Exhibit 99.1
PRESS RELEASE
FOR IMMEDIATE RELEASE:
National Bancshares Corporation Reports a $6.3 million increase in total assets
ORRVILLE, Ohio, July 16, 2004 / PR NEWSWIRE / -- National Bancshares Corporation
(OTC: NBOH), the holding company of First National Bank (www.fnborrville.com),
released their financial results for the second quarter of 2004.
Total assets ended the second quarter of 2004 just shy of $300 million,
increasing over $6.3 million, or 2.2%, above June 30, 2003. This asset growth
was driven by an increase in loans, which rose over $8.1 million, or 4.3%.
"The massive real estate mortgage loan refinancing that occurred in 2003, ended
by early 2004," said Charles J. Dolezal, President and Chairman. "The growth in
loans was mainly in the commercial area. Deposits increased by nearly $7
million, or 3%, above the end of the second quarter of 2003. Net income for the
first six months of 2004 was down $120 thousand, or 7.5%, below the same period
of the previous year. With net interest margins declining at most financial
institutions during the past few years, we continue to feel the pressure on our
margins. However, net interest income did post a nominal increase over the first
six months of the previous year. Noninterest income increased over $342
thousand, or 44.7%, when compared to June 30, 2003. This increase was mainly
fueled by gains on security sales."
"Noninterest expenses increased over $465 thousand, or 10.5%," continued
Dolezal. "As the bank experienced growth in recent years, the need for
professional staff has grown as well. A number of new positions were filled
during the second half of 2003. The costs associated with these positions are
reflected in the current year's personnel expense. Other expenses have also
risen, mainly in the data processing area. Growth of the bank also necessitated
an upgrade of data communication lines as we approached the speed and handling
capacity of our current operating system. This upgrade will accommodate and
position us for future growth."
"Signs of increasing inflation have appeared during the past few months as the
economy has improved. In response to this, the Federal Open Market Committee of
the Federal Reserve has recently increased the Federal funds rate by one-quarter
of one percent. The Fed is striving to keep the economy growing. They are
monitoring all economic indicators closely to insure any actions they take will
assist in the economic growth for our country, while keeping inflation in
check."
A second quarter cash dividend of 15(cent) per share is being paid July 16, 2004
to shareholders of record as of June 30, 2004.
National Bancshares Corporation, a one-bank holding company with assets of
approximately $300 million, operates fourteen First National Bank offices in
Orrville, Massillon, Wooster, Dalton, Kidron, Smithville, Apple Creek, Mt.
Eaton, Lodi, and Seville.
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 necessarily subject to many risks and
uncertainties. A number of things could cause actual results to differ
materially from those indicated by the forward-looking statements. These include
factors such as changes in the competitive marketplace, changes in the interest
rate environment, economic conditions, 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 Security
and Exchange Commission, including its Annual Report on Form 10-K for the year
ended December 31, 2003. The company disclaims any obligation to publicly update
or revise any forward-looking statements based on the occurrence of future
events, the receipt of new information, or otherwise.
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NATIONAL BANCSHARES CORPORATION
CONSOLIDATED BALANCE SHEETS
June 30, 2004 June 30, 2003
ASSETS:
Cash and due from banks $ 8,730,468 $ 9,448,614
Federal funds sold 5,490,000 14,370,000
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Total cash and cash equivalents 14,220,468 23,818,614
Interest bearing deposits with banks - 998,095
Securities available for sale 55,735,477 47,036,016
Securities held to maturity 16,781,845 16,860,832
Federal bank stock 2,812,250 2,731,150
Total loans (excluding unearned income) 196,378,225 188,235,407
Less: allowance for loan losses 1,756,530 1,686,127
------------- -------------
Loans, net 194,621,695 186,549,280
Accrued interest receivable 1,523,144 1,419,735
Premises and equipment 4,535,369 4,646,853
Other assets 8,859,527 8,706,851
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TOTAL $ 299,089,775 $ 292,767,426
============= =============
LIABILITIES:
Deposits:
Demand $ 36,783,031 $ 34,063,557
Savings and N.O.W.s 127,060,077 116,518,861
Time 76,727,047 83,065,272
------------- -------------
Total deposits 240,570,155 233,647,690
Securities sold under repurchase
agreements 4,131,353 2,151,865
Federal reserve note account 471,678 1,000,000
Federal Home Loan Bank advances 17,000,000 17,102,872
Accrued interest payable 438,785 488,280
Other liabilities 2,247,829 3,331,138
------------- -------------
Total liabilities 264,859,800 257,721,845
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SHAREHOLDERS' EQUITY
Common Stock, without par value:
6,000,000 shares authorized
and 2,289,528 shares issued 11,447,640 11,447,640
Additional paid-in-capital 4,689,800 4,689,800
Retained earnings 18,665,730 17,482,967
Accumulated other comprehensive
income 616,298 2,614,667
Less: Treasury shares (1,189,493) (1,189,493)
------------- -------------
Total shareholders' equity 34,229,975 35,045,581
------------- -------------
TOTAL $ 299,089,775 $ 292,767,426
============= =============
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NATIONAL BANCSHARES CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
For Six Months Ended June 30, 2004 and June 30, 2003
June 30, 2004 June 30, 2003
------------- -------------
INTEREST & DIVIDEND INCOME:
Loans, including fees $5,425,561 $5,891,105
Federal funds sold 12,647 40,452
Interest and dividends on investments:
US government obligations 633,001 588,098
Obligations of states and
political subdivisions 444,415 480,980
Other securities 1,047,214 900,555
---------- ----------
Total interest and dividend income 7,562,838 7,901,190
INTEREST EXPENSE:
Deposits 1,217,020 1,641,719
Short-term borrowings 4,018 3,369
Federal Home Loan Bank advances 410,876 337,628
---------- ----------
Total interest expense 1,631,914 1,982,716
---------- ----------
Net interest income 5,930,924 5,918,474
PROVISION FOR LOAN LOSSES 132,500 85,000
---------- ----------
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 5,798,424 5,833,474
---------- ----------
NONINTEREST INCOME 1,109,018 766,378
NONINTEREST EXPENSE:
Salaries and employee benefits 2,685,583 2,421,898
Net occupancy expense 334,892 338,664
Other expenses 1,894,428 1,688,347
---------- ----------
Total noninterest expense 4,914,903 4,448,909
---------- ----------
INCOME BEFORE INCOME TAXES 1,992,539 2,150,943
INCOME TAXES 506,362 544,671
---------- ----------
NET INCOME $1,486,177 $1,606,272
========== ==========
NET INCOME PER COMMON SHARE $ 0.67 $ 0.72
========== ==========
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