Exhibit 99.1
PRESS RELEASE
FOR IMMEDIATE RELEASE:
National Bancshares Corporation 3Q Report
ORRVILLE, Ohio, October 19, 2004 / PR NEWSWIRE / — National Bancshares Corporation (OTC: NBOH), the holding company of First National Bank (www.fnborrville.com), released their financial results for the third quarter of 2004.
Financial results for the first nine months of 2004 were mixed. Net loans increased by over $13.6 million, or 7.5%, above September 30, 2003. The majority of the growth in loans was realized in commercial and home equity products. Total deposits declined by more than $4 million, or 1.6%, when compared to the same period of the previous year. This decline was primarily due to unusually large transient deposits included in September 30, 2003 balances. Total assets declined by almost $3.2 million, or 1%, from September 30, 2003. Net income declined by $163 thousand, or 7.3%, when compared to the first nine months of 2003. This decline was driven by an increase in non-interest expenses, offset by growth in non-interest income. Higher non-interest expense is due to significant internal reorganization and training of personnel to position the company for future growth and expansion.
A third quarter cash dividend of 15¢ per share is being paid October 19, 2004 to shareholders of record as of September 30, 2004.
“In recent years we have seen a changing landscape in the area of competition, not only in our industry, but in our particular market as well,” said Charles J. Dolezal, President and Chairman. “A number of bank mergers have occurred, with smaller banks being acquired by larger institutions. Some have been driven by stock price, while others have been driven by cost factors, such as the ongoing and costly regulatory burden on financial institutions. Whatever the reason, the changes have created opportunities as well as challenges for community banks such as ours. As mentioned above, we are positioning our organization for future growth by reorganizing responsibility lines and providing significant training to our staff.”
National Bancshares Corporation, a one-bank holding company with assets of approximately $305 million, operates fourteen First National Bank offices in Orrville, Massillon, Wooster, Dalton, Kidron, Smithville, Apple Creek, Mt. Eaton, 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 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
| September 30, 2004 | September 30, 2003 | |||||||
| ASSETS: | ||||||||
| Cash and due from banks | $ | 11,227,535 | $ | 8,728,672 | ||||
| Federal funds sold | 3,870,000 | 21,000,000 | ||||||
| Total cash and cash equivalents | 15,097,535 | 29,728,672 | ||||||
| Interest bearing deposits with banks | — | 998,446 | ||||||
| Securities available for sale | 57,490,830 | 59,686,147 | ||||||
| Securities held to maturity | 18,035,576 | 17,162,474 | ||||||
| Federal bank stock | 2,832,850 | 2,751,050 | ||||||
| Loans held for sale | 199,600 | — | ||||||
| Total loans (excluding unearned income) | 198,144,701 | 184,452,728 | ||||||
| Less: allowance for loan losses | 1,767,413 | 1,743,424 | ||||||
| Loans, net | 196,377,288 | 182,709,304 | ||||||
| Accrued interest receivable | 1,697,328 | 1,715,472 | ||||||
| Premises and equipment | 4,464,679 | 4,622,061 | ||||||
| Other assets | 8,710,473 | 8,725,093 | ||||||
| TOTAL | $ | 304,906,159 | $ | 308,098,719 | ||||
| LIABILITIES: | ||||||||
| Deposits: | ||||||||
| Demand | $ | 41,361,027 | $ | 35,533,561 | ||||
| Savings and N.O.W.s | 129,600,609 | 134,591,538 | ||||||
| Time | 75,509,710 | 80,402,620 | ||||||
| Total deposits | 246,471,346 | 250,527,719 | ||||||
| Securities sold under repurchase agreements | 2,753,739 | 2,123,297 | ||||||
| Federal reserve note account | 428,576 | 157,534 | ||||||
| Federal Home Loan Bank advances | 17,000,000 | 17,068,581 | ||||||
| Accrued interest payable | 443,337 | 481,191 | ||||||
| Other liabilities | 2,701,667 | 2,985,685 | ||||||
| Total liabilities | 269,798,665 | 273,344,007 | ||||||
| SHAREHOLDERS’ EQUITY | ||||||||
| Common Stock, without par value: | ||||||||
| 6,000,000 shares authorized and 2,289,528 shares issued | 11,447,640 | 11,447,640 | ||||||
| Additional paid-in-capital | 4,689,800 | 4,689,800 | ||||||
| Retained earnings | 18,924,450 | 17,784,740 | ||||||
| Accumulated other comprehensive income | 1,235,097 | 2,022,025 | ||||||
| Less: Treasury shares | (1,189,493 | ) | (1,189,493 | ) | ||||
| Total shareholders’ equity | 35,107,494 | 34,754,712 | ||||||
| TOTAL | $ | 304,906,159 | $ | 308,098,719 | ||||
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NATIONAL BANCSHARES CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
For Nine Months Ended September 30, 2004 and September 30, 2003
| September 30, 2004 | September 30, 2003 | |||||||
| INTEREST & DIVIDEND INCOME: | ||||||||
| Loans, including fees | $ | 8,230,487 | $ | 8,625,312 | ||||
| Federal funds sold | 28,635 | 78,837 | ||||||
| Interest and dividends on investments US government obligations | 874,262 | 896,522 | ||||||
| Obligations of states and political subdivisions | 680,989 | 710,651 | ||||||
| Other securities | 1,561,668 | 1,334,061 | ||||||
| Total interest & dividend income | 11,376,041 | 11,645,383 | ||||||
| INTEREST EXPENSE: | ||||||||
| Deposits | 1,852,366 | 2,355,415 | ||||||
| Short term borrowings | 7,287 | 5,036 | ||||||
| Federal Home Loan Bank advances | 634,164 | 527,238 | ||||||
| Total interest expense | 2,493,817 | 2,887,689 | ||||||
| Net interest income | 8,882,224 | 8,757,694 | ||||||
| PROVISION FOR LOAN LOSSES | 177,500 | 155,000 | ||||||
| NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES | 8,704,724 | 8,602,694 | ||||||
| NONINTEREST INCOME | 1,503,547 | 1,151,415 | ||||||
| NONINTEREST EXPENSE: | ||||||||
| Salaries and employee benefits | 4,025,631 | 3,683,955 | ||||||
| Net occupancy expense | 503,293 | 506,930 | ||||||
| Other expenses | 2,921,854 | 2,585,598 | ||||||
| Total noninterest expense | 7,450,778 | 6,776,483 | ||||||
| INCOME BEFORE INCOME TAXES | 2,757,493 | 2,977,626 | ||||||
| INCOME TAXES | 677,423 | 734,408 | ||||||
| NET INCOME | $ | 2,080,070 | $ | 2,243,218 | ||||
| NET INCOME PER COMMON SHARE | $ | 0.93 | $ | 1.00 | ||||
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