National Bankshares, Inc. Reports Second Quarter and First Half Earnings
BLACKSBURG, VA--(Marketwired - Jul 28, 2016) - National Bankshares, Inc. ( NASDAQ : NKSH ) today announced its results of operations for the second quarter and first half of 2016. The Company reported net income of $7.64 million for the six months ended June 30, 2016 compared to $8.08 million at June 30, 2015. Basic earnings per share were $1.10 at June 30, 2016 compared to $1.16 for the same period in 2015. For the first half of the year, the return on average assets was 1.28% and the return on average equity was 8.65% compared to 1.41% and 9.55%, respectively, for the first six months of 2015. At June 30, 2016, the Company had total assets of $1.21 billion which was an increase of 5.40% when compared to $1.15 billion at the end of June 2015.
Commenting on the Company's financial results, National Bankshares Chairman, President & CEO James G. Rakes said, "The low interest rate environment continues to put pressure on our margins and impact earnings. Increasing competition for loans, along with lower yields for certain investment portfolio assets, are also reflected in the past quarter's numbers. As National Bank commemorates its 125 th anniversary, we are focused on positioning ourselves for future growth by improving our product offerings and exceeding our customers' expectations for personalized service."
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) |
|
June 30, 2016 |
|
|
June 30, 2015 |
|
|
December 31, 2015 |
|
| Assets |
|
|
|
|
|
|
|
|
|
|
|
|
| Cash and due from banks |
|
$ |
14,320 |
|
|
$ |
11,353 |
|
|
$ |
12,152 |
|
| Interest-bearing deposits |
|
|
75,892 |
|
|
|
83,818 |
|
|
|
130,811 |
|
| Federal funds sold |
|
|
--- |
|
|
|
--- |
|
|
|
--- |
|
| Securities available for sale, at fair value |
|
|
303,242 |
|
|
|
218,524 |
|
|
|
236,131 |
|
| Securities held to maturity |
|
|
138,424 |
|
|
|
155,704 |
|
|
|
152,028 |
|
| Restricted stock |
|
|
1,170 |
|
|
|
1,129 |
|
|
|
1,129 |
|
| |
|
Total securities |
|
|
442,836 |
|
|
|
375,357 |
|
|
|
389,288 |
|
| Mortgage loans held for sale |
|
|
663 |
|
|
|
853 |
|
|
|
634 |
|
| Loans: |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Loans, net of unearned income and deferred fees |
|
|
630,916 |
|
|
|
626,941 |
|
|
|
619,008 |
|
| |
Less: allowance for loan losses |
|
|
(8,195 |
) |
|
|
(8,131 |
) |
|
|
(8,297 |
) |
| |
|
Loans, net |
|
|
622,721 |
|
|
|
618,810 |
|
|
|
610,711 |
|
| Premises and equipment, net |
|
|
8,718 |
|
|
|
8,878 |
|
|
| 9,020 |
|
| Accrued interest receivable |
|
|
5,259 |
|
|
|
5,857 |
|
|
|
5,769 |
|
| Other real estate owned |
|
|
3,425 |
|
|
|
4,441 |
|
|
|
4,165 |
|
| Intangible assets and goodwill |
|
|
6,046 |
|
|
|
6,685 |
|
|
|
6,224 |
|
| Bank-owned life insurance |
|
|
22,699 |
|
|
|
22,097 |
|
|
|
22,401 |
|
| Other assets |
|
|
7,720 |
|
|
|
10,122 |
|
|
|
8,564 |
|
| |
|
Total assets |
|
$ |
1,210,299 |
|
|
$ |
1,148,271 |
|
|
$ |
1,199,739 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Liabilities and Stockholders' Equity |
|
|
|
|
|
|
|
|
|
|
|
|
| Noninterest-bearing deposits |
|
$ |
171,350 |
|
|
$ |
157,983 |
|
|
$ |
166,453 |
|
| Interest-bearing demand deposits |
| |
575,364 |
|
|
|
526,749 |
|
|
|
569,787 |
|
| Savings deposits |
|
|
95,484 |
|
|
|
86,354 |
|
|
|
90,236 |
|
| Time deposits |
|
|
179,540 |
|
|
|
203,070 |
|
|
|
192,383 |
|
| |
|
Total deposits |
|
|
1,021,738 |
|
|
|
974,156 |
|
|
|
1,018,859 |
|
| Other borrowed funds |
|
|
--- |
|
|
|
--- |
|
|
|
--- |
|
| Accrued interest payable |
|
|
56 |
|
|
|
61 |
|
|
|
56 |
|
| Other liabilities |
|
|
8,577 |
|
|
|
6,484 |
|
|
|
8,710 |
|
| |
|
Total liabilities |
|
|
1,030,371 |
|
|
|
980,701 |
|
|
|
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 June 30, 2016 and December 31, 2015 and 6,954,474 shares at June 30, 2015. |
|
|
8,697 |
|
|
|
8,693 |
|
|
|
8,697 |
|
| Retained earnings |
|
|
175,170 |
|
|
|
167,764 |
|
|
|
171,353 |
|
| Accumulated other comprehensive loss, net |
|
|
(3,939 |
) |
|
|
(8,887 |
) |
|
|
(7,936 |
) |
| |
|
Total stockholders' equity |
|
|
179,928 |
|
|
|
167,570 |
|
|
|
172,114 |
|
| |
|
Total liabilities and stockholders' equity |
|
$ |
1,210,299 |
|
|
$ |
1,148,271 |
|
|
$ |
1,199,739 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| National Bankshares, Inc. and Subsidiaries |
|
| Consolidated Statements of Income |
|
| (Unaudited) |
|
| |
|
| ($ in thousands, except |
|
Three Months Ended |
|
Six Months Ended |
|
| for share and per share data) |
|
June 30, 2016 |
|
June 30, 2015 |
|
June 30, 2016 |
|
|
June 30, 2015 |
|
| Interest Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest and fees on loans |
|
$ |
7,289 |
|
$ |
7,600 |
|
$ |
14,623 |
|
|
$ |
15,210 |
|
| Interest on federal funds |
|
|
--- |
|
|
--- |
|
|
--- |
|
|
|
--- |
|
| Interest on interest-bearing deposits |
|
|
150 |
|
|
55 |
|
|
312 |
|
|
|
119 |
|
| Interest on securities - taxable |
|
|
1,567 |
|
|
1,712 |
|
|
3,244 |
|
|
|
3,446 |
|
| Interest on securities - nontaxable |
|
|
1,286 |
|
|
1,357 | |
|
2,597 |
|
|
|
2,743 |
|
| |
Total interest income |
|
|
10,292 |
|
|
10,724 |
|
|
20,776 |
|
|
|
21,518 |
|
| Interest Expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest on time deposits |
|
|
253 |
|
|
315 |
|
|
527 |
|
|
|
642 |
|
| Interest on other deposits |
|
|
810 |
|
|
736 |
|
|
1,604 |
|
|
|
1,496 |
|
| Interest on borrowed funds |
|
|
--- |
|
|
--- |
|
|
--- |
|
|
|
--- |
|
| |
Total interest expense |
|
|
1,063 |
|
|
1,051 |
|
|
2,131 |
|
|
|
2,138 |
|
| |
Net interest income |
|
|
9,229 |
|
|
9,673 |
|
|
18,645 |
|
|
|
19,380 |
|
| Provision for loan losses |
|
|
654 | |
|
355 |
|
|
857 |
|
|
|
556 |
|
| |
Net income after provision for loan losses |
|
|
8,575 |
|
|
9,318 |
|
|
17,788 |
|
|
|
18,824 |
|
| Noninterest Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Service charges on deposit accounts |
|
|
569 |
|
|
570 |
|
|
1,129 |
|
|
|
1,105 |
|
| Other service charges and fees |
|
|
46 |
|
|
48 |
|
|
118 |
|
|
|
119 |
|
| Credit card fees |
|
|
969 |
|
|
976 |
|
|
1,839 |
|
|
|
1,871 |
|
| Trust Income |
|
|
354 |
|
|
299 |
|
|
677 |
|
|
|
588 |
|
| Bank-owned life insurance |
|
|
151 |
|
|
150 |
|
|
298 |
|
|
|
299 |
|
| Other income |
|
|
455 |
|
|
419 |
|
| 800 |
|
|
|
733 |
|
| Realized securities gain, net |
|
|
74 |
|
|
5 |
|
|
98 |
|
|
|
3 |
|
| |
Total noninterest income |
|
|
2,618 |
|
|
2,467 |
|
|
4,959 |
|
|
|
4,718 |
|
| Noninterest Expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Salaries and employee benefits |
|
|
2,907 |
|
|
3,232 |
|
|
6,475 |
|
|
|
6,283 |
|
| Occupancy and furniture and fixtures |
|
|
448 |
|
|
420 |
|
|
925 |
|
|
|
869 |
|
| Data processing and ATM |
|
|
595 |
|
|
408 |
|
|
1,006 |
|
|
|
843 |
|
| FDIC assessment |
|
|
145 |
|
|
135 |
|
|
286 |
|
|
|
270 |
|
| Credit card processing |
|
|
712 |
|
|
675 |
|
|
1,334 |
|
|
| 1,285 |
|
| Intangibles and goodwill amortization |
|
|
68 |
|
|
269 |
|
|
178 |
|
|
|
538 |
|
| Net cost of other real estate owned |
|
|
39 |
|
|
43 |
|
|
108 |
|
|
|
507 |
|
| Franchise taxes |
|
|
322 |
|
|
322 |
|
|
653 |
|
|
|
630 |
|
| Other operating expenses |
|
|
1,002 |
|
|
861 |
|
|
1,957 |
|
|
|
1,820 |
|
| |
Total noninterest expense |
|
|
6,238 |
|
|
6,365 |
|
|
12,922 |
|
|
|
13,045 |
|
| Income before income tax expense |
|
|
4,955 |
|
|
5,420 |
|
|
9,825 |
|
|
|
10,497 |
|
| Income tax expense |
|
|
1,090 |
|
|
1,310 |
|
|
2,181 |
|
|
|
2,421 |
|
| |
|
Net Income |
|
$ |
3,865 |
|
$ |
4,110 |
|
$ |
7,644 | |
|
$ |
8,076 |
|
| Basic net income per share |
|
$ |
0.56 |
|
$ |
0.59 |
|
$ |
1.10 |
|
|
$ |
1.16 |
|
| Fully diluted net income per share |
|
$ |
0.56 |
|
$ |
0.59 |
|
$ |
1.10 |
|
|
$ |
1.16 |
|
| Weighted average number of common shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Basic |
|
|
6,957,974 |
|
|
6,952,540 |
|
|
6,957,974 |
|
|
|
6,951,513 |
|
| |
Diluted |
|
|
6,957,974 |
|
|
6,956,039 |
|
|
6,957,974 |
|
|
|
6,955,093 |
|
| Dividends declared per share |
|
$ |
0.55 |
|
$ |
0.53 |
|
$ |
0.55 |
|
|
$ |
0.53 |
|
| Dividend payout ratio |
|
|
--- |
|
|
--- |
|
|
50.07 |
% |
|
|
45.64 | % |
| Book value per share |
|
$ |
25.86 |
|
$ |
24.10 |
|
$ |
25.86 |
|
|
$ |
24.10 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| National Bankshares, Inc. and Subsidiaries |
|
| Consolidated Statements of Comprehensive Income (Loss) |
|
| (Unaudited) |
|
| |
|
| ($ in thousands) |
|
Three Months Ended |
|
| |
|
June 30, 2016 |
|
|
June 30, 2015 |
|
| Net income |
|
$ |
3,865 |
|
|
$ |
4,110 |
|
| |
|
|
|
|
|
|
|
|
| Other Comprehensive Income (Loss), net of tax |
|
|
|
|
|
|
|
|
| Unrealized holding gain (loss) on available for sale securities net of tax of $368 and ($3,048) for the periods ended June 30, 2016 and 2015, respectively |
|
|
684 |
|
|
|
(5,665 |
) |
| Reclassification adjustment for gain included in net income, net of tax of ($16) and ($2) for the periods ended June 30, 2016 and 2015, respectively |
|
|
(30 |
) |
|
|
(3 |
) |
| Other comprehensive income (loss), net of tax of $352 and ($3,050) for the periods ended June 30, 2016 and 2015, respectively |
|
$ |
654 |
|
|
$ |
(5,668 |
) |
| Total Comprehensive Income (Loss) | |
$ |
4,519 |
|
|
$ |
(1,558 |
) |
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
Six Months Ended |
|
| ($ in thousands) |
|
June 30, 2016 |
|
|
June 30, 2015 |
|
| Net Income |
|
$ |
7,644 |
|
|
$ |
8,076 |
|
| |
|
|
|
|
|
|
|
|
| Other Comprehensive Income (Loss), Net of Tax |
|
|
|
|
|
|
|
|
| Unrealized holding gain (loss) on available for sale securities net of tax of $2,171 and ($1,728) for the periods ended June 30, 2016 and 2015, respectively |
|
|
4,031 |
|
|
|
(3,213 |
) |
| Reclassification adjustment for gain included in net income, net of tax of ($18) and ($1) for the periods ended June 30, 2016 and 2015, respectively |
|
|
(34 |
) |
|
|
(2 |
) |
| Other comprehensive income (loss), net of tax of $2,153 and ($1,729) for the periods ended June 30, 2016 and 2015, respectively |
|
|
3,997 |
|
|
|
(3,215 |
) |
| Total Comprehensive Income |
|
$ |
11,641 |
|
|
$ |
4,861 |
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| Key Ratios and Other Data |
|
| (Unaudited) |
|
| |
|
| ($ in thousands) | |
Three Months Ended |
|
|
Six Months Ended |
|
| |
|
June 30, 2016 |
|
|
June 30, 2015 |
|
|
June 30, 2016 |
|
|
June 30, 2015 |
|
| Average Balances |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cash and due from banks |
|
$ |
11,217 |
|
|
$ |
11,537 |
|
|
$ |
11,263 |
|
|
$ |
11,451 |
|
| Interest-bearing deposits |
|
|
118,395 |
|
|
|
86,617 |
|
|
|
122,122 |
|
|
|
95,314 |
|
| Securities available for sale |
|
|
283,280 |
|
|
|
229,447 |
|
|
|
264,217 |
|
|
|
225,824 |
|
| Securities held to maturity |
|
|
140,415 |
|
|
|
155,736 |
|
|
|
144,809 |
|
|
|
157,547 |
|
| Restricted stock |
|
|
1,170 |
|
|
|
1,130 |
|
|
|
1,151 |
|
|
|
1,112 |
|
| Mortgage loans held for sale |
|
|
601 |
|
|
| 893 |
|
|
|
514 |
|
|
|
678 |
|
| Gross Loans |
|
|
610,657 |
|
|
|
624,598 |
|
|
|
610,818 |
|
|
|
614,922 |
|
| Loans, net |
|
|
601,700 |
|
|
|
623,764 |
|
|
|
601,628 |
|
|
|
605,808 |
|
| Intangible assets |
|
|
6,085 |
|
|
|
6,839 |
|
|
|
6,128 |
|
|
|
6,974 |
|
| Total assets |
|
|
1,211,217 |
|
|
|
1,155,852 |
|
|
|
1,199,839 |
|
|
|
1,152,732 |
|
| Total deposits |
|
|
1,022,306 |
|
|
|
976,427 |
|
|
|
1,012,721 |
|
|
|
975,118 |
|
| Other borrowings |
|
|
--- |
|
|
|
1 |
|
|
|
--- |
|
|
|
--- |
|
| Stockholders' equity |
|
|
179,452 |
|
|
|
171,616 |
|
|
|
177,722 |
|
|
|
170,461 |
|
| Interest-earning assets |
| |
1,152,614 |
|
|
|
1,098,866 |
|
|
|
1,142,769 |
|
|
|
1,095,694 |
|
| Interest-bearing liabilities |
|
|
851,522 |
|
|
|
817,674 |
|
|
|
845,232 |
|
|
|
819,481 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Financial Ratios |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Return on average assets |
|
|
1.28 |
% |
|
|
1.43 |
% |
|
|
1.28 |
% |
|
|
1.41 |
% |
| Return on average equity |
|
|
8.66 |
% |
|
|
9.61 |
% |
|
|
8.65 |
% |
|
|
9.55 |
% |
| Net interest margin |
|
|
3.52 |
% |
|
|
3.87 |
% |
|
|
3.59 |
% |
|
|
3.90 |
% |
| Net interest income-fully taxable equivalent |
|
$ |
10,089 |
|
|
$ |
10,599 |
|
|
$ |
20,397 |
| |
$ |
21,207 |
|
| Efficiency ratio |
|
|
49.09 |
% |
|
|
48.71 |
% |
|
|
50.96 |
% |
|
|
50.32 |
% |
| Average equity to average assets |
|
|
14.82 |
% |
|
|
14.85 |
% |
|
|
14.81 |
% |
|
|
14.79 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Allowance for Loan Losses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Beginning balance |
|
$ |
8,107 |
|
|
$ |
8,257 |
|
|
$ |
8,297 |
|
|
$ |
8,263 |
|
| Provision for losses |
|
|
654 |
|
|
|
355 |
|
|
|
857 |
|
|
|
556 |
|
| Charge-offs |
|
|
(598 |
) |
|
|
(516 |
) |
|
|
(1,051 |
) |
|
|
(776 |
) |
| Recoveries |
|
|
32 |
|
|
| 35 |
|
|
|
92 |
|
|
|
88 |
|
| Ending balance |
|
$ |
8,195 |
|
|
$ |
8,131 |
|
|
$ |
8,195 |
|
|
$ |
8,131 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Asset Quality Data |
|
| (Unaudited) |
|
| |
|
| ($ in thousands) |
|
June 30, 2016 |
|
|
June 30, 2015 |
|
| Nonperforming Assets |
|
|
|
|
|
|
|
|
| Nonaccrual loans |
|
$ |
1,751 |
|
|
$ |
2,870 |
|
| Nonaccrual restructured loans |
|
|
4,454 |
|
|
|
6,035 |
|
| Total nonperforming loans |
|
$ |
6,205 |
|
|
$ |
8,905 |
|
| Other real estate owned |
|
$ |
3,425 |
|
|
$ |
4,441 |
|
| Total nonperforming assets |
|
$ |
9,630 |
|
|
$ |
13,346 |
|
| Accruing restructured loans |
|
$ |
4,729 |
|
|
$ |
5,943 |
|
| Loans 90 days or more past due |
|
$ |
316 |
|
|
$ |
80 |
|
| |
|
|
|
|
|
|
|
|
| Asset Quality Ratios |
|
|
|
|
|
|
|
|
| Nonperforming assets to loans net of unearned income and deferred fees, plus other real estate owned |
|
|
1.52 |
% |
|
|
2.11 |
% |
| Allowance for loans losses to total loans |
|
|
1.30 |
% |
|
|
1.30 |
% |
| Allowance for loan losses to nonperforming loans |
|
|
132.07 |
% |
|
|
91.31 |
% |
| Loans past due 90 days or more to loans net of unearned income and deferred fees |
|
|
0.05 |
% |
|
|
0.01 |
% |
CONTACTS: JAMES G. RAKES
CHAIRMAN, PRESIDENT & CEO
(540) 951-6236 Email Contact
DAVID K. SKEENS
TREASURER & CFO
(540) 951-6347 Email Contact
