ex99-1.htm

EX-99.1 2 ex99-1.htm EXHIBIT 99.1 ex99-1.htm

Exhibit 99.1

FOR IMMEDIATE RELEASE

CONTACTS:

JAMES G. RAKES, CHAIRMAN, PRESIDENT & CEO

(540) 951-6236 jrakes@nbbank.com

DAVID K. SKEENS, TREASURER & CFO

(540) 951-6347 dskeens@nbbank.com

NATIONAL BANKSHARES, INC. REPORTS FIRST QUARTER EARNINGS

BLACKSBURG, VA, APRIL 28, 2016: National Bankshares, Inc. (NASDAQ Capital Market: NKSH) today announced its results of operations for the first quarter of 2016. The Company reported net income of $3.78 million for the quarter ended March 31, 2016 compared to almost $3.97 million at March 31, 2015. Basic earnings per share were $0.54 at March 31, 2016 compared to $0.57 for the same period in 2015. For the first quarter, the return on average assets was 1.28% and the return on average equity was 8.64% compared to 1.40% and 9.50%, respectively, for the first quarter of 2015. At March 31, 2016, the Company had total assets of close to $1.21 billion which was an increase of 3.69% when compared to $1.16 billion at the end of the first quarter of 2015.

Commenting on the Company’s financial results, National Bankshares Chairman, President & CEO James G. Rakes said, “We continue to compare very favorably to our peer group in terms of our balance sheet and income statement results. Asset quality remains a priority as nonperforming loans declined over 31% from the first quarter of 2015. In addition, net OREO balances dropped 21% when the same two periods are compared. We still face challenges, such as static loan demand, a low interest rate environment and increased competition, but we are striving to grow loans, manage expenses, and increase noninterest revenue. As we enter our 125^th year of banking, we are focused on continuing to provide long-term value to our stockholders and customers through delivery of superior customer service and products.”

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.

101 Hubbard Street / Blacksburg, Virginia 24060

P.O. Box 90002 / Blacksburg, Virginia 24062-9002

540 951-6300 / 800 552-4123

www.nationalbankshares.com

National Bankshares, Inc. and Subsidiaries

Consolidated Balance Sheets

(Unaudited)

($ in thousands, except for share and per share data)	March 31, 2016			March 31, 2015			December 31, 2015
Assets
Cash and due from banks	$	9,913		$	12,452		$	12,152
Interest-bearing deposits		129,363			87,676			130,811
Federal funds sold		---			---			---
Securities available for sale, at fair value		270,094			238,496			236,131
Securities held to maturity		144,664			156,135			152,028
Restricted stock		1,170			1,129			1,129
Total securities		415,928			395,760			389,288
Mortgage loans held for sale		63			1,091			634
Loans:
Loans, net of unearned income and deferred fees		607,643			622,171			619,008
Less: allowance for loan losses		(8,107	)		(8,257	)		(8,297	)
Loans, net		599,536			613,914			610,711
Premises and equipment, net		8,841			8,998			9,020
Accrued interest receivable		5,587			5,506			5,769
Other real estate owned		3,612			4,573			4,165
Intangible assets and goodwill		6,114			6,954			6,224
Bank-owned life insurance		22,548			21,946			22,401
Other assets		6,366			5,975			8,564
Total assets	$	1,207,871		$	1,164,845		$	1,199,739

Liabilities and Stockholders' Equity
Noninterest-bearing deposits	$	170,207		$	160,217		$	166,453
Interest-bearing demand deposits		570,065			526,388			569,787
Savings deposits		92,944			85,615			90,236
Time deposits		185,296			212,737			192,383
Total deposits		1,018,512			984,957			1,018,859
Other borrowed funds		---			---			---
Accrued interest payable		62			70			56
Other liabilities		10,061			7,096			8,710
Total liabilities		1,028,635			992,123			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 March 31, 2016 and December 31, 2015 and 6,950,474 shares at March 31, 2015.		8,697			8,688			8,697
Retained earnings		175,132			167,253			171,353
Accumulated other comprehensive loss, net		(4,593	)		(3,219	)		(7,936	)
Total stockholders' equity		179,236			172,722			172,114
Total liabilities and stockholders' equity	$	1,207,871		$	1,164,845		$	1,199,739

National Bankshares, Inc. and Subsidiaries

Consolidated Statements of Income

(Unaudited)

	Three Months Ending
($ in thousands, except for share and per share data)	March 31, 2016			March 31, 2015
Interest Income
Interest and fees on loans	$	7,334		$	7,610
Interest on federal funds		---			---
Interest on interest-bearing deposits		162			64
Interest on securities - taxable		1,677			1,734
Interest on securities - nontaxable		1,311			1,386
Total interest income		10,484			10,794
Interest Expense
Interest on time deposits		274			327
Interest on other deposits		794			760
Interest on borrowed funds		---			---
Total interest expense		1,068			1,087
Net interest income		9,416			9,707
Provision for loan losses		203			201
Net income after provision for loan losses		9,213			9,506
Noninterest Income
Service charges on deposit accounts		560			535
Other service charges and fees		72			71
Credit card fees		870			895
Trust Income		323			289
Bank-owned life insurance		147			149
Other income		345			314
Realized securities gains (losses), net		24			(2	)
Total noninterest income		2,341			2,251
Noninterest Expense
Salaries and employee benefits		3,568			3,051
Occupancy and furniture and fixtures		477			449
Data processing and ATM		411			435
FDIC assessment		141			135
Credit card processing		622			610
Intangibles and goodwill amortization		110			269
Net cost of other real estate owned		69			464
Franchise taxes		331			308
Other operating expenses		955			959
Total noninterest expense		6,684			6,680
Income before income tax expense		4,870			5,077
Income tax expense		1,091			1,111
Net Income	$	3,779		$	3,966
Basic net income per share	$	0.54		$	0.57
Fully diluted net income per share	$	0.54		$	0.57
Weighted average number of common shares outstanding
Basic		6,957,974			6,950,474
Diluted		6,957,974			6,955,023
Dividends declared per share	$	---		$	---
Dividend payout ratio		0.00	%		0.00	%
Book value per share	$	25.76		$	24.85

National Bankshares, Inc. and Subsidiaries

Consolidated Statements of Comprehensive Income

(Unaudited)

	Three Months Ended
($ in thousands)	March 31, 2016			March 31, 2015
Net Income	$	3,779		$	3,966

Other Comprehensive Income, Net of Tax
Unrealized holding gains on available for sale securities net of tax of $1,809 and $1,320 for the periods ended March 31, 2016 and 2015, respectively		3,359			2,452
Reclassification adjustment for losses (gains) included in net income, net of tax of ($8) and $1 for the periods ended March 31, 2016 and 2015, respectively		(16	)		1
Other comprehensive income, net of tax of $1,801 and $1,321 for the periods ended March 31, 2016 and 2015, respectively	$	3,343		$	2,453
Total comprehensive income	$	7,122		$	6,419

Key Ratios and Other Data

(Unaudited)

	Three Months Ended
$ in thousands	March 31, 2016			March 31, 2015
Average Balances
Cash and due from banks	$	11,309		$	11,364
Interest-bearing deposits		125,849			104,104
Securities available for sale		245,153			222,161
Securities held to maturity		149,202			159,376
Restricted stock		1,133			1,095
Mortgage loans held for sale		427			460
Gross Loans		610,979			605,137
Loans, net		601,557			604,288
Intangible assets		6,170			7,109
Total assets		1,188,462			1,149,578
Total deposits		1,003,136			973,738
Other borrowings		---			---
Stockholders' equity		175,991			169,289
Interest-earning assets		1,132,925			1,092,481
Interest-bearing liabilities		838,943			821,308

Financial Ratios
Return on average assets		1.28	%		1.40	%
Return on average equity		8.64	%		9.50	%
Net interest margin		3.66	%		3.94	%
Net interest income-fully taxable equivalent	$	10,307		$	10,608
Efficiency ratio		52.85	%		51.95	%
Average equity to average assets		14.81	%		14.73	%

Allowance for Loan Losses
Beginning balance	$	8,297		$	8,263
Provision for losses		203			201
Charge-offs		(453	)		(260	)
Recoveries		60			53
Ending balance	$	8,107		$	8,257

Asset Quality Data

(Unaudited)

$ in thousands	March 31, 2016			March 31, 2015
Nonperforming Assets
Nonaccrual loans	$	1,901		$	3,102
Nonaccrual restructured loans		4,504			6,123
Total nonperforming loans		6,405			9,225
Other real estate owned	$	3,612		$	4,573
Total nonperforming assets	$	10,017		$	13,798
Accruing restructured loans		7,724			5,992
Loans 90 days or more past due	$	328		$	272

Asset Quality Ratios
Nonperforming assets to loans net of unearned income and deferred fees, plus other real estate owned		1.64	%		2.20	%
Allowance for loans losses to total loans		1.33	%		1.33	%
Allowance for loan losses to nonperforming loans		126.57	%		89.51	%
Loans past due 90 days or more to loans net of unearned income and deferred fees		0.05	%		0.04	%