FOR IMMEDIATE RELEASE
CONTACTS: | JAMES G. RAKES, CHAIRMAN, PRESIDENT & CEO |
| (540) 951-6236 | jrakes@nbbank.com |
| DAVID K. SKEENS, TREASURER & CFO |
| (540) 951-6347 |
NATIONAL BANKSHARES, INC. REPORTS
SECOND QUARTER EARNINGS
BLACKSBURG, VA, JULY 15, 2009: National Bankshares, Inc. (NASDAQ Capital Market: NKSH) reported today that it posted second quarter net income of nearly $3.36 million, or basic net income of $0.48 per share. For the second quarter of 2008, the Company had net income of nearly $3.47 million. Year-to-date net income is over $6.74 million, or $0.97 per share, 1.41% above the $6.65 million total on June 30, 2008. National Bankshares, Inc., a financial holding company headquartered in Blacksburg, Virginia, had net loans of $569.85 million at June 30, 2009, an increase of 7.63% over net loans at the end of the second quarter last year. Total assets on June 30 were $984.76 million, up by 10.04% over the same period in 2008.
Commenting on the Company’s quarterly results, Chairman, President & CEO James G. Rakes said, “Second quarter earnings were impacted by a special Federal Deposit Insurance Corporation assessment, as well as an increase in quarterly fees. It is not commonly understood that insured depository institutions themselves, not the taxpayers, fund FDIC deposit insurance. The financial crisis has put an additional burden on the Deposit Insurance Fund, and all insured banks are contributing so that the Fund’s reserve ratio remains healthy. Although the special assessment hurt second quarter earnings, FDIC insurance is a cornerstone of the American banking industry, and banks are doing what must be done to be certain that the public’s confidence in FDIC remains high.”
Mr. Rakes went on to say, “We are pleased with the level of loan growth through the first half of the year, and the quality of the loan portfolio is good. Although the total of nonperforming assets is somewhat higher, the ratio of nonperforming loans to total loans, at 0.47%, is reasonable and compares very well with our peers. We have increased the provision for loan losses throughout 2009, both in recognition of the difficult economy and to keep pace with loan growth. As we work to meet the challenges that remain this year, we are mindful of the conservative traditions that are a part of our bank’s 118-year heritage and of its important role in the communities we serve.”
National Bankshares, Inc. is the parent of the National Bank of Blacksburg, which does business as National Bank from 25 offices in Southwest Virginia. The Company has a financial services subsidiary that serves the same markets as National Bankshares Investment Services and National Bankshares Insurance Services. Company stock is traded on the NASDAQ Capital Market under the symbol “NKSH”. Additional information can be found 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.
National Bankshares, Inc. And Subsidiaries
(000’s), except ratios and percent data |
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Three months ending |
| June 30, 2009 |
| June 30, 2008 |
| Change |
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Selected consolidated data : |
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Interest income |
| $ | 12,711 |
| $ | 12,472 |
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| 1.92 | % |
Interest expense |
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| 4,274 |
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| 4,815 |
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| -11.24 | % |
Net interest income |
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| 8,437 |
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| 7,657 |
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| 10.19 | % |
Provision for loan losses |
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| 278 |
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| 135 |
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| 105.93 | % |
Trust income |
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| 261 |
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| 319 |
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| -18.18 | % |
Other noninterest income |
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| 1,911 |
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| 1,908 |
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| 0.16 | % |
Salary and benefits |
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| 2,794 |
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| 2,746 |
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| 1.75 | % |
Occupancy expense |
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| 425 |
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| 435 |
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| -2.30 | % |
Amortization of intangibles |
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| 273 |
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| 279 |
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| -2.15 | % |
Other noninterest expense |
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| 2,688 |
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| 1,846 |
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| 45.61 | % |
Income taxes |
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| -794 |
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| -974 |
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| -18.48 | % |
Net income |
| $ | 3,357 |
| $ | 3,469 |
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| -3.23 | % |
Basic net income per share |
| $ | 0.48 |
| $ | 0.50 |
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| $0.02 |
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Daily averages: |
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Gross loans |
| $ | 578,239 |
| $ | 529,653 |
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| 9.17 | % |
Loans, net |
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| 570,964 |
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| 523,336 |
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| 9.10 | % |
Total securities |
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| 303,753 |
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| 290,593 |
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| 4.53 | % |
Total deposits |
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| 858,977 |
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| 786,698 |
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| 9.19 | % |
Other borrowings |
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| 50 |
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| 61 |
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| -18.03 | % |
Stockholders’ equity |
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| 114,981 |
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| 108,891 |
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| 5.59 | % |
Cash and due from |
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| 12,135 |
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| 13,008 |
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| -6.71 | % |
Interest-earning assets |
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| 922,876 |
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| 844,591 |
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| 9.27 | % |
Interest-bearing liabilities |
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| 745,704 |
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| 670,099 |
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| 11.28 | % |
Intangible assets |
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| 13,324 |
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| 14,435 |
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| -7.70 | % |
Total assets |
| $ | 981,514 |
| $ | 902,368 |
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| 8.77 | % |
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Financial ratios: Note (1) |
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Return on average assets |
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| 1.37 | % |
| 1.55 | % |
| -0.18 | % |
Return on average equity |
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| 11.71 | % |
| 12.81 | % |
| -1.10 | % |
Net interest margin |
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| 4.10 | % |
| 4.05 | % |
| 0.05 | % |
Efficiency ratio |
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| 53.21 | % |
| 49.26 | % |
| 3.95 | % |
Average equity to average assets |
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| 11.71 | % |
| 12.07 | % |
| -0.35 | % |
Note (1) Ratio change measured in bp |
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Allowance for loan losses: |
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Beginning balance |
| $ | 6,118 |
| $ | 5,228 |
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| 17.02 | % |
Provision for losses |
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| 278 |
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| 135 |
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| 105.93 | % |
Charge-offs |
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| -131 |
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| -130 |
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| 0.77 | % |
Recoveries |
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| 19 |
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| 34 |
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| -44.12 | % |
Ending balance |
| $ | 6,284 |
| $ | 5,267 |
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| 19.31 | % |
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Year to Date |
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| June 30, 2009 |
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| June 30, 2008 |
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| Change |
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Selected consolidated data : |
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Interest income |
| $ | 25,289 |
| $ | 25,183 |
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| 0.42 | % |
Interest expense |
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| 8,686 |
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| 10,222 |
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| -15.03 | % |
Net interest income |
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| 16,603 |
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| 14,961 |
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| 10.98 | % |
Provision for loan losses |
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| 648 |
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| 235 |
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| 175.74 | % |
Trust income |
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| 537 |
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| 622 |
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| -13.67 | % |
Other noninterest income |
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| 3,742 |
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| 3,901 |
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| -4.08 | % |
Salary and benefits |
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| 5,625 |
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| 5,603 |
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| 0.39 | % |
Occupancy expense |
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| 894 |
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| 891 |
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| 0.34 | % |
Amortization of intangibles |
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| 551 |
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| 562 |
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| -1.96 | % |
Other noninterest expense |
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| 4,740 |
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| 3,707 |
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| 27.87 | % |
Income taxes |
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| -1,680 |
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| -1,836 |
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| -8.50 | % |
Net income |
| $ | 6,744 |
| $ | 6,650 |
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| 1.41 | % |
Basic net income per share |
| $ | 0.97 |
| $ | 0.96 |
| $ | 0.01 |
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Fully diluted net income per share |
| $ | 0.97 |
| $ | 0.96 |
| $ | 0.01 |
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Dividends per share |
| $ | 0.41 |
| $ | 0.39 |
| $ | 0.02 |
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Dividend payout ratio |
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| 42.16 |
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| 40.63 |
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| 1.53 |
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Book value per share |
| $ | 16.58 |
| $ | 15.50 |
| $ | 1.08 |
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Balance sheet at period-end: |
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Gross loans |
| $ | 577,226 |
| $ | 535,837 |
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| 7.72 | % |
Loans, net |
| $ | 569,852 |
| $ | 529,465 |
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| 7.63 | % |
Total securities |
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| 306,283 |
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| 289,315 |
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| 5.86 | % |
Cash and due From |
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| 15,039 |
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| 20,404 |
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| -26.29 | % |
Total deposits |
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| 861,862 |
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| 781,113 |
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| 10.34 | % |
Other borrowings |
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| 49 |
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| 59 |
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| -16.95 | % |
Stockholders’ equity |
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| 114,979 |
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| 107,354 |
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| 7.10 | % |
Intangible assets |
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| 13,168 |
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| 14,276 |
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| -7.76 | % |
Total assets |
| $ | 984,762 |
| $ | 894,912 |
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| 10.04 | % |
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Daily averages: |
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Gross loans |
| $ | 576,253 |
| $ | 527,366 |
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| 9.27 | % |
Loans, net |
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| 569,087 |
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| 521,064 |
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| 9.22 | % |
Total securities |
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| 295,163 |
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| 283,240 |
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| 4.21 | % |
Total deposits |
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| 849,456 |
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| 780,830 |
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| 8.79 | % |
Other borrowings |
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| 52 |
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| 61 |
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| -14.75 | % |
Stockholders’ equity |
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| 114,050 |
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| 107,963 |
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| 5.64 | % |
Cash and due from |
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| 11,798 |
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| 12,877 |
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| -8.38 | % |
Interest-earning assets |
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| 912,589 |
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| 839,198 |
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| 8.75 | % |
Interest-bearing liabilities |
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| 738,374 |
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| 668,344 |
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| 10.48 | % |
Intangible assets |
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| 13,462 |
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| 14,576 |
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| -7.64 | % |
Total assets |
| $ | 971,224 |
| $ | 895,701 |
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| 8.43 | % |
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Financial ratios: Note (1) |
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Return on average assets |
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| 1.40 | % |
| 1.49 | % |
| -0.09 | % |
Return on average equity |
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| 11.92 | % |
| 12.39 | % |
| -0.47 | % |
Net interest margin |
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| 4.09 | % |
| 4.00 | % |
| 0.09 | % |
Efficiency ratio |
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| 51.83 | % |
| 50.81 | % |
| 1.02 | % |
Average equity to average assets |
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| 11.74 | % |
| 12.05 | % |
| -0.31 | % |
Note (1) Ratio change measured in bp |
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Allowance for loan losses: |
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Beginning balance |
| $ | 5,858 |
| $ | 5,219 |
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| 12.24 | % |
Provision for losses |
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| 648 |
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| 235 |
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| 175.74 | % |
Charge-offs |
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| -254 |
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| -282 |
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| -9.93 | % |
Recoveries |
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| 32 |
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| 95 |
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| -66.32 | % |
Ending balance |
| $ | 6,284 |
| $ | 5,267 |
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| 19.31 | % |
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Nonperforming assets: |
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Nonaccrual loans |
| $ | 2,729 |
| $ | 2,200 |
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| 24.05 | % |
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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| 2,729 |
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| 2,200 |
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| 0 |
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Other real estate owned |
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| 1,869 |
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| 234 |
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| 698.72 | % |
Total nonperforming assets |
| $ | 4,598 |
| $ | 2,434 |
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| 88.91 | % |
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Asset quality ratios: Note (3) |
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Nonperforming loans to total loans |
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| 0.47 | % |
| 0.41 | % |
| --- |
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Allowance for loan losses to total loans |
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| 1.09 | % |
| 0.98 | % |
| --- |
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Allowance for loan losses to nonperforming loans |
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| 230.27 | % |
| 239.41 | % |
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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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Note (3) Ratio change measured in bp |
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