National Bankshares, Inc. Reports First Quarter Earnings

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BLACKSBURG, Va., April 27, 2017 (GLOBE NEWSWIRE) -- National Bankshares, Inc. NKSH today announced its results of operations for the first quarter of 2017. The Company reported net income of $3.65 million for the quarter ended March 31, 2017 compared to $3.78 million at March 31, 2016. Basic earnings per share were $0.52 for the three months ended March 31, 2017 compared to $0.54 for the same period in 2016. For the first quarter, the return on average assets was 1.21% and the return on average equity was 8.20% compared to 1.28% and 8.64%, respectively, for the first quarter of 2016. At March 31, 2017, the Company had total assets of $1.24 billion, an increase of 2.60% when compared to $1.21 billion at the end of the first quarter of 2016.

"The first quarter of 2017 saw improvements in several key areas, despite the low interest rate environment that continues to pressure earnings," said National Bankshares Chairman, President & CEO James G. Rakes. "While net income was down compared to the same period in 2016, we were pleased to see steady growth in net loans, improved asset quality, and increased noninterest income. Moving forward in 2017 we remain focused on providing the highest level of personalized financial service for our customers while we pursue opportunities to grow the bank and increase profitability."

National Bankshares, Inc., headquartered in Blacksburg, Virginia, is the parent company of The National Bank of Blacksburg, which does business as National Bank, and of National Bankshares Financial Services, Inc.  National Bank is a community bank operating from 26 full service offices and one loan production office throughout Southwest Virginia. National Bankshares Financial Services, Inc. is an investment and insurance subsidiary in the same trade area.  The Company's stock is traded on the NASDAQ Capital Market under the symbol "NKSH." Additional information is available at www.nationalbankshares.com.

Forward-Looking Statements

Certain statements in this press release may be "forward-looking statements."  Forward-looking statements are statements that include projections, predictions, expectations or beliefs about future events or results that are not statements of historical fact and that involve significant risks and uncertainties.  Although the Company believes that its expectations with regard to forward-looking statements are based upon reasonable assumptions within the bounds of its existing knowledge of its business and operations, there can be no assurance that actual Company results will not differ materially from any future results implied by the forward-looking statements.  Actual results may be materially different from past or anticipated results because of many factors, some of which may include changes in economic conditions, the interest rate environment, legislative and regulatory requirements, new products, competition, changes in the stock and bond markets and technology.  The Company does not update any forward-looking statements that it may make.


National Bankshares, Inc. and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
 
($ in thousands, except for share and per share data)March 31, 2017March 31, 2016December 31, 2016
Assets   
Cash and due from banks$13,654  $9,913 $13,974 
Interest-bearing deposits 85,552   129,363  80,268 
Federal funds sold ---  ---  --- 
Securities available for sale, at fair value 304,376   270,094  304,282 
Securities held to maturity 133,596   144,664  134,957 
Restricted stock 1,200   1,170  1,170 
Total securities 439,172   415,928  440,409 
Mortgage loans held for sale 608   63  478 
Loans:   
Loans, net of unearned income and deferred fees 652,313   607,643  647,752 
Less: allowance for loan losses (8,261) (8,107) (8,300)
Loans, net 644,052   599,536  639,452 
Premises and equipment, net 8,675   8,841  8,853 
Accrued interest receivable 5,267   5,587  5,260 
Other real estate owned 2,952   3,612  3,156 
Intangible assets and goodwill 5,936   6,114  5,966 
Bank-owned life insurance 23,141   22,548  22,998 
Other assets 14,117   10,146  13,128 
Total assets$1,243,126  $1,211,651 $1,233,942 
    
Liabilities and Stockholders' Equity   
Noninterest-bearing deposits$182,750  $170,206 $171,946 
Interest-bearing demand deposits 601,421   570,065  605,226 
Savings deposits 99,193   92,944  96,829 
Time deposits 163,116   185,296  169,441 
Total deposits 1,046,480   1,018,511  1,043,442 
Other borrowed funds ---  ---  --- 
Accrued interest payable 45   62  55 
Other liabilities 13,614   13,841  12,182 
Total liabilities 1,060,139   1,032,414  1,055,679 
    
Stockholders' Equity   
Preferred stock, no par value, 5,000,000 shares authorized; none issued and outstanding ---  ---  --- 
Common stock of $1.25 par value. Authorized 10,000,000 shares; issued and outstanding, 6,957,974 shares at March 31, 2107, December 31, 2016 and March 31, 2016. 8,698   8,698  8,698 
Retained earnings 181,873   175,132  178,224 
Accumulated other comprehensive loss, net (7,584) (4,593) (8,659)
Total stockholders' equity 182,987   179,237  178,263 
Total liabilities and stockholders' equity$1,243,126  $1,211,651 $1,233,942 


National Bankshares, Inc. and Subsidiaries
Consolidated Statements of Income
(Unaudited)
  
 Three Months Ending
($ in thousands, except for share and per share data)March 31, 2017  March 31, 2016
Interest Income  
Interest and fees on loans$7,453 $7,334
Interest on federal funds ---  ---
Interest on interest-bearing deposits 148   162
Interest on securities - taxable 1,402   1,677
Interest on securities - nontaxable 1,235   1,311
Total interest income 10,238   10,484
Interest Expense  
Interest on time deposits 202   274
Interest on other deposits 826   794
Interest on borrowed funds ---  ---
Total interest expense 1,028   1,068
Net interest income 9,210   9,416
Provision for loan losses 59   203
Net income after provision for loan losses 9,151   9,213
Noninterest Income   
Service charges on deposit accounts 665   560
Other service charges and fees 69   72
Credit card fees 898   870
Trust Income 401   323
Bank-owned life insurance 143   147
Other income 328   345
Realized securities gain,  net ---  24
Total noninterest income 2,504   2,341
Noninterest Expense  
Salaries and employee benefits 3,543   3,568
Occupancy and furniture and fixtures 438   477
Data processing and ATM 565   411
FDIC assessment 95   141
Credit card processing 655   622
Intangibles and goodwill amortization 31   110
Net cost of other real estate owned 29   69
Franchise taxes 322   331
Other operating expenses 1,259   955
Total noninterest expense 6,937   6,684
Income before income tax expense 4,718   4,870
Income tax expense 1,069   1,091
Net Income $3,649 $3,779
Basic net income per share$0.52 $0.54
Fully diluted net income per share$0.52 $0.54
Weighted average number of common shares outstanding  
Basic 6,957,974   6,957,974
Diluted 6,957,974   6,957,974
Dividends declared per share ---  ---
Dividend payout ratio ---  ---
Book value per share$26.30 $25.76


National Bankshares, Inc. and Subsidiaries
Consolidated Statements of Comprehensive Income
(Unaudited)
  
 Three Months Ended
($ in thousands)March 31, 2017 March 31, 2016 
Net Income$3,649 $3,779 
   
Other Comprehensive Income, Net of Tax  
Unrealized holding gain on available for sale securities net of tax of $580 and $1,802 for the periods ended March 31, 2017 and 2016, respectively 1,075  3,348 
Reclassification adjustment for gain included in net income, net of tax of  ($2) for the period ended March 31, 2016 --- (4)
Other comprehensive income, net of tax of $580 and $1,800 for the periods ended March 31, 2017 and 2016, respectively$1,075 $3,344 
Total Comprehensive Income $4,724 $7,123 


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Key Ratios and Other Data
(Unaudited)
  
 Three Months Ended
$ in thousandsMarch 31, 2017 March 31, 2016 
Average Balances  
Cash and due from banks$11,111  $11,309 
Interest-bearing deposits 72,322   125,849 
Securities available for sale 304,605   245,153 
Securities held to maturity 134,477   149,202 
Restricted stock 1,172   1,133 
Mortgage loans held for sale 214   427 
Gross Loans 650,464   610,979 
Loans, net 641,406   601,557 
Intangible assets 5,951   6,170 
Total assets 1,224,870   1,188,462 
Total deposits 1,032,012   1,003,136 
Other borrowings ---  --- 
Stockholders' equity 180,512   175,991 
Interest-earning assets 1,167,053   1,132,925 
Interest-bearing liabilities 860,928   838,943 
   
Financial Ratios  
Return on average assets 1.21%  1.28% 
Return on average equity 8.20%  8.64% 
Net interest margin 3.49%  3.66% 
Net interest income-fully taxable equivalent$10,048  $10,307 
Efficiency  ratio 55.27%  52.85% 
Average equity to average assets 14.74%  14.81% 
   
Allowance for Loan Losses  
Beginning balance$8,300  $8,297 
Provision for losses 59   203 
Charge-offs (143) (453)
Recoveries 45   60 
Ending balance$8,261  $8,107 


Asset Quality Data
(Unaudited)
   
$ in thousandsMarch 31, 2017 March 31, 2016 
Nonperforming Assets  
Nonaccrual loans$1,040  $1,901 
Nonaccrual restructured loans 4,640   4,504 
Total nonperforming loans 5,680   6,405 
Other real estate owned$2,952  $3,612 
Total nonperforming assets$8,632  $10,017 
Accruing restructured loans 3,747   7,724 
Loans 90 days or more past due$63  $328 
   
Asset Quality Ratios  
Nonperforming assets to loans net of unearned income and deferred fees, plus other real estate owned 1.32%  1.64% 
Allowance for loans losses to total loans 1.27%  1.33% 
Allowance for loan losses to nonperforming loans 145.44%  126.57% 
Loans past due 90 days or more to loans net of  unearned income and deferred fees 0.01%  0.05% 

 

CONTACTS:   
JAMES G. RAKES, CHAIRMAN, PRESIDENT & CEO 
(540) 951-6236   jrakes@nbbank.com
DAVID K. SKEENS, TREASURER & CFO
(540) 951-6347   dskeens@nbbank.com

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