Exhibit 99.1
National Bancshares Reports Third Quarter Results
For Immediate Release | October 20, 2006 |
ORRVILLE, Ohio, October 20, 2006 — National Bancshares Corporation (OTC: NBOH), the holding company of First National Bank (www.fnborrville.com) reported on their third quarter 2006.
Earnings results for third quarter of 2006 represent an improvement over second quarter 2006. However, net income for the first nine months of 2006 was down approximately 25% from the same period of 2005. This decline was primarily driven by a shrinking net interest margin, specifically attributed to an increase in cost of funds and a decline in National Bancshares loan portfolio.
Additionally, non-interest expenses continue to show an unfavorable variance versus 2005, primarily attributed to increased expenditures related to data processing and marketing. Total assets increased approximately $600 thousand as of September 30, 2006, compared to the same period in 2005. Commercial loan and residential real estate activity continues to slow. However, National Bancshares continues to experience favorable results with home equity and consumer loan products. Total deposits increased by over $600 thousand from September 30, 2005, as increasing interest rates attracted more time deposits. Moreover, repurchase agreements increased by $3.3 million when compared to September 30, 2005, a result of product enhancements made to cash management and sweep accounts.
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 with the Security and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2005. The company disclaims any obligation to publicly update or revise any forward-looking statements on the occurrence of future events, the receipt of new information of otherwise.
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NATIONAL BANCSHARES CORPORATION
CONSOLIDATED BALANCE SHEETS (Unaudited)
CONSOLIDATED BALANCE SHEETS (Unaudited)
September 30, 2006 | September 30, 2005 | |||||||
ASSETS: | ||||||||
Cash and due from banks | $ | 9,051,279 | $ | 10,925,095 | ||||
Federal funds sold | 7,565,000 | 9,710,000 | ||||||
Total cash and cash equivalents | 16,616,279 | 20,635,095 | ||||||
Interest bearing deposits with banks | — | — | ||||||
Securities available for sale | 66,075,882 | 51,285,174 | ||||||
Securities held to maturity | 16,878,721 | 17,699,878 | ||||||
Federal bank stock | 3,085,250 | 2,954,850 | ||||||
Loans held for sale | — | 50,000 | ||||||
Total loans | 187,584,880 | 197,652,941 | ||||||
Less: allowance for loan losses | 1,855,819 | 2,081,935 | ||||||
Loans, net | 185,729,061 | 195,571,006 | ||||||
Accrued interest receivable | 1,830,597 | 1,507,952 | ||||||
Premises and equipment | 5,098,321 | 5,279,627 | ||||||
Other assets | 9,213,844 | 8,946,982 | ||||||
TOTAL | $ | 304,527,955 | $ | 303,930,564 | ||||
LIABILITIES: | ||||||||
Deposits: | ||||||||
Demand | $ | 42,962,062 | $ | 44,727,109 | ||||
Savings and N.O.W.s | 114,118,021 | 125,360,169 | ||||||
Time | 87,633,010 | 74,017,069 | ||||||
Total deposits | 244,713,093 | 244,104,347 | ||||||
Securities sold under repurchase agreements | 7,316,921 | 4,020,843 | ||||||
Federal reserve note account | 966,350 | 1,000,000 | ||||||
Federal Home Loan Bank advances | 14,000,000 | 17,000,000 | ||||||
Accrued interest payable | 850,616 | 573,223 | ||||||
Other liabilities | 2,150,075 | 2,451,057 | ||||||
Total liabilities | 269,997,055 | 269,149,470 | ||||||
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 | 20,046,365 | 19,725,701 | ||||||
Accumulated other comprehensive income | (463,412 | ) | 107,446 | |||||
Less: Treasury shares | (1,189,493 | ) | (1,189,493 | ) | ||||
Total shareholders’ equity | 34,530,900 | 34,781,094 | ||||||
TOTAL | $ | 304,527,955 | $ | 303,930,564 | ||||
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NATIONAL BANCSHARES CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
For Nine Months Ended September 30, 2006 and September 30, 2005
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
For Nine Months Ended September 30, 2006 and September 30, 2005
September 30, 2006 | September 30, 2005 | |||||||
INTEREST & DIVIDEND INCOME: | ||||||||
Loans, including fees | $ | 9,397,909 | $ | 9,056,078 | ||||
Federal funds sold | 270,689 | 107,181 | ||||||
Interest and dividends on investments | ||||||||
US government obligations | 1,203,395 | 689,368 | ||||||
Obligations of states and political subdivisions | 603,808 | 646,987 | ||||||
Other securities | 1,255,494 | 1,339,869 | ||||||
Total interest & dividend income | 12,731,295 | 11,839,483 | ||||||
INTEREST EXPENSE: | ||||||||
Deposits | 3,537,770 | 2,181,958 | ||||||
Short term borrowings | 143,998 | 50,566 | ||||||
Federal Home Loan Bank advances | 613,989 | 671,456 | ||||||
Total interest expense | 4,295,757 | 2,903,980 | ||||||
Net interest income | 8,435,538 | 8,935,503 | ||||||
PROVISION FOR LOAN LOSSES | 40,000 | 336,500 | ||||||
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES | 8,395,538 | 8,599,003 | ||||||
NONINTEREST INCOME | 1,241,006 | 1,368,433 | ||||||
NONINTEREST EXPENSE: | ||||||||
Salaries and employee benefits | 4,341,034 | 4,469,922 | ||||||
Net occupancy expense | 518,280 | 573,894 | ||||||
Other expenses | 3,528,078 | 3,232,574 | ||||||
Total noninterest expense | 8,387,392 | 8,276,390 | ||||||
INCOME BEFORE INCOME TAXES | 1,249,152 | 1,691,046 | ||||||
INCOME TAXES | 197,573 | 290,392 | ||||||
NET INCOME | $ | 1,051,579 | $ | 1,400,654 | ||||
NET INCOME PER COMMON SHARE | $ | 0.47 | $ | 0.63 | ||||
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