National Bankshares, Inc. Reports First Quarter Income

Marketwired

BLACKSBURG, VA--(Marketwired - Apr 18, 2013) -  Today, National Bankshares, Inc. (NASDAQ: NKSH) announced results for the first quarter of 2013. Net income was $4.22 million for the quarter ended March 31, 2013. Basic net income per share was $0.61. The return on average assets for the first quarter was 1.56% and the return on average equity was 11.26%. At March 31, 2013, the Company had total assets of $1.10 billion, an increase of 1.35% when compared to the end of the first quarter of 2012.

National Bankshares' Chairman, President & CEO James G. Rakes commented, "During the first quarter of 2013, we were faced with the continued compression of the net interest margin and soft loan demand, but we still are delivering a strong financial performance for our stockholders. Although total loans at quarter-end, almost $574.96 million, were down slightly from the total of $584.56 million at the end of March last year, our returns on assets and equity compare favorably among peer financial institutions. We are striving to provide services and loan products to our customers and market area by adding quality loans to our portfolio. It is important to us as community bankers to put deposit dollars from our local markets to work in those same markets by making good loans." Mr. Rakes went on to say, "Our investment in the Company's technology infrastructure continued into the first quarter with the roll-out of our mobile banking product. As community bankers, we believe that it is important to have a solid platform from which to offer customers a full range of products and services. But we think it is even more important for our customers to have a trusted person to help them with their financial transactions. It is this relationship-based business philosophy that has guided us since the founding of National Bank in 1891 and will continue to guide us in the future."

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)   March 31, 2013     March 31, 2012     December 31, 2012  
Assets                        
Cash and due from banks   $ 10,674     $ 12,241     $ 14,783  
Interest-bearing deposits     107,176       101,301       96,597  
Securities available for sale     192,954       198,346       191,504  
Securities held to maturity     166,947       139,367       160,539  
    Total securities     359,901       337,713       352,043  
Mortgage loans held for sale     313       1,371       2,796  
Loans:                        
  Loans, net of unearned income and deferred fees     574,958       584,564       592,162  
  Less: allowance for loan losses     (8,291 )     (8,063 )     (8,349 )
    Loans, net     566,667       576,501       583,813  
Bank premises and equipment, net     10,237       10,563       10,401  
Accrued interest receivable     5,878       6,175       6,247  
Other real estate owned     1,094       940       1,435  
Intangible assets     9,106       10,189       9,377  
Bank-owned life insurance     20,690       19,991       20,523  
Other assets     6,767       6,857       6,346  
    Total assets   $ 1,098,503     $ 1,083,842     $ 1,104,361  
                         
Liabilities and Stockholders' Equity                        
Noninterest-bearing deposits   $ 144,815     $ 145,070     $ 144,252  
Interest-bearing demand deposits     449,992       415,352       455,713  
Savings deposits     72,420       65,322       69,063  
Time deposits     269,892       306,048       277,738  
    Total deposits     937,119       931,792       946,766  
Accrued interest payable     146       191       139  
Other liabilities     7,878       7,067       7,347  
    Total liabilities     945,143       939,050       954,252  
                         
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 6,947,974 shares at March 31, 2013, 6,939,974 at March 31, 2012 and 6,947,974 at December 31, 2012     8,685       8,675       8,685  
Retained earnings     148,378       138,374       144,162  
Accumulated other comprehensive loss, net     (3,703 )     (2,257 )     (2,738 )
    Total stockholders' equity     153,360       144,792       150,109  
      Total liabilities and stockholders' equity   $ 1,098,503     $ 1,083,842     $ 1,104,361  
                               
                               
                               
National Bankshares, Inc. and Subsidiaries
Consolidated Statements of Income
(Unaudited)
 
    Three Months Ended
    March 31, 2013   March 31, 2012
($ in thousands, except for per share data)            
Interest Income            
Interest and fees on loans   $ 8,319   $ 8,878
Interest on interest-bearing deposits     58     71
Interest on securities - taxable     1,539     1,589
Interest on securities - nontaxable     1,648     1,576
  Total interest income     11,564     12,114
             
Interest Expense            
Interest on time deposits of $100,000 or more     268     425
Interest on other deposits     1,411     1,692
  Total interest expense     1,679     2,117
  Net interest income     9,885     9,997
Provision for loan losses     671     672
  Net interest income after provision for loan losses     9,214     9,325
             
Noninterest Income            
Service charges on deposit accounts     588     631
Other service charges and fees     60     49
Credit card fees     740     794
Trust income     289     326
Bank-owned life insurance     188     200
Other income     150     99
Realized securities gains, net     95     53
  Total noninterest income     2,110     2,152
             
Noninterest Expense            
Salaries and employee benefits     2,940     2,956
Occupancy and furniture and fixtures     432     397
Data processing and ATM     393     392
FDIC assessment     136     109
Credit card processing     552     572
Intangibles and goodwill amortization     271     271
Net costs of other real estate owned     75     48
Franchise taxes     258     162
Other operating expenses     889     804
  Total noninterest expense     5,946     5,711
Income before income tax expense     5,378     5,766
Income tax expense     1,162     1,337
  Net income   $ 4,216   $ 4,429
             
Basic net income per share   $ 0.61   $ 0.64
Fully diluted net income per share   $ 0.60   $ 0.64
Weighted average outstanding number of common shares            
  Basic     6,947,974     6,939,974
  Diluted     6,969,073     6,954,637
Dividends declared per share     ---     ---
Dividend payout ratio     ---     ---
Book value per share   $ 22.07   $ 20.86
             
             
             
Consolidated Statements of Comprehensive Income  
(Unaudited)  
   
    Three Months Ended  
($ in thousands, except for per share data)   March 31, 2013     March 31, 2012  
Net Income   $ 4,216     $ 4,429  
                 
Other Comprehensive Income, net of tax                
Unrealized holding losses on available for sale securities net of deferred taxes of ($486) and ($489)     (903 )     (907 )
Reclassification adjustment, net of income taxes of ($33) and ($15)     (62 )     (29 )
Other comprehensive loss, net of tax of ($1,485) and ($504)   $ (965 )   $ (936 )
Total Comprehensive Income   $ 3,251     $ 3,493  
                 
                 
                 
Key Ratios and Other Data  
(Unaudited)  
   
Average Balances   March 31, 2013     March 31, 2012  
Cash and due from banks   $ 12,023     $ 11,865  
Interest-bearing deposits     99,216       110,901  
Securities available for sale     190,938       175,232  
Securities held to maturity     162,264       140,743  
Mortgage loans held for sale     1,507       1,213  
Gross loans     583,337       585,080  
Loans, net     574,030       575,583  
Intangible assets     9,262       10,344  
Total assets     1,092,880       1,068,848  
Total deposits     933,185       918,387  
Other borrowings     ---       ---  
Stockholders' equity     151,852       143,603  
Interest-earning assets     1,033,967       1,012,224  
Interest-bearing liabilities     795,321       780,804  
                 
Financial ratios                
Return on average assets     1.56 %     1.67 %
Return on average equity     11.26 %     12.40 %
Net interest margin     4.28 %     4.36 %
Net interest income - fully taxable equivalent   $ 10,906     $ 10,940  
Efficiency ratio     45.68 %     43.63 %
Average equity to average assets     13.89 %     13.44 %
                 
Allowance for loan losses                
Beginning balance   $ 8,349     $ 8,068  
Provision for losses     671       672  
Charge-offs     (754 )     (700 )
Recoveries     25       23  
Ending balance   $ 8,291     $ 8,063  
                 
                 
                 
Asset Quality Data  
(Unaudited)  
   
Nonperforming assets   March 31, 2013     March 31, 2012  
Nonaccrual loans   $ 10,734     $ 1,789  
Nonaccrual restructured loans     1,691       3,539  
Total nonperforming loans     12,425       5,328  
Other real estate owned     1,094       940  
Total nonperforming assets   $ 13,519     $ 6,268  
Accruing restructured loans   $ 5,732     $ 3,742  
Loans 90 days or more past due   $ 568     $ 210  
                 
Asset quality ratios                
Nonperforming assets to loans net of unearned income and deferred fees, plus other real estate owned     2.35 %     1.07 %
Allowance for loan losses to total loans     1.44 %     1.38 %
Allowance for loan losses to nonperforming loans     66.73 %     151.33 %
Loans past due 90 days or more to loans net of unearned income and deferred fees     0.10 %     0.04 %
Contact:
CONTACTS:
JAMES G. RAKES
CHAIRMAN, PRESIDENT & CEO
(540) 951-6236
Email Contact

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

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