National Bankshares, Inc. Reports Second Quarter and First Half Earnings
/EINPresswire.com/ -- BLACKSBURG, VA -- (Marketwired) -- 07/28/16 -- National Bankshares, Inc. (NASDAQ: NKSH) today announced its results of operations for the second quarter and first half of 2016. The Company reported net income of $7.64 million for the six months ended June 30, 2016 compared to $8.08 million at June 30, 2015. Basic earnings per share were $1.10 at June 30, 2016 compared to $1.16 for the same period in 2015. For the first half of the year, the return on average assets was 1.28% and the return on average equity was 8.65% compared to 1.41% and 9.55%, respectively, for the first six months of 2015. At June 30, 2016, the Company had total assets of $1.21 billion which was an increase of 5.40% when compared to $1.15 billion at the end of June 2015.
Commenting on the Company's financial results, National Bankshares Chairman, President & CEO James G. Rakes said, "The low interest rate environment continues to put pressure on our margins and impact earnings. Increasing competition for loans, along with lower yields for certain investment portfolio assets, are also reflected in the past quarter's numbers. As National Bank commemorates its 125th anniversary, we are focused on positioning ourselves for future growth by improving our product offerings and exceeding our customers' expectations for personalized service."
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 June 30, June 30, December 31,
and per share data) 2016 2015 2015
----------- ----------- ------------
Assets
Cash and due from banks $ 14,320 $ 11,353 $ 12,152
Interest-bearing deposits 75,892 83,818 130,811
Federal funds sold --- --- ---
Securities available for sale, at
fair value 303,242 218,524 236,131
Securities held to maturity 138,424 155,704 152,028
Restricted stock 1,170 1,129 1,129
----------- ----------- ------------
Total securities 442,836 375,357 389,288
----------- ----------- ------------
Mortgage loans held for sale 663 853 634
Loans:
Loans, net of unearned income and
deferred fees 630,916 626,941 619,008
Less: allowance for loan losses (8,195) (8,131) (8,297)
----------- ----------- ------------
Loans, net 622,721 618,810 610,711
----------- ----------- ------------
Premises and equipment, net 8,718 8,878 9,020
Accrued interest receivable 5,259 5,857 5,769
Other real estate owned 3,425 4,441 4,165
Intangible assets and goodwill 6,046 6,685 6,224
Bank-owned life insurance 22,699 22,097 22,401
Other assets 7,720 10,122 8,564
----------- ----------- ------------
Total assets $ 1,210,299 $ 1,148,271 $ 1,199,739
=========== =========== ============
Liabilities and Stockholders' Equity
Noninterest-bearing deposits $ 171,350 $ 157,983 $ 166,453
Interest-bearing demand deposits 575,364 526,749 569,787
Savings deposits 95,484 86,354 90,236
Time deposits 179,540 203,070 192,383
----------- ----------- ------------
Total deposits 1,021,738 974,156 1,018,859
----------- ----------- ------------
Other borrowed funds --- --- ---
Accrued interest payable 56 61 56
Other liabilities 8,577 6,484 8,710
----------- ----------- ------------
Total liabilities 1,030,371 980,701 1,027,625
----------- ----------- ------------
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 June 30, 2016 and
December 31, 2015 and 6,954,474
shares at June 30, 2015. 8,697 8,693 8,697
Retained earnings 175,170 167,764 171,353
Accumulated other comprehensive
loss, net (3,939) (8,887) (7,936)
----------- ----------- ------------
Total stockholders' equity 179,928 167,570 172,114
----------- ----------- ------------
Total liabilities and
stockholders' equity $ 1,210,299 $ 1,148,271 $ 1,199,739
=========== =========== ============
National Bankshares, Inc. and Subsidiaries
Consolidated Statements of Income
(Unaudited)
($ in thousands, except Three Months Ended Six Months Ended
for share and per share June 30, June 30, June 30, June 30,
data) 2016 2015 2016 2015
------------ ------------ ----------- -----------
Interest Income
Interest and fees on
loans $ 7,289 $ 7,600 $ 14,623 $ 15,210
Interest on federal
funds --- --- --- ---
Interest on interest-
bearing deposits 150 55 312 119
Interest on securities -
taxable 1,567 1,712 3,244 3,446
Interest on securities -
nontaxable 1,286 1,357 2,597 2,743
------------ ------------ ----------- -----------
Total interest income 10,292 10,724 20,776 21,518
------------ ------------ ----------- -----------
Interest Expense
Interest on time
deposits 253 315 527 642
Interest on other
deposits 810 736 1,604 1,496
Interest on borrowed
funds --- --- --- ---
------------ ------------ ----------- -----------
Total interest expense 1,063 1,051 2,131 2,138
------------ ------------ ----------- -----------
Net interest income 9,229 9,673 18,645 19,380
Provision for loan
losses 654 355 857 556
------------ ------------ ----------- -----------
Net income after
provision for loan
losses 8,575 9,318 17,788 18,824
------------ ------------ ----------- -----------
Noninterest Income
Service charges on
deposit accounts 569 570 1,129 1,105
Other service charges
and fees 46 48 118 119
Credit card fees 969 976 1,839 1,871
Trust Income 354 299 677 588
Bank-owned life
insurance 151 150 298 299
Other income 455 419 800 733
Realized securities
gain, net 74 5 98 3
------------ ------------ ----------- -----------
Total noninterest
income 2,618 2,467 4,959 4,718
------------ ------------ ----------- -----------
Noninterest Expense
Salaries and employee
benefits 2,907 3,232 6,475 6,283
Occupancy and furniture
and fixtures 448 420 925 869
Data processing and ATM 595 408 1,006 843
FDIC assessment 145 135 286 270
Credit card processing 712 675 1,334 1,285
Intangibles and goodwill
amortization 68 269 178 538
Net cost of other real
estate owned 39 43 108 507
Franchise taxes 322 322 653 630
Other operating expenses 1,002 861 1,957 1,820
------------ ------------ ----------- -----------
Total noninterest
expense 6,238 6,365 12,922 13,045
------------ ------------ ----------- -----------
Income before income tax
expense 4,955 5,420 9,825 10,497
Income tax expense 1,090 1,310 2,181 2,421
------------ ------------ ----------- -----------
Net Income $ 3,865 $ 4,110 $ 7,644 $ 8,076
============ ============ =========== ===========
Basic net income per
share $ 0.56 $ 0.59 $ 1.10 $ 1.16
============ ============ =========== ===========
Fully diluted net income
per share $ 0.56 $ 0.59 $ 1.10 $ 1.16
============ ============ =========== ===========
Weighted average number
of common shares
outstanding
Basic 6,957,974 6,952,540 6,957,974 6,951,513
============ ============ =========== ===========
Diluted 6,957,974 6,956,039 6,957,974 6,955,093
============ ============ =========== ===========
Dividends declared per
share $ 0.55 $ 0.53 $ 0.55 $ 0.53
============ ============ =========== ===========
Dividend payout ratio --- --- 50.07% 45.64%
============ ============ =========== ===========
Book value per share $ 25.86 $ 24.10 $ 25.86 $ 24.10
============ ============ =========== ===========
National Bankshares, Inc. and Subsidiaries
Consolidated Statements of Comprehensive Income (Loss)
(Unaudited)
($ in thousands) Three Months Ended
June 30, June 30,
2016 2015
----------- -----------
Net income $ 3,865 $ 4,110
Other Comprehensive Income (Loss), net of tax
Unrealized holding gain (loss) on available for
sale securities net of tax of $368 and ($3,048)
for the periods ended June 30, 2016 and 2015,
respectively 684 (5,665)
Reclassification adjustment for gain included in
net income, net of tax of ($16) and ($2) for the
periods ended June 30, 2016 and 2015,
respectively (30) (3)
----------- -----------
Other comprehensive income (loss), net of tax of
$352 and ($3,050) for the periods ended June 30,
2016 and 2015, respectively $ 654 $ (5,668)
----------- -----------
Total Comprehensive Income (Loss) $ 4,519 $ (1,558)
=========== ===========
Six Months Ended
June 30, June 30,
($ in thousands) 2016 2015
----------- -----------
Net Income $ 7,644 $ 8,076
Other Comprehensive Income (Loss), Net of Tax
Unrealized holding gain (loss) on available for
sale securities net of tax of $2,171 and ($1,728)
for the periods ended June 30, 2016 and 2015,
respectively 4,031 (3,213)
Reclassification adjustment for gain included in
net income, net of tax of ($18) and ($1) for the
periods ended June 30, 2016 and 2015,
respectively (34) (2)
----------- -----------
Other comprehensive income (loss), net of tax of
$2,153 and ($1,729) for the periods ended June
30, 2016 and 2015, respectively 3,997 (3,215)
----------- -----------
Total Comprehensive Income $ 11,641 $ 4,861
=========== ===========
Key Ratios and Other Data
(Unaudited)
($ in thousands) Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
2016 2015 2016 2015
---------- ---------- ---------- ----------
Average Balances
Cash and due from banks $ 11,217 $ 11,537 $ 11,263 $ 11,451
Interest-bearing deposits 118,395 86,617 122,122 95,314
Securities available for
sale 283,280 229,447 264,217 225,824
Securities held to maturity 140,415 155,736 144,809 157,547
Restricted stock 1,170 1,130 1,151 1,112
Mortgage loans held for sale 601 893 514 678
Gross Loans 610,657 624,598 610,818 614,922
Loans, net 601,700 623,764 601,628 605,808
Intangible assets 6,085 6,839 6,128 6,974
Total assets 1,211,217 1,155,852 1,199,839 1,152,732
Total deposits 1,022,306 976,427 1,012,721 975,118
Other borrowings --- 1 --- ---
Stockholders' equity 179,452 171,616 177,722 170,461
Interest-earning assets 1,152,614 1,098,866 1,142,769 1,095,694
Interest-bearing liabilities 851,522 817,674 845,232 819,481
Financial Ratios
Return on average assets 1.28% 1.43% 1.28% 1.41%
Return on average equity 8.66% 9.61% 8.65% 9.55%
Net interest margin 3.52% 3.87% 3.59% 3.90%
Net interest income-fully
taxable equivalent $ 10,089 $ 10,599 $ 20,397 $ 21,207
Efficiency ratio 49.09% 48.71% 50.96% 50.32%
Average equity to average
assets 14.82% 14.85% 14.81% 14.79%
Allowance for Loan Losses
Beginning balance $ 8,107 $ 8,257 $ 8,297 $ 8,263
Provision for losses 654 355 857 556
Charge-offs (598) (516) (1,051) (776)
Recoveries 32 35 92 88
---------- ---------- ---------- ----------
Ending balance $ 8,195 $ 8,131 $ 8,195 $ 8,131
========== ========== ========== ==========
Asset Quality Data
(Unaudited)
June 30, June 30,
($ in thousands) 2016 2015
----------- -----------
Nonperforming Assets
Nonaccrual loans $ 1,751 $ 2,870
Nonaccrual restructured loans 4,454 6,035
----------- -----------
Total nonperforming loans $ 6,205 $ 8,905
Other real estate owned $ 3,425 $ 4,441
----------- -----------
Total nonperforming assets $ 9,630 $ 13,346
=========== ===========
Accruing restructured loans $ 4,729 $ 5,943
----------- -----------
Loans 90 days or more past due $ 316 $ 80
=========== ===========
Asset Quality Ratios
Nonperforming assets to loans net of unearned
income and deferred fees, plus other real estate
owned 1.52% 2.11%
Allowance for loans losses to total loans 1.30% 1.30%
Allowance for loan losses to nonperforming loans 132.07% 91.31%
Loans past due 90 days or more to loans net of
unearned income and deferred fees 0.05% 0.01%
CONTACTS:
JAMES G. RAKES
CHAIRMAN, PRESIDENT & CEO
(540) 951-6236
Email Contact
DAVID K. SKEENS
TREASURER & CFO
(540) 951-6347
Email Contact
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