SOURCE: National Bankshares, Inc.

National Bankshares, Inc.

October 27, 2016 16:30 ET

National Bankshares, Inc. Reports Income for the Nine Months Ended September 30, 2016

BLACKSBURG, VA--(Marketwired - Oct 27, 2016) - Today, National Bankshares, Inc. (NASDAQ: NKSH) announced net income of approximately $11.47 million through September 30, 2016 compared to $12.28 million reported for the first nine months of 2015. Basic earnings per share were $1.65 which compares with $1.77 reported at September 30, 2015. The return on average assets for the nine months ended September 30, 2016 was 1.28% compared to 1.43% in 2015. The return on average equity was 8.55% and 9.60% for the same two periods. At September 30, 2016, the Company had total assets of over $1.20 billion.

Commenting on the company's financial results, National Bankshares' Chairman, President & CEO James G. Rakes said, "We continue to grow our asset and deposit base in a steady, consistent manner by making quality loans and providing superior customer service. We've also seen positive results from our efforts to increase noninterest income and improve overall efficiency. While we still face a challenging interest rate environment, we continue to invest in the people, technology and infrastructure that will position National Bankshares for long-term growth and increased profitability."

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)   September 30, 2016     September 30, 2015     December 31, 2015  
Assets                        
Cash and due from banks   $ 11,302     $ 12,446     $ 12,152  
Interest-bearing deposits     80,170       90,295       130,811  
Federal funds sold     ---       ---       ---  
Securities available for sale, at fair value     291,277       211,232       236,131  
Securities held to maturity     138,047       154,644       152,028  
Restricted stock     1,170       1,129       1,129  
  Total securities     430,494       367,005       389,288  
Mortgage loans held for sale     434       1,331       634  
Loans:                        
  Loans, net of unearned income and deferred fees     636,241       625,755       619,008  
  Less: allowance for loan losses     (8,301 )     (8,117 )     (8,297 )
    Loans, net     627,940       617,638       610,711  
Premises and equipment, net     8,757       9,135       9,020  
Accrued interest receivable     5,138       5,659       5,769  
Other real estate owned     3,188       4,194       4,165  
Intangible assets and goodwill     6,006       6,416       6,224  
Bank-owned life insurance     22,848       22,248       22,401  
Other assets     6,904       7,758       8,564  
    Total assets   $ 1,203,181     $ 1,144,125     $ 1,199,739  
                         
Liabilities and Stockholders' Equity                        
Noninterest-bearing deposits   $ 172,510     $ 163,877     $ 166,453  
Interest-bearing demand deposits     566,213       514,823       569,787  
Savings deposits     95,496       86,659       90,236  
Time deposits     175,789       197,171       192,383  
    Total deposits     1,010,008       962,530       1,018,859  
Other borrowed funds     ---       ---       ---  
Accrued interest payable     48       61       56  
Other liabilities     8,981       7,142       8,710  
    Total liabilities     1,019,037       969,733       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 September 30, 2016 and December 31, 2015 and 6,955,974 shares at September 30, 2015.     8,697       8,695       8,697  
Retained earnings     178,998       171,996       171,353  
Accumulated other comprehensive loss, net     (3,551 )     (6,299 )     (7,936 )
    Total stockholders' equity     184,144       174,392       172,114  
    Total liabilities and stockholders' equity   $ 1,203,181     $ 1,144,125     $ 1,199,739  
                         
                         
   
National Bankshares, Inc. and Subsidiaries  
Consolidated Statements of Income  
(Unaudited)  
   
    Three Months Ended   Nine Months Ended  
($ in thousands, except for share and per share data)   September 30, 2016   September 30, 2015   September 30, 2016     September 30, 2015  
Interest Income                            
Interest and fees on loans   $ 7,409   $ 7,676   $ 22,032     $ 22,886  
Interest on federal funds     ---     ---     ---       ---  
Interest on interest-bearing deposits     97     54     409       173  
Interest on securities - taxable     1,381     1,678     4,625       5,124  
Interest on securities - nontaxable     1,270     1,352     3,867       4,095  
  Total interest income     10,157     10,760     30,933       32,278  
Interest Expense                            
Interest on time deposits     238     301     765       943  
Interest on other deposits     781     708     2,385       2,204  
Interest on borrowed funds     ---     ---     ---       ---  
  Total interest expense     1,019     1,009     3,150       3,147  
  Net interest income     9,138     9,751     27,783       29,131  
Provision for loan losses     291     178     1,148       734  
  Net income after provision for loan losses     8,847     9,573     26,635       28,397  
Noninterest Income                            
Service charges on deposit accounts     649     571     1,778       1,676  
Other service charges and fees     47     45     165       164  
Credit card fees     963     972     2,802       2,843  
Trust Income     330     314     1,007       902  
Bank-owned life insurance     149     152     447       451  
Other income     242     230     1,042       963  
Realized securities gain, net     101     2     199       5  
  Total noninterest income     2,481     2,286     7,440       7,004  
Noninterest Expense                            
Salaries and employee benefits     3,239     3,150     9,714       9,433  
Occupancy and furniture and fixtures     463     438     1,388       1,307  
Data processing and ATM     624     387     1,630       1,230  
FDIC assessment     135     138     421       408  
Credit card processing     715     701     2,049       1,986  
Intangibles and goodwill amortization     40     269     218       807  
Net cost of other real estate owned     71     48     179       555  
Franchise taxes     321     329     974       959  
Other operating expenses     1,012     859     2,969       2,679  
  Total noninterest expense     6,620     6,319     19,542       19,364  
Income before income tax expense     4,708     5,540     14,533       16,037  
Income tax expense     880     1,341     3,061       3,762  
  Net Income   $ 3,828   $ 4,199   $ 11,472     $ 12,275  
Basic net income per share   $ 0.55   $ 0.60   $ 1.65     $ 1.77  
Fully diluted net income per share   $ 0.55   $ 0.60   $ 1.65     $ 1.76  
Weighted average number of common shares outstanding                            
  Basic     6,957,974     6,955,126     6,957,974       6,952,716  
  Diluted     6,957,974     6,959,168     6,957,974       6,956,689  
Dividends declared per share     ---     ---   $ 0.55     $ 0.53  
Dividend payout ratio     ---     ---     33.36 %     30.03 %
Book value per share   $ 26.47   $ 25.07   $ 26.47     $ 25.07  
                             
                             
   
National Bankshares, Inc. and Subsidiaries  
Consolidated Statements of Comprehensive Income  
(Unaudited)  
   
    Three Months Ended  
($ in thousands)   September 30, 2016     September 30, 2015  
Net income   $ 3,828     $ 4,199  
                 
Other Comprehensive Income, net of tax                
Unrealized holding gain on available for sale securities net of tax of $243 and $1,394 for the periods ended September 30, 2016 and 2015, respectively     454       2,589  
Reclassification adjustment for gain included in net income, net of tax of ($35) and ($1) for the periods ended September 30, 2016 and 2015, respectively     (66 )     (1 )
Other comprehensive income, net of tax of $208 and $1,393 for the periods ended September 30, 2016 and 2015, respectively   $ 388     $ 2,588  
Total Comprehensive Income   $ 4,216     $ 6,787  
                 
       
    Nine Months Ended  
($ in thousands)   September 30, 2016     September 30, 2015  
Net Income   $ 11,472     $ 12,275  
                 
Other Comprehensive Income (Loss), Net of Tax                
Unrealized holding gain (loss) on available for sale securities net of tax of $2,415 and ($334) for the periods ended September 30, 2016 and 2015, respectively     4,484       (624 )
Reclassification adjustment for gain included in net income, net of tax of ($54) and ($2) for the periods ended September 30, 2016 and 2015, respectively     (99 )     (3 )
Other comprehensive income (loss), net of tax of $2,361 and ($336) for the periods ended September 30, 2016 and 2015, respectively   $ 4,385     $ (627 )
Total Comprehensive Income   $ 15,857     $ 11,648  
                 
                 
   
National Bankshares, Inc. and Subsidiaries  
Key Ratios and Other Data  
(Unaudited)  
   
    Three Months Ended     Nine Months Ended  
$ in thousands   September 30,     September 30,     September 30,     September 30,  
    2016     2015     2016     2015  
Average Balances                                
Cash and due from banks   $ 11,248     $ 11,612     $ 11,258     $ 11,506  
Interest-bearing deposits     76,870       84,882       106,928       91,791  
Securities available for sale     298,422       216,949       275,702       222,823  
Securities held to maturity     138,186       154,978       142,585       156,678  
Restricted stock     1,170       1,129       1,158       1,118  
Mortgage loans held for sale     666       986       565       781  
Gross Loans     630,234       627,596       617,337       619,204  
Loans, net     621,251       618,611       608,217       610,135  
Intangible assets     6,029       6,571       6,094       6,838  
Total assets     1,200,629       1,144,723       1,200,104       1,150,026  
Total deposits     1,009,786       966,199       1,011,736       972,104  
Other borrowings     ---       ---       ---       ---  
Stockholders' equity     182,096       171,698       179,191       170,883  
Interest-earning assets     1,141,981       1,089,803       1,142,505       1,093,699  
Interest-bearing liabilities     835,984       805,655       842,127       814,800  
                                 
Financial Ratios                                
Return on average assets     1.27 %     1.46 %     1.28 %     1.43 %
Return on average equity     8.36 %     9.70 %     8.55 %     9.60 %
Net interest margin     3.48 %     3.89 %     3.55 %     3.90 %
Net interest income-fully taxable equivalent   $ 9,986     $ 10,673     $ 30,383     $ 31,881  
Efficiency ratio     53.10 %     48.76 %     51.67 %     49.80 %
Average equity to average assets     15.17 %     15.00 %     14.93 %     14.86 %
                                 
Allowance for Loan Losses                                
Beginning balance   $ 8,195     $ 8,131     $ 8,297     $ 8,263  
Provision for losses     291       178       1,148       734  
Charge-offs     (216 )     (226 )     (1,267 )     (1,002 )
Recoveries     31       34       123       122  
Ending balance   $ 8,301     $ 8,117     $ 8,301     $ 8,117  
                                 
                                 
   
National Bankshares, Inc. and Subsidiaries  
Asset Quality Data  
(Unaudited)  
   
$ in thousands   September 30, 2016     September 30, 2015  
Nonperforming Assets                
Nonaccrual loans   $ 1,592     $ 3,207  
Nonaccrual restructured loans     3,901       5,781  
Total nonperforming loans     5,493       8,988  
Other real estate owned     3,188       4,194  
Total nonperforming assets   $ 8,681     $ 13,182  
Accruing restructured loans   $ 4,662     $ 6,080  
Loans 90 days or more past due   $ 195     $ 47  
                 
Asset Quality Ratios                
Nonperforming assets to loans net of unearned income and deferred fees, plus other real estate owned     1.36 %     2.09 %
Allowance for loans losses to total loans     1.30 %     1.30 %
Allowance for loan losses to nonperforming loans     151.12 %     90.31 %
Loans past due 90 days or more to loans net of unearned income and deferred fees     0.03 %     0.01 %
                 

Contact Information

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

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