FOR IMMEDIATE RELEASE
CONTACTS: | James G. Rakes, Chairman, President & CEO (540) 951-6236 |
| F. Brad Denardo, Treasurer (540) 951-6213 |
NATIONAL BANKSHARES, INC. REPORTS
INCREASED EARNINGS FOR THIRD QUARTER AND YEAR
BLACKSBURG, VA, OCTOBER 15, 2008: At September 30, 2008, National Bankshares, Inc. (NASDAQ Capital Market: NKSH) reported year-to-date net income of nearly $10.27 million, which is 8.60% higher than net income the end of the third quarter last year. This translates to basic net income per share of $1.48, $0.12 over the 2007 figure. For the three months ended September 30, 2008, the Company posted net income of almost $3.62 million, a 13.11% increase over the same period in 2007. Net loans, which were at $541.40 million on September 30, were up by 6.32% over September 30 last year. At the end of the third quarter, National Bankshares, Inc. had total assets of more than $902.28 million, up by 4.93% when compared with the end of the third quarter last year. At September 30, 2008, the Company’s return on average assets was 1.53% and the return on average equity was 12.66%.
National Bankshares’ Chairman, President & CEO, James G. Rakes, said, “With so much negative financial news, it is nice to be able to report solid earnings growth for both the third quarter and the year to date. The improving net interest margin, which was 4.11% on September 30, and good growth in the loan portfolio were important factors in the positive earnings report. For more than 117 years our subsidiary bank has been well served by a traditional and conservative approach to community banking. It proved to be a prudent course to follow during past financial crises, and we do not think we should change direction now.” Mr. Rakes went on to say, “Especially when compared with historically good numbers in 2007, we are seeing an increase in nonperforming assets. However, even with the increase, the 0.37% ratio of nonperforming loans to total loans at September 30 is reasonable, and it compares well with peers. During these uncertain times, our lenders are not compromising loan underwriting standards, and we are making prudent additions to the allowance for loan losses.”
National Bankshares, Inc. is a financial holding company with headquarters in Blacksburg, Virginia. It has one community bank subsidiary, National Bank, which was founded in 1891. National Bank operates from 26 office locations throughout Southwest Virginia. National Bankshares Financial Services, Inc. is the Company’s non-bank brokerage and insurance subsidiary operating in the same market.
National Bankshares, Inc. stock is traded on the NASDAQ Stock Market under the symbol “NKSH”. More information is available at www.nationalbankshares.com.
Forward-Looking Statements
Certain statements in this press release may be “forward-looking statements.” Forward-looking statements are statements that include projections, predictions, expectations or beliefs about future events or results that are not statements of historical fact and that involve significant risks and uncertainties. Although the Company believes that its expectations with regard to forward-looking statements are based upon reasonable assumptions within the bounds of its existing knowledge of its business and operations, there can be no assurance that actual Company results will not differ materially from any future results implied by the forward-looking statements. Actual results may be materially different from past or anticipated results because of many factors, some of which may include changes in economic conditions, the interest rate environment, legislative and regulatory requirements, new products, competition, changes in the stock and bond markets and technology. The Company does not update any forward-looking statements that it may make.
(unaudited tables follow)
National Bankshares, Inc. And Subsidiaries
(000’s), except ratios and percent data |
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Three months ending |
| September 30, 2008 |
| September 30, 2007 |
| Change |
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Selected Consolidated Data : |
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Interest income |
| $ | 12,409 |
| $ | 12,693 |
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| -2.24 | % |
Interest expense |
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| 4,195 |
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| 5,442 |
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| -22.91 | % |
Net interest income |
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| 8,214 |
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| 7,251 |
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| 13.28 | % |
Provision for loan losses |
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| 280 |
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| 119 |
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| 135.29 | % |
Trust income |
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| 307 |
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| 286 |
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| 7.34 | % |
Other noninterest income |
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| 1,901 |
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| 1,839 |
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| 3.37 | % |
Salary and benefits |
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| 2,792 |
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| 2,621 |
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| 6.52 | % |
Occupancy expense |
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| 437 |
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| 419 |
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| 4.30 | % |
Amortization of intangibles |
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| 279 |
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| 284 |
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| -1.76 | % |
Other noninterest expense |
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| 2,023 |
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| 1,776 |
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| 13.91 | % |
Income taxes |
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| -996 |
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| -961 |
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| 3.64 | % |
Net income |
| $ | 3,615 |
| $ | 3,196 |
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| 13.11 | % |
Basic net income per share |
| $ | 0.52 |
| $ | 0.46 |
| $ | 0.06 |
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Daily averages: |
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Gross loans |
| $ | 540,911 |
| $ | 510,811 |
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| 5.89 | % |
Loans,net |
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| 534,504 |
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| 504,725 |
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| 5.90 | % |
Total securities |
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| 285,224 |
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| 281,921 |
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| 1.17 | % |
Total deposits |
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| 775,614 |
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| 751,896 |
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| 3.15 | % |
Other borrowings |
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| 1,004 |
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| 134 |
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| 649.25 | % |
Stockholders’ equity |
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| 108,974 |
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| 100,527 |
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| 8.40 | % |
Cash and due from |
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| 12,789 |
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| 13,021 |
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| -1.78 | % |
Interest-earning assets |
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| 832,990 |
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| 800,998 |
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| 3.99 | % |
Interest-bearing liabilities |
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| 661,912 |
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| 641,988 |
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| 3.10 | % |
Intangible assets |
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| 14,158 |
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| 15,286 |
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| -7.38 | % |
Total assets |
| $ | 892,260 |
| $ | 859,736 |
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| 3.78 | % |
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Financial ratios: Note (1) |
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Return on average assets |
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| 1.61 | % |
| 1.47 | % |
| 0.14 | % |
Return on average equity |
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| 13.20 | % |
| 12.61 | % |
| 0.59 | % |
Net interest margin |
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| 4.34 | % |
| 3.98 | % |
| 0.36 | % |
Efficiency ratio |
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| --- |
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Average equity to average assets |
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| 12.21 | % |
| 11.69 | % |
| 0.52 | % |
Note (1) Ratio change measured in bp |
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Allowance for loan losses: |
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Beginning balance |
| $ | 5,267 |
| $ | 5,000 |
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| 5.34 | % |
Provision for losses |
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| 280 |
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| 119 |
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| 135.29 | % |
Charge-offs |
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| -127 |
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| -94 |
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| 35.11 | % |
Recoveries |
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| 15 |
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| 18 |
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| -16.67 | % |
Ending balance |
| $ | 5,435 |
| $ | 5,043 |
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| 7.77 | % |
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Year to Date |
|
| September 30, 2008 |
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| September 30, 2007 |
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| Change |
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Selected Consolidated Data : |
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Interest income |
| $ | 37,592 |
| $ | 37,918 |
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| -0.86 | % |
Interest expense |
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| 14,417 |
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| 16,228 |
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| -11.16 | % |
Net interest income |
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| 23,175 |
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| 21,690 |
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| 6.85 | % |
Provision for loan losses |
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| 515 |
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| 129 |
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| 299.22 | % |
Trust income |
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| 929 |
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| 1,019 |
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| -8.83 | % |
Other noninterest income |
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| 5,802 |
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| 5,544 |
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| 4.65 | % |
Salary and benefits |
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| 8,395 |
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| 8,240 |
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| 1.88 | % |
Occupancy expense |
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| 1,328 |
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| 1,316 |
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| 0.91 | % |
Amortization of intangibles |
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| 841 |
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| 853 |
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| -1.41 | % |
Other noninterest expense |
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| 5,730 |
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| 5,452 |
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| 5.10 | % |
Income taxes |
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| -2,832 |
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| -2,811 |
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| 0.75 | % |
Net income |
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| 10,265 |
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| 9,452 |
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| 8.60 | % |
Basic net income per share |
| $ | 1.48 |
| $ | 1.36 |
| $ | 0.12 |
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Fully diluted net income per share |
| $ | 1.48 |
| $ | 1.36 |
| $ | 0.12 |
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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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| 26.32 | % |
| 27.34 | % |
| -1.02 | % |
Book value per share |
| $ | 15.80 |
| $ | 14.77 |
| $ | 1.03 |
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Balance sheet at period-end: |
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Gross loans |
| $ | 547,952 |
| $ | 515,350 |
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| 6.33 | % |
Loans, net |
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| 541,404 |
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| 509,203 |
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| 6.32 | % |
Total securities |
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| 278,700 |
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| 280,774 |
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| -0.74 | % |
Cash and due From |
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| 16,511 |
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| 12,058 |
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| 36.93 | % |
Total deposits |
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| 785,986 |
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| 749,991 |
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| 4.80 | % |
Other borrowings |
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| 56 |
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| 66 |
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| -15.15 | % |
Stockholders’ equity |
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| 109,473 |
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| 102,769 |
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| 6.52 | % |
Intangible assets |
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| 13,997 |
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| 15,123 |
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| -7.45 | % |
Total assets |
| $ | 902,283 |
| $ | 859,915 |
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| 4.93 | % |
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Daily averages: |
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Gross loans |
| $ | 531,914 |
| $ | 507,921 |
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| 4.72 | % |
Loans,net |
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| 525,577 |
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| 501,786 |
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| 4.74 | % |
Total securities |
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| 283,902 |
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| 284,675 |
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| -0.27 | % |
Total deposits |
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| 779,078 |
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| 757,185 |
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| 2.89 | % |
Other borrowings |
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| 379 |
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| 814 |
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| -53.44 | % |
Stockholders’ equity |
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| 108,297 |
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| 99,588 |
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| 8.75 | % |
Cash and due from |
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| 12,848 |
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| 13,971 |
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| -8.04 | % |
Interest-earning assets |
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| 837,109 |
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| 804,839 |
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| 4.01 | % |
Interest-bearing liabilities |
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| 666,185 |
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| 650,181 |
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| 2.46 | % |
Intangible assets |
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| 14,436 |
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| 15,570 |
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| -7.28 | % |
Total assets |
| $ | 894,544 |
| $ | 864,570 |
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| 3.47 | % |
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Financial ratios: Note (1) |
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Return on average assets |
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| 1.53 | % |
| 1.46 | % |
| 0.07 | % |
Return on average equity |
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| 12.66 | % |
| 12.69 | % |
| -0.03 | % |
Net interest margin |
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| 4.11 | % |
| 3.99 | % |
| 0.12 | % |
Efficiency ratio |
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| 50.17 | % |
| 51.73 | % |
| -1.56 | % |
Average equity to average assets |
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| 12.11 | % |
| 11.52 | % |
| 0.59 | % |
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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| 515 |
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| 129 |
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| 299.22 | % |
Charge-offs |
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| -409 |
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| -319 |
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| 28.21 | % |
Recoveries |
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| 110 |
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| 76 |
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| 44.74 | % |
Ending balance |
| $ | 5,435 |
| $ | 5,043 |
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| 7.77 | % |
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Nonperforming assets: |
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Nonaccrual loans |
| $ | 2,003 |
| $ | 1,208 |
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| 65.81 | % |
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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| 2,003 |
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| 1,208 |
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| 65.81 | % |
Other real estate owned |
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| 1,037 |
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| 192 |
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| 440.10 | % |
Total nonperforming assets |
| $ | 3,040 |
| $ | 1,400 |
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| 117.14 | % |
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Asset quality ratios: Note (3) |
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Nonperforming loans to total loans |
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| 0.37 | % |
| 0.23 | % |
| --- |
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Allowance for loan losses to total loans |
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| 0.99 | % |
| 0.98 | % |
| --- |
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Allowance for loan losses to nonperforming loans |
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| 271.34 | % |
| 417.47 | % |
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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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