nontaxable     1,591       1,620       3,167     3,296  
    Total interest income     12,182       12,475       24,296     24,940  
                               
Interest Expense                              
Interest on time deposits of $100,000 or more     391       505       816     1,066  
Interest on other deposits     1,627       1,841       3,319     3,659  
Interest on borrowed funds     ---       ---       ---     ---  
    Total interest expense     2,018       2,346       4,135     4,725  
    Net interest income     10,164       10,129       20,161     20,215  
Provision for loan losses     1,104       753       1,776     1,553  
    Net interest income after provision for loan losses     9,060       9,376       18,385     18,662  
                               
Noninterest Income                              
Service charges on deposit accounts     651       648       1,282     1,260  
Other service charges and fees     41       59       90     117  
Credit card fees     840       827       1,634     1,560  
Trust income     440       307       766     553  
Bank-owned life insurance     200       186       400     370  
Other income     112       77       211     168  
Realized securities gains (losses), net     (1 )     (14 )     52     (4 )
    Total noninterest income     2,283       2,090       4,435     4,024  
                               
Noninterest Expense                              
Salaries and employee benefits     2,954       2,823       5,910     5,727  
Occupancy and furniture and fixtures     397       435       794     858  
Data processing and ATM     424       429       816     873  
FDIC assessment     101       350       210     696  
Credit card processing     638       646       1,210     1,232  
Intangibles and goodwill amortization     271       271       542     542  
Net costs of other real estate owned     103       95       151     229  
Franchise taxes     226       215       388     457  
Other operating expenses     617       761       1,421     1,495  
    Total noninterest expense     5,731       6,025       11,442     12,109  
Income before income tax expense     5,612       5,441       11,378     10,577  
Income tax expense     1,272       1,225       2,609     2,337  
    Net income   $ 4,340     $ 4,216     $ 8,769   $ 8,240  
                               
Basic net income per share   $ 0.63     $ 0.61     $ 1.26   $ 1.19  
Fully diluted net income per share   $ 0.62     $ 0.61     $ 1.26   $ 1.19  
Weighted average outstanding number of common shares                              
    Basic     6,939,974       6,936,501       6,939,974     6,935,148  
    Diluted     6,957,445       6,946,852       6,956,041     6,952,159  
Dividends declared per share   $ 0.53     $ 0.48     $ 0.53   $ 0.48  
Dividend payout ratio     ---       ---       41.94     40.40  
Book value per share   $ 21.14     $ 19.65     $ 21.14   $ 19.65  
                               
                               
                               
National Bankshares, Inc. and Subsidiaries
Consolidated Statements of Comprehensive Income
(Unaudited)
 
    Three Months Ended
($ in thousands, except for per share data)   June 30, 2012   June 30, 2011
Net Income   $ 4,340   $ 4,216
             
Other Comprehensive Income, net of tax            
Unrealized holding gains on available for sale securities net of deferred taxes of $662 and $925     1,229     1,718
Reclassification adjustment, net of income taxes of $2 and $7     4     12
Other comprehensive income, net of tax of $664 and $932   $ 1,233   $ 1,730
Total Comprehensive Income   $ 5,573   $ 5,946
             
             
             
    Six Months Ended
($ in thousands, except for per share data)   June 30, 2012     June 30, 2011
Net Income   $ 8,769     $ 8,240
               
Other Comprehensive Income, net of tax              
Unrealized holding gains on available for sale securities net of deferred taxes of $173 and $1,153     322       2,141
Reclassification adjustment, net of income taxes of $(13) and $4     (25 )     7
Other comprehensive income, net of tax of $160 and $1,157   $ 297     $ 2,148
Total Comprehensive Income   $ 9,066     $ 10,388
               
               
               
Key Ratios and Other Data  
(Unaudited)  
   
    Three Months Ended     Six Months Ended  
Average Balances   June 30, 2012     June 30, 2011     June 30, 2012     June 30, 2011  
Cash and due from banks   $ 12,121     $ 12,290     $ 12,169     $ 11,857  
Interest-bearing deposits     88,152       59,465       99,352       56,792  
Securities available for sale     202,783       188,590       189,004       188,044  
Securities held to maturity     142,123       132,613       141,433       132,469  
Mortgage loans held for sale     1,264       512       1,238       603  
Gross loans     586,120       588,145       585,600       586,801  
Loans, net     576,996       578,824       576,290       577,723  
Intangible assets     10,073       11,157       10,209       11,292  
Total assets     1,076,975       1,027,361       1,072,910       1,022,196  
Total deposits     923,982       885,295       921,187       881,319  
Other borrowings     ---       ---       ---       ---  
Stockholders' equity     146,625       135,159       145,113       133,182  
Interest-earning assets     1,015,458       967,328       1,011,703       963,343  
Interest-bearing liabilities     782,875       750,735       781,840       749,182  
                                 
Financial ratios                                
Return on average assets     1.62 %     1.65 %     1.64 %     1.63 %
Return on average equity     11.90 %     12.51 %     12.15 %     12.48 %
Net interest margin     4.40 %     4.59 %     4.39 %     4.64 %
Net interest income - fully taxable equivalent   $ 11,119     $ 11,080     $ 22,059     $ 22,146  
Efficiency ratio     42.76 %     45.70 %     43.19 %     46.27 %
Average equity to average assets     13.61 %     13.16 %     13.53 %     13.03 %
                                 
Allowance for loan losses                                
Beginning balance   $ 8,063     $ 8,245     $ 8,068     $ 6,926  
Provision for losses     1,104       753       1,776       1,499  
Charge-offs     (1,033 )     (517 )     (1,733 )     (971 )
Recoveries     34       13       57       99  
Ending balance   $ 8,168     $ 8,494     $ 8,168     $ 7,553  
                                 
                                 
                                 
Asset Quality Data  
(Unaudited)  
   
Nonperforming assets   June 30, 2012     June 30, 2011  
Nonaccrual loans   $ 3,627     $ 1,819  
Nonaccrual restructured loans     3,763       5,030  
Total nonperforming loans     7,390       6,849  
Other real estate owned     871       1,855  
Total nonperforming assets   $ 8,261     $ 8,704  
Accruing restructured loans   $ 2,035     $ 780  
Loans 90 days or more past due   $ 242     $ 572  
                 
Asset quality ratios                
Nonperforming assets to loans net of unearned income and deferred fees, plus other real estate owned     1.41 %     1.46 %
Allowance for loan losses to total loans     1.39 %     1.43 %
Allowance for loan losses to nonperforming loans     110.53 %     124.02 %
Loans past due 90 days or more to loans net of unearned income and deferred fees     0.04 %     0.10 %
                 

Contact Information

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

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