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FOR IMMEDIATE RELEASE
CONTACTS: James G. Rakes, Chairman, President & CEO (540) 951-6236
jrakes@nbbank.com
David K. Skeens, Treasurer (540) 951-6347
dskeens@nbbank.com
NATIONAL BANKSHARES HAS INCREASE IN NET INCOME
OF 11.76% FOR THE FIRST THREE QUARTERS OF 2010
BLACKSBURG, VA, OCTOBER 14, 2010: National Bankshares, Inc. (NASDAQ Capital Market: NKSH) today announced that it had net income of nearly $4.0 million in the third quarter of 2010, an increase of 5.74% over the $3.78 million reported for the same period of 2009. The financial holding company headquartered in Blacksburg, Virginia, posted net income of over $11.76 million for the nine months ended September 30, 2010, up by $1.24 million, or 11.76%, when compared with net income for the first nine months in 2009. Basic net income per share for the third quarter of 2010 was $0.58, and it was $0.55 for the third quarter last year. For the first nine months of 2010, basic net income per share was $1.70, up from $1.52 per share for 2009. Total loans at September 30, 2010 were at $583.61 million, slightly higher than the $582.76 million in total loans at the end of the third quarter in 2009. National Bankshares had total assets of nearly $982.45 million at September 30, 2010, and total assets of $965.89 million at September 30, 2009. The Company reported that the return on average assets was 1.60% and the return on average equity was 12.32% for the nine months ended September 30, 2010.
National Bankshares’ Chairman, President & CEO James G. Rakes said, “With interest rates remaining stable through the third quarter, we have been able to keep the net interest margin in a healthy range. This in turn has led to an increase in net interest income. We also maintain a focus on containing controllable costs. The end result is higher earnings through three quarters of the year.” Mr. Rakes continued, “Our lenders are still working closely with some loan customers who are struggling in this difficult economy. We continue to fund the provision for loan losses at a prudent level as we look forward to a sustained recovery in our markets.”
National Bankshares, Inc. is the parent company of the National Bank of Blacksburg, which does business as National Bank from 25 offices throughout Southwest Virginia. It also has an insurance and investments subsidiary, National Bankshares Financial Services, Inc., which operates in the same trade area. The Company’s stock is traded on the NASDAQ Capital Market under the symbol “NKSH”. Additional information is available at www.nationalbankshares.com.
101 Hubbard Street / Blacksburg, Virginia 24060
P.O. Box 90002 / Blacksburg, Virginia 24062-9002
540 951-6300 / 800 552-4123
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
Consolidated Balance Sheet
(Unaudited) | (Unaudited) | |||||||||
($ in thousands, except for per share data) | September 30, 2010 | September 30, 2009 | December 31, 2009 | |||||||
Assets | ||||||||||
Cash and due from banks | $ | 12,540 | $ | 11,891 | $ | $12,894 | ||||
Interest-bearing deposits | 55,367 | 22,935 | 32,730 | |||||||
Federal funds sold | --- | --- | --- | |||||||
Securities available for sale | 154,980 | 169,457 | 168,041 | |||||||
Securities held to maturity | 127,480 | 132,786 | 129,376 | |||||||
Total securities | 282,460 | 302,243 | 297,417 | |||||||
Mortgage loans held for sale | 1,732 | 628 | 126 | |||||||
Loans: | ||||||||||
Real estate construction loans | 48,908 | 47,671 | 45,625 | |||||||
Real estate mortgage loans | 173,753 | 167,589 | 165,542 | |||||||
Commercial and industrial loans | 269,619 | 268,868 | 283,998 | |||||||
Consumer loans | 91,329 | 98,632 | 95,844 | |||||||
Total loans | 583,609 | 582,760 | 591,009 | |||||||
Less: unearned income and deferred fees | (975) | (1,119) | (1,062) | |||||||
Loans, net of unearned income and deferred fees | 582,634 | 581,641 | 589,947 | |||||||
Less: allowance for loan losses | (7,794) | (6,453) | (6,926) | |||||||
Loans, net | 574,840 | 575,188 | 583,021 | |||||||
Bank premises and equipment, net | 10,608 | 10,734 | 10,628 | |||||||
Accrued interest receivable | 6,000 | 6,322 | 6,250 | |||||||
Other real estate owned | 3,026 | 1,944 | 2,126 | |||||||
Intangible assets | 11,814 | 12,897 | 12,626 | |||||||
Other assets | 24,060 | 21,106 | 24,549 | |||||||
Total assets | $ | 982,447 | $ | 965,888 | $ | 982,367 | ||||
Liabilities and Stockholders' Equity | ||||||||||
Noninterest-bearing deposits | $ | 125,877 | $ | 122,519 | $ | 122,549 | ||||
Interest-bearing demand deposits | 316,820 | 277,884 | 310,629 | |||||||
Savings deposits | 55,695 | 50,241 | 51,622 | |||||||
Time deposits | 343,464 | 385,229 | 367,312 | |||||||
Total deposits | 841,856 | 835,873 | 852,112 | |||||||
Other borrowed funds | --- | 46 | --- | |||||||
Accrued interest payable | 304 | 473 | 336 | |||||||
Other liabilities | 7,673 | 8,025 | 7,843 | |||||||
Total liabilities | 849,833 | 844,417 | 860,291 | |||||||
Stockholders' Equity | ||||||||||
Preferred stock of no par value. Authorized 5,000,000 shares; none issued and outstanding | --- | --- | --- | |||||||
Common stock of $1.25 par value. Authorized 10,000,000 shares; issued and outstanding 6,933,474 shares at September 30, 2010, September 30, 2009, and December 31, 2009 | 8,667 | 8,667 | 8,667 | |||||||
Retained earnings | 122,612 | 113,087 | 113,901 | |||||||
Accumulated comprehensive income gain (loss) | 1,335 | (283 | ) | (492 | ) | |||||
Total stockholders' equity | 132,614 | 121,471 | 122,076 | |||||||
Total liabilities and stockholders' equity | S | 982,447 | $ | 965,888 | $ | 982,367 |
Consolidated Statements of Income
(Unaudited)
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, 2010 | September 30, 2009 | September 30, 2010 | September 30, 2009 | |||||||||||||
($ in thousands, except for per share data) | ||||||||||||||||
Interest Income | ||||||||||||||||
Interest and fees on loans | $ | 9,284 | $ | $9,316 | $ | 27,720 | $ | $28,170 | ||||||||
Interest on federal funds | --- | --- | --- | --- | ||||||||||||
Interest on interest-bearing deposits | 36 | 23 | 85 | 73 | ||||||||||||
Interest on securities – taxable | 1,325 | 1,600 | 4,234 | 4,766 | ||||||||||||
Interest on securities – nontaxable | 1,642 | 1,677 | 4,835 | 4,896 | ||||||||||||
Total interest income | 12,287 | 12,616 | 36,874 | 37,905 | ||||||||||||
Interest Expense | ||||||||||||||||
Interest on time deposits | 855 | 1,379 | 2,695 | 4,363 | ||||||||||||
Interest on other deposits | 1,871 | 2,496 | 5,860 | 8,197 | ||||||||||||
Interest on borrowed funds | --- | 1 | --- | 2 | ||||||||||||
Total interest expense | 2,726 | 3,876 | 8,555 | 12,562 | ||||||||||||
Net interest income | 9,561 | 8,740 | 28,319 | 25,343 | ||||||||||||
Provision for loan losses | 710 | 305 | 2,209 | 953 | ||||||||||||
Net interest income after provision for loan losses | 8,851 | 8,435 | 26,110 | 24,390 | ||||||||||||
Noninterest Income | ||||||||||||||||
Service charges on deposit accounts | 706 | 865 | 2,192 | 2,506 | ||||||||||||
Other service charges and fees | 63 | 107 | 214 | 263 | ||||||||||||
Credit card fees | 745 | 723 | 2,171 | 2,060 | ||||||||||||
Trust income | 316 | 255 | 846 | 792 | ||||||||||||
Bank owned life insurance | 197 | 201 | 558 | 554 | ||||||||||||
Other income | 72 | 76 | 215 | 261 | ||||||||||||
Realized securities gains/(losses), net | 2 | (15) | (1) | 55 | ||||||||||||
Total noninterest income | 2,101 | 2,212 | 6,195 | 6,491 | ||||||||||||
Noninterest Expense | ||||||||||||||||
Salaries and employee benefits | 2,695 | 2,784 | 8,205 | 8,409 | ||||||||||||
Occupancy and furniture and fixtures | 451 | 450 | 1,419 | 1,344 | ||||||||||||
Data processing and ATM | 414 | 380 | 1,120 | 1,016 | ||||||||||||
FDIC assessment | 273 | 423 | 805 | 1,429 | ||||||||||||
Credit card processing | 588 | 550 | 1,680 | 1,551 | ||||||||||||
Intangibles and goodwill amortization | 270 | 271 | 812 | 822 | ||||||||||||
Net costs of other real estate owned | 120 | 29 | 180 | 100 | ||||||||||||
Franchise taxes | 241 | 221 | 722 | 666 | ||||||||||||
Other operating expenses | 774 | 783 | 2,364 | 2,364 | ||||||||||||
Total noninterest expense | 5,826 | 5,891 | 17,307 | 17,701 | ||||||||||||
Income before income tax expense | 5,126 | 4,756 | 14,998 | 13,180 | ||||||||||||
Income tax expense | 1,129 | 976 | 3,236 | 2,656 | ||||||||||||
Net income | $ | 3,997 | $ | 3,780 | $ | 11,762 | $ | 10,524 | ||||||||
Basic net income per share | $ | 0.58 | $ | 0.55 | $ | 1.70 | $ | 1.52 | ||||||||
Fully diluted net income per share | $ | 0.58 | $ | 0.54 | $ | 1.69 | $ | 1.52 | ||||||||
Weighted average outstanding number of common shares | ||||||||||||||||
Basic | 6,933,474 | 6,933,474 | 6,933,474 | 6,931,672 | ||||||||||||
Diluted | 6,946,650 | 6,948,083 | 6,949,731 | 6,942,712 | ||||||||||||
Dividends declared per share | $ | --- | $ | --- | $ | 0.44 | $ | 0.41 | ||||||||
Dividend payout ratio | --- | --- | 25.94 | 27.01 | ||||||||||||
Book value per share | --- | --- | $ | 19.13 | $ | 17.52 |
Key Ratios and Other Data
(Unaudited)
Three Months Ended | Nine Months Ended | |||||||||||||||
Average Balances | September 30, 2010 | September 30, 2009 | September 30, 2010 | September 30, 2009 | ||||||||||||
Cash and due from banks | $ | 11,732 | $ | 11,368 | $ | 11,404 | $ | 11,886 | ||||||||
Interest-bearing deposits | 61,389 | 34,418 | 49,658 | 38,706 | ||||||||||||
Securities available for sale | 155,602 | 169,149 | 160,326 | 166,446 | ||||||||||||
Securities held to maturity | 129,416 | 135,419 | 127,659 | 131,888 | ||||||||||||
Mortgage loans held for sale | 1,918 | 636 | 1,181 | 901 | ||||||||||||
Gross loans | 584,510 | 579,248 | 587,312 | 577,262 | ||||||||||||
Loans, net | 575,921 | 571,837 | 578,978 | 570,014 | ||||||||||||
Intangible assets | 11,969 | 13,053 | 12,238 | 13,324 | ||||||||||||
Total assets | 990,306 | 974,574 | 983,981 | 972,363 | ||||||||||||
Total deposits | 852,021 | 848,836 | 848,223 | 849,255 | ||||||||||||
Other borrowings | --- | 48 | --- | 50 | ||||||||||||
Stockholders' equity | 130,535 | 117,868 | 127,613 | 115,337 | ||||||||||||
Interest-earning assets | 928,140 | 916,773 | 921,431 | 914,332 | ||||||||||||
Interest-bearing liabilities | 727,328 | 730,628 | 726,559 | 735,764 | ||||||||||||
Financial ratios | ||||||||||||||||
Return on average assets | 1.60 | % | 1.56 | % | 1.60 | % | 1.45 | % | ||||||||
Return on average equity | 12.15 | % | 12.86 | % | 12.32 | % | 12.20 | % | ||||||||
Net interest margin | 4.50 | % | 4.27 | % | 4.54 | % | 4.13 | % | ||||||||
Net interest income – fully taxable equivalent | $ | 10,530 | $ | 9,756 | $ | 31,260 | $ | 28,265 | ||||||||
Efficiency ratio | 46.13 | % | 49.77 | % | 46.21 | % | 50.93 | % | ||||||||
Average equity to average assets | 13.18 | % | 12.09 | % | 12.97 | % | 11.86 | % | ||||||||
Allowance for loan losses | ||||||||||||||||
Beginning balance | $ | 7,553 | $ | 6,284 | $ | 6,926 | $ | 5,858 | ||||||||
Provision for losses | 710 | 305 | 2,209 | 953 | ||||||||||||
Charge-offs | (488 | ) | (168 | ) | (1,459 | ) | (422 | ) | ||||||||
Recoveries | 19 | 32 | 118 | 64 | ||||||||||||
Ending balance | $ | 7,794 | $ | 6,453 | $ | 7,794 | $ | 6,453 |
Asset Quality Data
(Unaudited)
Nonperforming assets | September 30, 2010 | September 30, 2009 | ||||||
Nonaccrual loans | $ | 7,639 | $ | 3,888 | ||||
Restructured loans | --- | --- | ||||||
Total nonperforming loans | 7,639 | 3,888 | ||||||
Other real estate owned | 3,026 | 1,944 | ||||||
Total nonperforming assets | $ | $10,665 | $ | 5,832 | ||||
Loans 90 days or more past due | $ | 533 | $ | 2,153 | ||||
Asset quality ratios | ||||||||
Nonperforming loans to loans net of unearned income and deferred fees, plus other real estate owned | 1.30 | % | 0.67 | % | ||||
Allowance for loan losses to total loans | 1.34 | % | 1.11 | % | ||||
Allowance for loan losses to nonperforming loans | 102.03 | % | 165.97 | % | ||||
Loans past due 90 days or more to loans net of unearned income and deferred fees | 0.09 | % | 0.37 | % |