Exhibit 99.1
PRESS RELEASE
FOR IMMEDIATE RELEASE:
National Bancshares Corporation Reports 14% Increase in Net Income
ORRVILLE, Ohio, July 18, 2003 / PR NEWSWIRE / -- National Bancshares Corporation
(NBOH), the holding company of First National Bank of Orrville, Ohio, released
their financial results for the second quarter of 2003.
Net income for the first half of 2003 increased by approximately $196 thousand,
or 13.9%, above the same period of the previous year. This increase was
primarily driven by an increase in net interest income of nearly $900 thousand,
or 17.9%, above the first half of last year.
Net loans declined by approximately $14 million, or 6.9%, from June 30, 2002.
"This decline occurred as many fixed rate residential mortgage loans were either
sold into the secondary market or paid off," said Charles J. Dolezal, President
and Chariman. "Virtually all the loans acquired in the acquisition of Peoples
Financial Corporation were fixed rate residential mortgage loans. The decrease
in these loans has helped diversify the portfolio by enabling a redeployment of
funds into other types of loans and earning assets carrying a variable rate of
interest or shorter maturity. Total deposits decreased by $3 million, or 1.3%,
from the same period of the previous year, due to many high-rate certificates of
deposit that matured and moved to savings accounts or left for alternative
investments. As we reposition the balance sheet, we are optimistic that
additional profitable growth opportunities lie ahead."
A second quarter cash dividend of 14(cent) per share is being paid July 18, 2003
to shareholders of record as of June 30, 2003.
"As our organization grew significantly with the acquisition of Peoples
Financial in the second quarter of last year, we embarked upon a reorganization
of certain lending functions within the bank," continued Dolezal. "Through this
reorganization, we have added professional staff and centralized certain
functions to better control service quality and gain greater efficiencies. We
are also expanding training programs to focus on key areas throughout the bank.
As the economy slowed and interest rates declined, we experienced increased
competition in the financial services arena. We look to the future with great
optimism in meeting the challenges these uncertain times present us."
National Bancshares Corporation, a one-bank holding company with assets of more
than $292 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, 2002. 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.
Contact Person: Traci Carmony, Marketing Assistant, First National Bank,
Orrville, Ohio
(330) 828-2227
tcarmony@fnborrville.com
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NATIONAL BANCSHARES CORPORATION
CONSOLIDATED BALANCE SHEETS (Unaudited)
June 30, 2003 June 30, 2002
ASSETS:
Cash and due from banks $9,448,614 $8,918,045
Interest bearing deposits with banks 998,095 996,292
Securities held to
maturity 16,860,832 12,736,912
Securities available for sale 47,036,016 46,045,188
Federal bank stock 2,731,150 2,639,250
Federal funds sold 14,370,000 6,875,000
Total loans (excluding unearned
income) 188,235,407 202,129,723
Less: allowance for
loan losses 1,686,127 1,664,544
------------------------------------------
Loans, net 186,549,280 200,465,179
Accrued interest receivable 1,419,735 1,547,345
Premises and equipment 4,646,853 4,810,693
Other assets 8,706,851 9,096,456
------------------------------------------
TOTAL $292,767,426 $294,130,360
==========================================
LIABILITIES:
Deposits:
Demand $34,063,557 $31,820,414
Savings and N.O.W.s 116,518,861 105,366,211
Time 83,065,272 99,522,703
------------------------------------------
Total deposits 233,647,690 236,709,328
Securities sold under repurchase
agreements 2,151,865 3,307,633
Federal reserve note account 1,000,000 1,000,000
Federal Home Loan Bank advances 17,102,872 17,900,813
Accrued interest payable 488,280 525,575
Other liabilities 3,331,138 2,252,581
------------------------------------------
Total liabilities 257,721,845 261,695,930
------------------------------------------
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 17,482,967 16,348,731
Accumulated other comprehensive
Income 2,614,667 1,338,046
Less: Treasury shares (1,189,493) (1,389,787)
------------------------------------------
Total shareholders' equity 35,045,581 32,434,430
------------------------------------------
TOTAL $292,767,426 $294,130,360
==========================================
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NATIONAL BANCSHARES CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
For Six Months Ended June 30, 2003 and June 30, 2002
June 30, 2003 June 30, 2002
INTEREST & DIVIDEND INCOME:
Loans, including fees $5,891,105 $5,450,755
Federal funds sold 40,452 37,847
Interest and dividends on investments:
US government obligations 588,098 600,163
Obligations of states and
political subdivisions 480,980 424,729
Other securities 900,555 891,355
-----------------------------------------
Total interest and dividend income 7,901,190 7,404,849
INTEREST EXPENSE:
Deposits 1,641,719 2,164,528
Short-term borrowings 3,369 6,938
Federal Home Loan Bank advances 337,628 213,354
-----------------------------------------
Total interest expense 1,982,716 2,384,820
-----------------------------------------
Net interest income 5,918,474 5,020,029
PROVISION FOR LOAN LOSSES 85,000 115,000
-----------------------------------------
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 5,833,474 4,905,029
NONINTEREST INCOME 766,378 780,470
NONINTEREST EXPENSE:
Salaries and employee benefits 2,421,898 2,052,068
Net occupancy expense 338,664 255,366
Other expenses 1,688,347 1,468,594
-----------------------------------------
Total noninterest expense 4,448,909 3,776,028
-----------------------------------------
INCOME BEFORE INCOME TAXES 2,150,943 1,909,471
INCOME TAXES 544,671 499,178
-----------------------------------------
NET INCOME $1,606,272 $1,410,293
=========================================
NET INCOME PER COMMON SHARE $0.72 $0.63
=========================================
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