National Bankshares, Inc. Reports Income for the Nine Months Ended September 30, 2014
BLACKSBURG, VA--(Marketwired - Oct 23, 2014) - Today, National Bankshares, Inc. ( NASDAQ : NKSH ) announced net income of approximately $12.78 million through September 30, 2014 compared to $13.17 million reported for the first nine months of 2013. Basic earnings per share were $1.84 which compares with $1.90 reported at September 30, 2013. The return on average assets for the nine months ended September 30, 2014 was 1.53% compared to 1.61% in 2013. The return on average equity was 10.99% and 11.70% for the same two periods. At September 30, 2014, the Company had total assets of almost $1.12 billion.
National Bankshares' Chairman, President & CEO James G. Rakes commented, "We continue to seek ways to grow our bank and build value for our stockholders. We have money to lend and are ready to assist with our customers' financial needs. While there continues to be aggressive competition for loan and deposit growth, we are staying true to our community banking fundamentals by delivering the very best products and personal customer service in the communities that we serve."
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 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, 2014 |
|
|
September 30, 2013 |
|
|
December 31, 2013 |
|
| Assets |
|
|
|
|
|
|
|
|
|
|
|
|
| Cash and due from banks |
|
$ |
12,815 |
|
|
$ |
13,806 |
|
|
$ |
13,283 |
|
| Interest-bearing deposits |
|
|
87,621 |
|
|
|
63,452 |
|
|
|
98,066 |
|
| Federal funds sold |
|
|
--- |
|
|
|
--- |
|
|
|
--- |
|
| Securities available for sale, at fair value |
|
|
205,020 |
|
|
|
190,264 |
|
|
|
181,712 |
|
| Securities held to maturity |
|
|
162,457 |
|
|
|
164,752 |
|
|
|
163,983 |
|
| Restricted stock |
|
|
1,089 |
|
|
|
1,414 |
|
|
|
1,414 |
|
| |
Total securities |
|
|
368,566 |
|
|
|
356,430 |
|
|
|
347,109 |
|
| Mortgage loans held for sale |
|
|
725 |
|
|
|
617 |
|
|
|
1,276 |
|
| Loans: |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Loans, net of unearned income and deferred fees |
|
|
595,801 |
|
|
|
590,664 |
|
|
|
595,690 |
|
| |
Less: allowance for loan losses |
|
|
(8,031 |
) |
|
|
(8,090 |
) |
|
|
(8,227 |
) |
| |
|
Loans, net |
|
|
587,770 |
|
|
|
582,574 |
|
|
|
587,463 |
|
| Premises and equipment, net |
|
|
9,445 |
|
|
|
10,025 |
|
|
| 9,951 |
|
| Accrued interest receivable |
|
|
5,708 |
|
|
|
6,044 |
|
|
|
5,949 |
|
| Other real estate owned |
|
|
5,145 |
|
|
|
973 |
|
|
|
4,712 |
|
| Intangible assets and goodwill |
|
|
7,492 |
|
|
|
8,568 |
|
|
|
8,299 |
|
| Bank-owned life insurance |
|
|
21,643 |
|
|
|
21,020 |
|
|
|
21,181 |
|
| Other assets |
|
|
9,329 |
|
|
|
13,894 |
|
|
|
13,341 |
|
| |
|
Total assets |
|
$ |
1,116,259 |
|
|
$ |
1,077,403 |
|
|
$ |
1,110,630 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Liabilities and Stockholders' Equity |
|
|
|
|
|
|
|
|
|
|
|
|
| Noninterest-bearing deposits |
|
$ |
153,118 |
|
|
$ |
147,928 |
|
|
$ |
142,645 |
|
| Interest-bearing demand deposits |
|
| 492,005 |
|
|
|
453,044 |
|
|
|
501,541 |
|
| Savings deposits |
|
|
79,870 |
|
|
|
73,952 |
|
|
|
74,141 |
|
| Time deposits |
|
|
223,930 |
|
|
|
248,574 |
|
|
|
241,709 |
|
| |
|
Total deposits |
|
|
948,923 |
|
|
|
923,498 |
|
|
|
960,036 |
|
| Other borrowed funds |
|
|
--- |
|
|
|
--- |
|
|
|
--- |
|
| Accrued interest payable |
|
|
67 |
|
|
|
97 |
|
|
|
92 |
|
| Other liabilities |
|
|
4,447 |
|
|
|
7,514 |
|
|
|
4,610 |
|
| |
|
Total liabilities |
|
|
953,437 |
|
|
|
931,109 |
|
|
|
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, 6,950,474 shares in 2014 and 6,947,974 shares in 2013 |
|
|
8,688 |
|
|
|
8,685 |
|
|
|
8,685 |
|
| Retained earnings |
|
|
163,181 |
|
|
|
153,578 |
|
|
|
154,171 |
|
| Accumulated other comprehensive loss, net |
|
|
(9,047 |
) |
|
|
(15,969 |
) |
|
|
(16,964 |
) |
| |
|
Total stockholders' equity |
|
|
162,822 |
|
|
|
146,294 |
|
|
|
145,892 |
|
| |
|
Total liabilities and stockholders' equity |
|
$ |
1,116,259 |
|
|
$ |
1,077,403 |
|
|
$ |
1,110,630 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
| National Bankshares, Inc. and Subsidiaries |
| Consolidated Statements of Income |
| (Unaudited) |
| |
|
|
|
| |
|
| |
|
Three Months Ended |
|
|
Nine Months Ended |
|
| |
|
September 30, 2014 |
|
September 30, 2013 |
|
|
September 30, 2014 |
|
|
September 30, 2013 |
|
| ($ in thousands, except for share and per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest and fees on loans |
|
$ |
7,766 |
|
$ |
8,196 |
|
|
$ |
23,520 |
|
|
$ |
24,707 |
|
| Interest on federal funds |
|
|
--- |
|
|
--- |
|
|
|
--- |
|
|
|
--- |
|
| Interest on interest-bearing deposits |
|
|
64 |
|
|
45 |
|
|
|
193 |
|
|
|
161 |
|
| Interest on securities - taxable |
|
|
1,718 |
|
|
1,722 |
|
|
|
5,068 |
|
|
|
4,928 |
|
| Interest on securities - nontaxable |
|
|
1,436 |
|
|
1,581 | |
|
|
4,410 |
|
|
|
4,847 |
|
| |
Total interest income |
|
|
10,984 |
|
|
11,544 |
|
|
|
33,191 |
|
|
|
34,643 |
|
| Interest Expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest on time deposits of $100 or more |
|
|
139 |
|
|
196 |
|
|
|
437 |
|
|
|
694 |
|
| Interest on other deposits |
|
|
1,008 |
|
|
1,192 |
|
|
|
3,320 |
|
|
|
3,921 |
|
| Interest on borrowed funds |
|
|
--- |
|
|
--- |
|
|
|
--- |
|
|
|
--- |
|
| |
Total interest expense |
|
|
1,147 |
|
|
1,388 |
|
|
|
3,757 |
|
|
|
4,615 |
|
| |
Net interest income |
|
|
9,837 |
|
|
10,156 |
|
|
|
29,434 |
| |
|
30,028 |
|
| Provision for loan losses |
|
|
356 |
|
|
303 |
|
|
|
1,160 |
|
|
|
1,329 |
|
| Net income after provision for loan losses |
|
|
9,481 |
|
|
9,853 |
|
|
|
28,274 |
|
|
|
28,699 |
|
| Noninterest Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Service charges on deposit accounts |
|
|
634 |
|
|
709 |
|
|
|
1,833 |
|
|
|
1,922 |
|
| Other service charges and fees |
|
|
42 |
|
|
37 |
|
|
|
145 |
|
|
|
139 |
|
| Credit card fees |
|
|
929 |
|
|
834 |
|
|
|
2,687 |
|
|
|
2,427 |
|
| Trust Income |
|
|
296 |
|
|
267 |
|
|
|
921 |
|
|
|
867 |
|
| Bank-owned life insurance |
|
|
174 |
|
|
182 |
| |
|
526 |
|
|
|
546 |
|
| Other income |
|
|
163 |
|
|
183 |
|
|
|
669 |
|
|
|
687 |
|
| Realized securities gains (losses), net |
|
|
4 |
|
|
(62 |
) |
|
|
5 |
|
|
|
(44 |
) |
| |
Total noninterest income |
|
|
2,242 |
|
|
2,150 |
|
|
|
6,786 |
|
|
|
6,544 |
|
| Noninterest Expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Salaries and employee benefits |
|
|
2,948 |
|
|
3,031 |
|
|
|
8,954 |
|
|
|
8,963 |
|
| Occupancy and furniture and fixtures |
|
|
408 |
|
|
394 |
|
|
|
1,265 |
|
|
|
1,230 |
|
| Data processing and ATM |
|
|
426 |
|
|
477 |
|
|
|
1,183 |
|
|
|
1,288 |
|
| FDIC assessment |
|
| 147 |
|
|
136 |
|
|
|
411 |
|
|
|
408 |
|
| Credit card processing |
|
|
673 |
|
|
656 |
|
|
|
1,887 |
|
|
|
1,854 |
|
| Intangibles and goodwill amortization |
|
|
269 |
|
|
269 |
|
|
|
807 |
|
|
|
809 |
|
| Net cost of other real estate owned |
|
|
98 |
|
|
52 |
|
|
|
259 |
|
|
|
192 |
|
| Franchise taxes |
|
|
308 |
|
|
280 |
|
|
|
874 |
|
|
|
803 |
|
| Other operating expenses |
|
|
859 |
|
|
848 |
|
|
|
2,738 |
|
|
|
2,697 |
|
| |
Total noninterest expense |
|
|
6,136 |
|
|
6,143 |
|
|
|
18,378 |
|
|
|
18,244 |
|
| Income before income tax expense |
|
|
5,587 |
|
|
5,860 |
|
|
|
16,682 |
|
|
|
16,999 | |
| Income tax expense |
|
|
1,324 |
|
|
1,343 |
|
|
|
3,906 |
|
|
|
3,831 |
|
| |
Net income |
|
$ |
4,263 |
|
$ |
4,517 |
|
|
$ |
12,776 |
|
|
$ |
13,168 |
|
| Basic net income per share |
|
$ |
0.61 |
|
$ |
0.65 |
|
|
$ |
1.84 |
|
|
$ |
1.90 |
|
| Fully diluted net income per share |
|
$ |
0.61 |
|
$ |
0.65 |
|
|
$ |
1.84 |
|
|
$ |
1.89 |
|
| Weighted average number of common shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Basic |
|
|
6,948,681 |
|
|
6,947,974 |
|
|
|
6,948,212 |
|
|
|
6,947,974 |
|
| |
Diluted |
|
|
6,956,777 |
|
|
6,972,769 |
|
|
|
6,960,444 | |
|
|
6,970,063 |
|
| Dividends declared per share |
|
|
--- |
|
|
--- |
|
|
$ |
0.55 |
|
|
$ |
0.54 |
|
| Dividend payout ratio |
|
|
--- |
|
|
--- |
|
|
|
29.91 |
% |
|
|
28.49 |
% |
| Book value per share |
|
|
--- |
|
|
--- |
|
|
$ |
23.43 |
|
|
$ |
21.06 |
|
| |
| National Bankshares, Inc. and Subsidiaries |
| Consolidated Statements of Comprehensive Income |
| (Unaudited) |
| |
|
|
|
| |
|
Three Months Ended |
|
| ($ in thousands) |
|
September 30, 2014 |
|
|
September 30, 2013 |
|
| Net income |
|
$ |
4,263 |
|
|
$ |
4,517 |
|
| |
|
|
|
|
|
|
|
|
| Other Comprehensive Income, net of tax |
|
|
|
|
|
|
|
|
| Unrealized holding gains (losses) on available for sale securities net of deferred tax of $919 in 2014 and ($2,048) in 2013 |
|
|
1,708 |
|
|
|
(3,804 |
) |
| Reclassification adjustment, net of income tax (benefit) of ($1) in 2014 and $24 in 2013 | |
|
(3 |
) |
|
|
44 |
|
| Other comprehensive income (loss), net of tax of $918 in 2014 and ($2,024) in 2013 |
|
$ |
1,705 |
|
|
$ |
(3,760 |
) |
| Total Comprehensive Income |
|
$ |
5,968 |
|
|
$ |
757 |
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
| |
|
Nine Months Ended |
|
| ($ in thousands) |
|
September 30, 2014 |
|
|
September 30, 2013 |
|
| Net income |
|
$ |
12,776 |
|
|
$ |
13,168 |
|
| |
|
|
|
|
|
|
|
|
| Other Comprehensive Income, net of tax |
|
|
|
|
|
|
|
|
| Unrealized holding gains (losses) on available for sale securities net of deferred tax of $4,264 in 2014 and ($7,142) in 2013 |
|
|
7,920 |
|
|
|
(13,263 |
) |
| Reclassification adjustment, net of income tax (benefit) of ($1) in 2014 and $18 in 2013 |
|
|
(3 |
) |
|
|
32 |
|
| Other comprehensive income (loss), net of tax of $4,263 in 2014 and ($7,124) in 2013 |
|
$ |
7,917 |
|
|
$ |
(13,231 |
) |
| Total Comprehensive Income (Loss) |
|
$ |
20,693 |
|
|
$ |
(63 |
) |
| | |
|
|
|
|
|
|
|
| |
| Key Ratios and Other Data |
| (Unaudited) |
| |
|
|
|
|
|
|
| ($ in thousands) |
|
Three Months Ended |
|
|
Nine Months Ended |
|
| Average Balances |
|
September 30, 2014 |
|
|
September 30, 2013 |
|
|
September 30, 2014 |
|
|
September 30, 2013 |
|
| Cash and due from banks |
|
$ |
11,863 |
|
|
$ |
11,486 |
|
|
$ |
11,811 |
|
|
$ |
11,877 |
|
| Interest-bearing deposits |
|
|
100,349 |
|
|
|
61,365 |
|
|
|
101,908 |
|
|
|
80,414 |
|
| Securities available for sale |
|
|
202,113 |
|
|
|
199,709 |
|
|
|
193,549 |
|
|
|
198,866 |
|
| Securities held to maturity |
|
|
162,531 |
|
|
|
165,881 |
|
|
|
163,268 |
|
|
|
165,014 |
|
| Restricted stock |
|
|
1,089 |
|
|
|
1,414 |
|
|
|
1,187 |
|
|
|
1,498 |
|
| Mortgage loans held for sale | |
|
439 |
|
|
|
757 |
|
|
|
359 |
|
|
|
1,220 |
|
| Gross Loans |
|
|
593,165 |
|
|
|
588,379 |
|
|
|
592,528 |
|
|
|
584,920 |
|
| Loans, net |
|
|
584,308 |
|
|
|
579,404 |
|
|
|
583,521 |
|
|
|
575,741 |
|
| Intangible assets |
|
|
7,646 |
|
|
|
8,722 |
|
|
|
7,914 |
|
|
|
8,989 |
|
| Total assets |
|
|
1,121,501 |
|
|
|
1,078,837 |
|
|
|
1,115,643 |
|
|
|
1,090,628 |
|
| Total deposits |
|
|
956,804 |
|
|
|
925,382 |
|
|
|
955,058 |
|
|
|
932,620 |
|
| Other borrowings |
|
|
--- |
|
|
|
--- |
|
|
|
--- |
|
|
|
--- |
|
| Stockholders' equity |
|
|
160,310 |
|
|
|
145,806 |
|
|
|
155,447 |
|
| |
150,424 |
|
| Interest-earning assets |
|
|
1,068,583 |
|
|
|
1,031,192 |
|
|
|
1,066,031 |
|
|
|
1,034,934 |
|
| Interest-bearing liabilities |
|
|
808,075 |
|
|
|
784,421 |
|
|
|
810,808 |
|
|
|
791,940 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Financial ratios |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Return on average assets |
|
|
1.51 |
% |
|
|
1.66 |
% |
|
|
1.53 |
% |
|
|
1.61 |
% |
| Return on average equity |
|
|
10.55 |
% |
|
|
12.29 |
% |
|
|
10.99 |
% |
|
|
11.70 |
% |
| Net interest margin |
|
|
3.99 |
% |
|
|
4.29 |
% |
|
|
4.05 |
% |
|
|
4.27 |
% |
| Net interest income-fully taxable equivalent |
|
$ |
10,755 |
|
|
$ |
11,144 | |
|
$ |
32,253 |
|
|
$ |
33,045 |
|
| Efficiency ratio |
|
|
47.21 |
% |
|
|
46.21 |
% |
|
|
47.08 |
% |
|
|
46.08 |
% |
| Average equity to average assets |
|
|
14.29 |
% |
|
|
13.52 |
% |
|
|
13.93 |
% |
|
|
13.79 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Allowance for loan losses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Beginning balance |
|
$ |
7,971 |
|
|
$ |
7,952 |
|
|
$ |
8,227 |
|
|
$ |
8,349 |
|
| Provision for losses |
|
|
356 |
|
|
|
303 |
|
|
|
1,160 |
|
|
|
1,329 |
|
| Charge-offs |
|
|
(324 |
) |
|
|
(196 |
) |
|
|
(1,568 |
) |
|
|
(1,680 |
) |
| Recoveries |
|
| 28 |
|
|
|
31 |
|
|
|
212 |
|
|
|
92 |
|
| Ending balance |
|
$ |
8,031 |
|
|
$ |
8,090 |
|
|
$ |
8,031 |
|
|
$ |
8,090 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| Asset Quality Data |
| (Unaudited) |
| |
|
|
|
|
|
|
| ($ in thousands) |
|
September 30, 2014 |
|
|
September 30, 2013 |
|
| Nonperforming assets |
|
|
|
|
|
|
|
|
| Nonaccrual loans |
|
$ |
5,366 |
|
|
$ |
10,194 |
|
| Nonaccrual restructured loans |
|
|
2,360 |
|
|
|
1,042 |
|
| Total nonperforming loans |
|
|
7,726 |
|
|
|
11,236 |
|
| Other real estate owned |
|
|
5,145 |
|
|
|
973 |
|
| Total nonperforming assets |
|
$ |
12,871 |
|
|
$ |
12,209 | |
| Accruing restructured loans |
|
|
5,947 |
|
|
|
6,545 |
|
| Loans 90 days or more past due |
|
$ |
485 |
|
|
$ |
149 |
|
| |
|
|
|
|
|
|
|
|
| Asset quality ratios |
|
|
|
|
|
|
|
|
| Nonperforming assets to loans net of unearned income and deferred fees, plus other real estate owned |
|
|
2.14 |
% |
|
|
2.06 |
% |
| Allowance for loans losses to total loans |
|
|
1.35 |
% |
|
|
1.37 |
% |
| Allowance for loan losses to nonperforming loans |
|
|
103.95 |
% |
|
|
72.00 |
% |
| Loans past due 90 days or more to loans net of unearned income and deferred fees |
|
|
0.08 |
% |
|
|
0.03 |
% |
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
CONTACTS: JAMES G. RAKES
CHAIRMAN, PRESIDENT & CEO
(540) 951-6236 Email Contact
DAVID K. SKEENS
TREASURER & CFO
(540) 951-6347 Email Contact
