Exhibit 99.1
PRESS RELEASE
Company: National Bancshares Corporation
OTC Bulletin Board - NBOH
Contact: David C. Vernon, President and CEO
Address: 112 West Market Street
Orrville, Ohio 44667
Phone: 330.682.1010
Fax: 330.682.4644
For Immediate Release: November 2, 2010
National Bancshares Corporation Announces Third Quarter Earnings
Orrville, Ohio ~ National Bancshares Corporation, the holding company for
First National Bank, reported net income of $866 thousand for the quarter
ended September 30, 2010, an increase from $267 thousand for the same
period in 2009. The earnings increase was caused primarily by an increase
in noninterest income and a decrease in the provision for loan losses,
partially offset by an increase in noninterest expense. Earnings per share
were $0.39 and $0.12 for the quarter ended September 30, 2010 and 2009,
respectively.
Third Quarter 2010 Business Highlights:
~ Net interest income for the quarter ended September 30, 2010 was
$3.12 million, an increase of 1.6% from $3.07 million for the same period
in 2009.
~ Interest income on loans for the three-month period ended
September 30, 2010 increased $217 thousand to $2.7 million, compared to
the same period in 2009.
~ Interest expense on deposits for the quarter was $536 thousand, a decrease
of 21.3% compared to $681 thousand for the same period in 2009.
~ The provision for loan losses decreased to $228 thousand from
$576 thousand in the same period in 2009.
~ Net securities gains totaled $540 thousand in the quarter compared to
$79 thousand in 2009. $13.2 million of securities were sold in the third
quarter of 2010. The securities sold primarily consisted of First National
originated mortgage loans.
Year-to-date 2010 Business Highlights:
~ Total assets have increased $14.9 million, from $370.2 million as of
December 31, 2009 to $385.1 million as of September 30, 2010.
~ Total deposits have increased $17.9 million, from $291.4 million as of
December 31, 2009 to $309.3 million as of September 30, 2010.
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~ Adversely classified loans decreased from $14.6 million as
December 31, 2009 to $10.0 million at September 30, 2010.
Year-to-Date September 30, 2010 Financial Summary:
Net income for the first nine months of 2010 was $1.32 million or
$0.60 per basic and diluted earnings per share compared to $1.29 million
or $0.58 per basic and diluted earnings per share for the same period
in 2009. The earnings increase was caused primarily by an increase in
net interest income and noninterest income, partially offset by an increase
in the provision for loan losses and an increase in noninterest expense.
Net interest income for the first nine months of 2010 increased
$252 thousand to $9.3 million from $9.1 million in the first nine months
of 2009. Net interest income was positively impacted by the growth in
average balances of loans and deposits and a decrease in the cost of funds,
partially offset by a decrease in the yield on earning assets.
Provision for loan losses totaled $1.4 million for the first nine months
of 2010 compared to $927 thousand for the same period in 2009. The increase
in the provision for loan losses is primarily related to the deterioration
in 2010 of two loan relationships mentioned later in the financial condition
section.
Noninterest income for the nine months ended September 30, 2010 increased
to $2.4 million or 23.2%, from $2.0 million for the same period in 2009.
The change is primarily related to the increase in net gains recorded on
the sale of securities from $387 thousand in 2009 to $616 thousand in 2010.
Noninterest expense for the nine months ended September 30, 2010 was
$8.9 million, an increase of 4.6% from $8.5 million for the same period
in 2009. The increase resulted primarily from increased legal fees related
to loan collection expenses and the costs associated with a project to
convert all loan and deposit documents to digital images. The conversion
of the loan and deposit documents to digital images was completed in
August of 2010.
September 30, 2010 Financial Condition:
Total assets increased 4.0% to $385.1 million as of September 30, 2010,
from $370.2 million at December 31, 2009. Securities available for sale
totaled $131.8 million as of September 30, 2010, compared to $130.2 million
at December 31, 2009. Loans, net of allowance for loan losses increased
$933 thousand to $195.0 million as of September 30, 2010, compared to
$194.1 million at December 31, 2009.
Deposits increased 6.2% to $309.3 million as of September 30, 2010,
compared to $291.4 million at December 31, 2009. Shareholders` equity
increased 4.3% to $40.6 million at September 30, 2010, from $38.9 million
at the end of 2009. Accumulated other comprehensive income, which is the
net unrealized gain or loss on securities classified as available for
sale, net of tax, increased to $3.4 million as of September 30, 2010,
compared to $2.5 million as of December 31, 2009.
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The allowance for loan losses to total loans outstanding was 1.39% as of
September 30, 2010, which is a decrease from 1.47% at December 31, 2009.
The decrease in the allowance for loan losses was primarily related to a
$1.1 million partial charge-off of a commercial credit and a $270 thousand
charge-off of a commercial real estate loan sold in the second quarter.
These loans were graded substandard and considered impaired as of
December 31, 2009. $720 thousand was allocated to the allowance for loan
losses for these two loans as of December 31, 2009. The provision for loan
losses for the nine months ended September 30, 2010 was $1.4 million,
compared to $927 thousand for the same period in 2009. Net charge-offs were
$1.5 million for the nine months ended September 30, 2010, compared to
$638 thousand for the same period in 2009.
Total nonperforming loans decreased from $5.2 million as of
December 31, 2009 to $3.6 million at September 30, 2010. Non-performing
loans consist of loans placed on non-accrual status and loans past due
over 90 days and still accruing interest. Loans, past due greater than
30 days decreased from $1.7 million as of December 31, 2009 to $1.3 million
as of September 30, 2010. Adversely classified loans, including loans
graded special mention, doubtful and substandard, decreased from
$14.6 million as of December 31, 2009 to $10.0 million as of
September 30, 2010. The Bank`s classification ratio declined to 29.5% in
the third quarter from 39.5% as December 31, 2009. The classification
ratio is calculated using total adversely classified assets (excluding
special mention loans) divided by Tier 1 capital plus allowance for loan
losses. Management believes the allowance for loan losses is adequate as
of September 30, 2010.
Third-Quarter 2010 Financial Summary:
Net interest income for the quarter ended September 30, 2010 was
$3.12 million, an increase of 1.6% from $3.07 million for the same period
in 2009, the second-highest level of net interest income for a quarter in
the Bank`s history.
Noninterest income for the quarter ended September 30, 2010 increased
103.2%, from $595 thousand for the same period in 2009 to $1.2 million.
The increase is primarily related to net gains recorded on the sale of
First National originated mortgage backed securities.
Noninterest expense for the quarter ended September 30, 2010 was
$2.9 million, an increase of 5.0% from $2.8 million for the same period
in 2009. The increase in noninterest expense was due primarily to an
increase in salaries and benefits expense and occupancy expense.
Income tax expense was $288 thousand for the three months ended
September 30, 2010, an increase of $270 thousand compared to the same
period in 2009. Higher pre-tax income in 2010, compared to the same
period in 2009, is the primary cause of the increase.
National Bancshares Corporation`s subsidiary, First National Bank, is
headquartered in Orrville, Ohio with fourteen full service offices located
in Orrville, Massillon, Wooster, Apple Creek, Dalton, Fairlawn, Kidron,
Lodi, Mt. Eaton, Seville and Smithville and a loan production office
in Salem, OH.
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Forward-Looking Statements ~ This press release contains forward-looking
statements as referenced in the Private Securities Litigation Reform Act
of 1995. Forward-looking statements are subject to many risks and
uncertainties. Actual results could differ materially from those indicated
by the forward-looking statements. These include factors such as changes
in the regulatory environment, changes in business conditions and
inflation, risks associated with credit quality and other factors discussed
in the Company`s filings with the U.S. Securities and Exchange Commission,
including its Annual Report on Form 10-K for the year ended
December 31, 2009. The Company assumes no obligation to update any
forward-looking statement.
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Selected Consolidated Financial Data
Balance Sheet Data:
(dollars in thousands)
Sep 30, Jun 30, Mar 31, Dec 31, Sep 30,
2010 2010 2010 2009 2009
Cash and cash equivalents $ 21,805 $ 25,975 $ 28,832 $ 8,124 $ 15,732
Securities available for sale 131,799 131,734 123,539 130,241 135,222
Loans, net 195,004 191,078 191,483 194,071 183,464
Deposits 309,296 309,080 306,006 291,373 279,475
Repurchase agreements 6,551 6,980 6,893 6,105 6,782
Federal Home Loan Bank advances 25,000 25,000 25,000 27,000 27,000
Shareholders' equity 40,585 39,977 39,666 38,903 39,395
Total assets 385,108 384,340 381,325 370,228 356,773
Income Statement Data:
(dollars in thousands, except per
share data) Nine months ended
Sep 30, Sep 30,
2010 2009 Change
Interest income $ 11,797 $ 12,386 (4.8)%
Interest expense 2,464 3,305 (25.4)%
Net interest income 9,333 9,081 2.8 %
Provision for loan losses 1,350 927 45.6 %
Net interest income after provision for
loan losses 7,983 8,154 (2.1)%
Noninterest income 2,446 1,985 23.2 %
Noninterest expense:
Salaries and employee benefits 4,115 4,003 2.8 %
Data processing 758 670 13.1 %
Net occupancy 917 789 16.2 %
Professional and consulting fees 570 402 41.8 %
FDIC assessment 398 512 (22.3)%
Other 2,120 2,110 0.5 %
Total noninterest expense 8,878 8,486 4.6 %
Income before income taxes 1,551 1,653 (6.2)%
Income taxes 234 367 (36.2)%
Net income $ 1,317 $ 1,286 2.4 %
Earnings per share, basic and diluted $ 0.60 $ 0.58 3.4 %
Weighted average shares outstanding 2,205,973 2,202,368
Income Statement Data:
(dollars in thousands, except per
share data) Three months ended
Sep 30, Sep 30,
2010 2009 Change
Interest income $ 3,919 $ 4,026 (2.7)%
Interest expense 799 954 (16.2)%
Net interest income 3,120 3,072 1.6 %
Provision for loan losses 228 576 (60.4)%
Net interest income after provision for
loan losses 2,892 2,496 15.9 %
Noninterest income 1,209 595 103.2 %
Noninterest expense:
Salaries and employee benefits 1,380 1,329 3.8 %
Data processing 261 224 16.5 %
Net occupancy 319 262 21.8 %
Professional and consulting fees 178 171 4.1 %
FDIC assessment 132 116 13.8 %
Other 677 704 (3.8)%
Total noninterest expense 2,947 2,806 5.0 %
Income before income taxes 1,154 285 304.9 %
Income taxes 288 18 1500.0 %
Net income $ 866 $ 267 224.3 %
Earnings per share, basic and diluted $ 0.39 $ 0.12 225.0 %
Weighted average shares outstanding 2,205,973 2,202,368
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Quarterly Earnings Summary
Previous Eight Quarters:
(dollars in thousands, except per
share data)
Sep Jun Mar Dec
2010 2010 2010 2009
Interest income $ 3,919 $ 3,920 $ 3,958 $ 4,082
Interest expense 799 819 846 932
Net interest income 3,120 3,101 3,112 3,150
Provision for loan losses 228 615 507 902
Net interest income after provision for
loan losses 2,892 2,486 2,605 2,248
Noninterest income 1,209 612 625 976
Noninterest expense 2,947 3,002 2,929 2,878
Income before income taxes 1,154 96 301 346
Income taxes 288 (62) 8 31
Net income $ 866 $ 158 $ 293 $ 315
Earnings per share, basic and diluted $ 0.39 $ 0.07 $ 0.13 $ 0.14
Cash dividends per share $ 0.08 $ 0.08 $ 0.08 $ 0.08
Weighted average shares outstanding 2,205,973 2,205,973 2,205,973 2,202,721
Sep Jun Mar Dec
2009 2009 2009 2008
Interest income $ 4,026 $ 4,149 $ 4,208 $ 4,311
Interest expense 954 1,136 1,215 1,375
Net interest income 3,072 3,013 2,993 3,150
Provision for loan losses 576 228 123 98
Net interest income after provision for
loan losses 2,496 2,785 2,870 2,838
Noninterest income 595 756 645 609
Noninterest expense 2,806 2,945 2,735 2,606
Income before income taxes 285 596 780 841
Income taxes 18 142 207 226
Net income $ 267 $ 454 $ 573 $ 615
Earnings per share, basic and diluted $ 0.12 $ 0.21 $ 0.26 $ 0.28
Cash dividends per share $ 0.08 $ 0.08 $ 0.08 $ 0.16
Weighted average shares outstanding 2,202,368 2,202,368 2,202,368 2,202,368
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