FOR IMMEDIATE RELEASE
CONTACTS: | James G. Rakes, Chairman, President & CEO (540) 951-6236 |
| F. Brad Denardo, Treasurer (540) 951-6213 |
NATIONAL BANKSHARES, INC. ANNOUNCES HIGHER
SECOND QUARTER EARNINGS
BLACKSBURG, VA, JULY 18, 2008: At June 30, 2008, National Bankshares, Inc. (NASDAQ Capital Market: NKSH) posted year-to-date net income of $6.65 million, or basic net income of $0.96 per share. This is a 6.3% increase over the $6.26 million in net income at June 30, 2007. For the three months ending June 30, 2008, the Company had net income of nearly $3.47 million, up by 10.48% over net income earned in the second quarter of 2007. Net loans were nearly $529.47 million at June 30, 2008, up by 5.24% over the total at the same time last year. The Company ended the second quarter with total assets of just over $894.91 million, 2.03% higher than at the end of the second quarter in 2007.
National Bankshares, Inc. is a financial holding company headquartered in Blacksburg, Virginia. It is the parent of National Bank, a community bank with 26 offices throughout Southwest Virginia that was founded in 1891. The Company has a non-bank brokerage and insurance subsidiary, National Bankshares Financial Services, Inc., trading in the same market.
The Company’s Chairman, President & CEO James G. Rakes commented, “In these challenging times, I am pleased to report solidly higher earnings, which were achieved using a traditional approach. We experienced good growth in the loan portfolio without compromising loan underwriting standards. At the same time, the net interest margin held steady at a respectable 4.00%. Finally, controllable costs have been kept in check, producing an efficiency ratio of 50.81% at June 30. Compared with last year’s historically good numbers, we are seeing an increase in nonperforming assets. Despite these changes, the 0.41% ratio of nonperforming loans to total loans at June 30, 2008, remains reasonable and good when compared with our peers. We are paying attention to local economic conditions and are prudently adding to the allowance for loan losses as warranted. National Bankshares, Inc. has operated with a consistently conservative business philosophy. This philosophy and our high capital levels help to prepare us for any economic weakness to come.”
National Bankshares, Inc. stock is traded on the NASDAQ Stock Market under the symbol “NKSH”. More information is available at www.nationalbankshares.com.
National Bankshares, Inc. And Subsidiaries
(000’s), except ratios and percent data |
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Three months ending |
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| June 30, 2008 |
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| June 30, 2007 |
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| Change |
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Selected Consolidated Data : |
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Interest income |
| $ | 12,472 |
| $ | 12,695 |
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| -1.76 | % |
Interest expense |
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| 4,815 |
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| 5,370 |
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| -10.34 | % |
Net interest income |
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| 7,657 |
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| 7,325 |
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| 4.53 | % |
Provision for loan losses |
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| 135 |
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| 13 |
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| 938.46 | % |
Trust income |
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| 319 |
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| 360 |
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| -11.39 | % |
Other noninterest income |
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| 1,908 |
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| 1,899 |
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| 0.47 | % |
Salary and benefits |
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| 2,746 |
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| 2,778 |
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| -1.15 | % |
Occupancy expense |
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| 435 |
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| 412 |
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| 5.58 | % |
Amortization of intangibles |
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| 279 |
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| 285 |
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| -2.11 | % |
Other noninterest expense |
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| 1,846 |
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| 2,029 |
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| -9.02 | % |
Income taxes |
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| -974 |
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| -927 |
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| 5.07 | % |
Net income |
| $ | 3,469 |
| $ | 3,140 |
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| 10.48 | % |
Basic net income per share |
| $ | 0.50 |
| $ | 0.45 |
| $ | 0.05 |
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Daily averages: |
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Gross loans |
| $ | 529,653 |
| $ | 509,826 |
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| 3.89 | % |
Loans,net |
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| 523,336 |
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| 503,706 |
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| 3.90 | % |
Total securities |
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| 290,593 |
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| 288,215 |
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| 0.83 | % |
Total deposits |
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| 786,698 |
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| 756,952 |
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| 3.93 | % |
Other borrowings |
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| 61 |
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| 2,235 |
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| -97.27 | % |
Stockholders’ equity |
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| 108,891 |
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| 101,105 |
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| 7.70 | % |
Cash and due from |
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| 13,008 |
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| 14,213 |
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| -8.48 | % |
Interest-earning assets |
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| 844,591 |
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| 806,828 |
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| 4.68 | % |
Interest-bearing liabilities |
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| 670,099 |
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| 648,844 |
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| 3.28 | % |
Intangible assets |
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| 14,435 |
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| 15,569 |
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| -7.28 | % |
Total assets |
| $ | 902,368 |
| $ | 866,915 |
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| 4.09 | % |
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Financial ratios: Note (1) |
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Return on average assets |
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| 1.55 | % |
| 1.45 | % |
| 0.10 |
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Return on average equity |
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| 12.81 | % |
| 12.46 | % |
| 0.35 |
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Net interest margin |
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| 4.05 | % |
| 4.03 | % |
| 0.02 |
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Average equity to average assets |
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| 12.07 | % |
| 11.66 | % |
| 0.40 |
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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 |
| $ | 5,228 |
| $ | 5,045 |
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| 3.63 | % |
Provision for losses |
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| 135 |
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| 13 |
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| 938.46 | % |
Charge-offs |
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| -130 |
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| -89 |
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| 46.07 | % |
Recoveries |
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| 34 |
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| 31 |
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| 9.68 | % |
Ending balance |
| $ | 5,267 |
| $ | 5,000 |
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| 5.34 | % |
Year to Date |
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| June 30, 2008 |
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| June 30, 2007 |
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| Change |
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Selected Consolidated Data : |
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Interest income |
| $ | 25,183 |
| $ | 25,225 |
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| -0.17 | % |
Interest expense |
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| 10,222 |
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| 10,786 |
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| -5.23 | % |
Net interest income |
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| 14,961 |
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| 14,439 |
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| 3.62 | % |
Provision for loan losses |
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| 235 |
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| 10 |
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| 2250.00 | % |
Trust income |
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| 622 |
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| 733 |
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| -15.14 | % |
Other noninterest income |
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| 3,901 |
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| 3,705 |
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| 5.29 | % |
Salary and benefits |
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| 5,603 |
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| 5,619 |
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| -0.28 | % |
Occupancy expense |
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| 891 |
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| 897 |
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| -0.67 | % |
Amortization of intangibles |
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| 563 |
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| 569 |
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| -1.05 | % |
Other noninterest expense |
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| 3,706 |
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| 3,676 |
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| 0.82 | % |
Income taxes |
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| -1,836 |
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| -1,850 |
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| -0.76 | % |
Net income |
| $ | 6,650 |
| $ | 6,256 |
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| 6.30 | % |
Basic net income per share |
| $ | 0.96 |
| $ | 0.90 |
| $ | 0.06 |
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Fully diluted net income per share |
| $ | 0.96 |
| $ | 0.89 |
| $ | 0.07 |
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Dividends per share |
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| --- |
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| --- |
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| --- |
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Dividend payout ratio |
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| 40.63 |
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| 41.30 |
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| 0.67 |
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Book value per share |
| $ | 15.50 |
| $ | 14.14 |
| $ | 1.36 |
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Balance sheet at period-end: |
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Gross loans |
| $ | 535,837 |
| $ | 509,232 |
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| 5.22 | % |
Loans, net |
| $ | 529,465 |
| $ | 503,118 |
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| 5.24 | % |
Total securities |
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| 289,315 |
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| 282,955 |
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| 2.25 | % |
Cash and due From |
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| 20,404 |
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| 16,937 |
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| 20.47 | % |
Total deposits |
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| 781,113 |
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| 771,319 |
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| 1.27 | % |
Other borrowings |
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| 59 |
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| 141 |
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| -58.16 | % |
Stockholders’ equity |
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| 107,354 |
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| 98,674 |
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| 8.80 | % |
Intangible assets |
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| 14,276 |
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| 15,407 |
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| -7.34 | % |
Total assets |
| $ | 894,912 |
| $ | 877,098 |
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| 2.03 | % |
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Daily averages: |
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Gross loans |
| $ | 527,366 |
| $ | 506,452 |
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| 4.13 | % |
Loans,net |
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| 521,064 |
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| 500,292 |
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| 4.15 | % |
Total securities |
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| 283,240 |
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| 286,073 |
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| -0.99 | % |
Total deposits |
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| 780,830 |
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| 759,874 |
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| 2.76 | % |
Other borrowings |
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| 61 |
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| 1,160 |
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| -94.74 | % |
Stockholders’ equity |
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| 107,963 |
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| 99,086 |
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| 8.96 | % |
Cash and due from |
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| 12,877 |
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| 14,453 |
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| -10.90 | % |
Interest-earning assets |
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| 839,198 |
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| 806,790 |
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| 4.02 | % |
Interest-bearing liabilities |
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| 668,344 |
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| 654,345 |
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| 2.14 | % |
Intangible assets |
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| 14,576 |
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| 15,714 |
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| -7.24 | % |
Total assets |
| $ | 895,701 |
| $ | 867,003 |
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| 3.31 | % |
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Financial ratios: Note (1) |
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Return on average assets |
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| 1.49 | % |
| 1.46 | % |
| 0.03 |
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Return on average equity |
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| 12.39 | % |
| 12.73 | % |
| -0.34 |
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Net interest margin |
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| 4.00 | % |
| 4.00 | % |
| 0.00 |
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Efficiency ratio |
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| 50.81 | % |
| 52.55 | % |
| -1.74 |
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Average equity to average assets |
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| 12.05 | % |
| 11.43 | % |
| 0.62 |
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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 |
| $ | 5,219 |
| $ | 5,157 |
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| 1.20 | % |
Provision for losses |
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| 235 |
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| 10 |
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| 2250.00 | % |
Charge-offs |
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| -282 |
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| -225 |
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| 25.33 | % |
Recoveries |
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| 95 |
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| 58 |
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| 63.79 | % |
Ending balance |
| $ | 5,267 |
| $ | 5,000 |
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| 5.34 | % |
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Nonperforming assets: |
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Nonaccrual loans |
| $ | 2,200 |
| $ | 1,136 |
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| -100.00 | % |
Restructured loans |
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| --- |
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| --- |
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| --- |
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Total nonperforming loans Note (2) |
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| 2,200 |
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| 1,136 |
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| -100.00 | % |
Other real estate owned |
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| 234 |
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| 306 |
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| -23.53 | % |
Total nonperforming assets |
| $ | 2,434 |
| $ | 1,442 |
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| 68.79 | % |
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Asset quality ratios: Note (3) |
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Nonperforming loans to total loans |
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| 0.41 | % |
| 0.23 | % |
| --- |
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Allowance for loan losses to total loans |
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| 0.98 | % |
| 0.98 | % |
| 0.50 | % |
Allowance for loan losses to nonperforming loans |
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| 239.41 | % |
| 440.41 | % |
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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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