FOR IMMEDIATE RELEASE
CONTACTS: James G. Rakes, President & CEO (540) 951-6236
J. Robert Buchanan, Treasurer (276) 979-0341
NATIONAL BANKSHARES, INC.
ANNOUNCES FIRST QUARTER EARNINGS
BLACKSBURG, VA, APRIL 20, 2006: National Bankshares, Inc. (Nasdaq Capital
Market: NKSH) today announced first quarter net income of just over $3 million,
or basic net income of $0.43 per share (adjusted to reflect a 2-for-1 stock
split which was effective on March 31). This is a slight increase over the $2.99
million earned in the first quarter of 2005. At March 31, National Bankshares,
Inc, the parent company of the National Bank of Blacksburg, Bank of Tazewell
County and National Bankshares Financial Services had total assets of nearly
$848 million, up by 3.80% over the total on March 31, 2005.
In making the earnings announcement, Chairman, President & CEO James G.
Rakes said, "We continue to experience the effects of compression of the net
interest margin, as regular interest rate increases by the Federal Reserve Bank
have continued longer than some had predicted. Pressure on the interest margin
has impacted earnings. However, we are pleased with the quality of the loan
portfolio and with solid asset growth. With the recently announced consolidation
of our two bank subsidiaries into National Bank, we are also taking steps to
streamline operations and position our Company for a positive future."
National Bankshares, Inc. is a financial holding company headquartered
in Blacksburg, Virginia. It now has two community bank subsidiaries, The
National Bank of Blacksburg and Bank of Tazewell County, with its main office in
Tazewell, Virginia. Together, the banks operate from 26 locations throughout
Southwest Virginia. The company has a non-bank subsidiary, National Bankshares
Financial Services, Inc., which does business as National Bankshares Investment
Services and National Bankshares Insurance Services. Additional information
about the company is available on its web site at www.nationalbankshares.com.
(unaudited tables follow)
National Bankshares, Inc. And Subsidiaries
(000's), except ratios and percent data
Three months ending March 31, 2006 March 31, 2005 Change
Selected Consolidated Data :
- ---------------------------------------------------------------------------------------------------------------------
Interest income $11,583 $11,035 4.97%
Interest expense 4,238 3,043 39.27%
Net interest income 7,345 7,992 -8.10%
Provision for loan losses 17 190 -91.05%
Trust income 380 408 -6.86%
Other noninterest income 1,679 1,360 23.46%
Salary and benefits 2,911 2,862 1.71%
Occupancy expense 533 479 11.27%
Amortization of intangibles 284 266 6.77%
Other noninterest expense 1,771 2,082 -14.94%
Income taxes -885 -888 -0.34%
Net income $3,003 $2,993 0.33%
Basic net income per share $0.43 $0.43 $0.00
- ---------------------------------------------------------------------------------------------------------------------
Daily averages:
- ---------------------------------------------------------------------------------------------------------------------
Gross loans $491,410 $484,551 1.42%
Loans,net 485,031 477,992 1.47%
Total securities 272,644 256,117 6.45%
Total deposits 741,941 707,254 4.90%
Other borrowings 146 204 -28.43%
Stockholders' equity 93,417 88,109 6.02%
Cash and due from 17,149 14,082 21.78%
Interest-earning assets 777,400 753,895 3.12%
Interest-bearing liabilities 630,151 592,287 6.39%
Intangible assets 16,988 17,121 -0.78%
Total assets 839,478 802,861 4.56%
- ---------------------------------------------------------------------------------------------------------------------
Financial ratios: Note (1)
- ---------------------------------------------------------------------------------------------------------------------
Return on average assets 1.45% 1.51% -0.06
Return on average equity 13.04% 13.78% -0.74
Net interest margin 4.22% 4.71% -0.49
Efficiency ratio --- --- ---
Average equity to average assets 11.13% 10.97% 0.15
- ---------------------------------------------------------------------------------------------------------------------
Note (1) Ratio change measured in bp
Allowance for loan losses:
- ---------------------------------------------------------------------------------------------------------------------
Beginning balance $5,449 $5,729 -4.89%
Provision for losses 17 190 -91.05%
Charge-offs -87 -253 -65.61%
Recoveries 39 46 -15.22%
Acquisition of CNB --- --- ---
Ending balance $5,418 $5,712 -5.15%
- ---------------------------------------------------------------------------------------------------------------------
Year to Date March 31, 2006 March 31, 2005 Change
Selected Consolidated Data :
- ---------------------------------------------------------------------------------------------------------------------
Interest income $11,583 $11,035 4.97%
Interest expense 4,238 3,043 39.27%
Net interest income 7,345 7,992 -8.10%
Provision for loan losses 17 190 -91.05%
Trust income 380 408 -6.86%
Other noninterest income 1,679 1,360 23.46%
Salary and benefits 2,911 2,862 1.71%
Occupancy expense 533 479 11.27%
Amortization of intangibles 284 266 6.77%
Other noninterest expense 1,771 2,082 -14.94%
Income taxes -885 -888 -0.34%
Net income $3,003 $2,993 0.33%
Basic net income per share $0.43 $0.43 $0.00
Fully diluted net income per share --- --- ---
Dividends per share --- --- ---
Dividend payout ratio --- --- ---
Book value per share $13.44 12.61 $0.83
- ---------------------------------------------------------------------------------------------------------------------
Balance sheet at period-end:
- ---------------------------------------------------------------------------------------------------------------------
Gross loans $490,757 $495,355 -0.93%
Loans, net $484,391 $488,735 -0.89%
Total securities 275,828 262,204 5.20%
Cash and due From 18,270 14,043 30.10%
Total deposits 749,222 723,873 3.50%
Other borrowings 83 431 -80.74%
Stockholders' equity 94,260 88,793 6.16%
Intangible assets 16,829 17,964 -6.32%
Total assets 847,956 816,988 3.79%
- ---------------------------------------------------------------------------------------------------------------------
Daily averages:
- ---------------------------------------------------------------------------------------------------------------------
Gross loans $491,410 $484,551 1.42%
Loans,net 485,029 477,992 1.47%
Total securities 272,644 256,117 6.45%
Total deposits 741,941 707,254 4.90%
Other borrowings 146 204 -28.43%
Stockholders' equity 93,419 88,109 6.03%
Cash and due from 17,149 14,082 21.78%
Interest-earning assets 777,400 753,895 3.12%
Interest-bearing liabilities 630,151 592,287 6.39%
Intangible assets 16,988 17,121 -0.78%
Total assets 839,478 802,861 4.56%
- ---------------------------------------------------------------------------------------------------------------------
Financial ratios: Note (1)
- ---------------------------------------------------------------------------------------------------------------------
Return on average assets 1.45% 1.51% -0.06
Return on average equity 13.04% 13.78% -0.74
Net interest margin 4.22% 4.71% -0.49
Efficiency ratio 54.17% 54.12% 0.05
Average equity to average assets 11.13% 10.97% 0.15
- ---------------------------------------------------------------------------------------------------------------------
Note (1) Ratio change measured in bp
Allowance for loan losses:
- ---------------------------------------------------------------------------------------------------------------------
Beginning balance $5,449 $5,729 -4.89%
Provision for losses 17 190 -91.05%
Charge-offs -87 -253 -65.61%
Recoveries 39 46 -15.22%
Acquisition of CNB --- --- -100.00%
Ending balance $5,418 $5,712 -5.15%
- ---------------------------------------------------------------------------------------------------------------------
Nonperforming assets:
- ---------------------------------------------------------------------------------------------------------------------
Nonaccrual loans $92 $347 -73.49%
Restructured loans --- --- ---
Total nonperforming loans Note (2) 92 347 -73.49%
Other real estate owned 390 715 -45.45%
Total nonperforming assets $482 $1,062 -54.61%
- ---------------------------------------------------------------------------------------------------------------------
Asset quality ratios: Note (3)
- ---------------------------------------------------------------------------------------------------------------------
Nonperforming loans to total loans 0.02% 0.07% -0.05
Allowance for loan losses to total loans 1.11% 1.16% -0.05
Allowance for loan losses
to nonperforming loans 5889.13% 1646.11% 4243.02
- ---------------------------------------------------------------------------------------------------------------------
Note (2) Loans 90 days past due or more not included Note (3) Ratio change
measured in bp