Message to Our Stockholders:
It is a pleasure to present to you our First Quarter Report for 2013.
National Bankshares, Inc. posted net income of $4.22 million, or basic net income per share of $0.61. The return on average assets for the first quarter was 1.56% and the return on average equity was 11.26%. At March 31, 2013, the Company had total assets of $1.10 billion, an increase of 1.35% when compared to the end of the first quarter of 2012.
We are pleased that our returns on equity and assets compare favorably to our peer financial institutions. We still face challenges as loan demand remains low throughout much of the country and in our market area. Total loans at quarter-end, almost $574.96 million, were down slightly from the total of $584.56 million at the end of March last year.
We recently concluded our Annual Meeting of Stockholders where our directors, officers and employees were able to visit with some of you. During my remarks, I briefly discussed the various options and delivery channels of products and services available to consumers today. For instance, during the first quarter, we continued with our investment in the Company’s technology infrastructure with the roll-out of our mobile banking product. This product will allow our many customers the ability to manage their accounts through their mobile devices, anytime and anywhere. We are committed to providing a wide range of financial products and delivery options with a personalized level of service which, for us, is the hallmark of community banking.
I also highlighted the deep level of expertise and talent that we have in our management and other employees which will ensure that we continue to bring value to our stockholders and solid products and services to our customers for years to come. We are all proud to be bankers, and we are especially proud to be a part of the National Bank’s long tradition of community banking.
Finally, we recognize that you, our stockholders, are a very important part of our success. We thank you for your continued support and investment.
James G. Rakes
Chairman, President
and Chief Executive Officer
National Bankshares, Inc. and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
($ in thousands, except for per share data) | March 31, 2013 | March 31, 2012 | ||||||
Assets | ||||||||
Cash and due from banks | $ | 10,674 | $ | 12,241 | ||||
Interest-bearing deposits | 107,176 | 101,301 | ||||||
Securities available for sale, at fair value | 192,954 | 198,346 | ||||||
Securities held to maturity (fair value $174,218 in 2013 and fair value $147,509 in 2012) | 166,947 | 139,367 | ||||||
Mortgage loans held for sale | 313 | 1,371 | ||||||
Loans: | ||||||||
Loans, net of unearned income and deferred fees | 574,958 | 584,564 | ||||||
Less: allowance for loan losses | (8,291 | ) | (8,063 | ) | ||||
Loans, net | 566,667 | 576,501 | ||||||
Bank premises and equipment, net | 10,237 | 10,563 | ||||||
Accrued interest receivable | 5,878 | 6,175 | ||||||
Other real estate owned, net | 1,094 | 940 | ||||||
Intangible assets | 9,106 | 10,189 | ||||||
Bank-owned life insurance | 20,690 | 19,991 | ||||||
Other assets | 6,767 | 6,857 | ||||||
Total assets | $ | 1,098,503 | $ | 1,083,842 | ||||
Liabilities and Stockholders' Equity | ||||||||
Noninterest-bearing deposits | $ | 144,815 | $ | 145,070 | ||||
Interest-bearing demand deposits | 449,992 | 415,352 | ||||||
Savings deposits | 72,420 | 65,322 | ||||||
Time deposits | 269,892 | 306,048 | ||||||
Total deposits | 937,119 | 931,792 | ||||||
Other borrowed funds | --- | --- | ||||||
Accrued interest payable | 146 | 191 | ||||||
Other liabilities | 7,878 | 7,067 | ||||||
Total liabilities | 945,143 | 939,050 | ||||||
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 6,947,974 shares in 2013 and 6,939,974 shares in 2012 | 8,685 | 8,675 | ||||||
Retained earnings | 148,378 | 138,374 | ||||||
Accumulated other comprehensive loss, net | (3,703 | ) | (2,257 | ) | ||||
Total stockholders' equity | 153,360 | 144,792 | ||||||
Total liabilities and stockholders' equity | $ | 1,098,503 | $ | 1,083,842 |
This financial information is a high level review and discussion of recent performance and activities. For a full discussion, investors should refer to the 04/18/2013 Earnings Press Release and our SEC Filings found at www.sec.gov and on the company’s web site at www.nationalbankshares.com.
National Bankshares, Inc. and Subsidiaries
Consolidated Statements of Income
(Unaudited)
March 31, 2013 | March 31, 2012 | |||||||
($ in thousands, except for per share data) | ||||||||
Interest Income | ||||||||
Interest and fees on loans | $ | 8,319 | $ | 8,878 | ||||
Interest on interest-bearing deposits | 58 | 71 | ||||||
Interest on securities – taxable | 1,539 | 1,589 | ||||||
Interest on securities – nontaxable | 1,648 | 1,576 | ||||||
Total interest income | 11,564 | 12,114 | ||||||
Interest Expense | ||||||||
Interest on time deposits of $100,000 or more | 268 | 425 | ||||||
Interest on other deposits | 1,411 | 1,692 | ||||||
Interest on other borrowed funds | --- | --- | ||||||
Total interest expense | 1,679 | 2,117 | ||||||
Net interest income | 9,885 | 9,997 | ||||||
Provision for loan losses | 671 | 672 | ||||||
Net interest income after provision for loan losses | 9,214 | 9,325 | ||||||
Noninterest Income | ||||||||
Service charges on deposit accounts | 588 | 631 | ||||||
Other service charges and fees | 60 | 49 | ||||||
Credit card fees | 740 | 794 | ||||||
Trust income | 289 | 326 | ||||||
Bank-owned life insurance | 188 | 200 | ||||||
Other income | 150 | 99 | ||||||
Realized securities gains, net | 95 | 53 | ||||||
Total noninterest income | 2,110 | 2,152 | ||||||
Noninterest Expense | ||||||||
Salaries and employee benefits | 2,940 | 2,956 | ||||||
Occupancy and furniture and fixtures | 432 | 397 | ||||||
Data processing and ATM | 393 | 392 | ||||||
FDIC assessment | 136 | 109 | ||||||
Credit card processing | 552 | 572 | ||||||
Intangibles and goodwill amortization | 271 | 271 | ||||||
Net costs of other real estate owned | 75 | 48 | ||||||
Franchise taxes | 258 | 162 | ||||||
Other operating expenses | 889 | 804 | ||||||
Total noninterest expense | 5,946 | 5,711 | ||||||
Income before income tax expense | 5,378 | 5,766 | ||||||
Income tax expense | 1,162 | 1,337 | ||||||
Net income | $ | 4,216 | $ | 4,429 | ||||
Basic net income per share | $ | 0.61 | $ | 0.64 |
National Bankshares, Inc.
Board of Directors
Lawrence J. Ball President Moog Components Group John E. Dooley Chief Executive Officer Virginia Tech Foundation, Inc. Charles E. Green, III Financial Planner AXA Advisors, LLC Jack M. Lewis President New River Community College Mary G. Miller President Interactive Design & Development, Inc. | William A. Peery President Cargo Oil Co., Inc. James G. Rakes Chairman, President and CEO, National Bankshares, Inc.; Chairman, President and CEO, National Bank; Chairman, President and CEO, National Bankshares Financial Services, Inc. Glenn P. Reynolds President Reynolds Architects Incorporated James M. Shuler Vice Chairman of the Board Virginia House of Delegates, Retired |
Mission Statement
National Bankshares, Inc. strives to be an exceptional community bank holding company dedicated to providing shareholder value by offering financial services to customers through subsidiary financial institutions and affiliated companies in an efficient, friendly, personalized and cost-effective manner. We recognize that to do this, our financial institutions must retain the ability to make decisions locally and must actively participate in the communities they serve. We are committed to offering competitive and fair employment opportunities and to maintaining the highest standards in all aspects of our business.