National Bankshares, Inc. Posts Record Earnings for 2012
BLACKSBURG, VA -- (Marketwire) -- 02/14/13 -- National Bankshares, Inc. (NKSH) (NASDAQ: NKSH) today announced that it had record net income approaching $17.75 million for the twelve months ended December 31, 2012, an increase over the nearly $17.64 million earned in 2011. The 2012 return on average assets and return on average equity was 1.64% and 12.01%, respectively. Basic earnings per share were $2.56 in 2012 compared to $2.54 for 2011. National Bankshares, Inc. ended 2012 with total assets of over $1.10 billion, up by 3.49% over the roughly $1.07 billion in total assets reported at December 31, 2011.
Commenting on the Company's financial results, National Bankshares Chairman, President & CEO James G. Rakes said, "We are pleased with our strong operating results for 2012 and, in 2013, we will continue to focus on banking fundamentals and serving our existing and new customers, as well as our community. We are mindful of controlling costs, but will move forward with our efforts to invest in technology and innovations to enhance our customers' banking experience."
Mr. Rakes continued, "Even with the additional regulatory burdens and economic challenges in our market area, we were able to provide our stockholders dividends of $1.10 per share in 2012 compared to $1.00 in 2011. This per share dividend payment amount resulted in a dividend payout ratio of 43.04% in 2012 compared to 39.34% in 2011."
National Bankshares, Inc., headquartered in Blacksburg, Virginia, is the parent company of National Bank of Blacksburg, which does business as National Bank, and of National Bankshares Financial Services, Inc. National Bank is a community bank operating from 25 offices throughout Southwest Virginia. National Bankshares Financial Services, Inc. is an investment and insurance subsidiary in the same trade area. The Company's stock is traded on the NASDAQ Capital Market under the symbol "NKSH." Additional information is available at www.nationalbankshares.com.
Forward-Looking Statements
Certain statements in this press release may be "forward-looking statements." Forward-looking statements are statements that include projections, predictions, expectations or beliefs about future events or results that are not statements of historical fact and that involve significant risks and uncertainties. Although the Company believes that its expectations with regard to forward-looking statements are based upon reasonable assumptions within the bounds of its existing knowledge of its business and operations, there can be no assurance that actual Company results will not differ materially from any future results implied by the forward-looking statements. Actual results may be materially different from past or anticipated results because of many factors, some of which may include changes in economic conditions, the interest rate environment, legislative and regulatory requirements, new products, competition, changes in the stock and bond markets and technology. The Company does not update any forward-looking statements that it may make.
National Bankshares, Inc. and Subsidiaries
Consolidated Balance Sheet
(Unaudited)
December 31, December 31,
($ in thousands, except for per share data) 2012 2011
------------ ------------
Assets
Cash and due from banks $ 14,783 $ 11,897
Interest-bearing deposits 96,597 98,355
Federal funds sold --- ---
Securities available for sale 191,504 174,918
Securities held to maturity 160,539 143,995
------------ ------------
Total securities 352,043 318,913
------------ ------------
Mortgage loans held for sale 2,796 2,623
Loans:
Loans, net of unearned income and deferred
fees 592,162 588,470
Less allowance for loan losses (8,349) (8,068)
------------ ------------
Loans, net 583,813 580,402
------------ ------------
Bank premises and equipment, net 10,401 10,393
Accrued interest receivable 6,247 6,304
Other real estate owned 1,435 1,489
Intangible assets 9,377 10,460
Bank-owned life insurance 20,523 19,812
Other assets 6,346 6,454
------------ ------------
Total assets $ 1,104,361 $ 1,067,102
============ ============
Liabilities and Stockholders' Equity
Noninterest-bearing deposits $ 144,252 $ 142,163
Interest-bearing demand deposits 455,713 404,801
Savings deposits 69,063 61,298
Time deposits 277,738 311,071
------------ ------------
Total deposits 946,766 919,333
------------ ------------
Accrued interest payable 139 206
Other liabilities 7,347 6,264
------------ ------------
Total liabilities 954,252 925,803
------------ ------------
Stockholders' Equity
Preferred stock of no par value. Authorized
5,000,000 shares; none issued and outstanding --- ---
Common stock of $1.25 par value. Authorized
10,000,000 shares; issued and outstanding
6,947,974 shares at December 31, 2012 and
6,939,974 at December 31, 2011 8,685 8,675
Retained earnings 144,162 133,945
Accumulated other comprehensive loss (2,738) (1,321)
------------ ------------
Total stockholders' equity 150,109 141,299
------------ ------------
Total liabilities and stockholders' equity $ 1,104,361 $ 1,067,102
============ ============
National Bankshares, Inc. and Subsidiaries
Consolidated Statements of Income
(Unaudited)
Three Months Ended Twelve Months Ended
December December December December
31, 2012 31, 2011 31, 2012 31, 2011
---------- ---------- ---------- ----------
($ in thousands, except for
per share data)
Interest Income
Interest and fees on loans $ 8,800 $ 9,128 $ 35,354 $ 36,514
Interest on federal funds --- --- --- ---
Interest on interest-bearing
deposits 53 51 240 155
Interest on securities -
taxable 1,622 1,630 6,613 6,745
Interest on securities -
nontaxable 1,662 1,620 6,463 6,532
---------- ---------- ---------- ----------
Total interest income 12,137 12,429 48,670 49,946
---------- ---------- ---------- ----------
Interest Expense
Interest on time deposits of
$100,000 or more 320 468 1,491 2,019
Interest on other deposits 1,496 1,709 6,396 7,165
Total interest expense 1,816 2,177 7,887 9,184
---------- ---------- ---------- ----------
Net interest income 10,321 10,252 40,783 40,762
Provision for loan losses 580 753 3,134 2,949
---------- ---------- ---------- ----------
Net interest income after
provision for loan losses 9,741 9,499 37,649 37,813
---------- ---------- ---------- ----------
Noninterest Income
Service charges on deposit
accounts 638 665 2,594 2,617
Other service charges and
fees 113 113 243 287
Credit card fees 837 832 3,278 3,197
Trust income 276 270 1,313 1,087
Bank-owned life insurance 209 203 814 762
Other income 131 156 472 449
Realized securities gains
(losses), net (8) 18 25 11
---------- ---------- ---------- ----------
Total noninterest income 2,196 2,257 8,739 8,410
---------- ---------- ---------- ----------
Noninterest Expense
Salaries and employee
benefits 2,991 2,796 12,005 11,357
Occupancy and furniture and
fixtures 408 392 1,589 1,599
Data processing and ATM 387 412 1,593 1,701
FDIC assessment 132 (372) 475 677
Credit card processing 625 614 2,442 2,485
Intangibles and goodwill
amortization 271 270 1,083 1,083
Net costs of other real
estate owned (1) 237 208 518
Franchise taxes 255 161 901 780
Other operating expenses 798 832 3,100 3,138
---------- ---------- ---------- ----------
Total noninterest expense 5,866 5,342 23,396 23,338
---------- ---------- ---------- ----------
Income before income tax
expense 6,071 6,414 22,992 22,885
Income tax expense 1,386 1,525 5,245 5,247
---------- ---------- ---------- ----------
Net income $ 4,685 $ 4,889 $ 17,747 $ 17,638
========== ========== ========== ==========
Basic net income per share $ 0.67 $ 0.70 $ 2.56 $ 2.54
========== ========== ========== ==========
Fully diluted net income per
share $ 0.67 $ 0.70 $ 2.55 $ 2.54
========== ========== ========== ==========
Weighted average outstanding
number of common shares
Basic 6,947,887 6,939,148 6,942,411 6,936,869
========== ========== ========== ==========
Diluted 6,964,482 6,949,960 6,959,867 6,950,863
========== ========== ========== ==========
Dividends declared per share $ 0.57 $ 0.52 $ 1.10 $ 1.00
========== ========== ========== ==========
Dividend payout ratio --- --- 43.04 39.34
========== ========== ========== ==========
Book value per share $ --- $ --- $ 21.60 $ 20.36
========== ========== ========== ==========
National Bankshares, Inc. and Subsidiaries
Consolidated Statements of Comprehensive Income
(Unaudited)
Three Months Ended
December 31, December 31,
($ in thousands) 2012 2011
------------ ------------
Net Income $ 4,685 $ 4,889
Other Comprehensive Income, Net of Tax
Unrealized holding losses on available for sale
securities net of deferred taxes of ($141) in
2012 and ($222) in 2011 (261) (412)
Reclassification adjustment, net of income taxes
of $3 in 2012 and $2 in 2011 6 3
Net pension loss arising during the period, net
of taxes of ($405) in 2012 and ($731) in 2011 (752) (1,356)
Less: amortization of prior service cost
included in net periodic pension cost, net
taxes of ($35) in 2012 and ($35) in 2011 (66) (66)
------------ ------------
Other comprehensive loss, net of tax of ($578)
and ($986) $ (1,073) $ (1,831)
------------ ------------
Total Comprehensive Income $ 3,612 $ 3,058
============ ============
Twelve Months Ended
December 31, December 31,
($ in thousands) 2012 2011
------------ ------------
Net Income $ 17,747 $ 17,638
Other Comprehensive Income, Net of Tax
Unrealized holding gains (losses) on available
for sale securities net of deferred taxes of
($320) in 2012 and $1,468 in 2011 (592) 2,725
Reclassification adjustment, net of income taxes
of ($3) in 2012 and $9 in 2011 (7) 17
Net pension loss arising during the period, net
of taxes of ($405) in 2012 and ($731) in 2011 (752) (1,356)
Less: amortization of prior service cost
included in net periodic pension cost, net
taxes of ($35) in 2012 and ($35) in 2011 (66) (66)
------------ ------------
Other comprehensive income (loss), net of tax of
($763) and $711 $ (1,417) $ 1,320
------------ ------------
Total Comprehensive Income $ 16,330 $ 18,958
============ ============
Key Ratios and Other Data
(Unaudited)
Three Months Ended Twelve Months Ended
December December December December
Average Balances 31, 2012 31, 2011 31, 2012 31, 2011
---------- ---------- ---------- ----------
Cash and due from banks $ 8,958 $ 12,548 $ 11,129 $ 11,654
Interest-bearing deposits 89,703 87,266 94,724 64,977
Securities available for
sale 192,724 177,387 189,850 186,296
Securities held to maturity 161,344 139,318 149,566 134,612
Mortgage loans held for sale 2,543 1,411 1,765 818
Gross loans 591,604 590,425 589,129 589,414
Loans, net 582,272 580,766 579,817 580,037
Intangible assets 9,531 10,614 9,936 11,019
Total assets 1,091,032 1,050,417 1,080,351 1,031,899
Total deposits 932,678 902,055 925,986 888,044
Other borrowings --- --- --- ---
Stockholders' equity 151,660 142,292 147,812 136,794
Interest-earning assets 1,032,929 990,999 1,019,887 973,171
Interest-bearing liabilities 789,684 760,567 784,717 752,164
Financial ratios
Return on average assets 1.71% 1.85% 1.64% 1.71%
Return on average equity 12.29% 13.63% 12.01% 12.89%
Net interest margin 4.37% 4.50% 4.39% 4.59%
Net interest income - fully
taxable equivalent $ 11,354 $ 11,230 $ 44,712 $ 41,914
Efficiency ratio 43.29% 39.66% 43.77% 44.00%
Average equity to average
assets 13.90% 13.55% 13.68% 13.26%
Allowance for loan losses
Beginning balance $ 8,254 $ 8,719 $ 8,068 $ 7,664
Provision for losses 580 753 3,134 2,949
Charge-offs (509) (1,423) (2,953) (2,628)
Recoveries 24 19 100 83
---------- ---------- ---------- ----------
Ending balance $ 8,349 $ 8,068 $ 8,349 $ 8,068
========== ========== ========== ==========
Asset Quality Data
(Unaudited)
December 31, December 31,
Nonperforming assets 2012 2011
------------ ------------
Nonaccrual loans $ 3,466 $ 1,398
Nonaccrual restructured loans 2,151 3,806
------------ ------------
Total nonperforming loans 5,617 5,204
Other real estate owned 1,435 1,489
------------ ------------
Total nonperforming assets $ 7,052 $ 6,693
============ ============
Accruing restructured loans $ 2,005 $ 3,756
============ ============
Loans 90 days or more past due $ 170 $ 481
============ ============
Asset quality ratios
Nonperforming assets to loans net of unearned
income and deferred fees, plus other real
estate owned 1.19% 1.13%
Allowance for loan losses to total loans 1.41% 1.37%
Allowance for loan losses to nonperforming loans 148.64% 155.03%
Loans past due 90 days or more to loans net of
unearned income and deferred fees 0.03% 0.08%
CONTACTS: James G. Rakes Chairman, President & CEO (540) 951-6236 Email Contact David K. Skeens Treasurer & CFO (540) 951-6347 Email Contact
Source: National Bankshares, Inc.
