Exhibit 99.1
PRESS RELEASE
FOR IMMEDIATE RELEASE:
National Bancshares Corporation’s 2004 Earnings Increased Over 10%
ORRVILLE, Ohio, February 23, 2005 / PR NEWSWIRE / — As the year 2004 came to a close, National Bancshares Corporation (OTC: NBOH), the holding company of First National Bank (www.fnborrville.com), experienced growth in many areas of the company. From the financial perspective, National Bancshares reached new highs in earnings and balance sheet growth. Net income of over $2.9 million, increased $267 thousand, or 10.1%, above that of the previous year. This increase was driven by growth in both net interest income and non-interest income. A number of balance sheet totals posted gains as well. Total assets reached over $308 million, growing by $7.2 million, or 2.4%, above the end of 2003. Total loans grew by $9.7 million, or 5.2%, while total deposits increased by $5.7 million, or 2.3%, above December 31, 2003.
Cash dividends declared for the year 2004 amounted to 61¢ per share. “This is a 5.2% increase over the previous year,” reported Charles Dolezal, President. “This continues our long history of increasing cash dividends for over 35 consecutive years. The market value of our common stock increased approximately 13.4% during the course of 2004.”
“As the competitive scene in the markets we serve changed during the past year, we added sales staff and continued the extensive training programs we embarked upon in 2003,” continued Dolezal. “Responsibility lines were shifted in the organization to support faster and more effective decision-making and execution of customer service. We will continue to change the organizational structure to meet the needs of a changing marketplace. We are analyzing the service demands of our customers on an ongoing basis to ensure we have the products and services that meet their needs. Several new products were recently unveiled with several more to be introduced soon, including Online Bill Payment which will enhance our online banking service. We also continue to seek opportunities to expand our service area either within our current markets or in new geographic markets.”
“During the past several years we have seen a number of changes in the regulatory environment in which we operate. This includes changes from how banking regulators review and analyze banks to the Sarbanes-Oxley Act enacted in 2002. This congressionally-mandated act imposes new regulatory requirements on all SEC reporting companies. As an SEC filer, we are bound by the provisions of this new law. It requires extensive documentation and testing of internal control procedures as well as a host of other requirements. We estimate our cost of meeting the requirements of this new law to be in excess of $100,000. Hopefully, efficiencies and operational cost savings will be identified in the process of meeting these requirements.”
“As we enter 2005 we see an improving business environment and a better overall economy. We are optimistic as we enter 2005 and embrace the opportunities this new year presents.”
National Bancshares Corporation’s subsidiary, First National Bank, is headquartered in Orrville, Ohio, with fourteen banking offices located in Orrville, Wooster, Dalton, Kidron, Smithville, Apple Creek, Mt. Eaton, Massillon, Lodi, and Seville.
Forward-looking Statements— This press release contains forward-looking statements as referenced in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are necessarily subject to many risks and uncertainties. A number of things could cause actual results to differ materially from those indicated by the forward-looking statements. These include factors such as changes in the competitive marketplace, changes in the interest rate environment, economic conditions, changes in the regulatory environment, changes in business conditions and inflation, risks associated with credit quality and other factors discussed in the Company’s filings
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with the Security and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2003. The company disclaims any obligation to publicly update or revise any forward-looking statements based on the occurrence of future events, the receipt of new information, or otherwise.
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NATIONAL BANCSHARES CORPORATION
CONSOLIDATED BALANCE SHEETS
December 31, 2004 and 2003
| 2004 | 2003 | |||||||
ASSETS | ||||||||
| Cash and due from banks | $ | 11,756,454 | $ | 11,506,999 | ||||
| Federal funds sold | 6,070,000 | — | ||||||
| Total cash and cash equivalents | 17,826,454 | 11,506,999 | ||||||
| Interest-bearing time deposits with other banks | — | 999,048 | ||||||
| Securities available for sale | 60,461,982 | 67,189,563 | ||||||
| Securities held to maturity (fair value: 2004 - - $16,444,769; 2003 - $17,300,084) | 15,865,047 | 16,603,556 | ||||||
| Federal bank stock | 2,877,850 | 2,771,350 | ||||||
| Loans held for sale | 57,000 | — | ||||||
| Loans, net of allowance for loan losses: 2004 - - $1,763,298; 2003 - $1,603,568 | 196,724,596 | 187,056,241 | ||||||
| Premises and equipment, net | 4,366,780 | 4,737,018 | ||||||
| Foreclosed assets | 46,000 | — | ||||||
| Goodwill | 4,722,775 | 4,722,775 | ||||||
| Identified intangible assets | 1,386,577 | 1,654,086 | ||||||
| Accrued interest receivable | 1,615,798 | 1,622,090 | ||||||
| Other assets | 2,474,070 | 2,386,649 | ||||||
| $ | 308,424,929 | $ | 301,249,375 | |||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Deposits | ||||||||
| Noninterest-bearing | $ | 47,569,690 | $ | 38,821,286 | ||||
| Interest-bearing | 200,952,786 | 204,026,005 | ||||||
| Total deposits | 248,522,476 | 242,847,291 | ||||||
| Repurchase agreements | 3,888,235 | 2,786,848 | ||||||
| Federal Reserve note account | 791,007 | 319,563 | ||||||
| Federal Home Loan Bank advances | 17,000,000 | 17,034,291 | ||||||
| Accrued expenses and other liabilities | 2,903,890 | 3,456,647 | ||||||
| Total liabilities | 273,105,608 | 266,444,640 | ||||||
| Shareholders’ equity | ||||||||
| Common stock, no par value; 6,000,000 shares authorized; 2,289,528 shares issued | 11,447,640 | 11,447,640 | ||||||
| Additional paid-in capital | 4,689,800 | 4,689,800 | ||||||
| Retained earnings | 19,397,601 | 17,849,899 | ||||||
| Treasury stock, at cost (55,040 shares) | (1,189,493 | ) | (1,189,493 | ) | ||||
| Accumulated other comprehensive income | 973,773 | 2,006,889 | ||||||
| Total shareholders’ equity | 35,319,321 | 34,804,735 | ||||||
| $ | 308,424,929 | $ | 301,249,375 | |||||
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NATIONAL BANCSHARES CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
Years ended December 31, 2004, 2003 and 2002
| 2004 | 2003 | 2002 | |||||||||||||
| Interest and dividend income | |||||||||||||||
| Loans, including fees | $ | 11,098,476 | $ | 10,833,688 | $ | 11,974,356 | |||||||||
| Federal funds sold | 75,138 | 85,635 | 136,263 | ||||||||||||
| Securities: | |||||||||||||||
| Taxable | 3,213,539 | 3,186,618 | 2,980,610 | ||||||||||||
| Nontaxable | 924,846 | 937,868 | 849,924 | ||||||||||||
| Total interest and dividend income | 15,311,999 | 15,043,809 | 15,941,153 | ||||||||||||
| Interest expense | |||||||||||||||
| Deposits | 2,473,832 | 3,016,172 | 4,384,154 | ||||||||||||
| Short-term borrowings | 15,037 | 6,996 | 13,551 | ||||||||||||
| Federal Home Loan Bank advances | 857,453 | 716,848 | 530,069 | ||||||||||||
| Total interest expense | 3,346,322 | 3,740,016 | 4,927,774 | ||||||||||||
| Net interest income | 11,965,677 | 11,303,793 | 11,013,379 | ||||||||||||
| Provision for loan losses | 177,500 | 245,000 | 1,569,402 | ||||||||||||
| Net interest income after provision for loan losses | 11,788,177 | 11,058,793 | 9,443,977 | ||||||||||||
| Noninterest income | |||||||||||||||
| Checking account fees | 790,928 | 752,833 | 754,341 | ||||||||||||
| Gain on sale of loans | 67,379 | 115,982 | 8,409 | ||||||||||||
| Securities gains, net | 432,915 | 72,290 | 182,324 | ||||||||||||
| Other | 604,091 | 590,915 | 512,957 | ||||||||||||
| Total noninterest income | 1,895,313 | 1,532,020 | 1,458,031 | ||||||||||||
| Noninterest expense | |||||||||||||||
| Salaries and employee benefits | 5,351,230 | 4,844,909 | 4,338,987 | ||||||||||||
| Data processing | 970,492 | 794,932 | 738,643 | ||||||||||||
| Net occupancy | 410,276 | 404,489 | 345,858 | ||||||||||||
| Depreciation — furniture and fixtures | 363,391 | 353,601 | 327,634 | ||||||||||||
| Franchise tax | 355,469 | 321,824 | 302,880 | ||||||||||||
| Maintenance and repairs | 262,777 | 267,261 | 238,735 | ||||||||||||
| Amortization of intangibles | 267,509 | 275,647 | 145,227 | ||||||||||||
| Dues, subscriptions and fees | 262,079 | 213,721 | 158,810 | ||||||||||||
| Marketing | 181,526 | 199,242 | 130,342 | ||||||||||||
| Other | 1,472,713 | 1,464,890 | 1,271,658 | ||||||||||||
| Total noninterest expense | 9,897,462 | 9,140,516 | 7,998,774 | ||||||||||||
| Income before income taxes | 3,786,028 | 3,450,297 | 2,903,234 | ||||||||||||
| Income tax expense | 875,288 | 806,746 | 648,460 | ||||||||||||
| Net income | $ | 2,910,740 | $ | 2,643,551 | $ | 2,254,774 | |||||||||
| Weighted average common shares outstanding | 2,234,488 | 2,234,488 | 2,228,510 | ||||||||||||
| Basic and diluted earnings per common share | $ | 1.30 | $ | 1.18 | $ | 1.01 | |||||||||
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