FOR IMMEDIATE RELEASE
CONTACTS: James G. Rakes, Chairman, President & CEO (540) 951-6236
J. Robert Buchanan, Treasurer (276) 979-0341
NATIONAL BANKSHARES, INC.
ANNOUNCES THIRD QUARTER EARNINGS
BLACKSBURG, VA, OCTOBER 15, 2004: National Bankshares, Inc. (NASDAQ SmallCap
Market: NKSH) today reported net income of nearly $3.22 million, or basic net
income per share of $0.91 for the third quarter ended September 30. Year-to-date
net income is $9.11 million, an increase of 9.19% over the same period in 2004.
Total assets at the end of the third quarter were $782.61 million, up by 11.87%
over last September 30. A significant percentage of asset growth is attributable
to purchases completed by the Company in the first half of the year.
National Bankshares' Chairman, President & CEO James G. Rakes commented,
"Performance is good to this point in the year. Both net interest income and
noninterest income totals have improved over 2003, and we continue to focus on
controllable expense categories. In these unsettled economic times, we believe
that the basics of conveniently delivering a wide range of financial products
and services to our customers in a professional and friendly manner should help
insure long-term success."
National Bankshares, Inc. is the parent company of The National Bank,
with headquarters in Blacksburg, Virginia, and of Bank of Tazewell County of
Tazewell, Virginia. The two banks have 25 office locations throughout Southwest,
Virginia. The Company also operates a non-bank subsidiary, National Bankshares
Financial Services, Inc., which does business as National Bankshares Financial
Services and National Bankshares Insurance Services. National Bankshares, Inc.
stock trades on the Nasdaq Stock Market with the symbol "NKSH". Additional
information is available at www.nationalbankshares.com.
(unaudited tables follow)
National Bankshares, Inc. And Subsidiaries
(000's), except ratios and Three months Three months
percent data ending ending Year-to-date Year-to-date
September 30, September 30, September 30, September 30,
Selected Consolidated Data: 2004 2003 Change 2004 2003 Change
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Interest income $10,841 $10,262 5.64% $30,655 $31,134 -1.54%
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Interest expense 2,904 2,840 2.25% 8,162 9,574 -14.75%
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Net interest income 7,937 7,422 6.94% 22,493 21,560 4.33%
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Provision for loan losses 293 435 -32.64% 885 1,277 -30.70%
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Noninterest income 1,865 1,522 22.54% 5,285 4,395 20.25%
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Noninterest expense 5,275 4,704 12.14% 15,010 13,840 8.45%
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Income taxes -1,019 (894) 13.98% -2,772 -2,494 11.15%
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Net income $3,215 $2,911 10.44% $9,111 $8,344 9.19%
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Basic net income per share $0.91 $0.83 $0.08 $2.59 $2.38 $0.21
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Fully diluted net income per share --- --- --- --- --- ---
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Dividends per share --- --- --- --- --- ---
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Dividend payout ratio --- --- --- --- --- ---
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Book value per share --- --- --- $24.81 22.56 $2.25
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Balance sheet at period-end:
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Loans, net --- --- --- $466,256 $407,027 14.55%
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Total securities --- --- --- 255,841 232,527 10.03%
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Total deposits --- --- --- 690,291 617,770 11.74%
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Other borrowings --- --- --- 2,214 92 2306.52%
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Stockholders' equity --- --- --- 87,270 79,268 10.09%
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Total Assets --- --- --- 782,613 699,565 11.87%
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Daily averages:
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Loans,net $465,806 $409,307 13.80% $428,552 $405,903 5.58%
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Total securities 256,727 228,794 12.21% 248,868 226,692 9.78%
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Total deposits 697,119 616,574 13.06% 654,814 615,958 6.31%
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Other borrowings 1,086 181 500.00% 468 195 140.00%
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Stockholders' equity 83,919 78,143 7.39% 83,372 76,648 8.77%
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Interest-earning assets 736,198 665,040 10.70% 701,684 659,963 6.32%
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Interest-bearing liabilities 603,017 532,100 13.33% 565,674 537,631 5.22%
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Total Assets 786,220 697,216 12.77% 741,743 695,291 6.68%
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Financial ratios: Note (1)
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Return on average assets 1.63% 1.66% -0.03 1.64% 1.60% 0.04
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Return on average equity 15.24% 14.78% 0.46 14.60% 14.55% 0.05
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Net interest margin 4.70% 4.86% --- 4.73% 4.83% -0.10
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Efficiency ratio --- --- --- 50.01% 49.04% 0.97
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Average equity to average assets 10.67% 11.21% -0.53 11.24% 11.02% 0.22
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Note (1) Ratio change measured in bp
Allowance for loan losses:
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Beginning balance $5,886 $5,493 7.15% $5,369 $5,092 5.44%
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Provision for losses 293 435 -32.64% 885 1,277 -30.70%
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Charge-offs -411 -457 -10.07% -1,091 -1,059 3.02%
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Recoveries 67 31 116.13% 174 192 -9.38%
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Acquisition of C.N.B. 0 --- 100.00% 498 --- 100.00%
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Ending balance $5,835 $5,502 6.05% $5,835 $5,502 6.05%
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Nonperforming assets:
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Nonaccrual loans --- --- --- $478 $190 151.58%
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Restructured loans --- --- --- --- --- ---
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Total nonperforming loans --- --- --- 478 190 151.58%
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Other real estate owned --- --- --- 1,010 940 7.45%
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Total nonperforming assets --- --- --- $1,488 $1,130 31.68%
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Asset quality ratios: Note (2)
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Nonperforming loans to total loans --- --- --- 0.10% 0.05% 0.06
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Allowance for loan losses to total loans --- --- --- 1.24% 1.33% -0.09
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Allowance for loan losses
to nonperforming loans --- --- --- 1220.71% 2895.79% -1675.08
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Note (2) Ratio change measured in bp