FOR IMMEDIATE RELEASE
CONTACTS: | James G. Rakes, Chairman, President & CEO (540) 951-6236 |
| J. Robert Buchanan, Treasurer (276) 979-0341 |
NATIONAL BANKSHARES, INC.
REPORTS SECOND QUARTER EARNINGS
BLACKSBURG, VA, JULY 19, 2007: National Bankshares, Inc. (NASDAQ Capital Market: NKSH) posted year-to-date net income of nearly $6.26 million on June 30, 2007, an increase over the $6.23 million earned at the end of the second quarter in 2006. Net income earned in the second quarter this year was $3.14 million, slightly behind the $3.23 million reported in the same period last year. These earnings figures translate to 2007 year-to-date basic net income per share of $0.90, as compared with $0.89 last year. Total assets at June 30 were nearly $877.10 million, up by 3.99% over total assets of $843.41 million on June 30, 2006. In a competitive loan market, total loans grew from $490.16 million at the same time last year to $503.12 million at the end of June 2007.
National Bankshares’ Chairman, President & CEO James G. Rakes commented, “The Company has been able to compensate for the continued effects of compression in the net interest margin in three ways. First, the quality of the loan portfolio remains very good, so contributions to the provision for loan losses have been minimal. Second, noninterest income is up by 3.9% over last year. Finally, the May 2006 merger of our two subsidiary banks has produced savings in several expense categories, and total noninterest expense has declined from $10.90 million at June 30 last year to $10.76 million at the same point this year.” Mr. Rakes added, “We believe that National Bankshares’ history of profitability, together with our practice of sharing those profits with our stockholders in the form of fair dividends, will serve the Company and its stockholders well over time.”
National Bankshares, Inc. is the parent company of National Bank, a 117 year-old community bank that operates from 26 offices throughout Southwest Virginia. The Company, which is headquartered in Blacksburg, Virginia, also has a non-bank subsidiary, National Bankshares Financial Services, Inc. which offers insurance and investment products. National Bankshares, Inc. stock trades on the NASDAQ Stock Market under the symbol “NKSH”. Additional information is available on the Company’s web site at www.nationalbankshares.com.
(unaudited tables follow)
101 Hubbard Street / Blacksburg, Virginia 24060
P.O. Box 90002 / Blacksburg, Virginia 24062-9002
540 951-6300 / 800 552-4123
www.nationalbankshares.com
National Bankshares, Inc. And Subsidiaries
(000’s), except ratios and percent data
Three months ending |
| June 30, 2007 |
| June 30, 2006 |
| Change |
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Selected Consolidated Data : |
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Interest income |
| $ | 12,695 |
| $ | 11,849 |
| 7.14 | % | ||||||
Interest expense |
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| 5,370 |
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| 4,374 |
| 22.77 | % | ||||||
Net interest income |
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| 7,325 |
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| 7,475 |
| -2.01 | % | ||||||
Provision for loan losses |
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| 13 |
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| 7 |
| 85.71 | % | ||||||
Trust income |
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| 360 |
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| 365 |
| -1.37 | % | ||||||
Other noninterest income |
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| 1,899 |
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| 1,847 |
| 2.82 | % | ||||||
Salary and benefits |
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| 2,778 |
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| 2,929 |
| -5.16 | % | ||||||
Occupancy expense |
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| 412 |
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| 472 |
| -12.71 | % | ||||||
Amortization of intangibles |
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| 285 |
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| 285 |
| 0.00 | % | ||||||
Other noninterest expense |
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| 2,029 |
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| 1,715 |
| 18.31 | % | ||||||
Income taxes |
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| -927 |
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| -1,052 |
| -11.88 | % | ||||||
Net income |
| $ | 3,140 |
| $ | 3,227 |
| -2.70 | % | ||||||
Basic net income per share |
| $ | 0.45 |
| $ | 0.46 | $ | 0.01 |
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Daily averages: |
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Gross loans |
| $ | 509,826 |
| $ | 494,387 |
| 3.12 | % | ||||||
Loans,net |
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| 503,706 |
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| 488,039 |
| 3.21 | % | ||||||
Total securities |
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| 288,215 |
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| 271,677 |
| 6.09 | % | ||||||
Total deposits |
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| 756,952 |
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| 738,669 |
| 2.48 | % | ||||||
Other borrowings |
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| 2,235 |
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| 753 |
| 196.81 | % | ||||||
Stockholders’ equity |
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| 101,105 |
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| 90,113 |
| 12.20 | % | ||||||
Cash and due from |
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| 14,213 |
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| 15,830 |
| -10.21 | % | ||||||
Interest-earning assets |
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| 806,828 |
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| 774,594 |
| 4.16 | % | ||||||
Interest-bearing liabilities |
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| 648,844 |
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| 625,375 |
| 3.75 | % | ||||||
Intangible assets |
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| 15,569 |
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| 16,640 |
| -6.44 | % | ||||||
Total assets |
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| 866,915 |
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| 834,745 |
| 3.85 | % | ||||||
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Financial ratios: Note (1) |
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Return on average assets |
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| 1.45 | % |
| 1.57 | % | -0.12 |
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Return on average equity |
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| 12.46 | % |
| 14.52 | % | -2.06 |
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Net interest margin |
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| 4.03 | % |
| 4.30 | % | -0.27 |
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Average equity to average assets |
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| 11.66 | % |
| 10.80 | % | 0.87 |
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Note (1) Ratio change measured in bp |
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Allowance for loan losses: |
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Beginning balance |
| $ | 5,045 |
| $ | 5,418 |
| -6.88 | % | ||||||
Provision for losses |
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| 13 |
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| 7 |
| 85.71 | % | ||||||
Charge-offs |
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| -89 |
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| -122 |
| -27.05 | % | ||||||
Recoveries |
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| 31 |
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| 37 |
| -16.22 | % | ||||||
Ending balance |
| $ | 5,000 |
| $ | 5,340 |
| -6.37 | % | ||||||
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Year to Date |
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| June 30, 2007 |
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| June 30, 2006 |
| Change |
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Selected Consolidated Data : |
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Interest income |
| $ | 25,225 |
| $ | 23,432 |
| 7.65 | % |
Interest expense |
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| 10,786 |
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| 8,612 |
| 25.24 | % |
Net interest income |
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| 14,439 |
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| 14,820 |
| -2.57 | % |
Provision for loan losses |
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| 10 |
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| 24 |
| -58.33 | % |
Trust income |
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| 733 |
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| 745 |
| -1.61 | % |
Other noninterest income |
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| 3,705 |
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| 3,526 |
| 5.08 | % |
Salary and benefits |
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| 5,619 |
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| 5,840 |
| -3.78 | % |
Occupancy expense |
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| 897 |
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| 1,005 |
| -10.75 | % |
Amortization of intangibles |
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| 569 |
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| 569 |
| 0.00 | % |
Other noninterest expense |
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| 3,676 |
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| 3,486 |
| 5.45 | % |
Income taxes |
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| -1,850 |
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| -1,937 |
| -4.49 | % |
Net income |
| $ | 6,256 |
| $ | 6,230 |
| 0.42 | % |
Basic net income per share |
| $ | 0.90 |
| $ | 0.89 | $ | 0.01 |
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Fully diluted net income per share |
| $ | 0.89 |
| $ | 0.89 | $ | 0.00 |
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Dividends per share |
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| 0 |
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| 0 | $ | 0.00 |
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Dividend payout ratio |
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| 41.30 |
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| 40.53 | $ | 0.77 |
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Book value per share |
| $ | 14.14 |
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| 13.29 | $ | 0.85 |
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Balance sheet at period-end: |
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Gross loans |
| $ | 509,232 |
| $ | 496,476 |
| 2.57 | % |
Loans, net |
| $ | 503,118 |
| $ | 490,160 |
| 2.64 | % |
Total securities |
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| 282,955 |
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| 267,677 |
| 5.71 | % |
Cash and due From |
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| 16,934 |
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| 19,037 |
| -11.05 | % |
Total deposits |
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| 771,316 |
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| 746,581 |
| 3.31 | % |
Other borrowings |
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| 141 |
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| 78 |
| 80.77 | % |
Stockholders’ equity |
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| 98,674 |
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| 93,173 |
| 5.90 | % |
Intangible assets |
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| 15,407 |
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| 16,544 |
| -6.87 | % |
Total assets |
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| 877,095 |
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| 843,407 |
| 3.99 | % |
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Daily averages: |
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Gross loans |
| $ | 506,452 |
| $ | 492,905 |
| 2.75 | % |
Loans,net |
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| 500,292 |
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| 486,541 |
| 2.83 | % |
Total securities |
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| 286,073 |
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| 272,151 |
| 5.12 | % |
Total deposits |
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| 759,874 |
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| 740,298 |
| 2.64 | % |
Other borrowings |
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| 1,160 |
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| 772 |
| 50.26 | % |
Stockholders’ equity |
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| 99,086 |
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| 91,754 |
| 7.99 | % |
Cash and due from |
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| 14,453 |
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| 16,493 |
| -12.37 | % |
Interest-earning assets |
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| 806,790 |
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| 776,117 |
| 3.95 | % |
Interest-bearing liabilities |
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| 654,345 |
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| 627,882 |
| 4.21 | % |
Intangible assets |
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| 15,714 |
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| 16,734 |
| -6.10 | % |
Total assets |
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| 867,003 |
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| 837,315 |
| 3.55 | % |
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Financial ratios: Note (1) |
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Return on average assets |
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| 1.46 | % |
| 1.50 | % | -0.04 |
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Return on average equity |
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| 12.73 | % |
| 13.69 | % | -0.96 |
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Net interest margin |
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| 4.00 | % |
| 4.22 | % | -0.22 |
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Efficiency ratio |
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| 52.55 | % |
| 52.96 | % | -0.41 |
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Average equity to average assets |
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| 11.43 | % |
| 10.96 | % | 0.47 |
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Note (1) Ratio change measured in bp |
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Allowance for loan losses: |
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Beginning balance |
| $ | 5,157 |
| $ | 5,449 |
| -5.36 | % |
Provision for losses |
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| 10 |
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| 24 |
| -58.33 | % |
Charge-offs |
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| -225 |
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| -209 |
| 7.66 | % |
Recoveries |
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| 58 |
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| 76 |
| -23.68 | % |
Ending balance |
| $ | 5,000 |
| $ | 5,340 |
| -6.37 | % |
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Nonperforming assets: |
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Nonaccrual loans |
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| 1,136 |
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| --- |
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Restructured loans |
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| --- |
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| --- |
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Total nonperforming loans Note (2) |
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| 1,136 |
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| 0 |
| --- |
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Other real estate owned |
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| 306 |
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| 390 |
| -21.54 | % |
Total nonperforming assets |
| $ | 1,442 |
| $ | 390 |
| 269.74 | % |
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Asset quality ratios: Note (3) |
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Nonperforming loans to total loans |
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| 0.224 | % |
| --- |
| --- |
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Allowance for loan losses to total loans |
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| 0.98 | % |
| 1.08 | % | -9.60 | % |
Allowance for loan losses to nonperforming loans |
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| 440.14 | % |
| --- |
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Note (2) Loans 90 days past due or more not included |
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Note (3) Ratio change measured in bp |
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