SOURCE: National Bankshares, Inc.

National Bankshares, Inc.

July 24, 2014 16:30 ET

National Bankshares, Inc. Reports Second Quarter And First Half Earnings

BLACKSBURG, VA--(Marketwired - Jul 24, 2014) -  Today, National Bankshares, Inc. (NASDAQ: NKSH) announced net income of over $8.51 million for the six months ended June 30, 2014 compared to $8.65 million for the same period in 2013. Basic earnings per share were $1.23 at June 30, 2014 compared to $1.25 at June 30, 2013. The return on average assets for the six months ending June 30, 2014 was 1.54% compared to 1.59% in 2013. The return on average equity was 11.22% and 11.42% for the same two periods.

For the three month ending June 30, 2014, net income was $4.11 million. The Company had total assets of almost $1.13 billion at June 30, 2014.

National Bankshares' Chairman, President & CEO James G. Rakes commented, "While the interest rate environment and competitive pressures remain very challenging, we are positioning the Bank to take advantage of opportunities on the horizon as economic conditions in our market area improve. We pride ourselves in our community banking philosophy which leads to exceptional service and strong customer relationships. These principles provide a competitive advantage when meeting the needs of our customers."

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 25 offices throughout Southwest Virginia. National Bankshares Financial Services, Inc. is an investment and insurance subsidiary operating 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)   June 30, 2014     June 30, 2013     December 31, 2013  
Assets                        
Cash and due from banks   $ 15,917     $ 13,474     $ 13,283  
Interest-bearing deposits     106,112       64,278       98,066  
Federal funds sold     ---       ---       ---  
Securities available for sale, at fair value     195,407       204,096       181,712  
Securities held to maturity     162,956       166,915       163,983  
Restricted stock     1,089       1,414       1,414  
    Total securities     359,452       372,425       347,109  
Mortgage loans held for sale     383       1,950       1,276  
Loans:                        
    Loans, net of unearned income and deferred fees     593,400       588,061       595,690  
    Less allowance for loan losses     (7,971 )     (7,952 )     (8,227 )
      Loans, net     585,429       580,109       587,463  
Premises and equipment, net     9,482       10,222       9,951  
Accrued interest receivable     5,798       6,291       5,949  
Other real estate owned     5,293       969       4,712  
Intangible assets and goodwill     7,761       8,837       8,299  
Bank-owned life insurance     21,491       20,858       21,181  
Other assets     11,361       11,673       13,341  
        Total assets   $ 1,128,479     $ 1,091,086     $ 1,110,630  
                         
Liabilities and Stockholders' Equity                        
Noninterest-bearing deposits   $ 146,727     $ 144,164     $ 142,645  
Interest-bearing demand deposits     510,304       461,662       501,541  
Savings deposits     79,255       73,095       74,141  
Time deposits     231,177       259,600       241,709  
        Total deposits     967,463       938,521       960,036  
Other borrowed funds     ---       ---       ---  
Accrued interest payable     71       126       92  
Other liabilities     4,149       6,901       4,610  
Total liabilities     971,683       945,548       964,738  
                         
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 2014 and 2013     8,685       8,685       8,685  
Retained earnings     158,863       149,061       154,171  
Accumulated other comprehensive loss, net     (10,752 )     (12,208 )     (16,964 )
        Total stockholders' equity     156,796       145,538       145,892  
        Total liabilities and stockholders' equity   $ 1,128,479     $ 1,091,086     $ 1,110,630  
                         
                         
                         
National Bankshares, Inc. and Subsidiaries  
Consolidated Statements of Income  
(Unaudited)  
   
    Three Months Ended   Six Months Ended  
($ in thousands, except for share and per share data)   June 30,
2014
  June 30,
2013
  June 30,
2014
    June 30,
2013
 
Interest Income                            
Interest and fees on loans   $ 7,819   $ 8,192   $ 15,754     $ 16,511  
Interest on federal funds     ---     ---     ---       ---  
Interest on interest-bearing deposits     64     58     129       116  
Interest on securities - taxable     1,697     1,694     3,350       3,206  
Interest on securities - nontaxable     1,474     1,618     2,974       3,266  
    Total interest income     11,054     11,562     22,207       23,099  
Interest Expense                            
Interest on time deposits of $100 or more     145     230     298       498  
Interest on other deposits     1,150     1,318     2,312       2,729  
Interest on borrowed funds     ---     ---     ---       ---  
    Total interest expense     1,295     1,548     2,610       3,227  
    Net interest income     9,759     10,014     19,597       19,872  
Provision for loan losses     701     355     804       1,026  
    Net income after provision for loan losses     9,058     9,659     18,793       18,846  
Noninterest Income                            
Service charges on deposit accounts     607     625     1,199       1,213  
Other service charges and fees     38     42     103       102  
Credit card fees     961     853     1,758       1,593  
Trust Income     332     311     625       600  
Bank-owned life insurance     177     176     352       364  
Other income     229     223     506       504  
Realized securities gains, net     ---     9     1       18  
    Total noninterest income     2,344     2,239     4,544       4,394  
Noninterest Expense                            
Salaries and employee benefits     3,007     2,992     6,006       5,932  
Occupancy and furniture and fixtures     417     404     857       836  
Data processing and ATM     394     418     757       811  
FDIC assessment     117     136     264       272  
Credit card processing     665     646     1,214       1,198  
Intangibles and goodwill amortization     269     269     538       540  
Net cost of other real estate owned     84     65     161       140  
Franchise taxes     287     265     566       523  
Other operating expenses     820     942     1,879       1,849  
    Total noninterest expense     6,060     6,137     12,242       12,101  
Income before income tax expense     5,342     5,761     11,095       11,139  
Income tax expense     1,233     1,326     2,582       2,488  
    Net income   $ 4,109   $ 4,435   $ 8,513     $ 8,651  
Basic net income per share   $ 0.59   $ 0.64   $ 1.23     $ 1.25  
Fully diluted net income per share   $ 0.59   $ 0.64   $ 1.22     $ 1.24  
Weighted average number of common shares outstanding                            
    Basic     6,947,974     6,947,974     6,947,974       6,947,974  
    Diluted     6,960,683     6,968,348     6,962,274       6,968,711  
Dividends declared per share   $ 0.55   $ 0.54   $ 0.55     $ 0.54  
Dividends payout ratio     ---     ---     44.89 %     43.37 %
Book value per share     22.57   $ 20.95     22.57     $ 20.95  
                             
                             
                             
National Bankshares, Inc. and Subsidiaries  
Consolidated Statements of Comprehensive Income (Loss)  
(Unaudited)  
   
    Three Months Ended  
($ in thousands)   June 30, 2014   June 30, 2013  
Net income   $ 4,109   $ 4,435  
               
Other Comprehensive Income, net of tax              
Unrealized holding gains (losses) on available for sale securities net of deferred tax of $1,664 in 2014 and ($4,577) in 2013     3,091     (8,500 )
Reclassification adjustment, net of income tax (benefit) of $0 in 2014 and $(3) in 2013     ---     (6 )
Other comprehensive income (loss), net of tax of $1,664 in 2014 and ($4,580) in 2013   $ 3,091   $ (8,506 )
Total Comprehensive Income (Loss)   $ 7,200   $ (4,071 )
               
    Six Months Ended  
($ in thousands)   June 30, 2014   June 30, 2013  
Net income   $ 8,513   $ 8,651  
               
Other Comprehensive Income, net of tax              
Unrealized holding gains (losses) on available for sale securities net of deferred tax of $3,345 in 2014 and ($5,094) in 2013     6,212     (9,458 )
Reclassification adjustment, net of income tax (benefit)of $0 in 2014 and ($6) in 2013     ---     (12 )
Other comprehensive income (loss), net of tax of 3,345 in 2013 and ($5,100) in 2013   $ 6,212   $ (9,470 )
Total Comprehensive Income (Loss)   $ 14,725   $ (819 )
               
               
               
Key Ratios and Other Data  
(Unaudited)  
   
($ in thousands)   Three Months Ended     Six Months Ended  
    June 30, 2014     June 30, 2013     June 30, 2014     June 30, 2013  
Average Balances                                
Cash and due from banks   $ 11,636     $ 12,126     $ 11,786     $ 12,076  
Interest-bearing deposits     102,409       80,447       102,698       90,099  
Securities available for sale     193,854       209,367       189,196       198,436  
Securities held to maturity     164,476       166,859       163,643       164,574  
Restricted stock     1,089       1,414       1,237       1,541  
Mortgage loans held for sale     256       1,405       319       1,456  
Gross Loans     592,073       582,988       592,205       583,161  
Loans, net     583,054       573,727       583,121       573,877  
Intangible assets     7,915       8,991       8,050       9,125  
Total assets     1,116,461       1,100,325       1,112,664       1,096,620  
Total deposits     954,592       939,379       954,163       936,297  
Other borrowings     1       ---       ---       ---  
Stockholders' equity     156,045       153,684       152,975       152,775  
Interest-earning assets     1,067,136       1,040,900       1,064,732       1,036,833  
Interest-bearing liabilities     811,711       796,195       812,197       795,760  
                                 
Financial ratios                                
Return on average assets     1.48 %     1.62 %     1.54 %     1.59 %
Return on average equity     10.56 %     11.58 %     11.22 %     11.42 %
Net interest margin     4.02 %     4.25 %     4.07 %     4.26 %
Net interest income-fully taxable equivalent   $ 10,699     $ 11,022     $ 21,498     $ 21,901  
Efficiency ratio     46.46 %     46.28 %     47.01 %     46.02 %
Average equity to average assets     13.98 %     13.97 %     13.75 %     13.93 %
                                 
Allowance for loan losses                                
Beginning balance   $ 8,297     $ 8,291     $ 8,227     $ 8,349  
Provision for losses     701       355       804       1,026  
Charge-offs     (1,053 )     (730 )     (1,244 )     (1,484 )
Recoveries     26       36       184       61  
Ending balance   $ 7,971     $ 7,952     $ 7,971     $ 7,952  
                                 
                                 
                                 
Asset Quality Data  
(Unaudited)  
   
($ in thousands)            
Nonperforming assets   June 30, 2014     June 30, 2013  
Nonaccrual loans   $ 2,335     $ 10,428  
Nonaccrual restructured loans     2,674       1,522  
Total nonperforming loans     5,009       11,950  
Other real estate owned     5,293       969  
Total nonperforming assets   $ 10,302     $ 12,919  
Accruing restructured loans     6,240       6,234  
Loans 90 days or more past due   $ 266     $ 125  
                 
Asset quality ratios                
Nonperforming assets to loans net of unearned income and deferred fees, plus other real estate owned     1.72 %     2.19 %
Allowance for loans losses to total loans     1.34 %     1.35 %
Allowance for loan losses to nonperforming loans     159.13 %     66.54 %
Loans past due 90 days or more to loans net of unearned income and deferred fees     0.04 %     0.02 %

Contact Information

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

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