2010-02-04 22:40:04 -
BLACKSBURG, VA -- (Marketwire) -- 02/04/10 -- National Bankshares, Inc. (NASDAQ: NKSH) announced today that it posted record net income of nearly $14.32 million for the year ended December 31, 2009. Net income for the year is 5.34% higher than the $13.59 million earned by the Company in 2008. Basic net income per share increased from $1.96 last year to $2.07 for 2009.
National Bankshares, Inc. ended 2009 with total assets of nearly $982.37 million, an increase of 5.02% over the $935.37 million at December 31, 2008. Net loans, which were at $583.02 million at the end of 2009, experienced a 2.34% increase compared to net loans at year-end 2008. The return on average assets for the twelve months ended December 31, 2009 was 1.47%, and the return on average equity for the period was 12.23%.
For the three months ending December 31, 2009, National Bankshares, Inc.
had net income of nearly $3.80 million, or basic net income per share of $0.55. This compares with nearly $3.33 million, or basic net income per share of $0.48, for the same three month period in 2008.
Chairman, President & CEO James G. Rakes commented on the year's financial performance. "Last year, National Bankshares benefited from the fact that our subsidiary community bank, National Bank, maintained its traditional, conservative approach to banking. Record earnings in 2009 came largely from higher net interest income, coupled with limited increases in controllable noninterest expense. We were able to take advantage of the low and stable interest rate environment, and net interest income grew by almost 10.77%, from $31.29 million for 2008 to $34.66 million for 2009. A portion of the growth in interest income came from meeting the credit needs of borrowers in our market area. We experienced $14.33 million of growth in the loan portfolio, as our bankers continued to make good loans despite the difficult economy. At the same time as net interest income was improving, we were keeping careful watch on controllable costs. As a result, total noninterest expense for the year was only $1.83 million above 2008 levels, despite FDIC Deposit Insurance Fund assessments climbing by $1.52 million from 2008 to 2009."
Mr. Rakes continued, "Our region of the country has not totally escaped the effects of the recession and the slow economic recovery. Fortunately, we have not been as seriously impacted as some other areas. In the last half of 2008, we began to see a rise in the level of total nonperforming assets.
Anticipating that this trend would continue and worsen during 2009, we increased the provision for loan losses as the year progressed. In 2008, the provision for losses was $1.12 million, and in 2009 we set aside over $1.63 million. By December 31, 2009, the allowance for loan losses had grown to almost $6.93 million from $5.86 million at the end of 2008, and the ratio of the allowance for loan losses to total loans had gone from 1.02% at year-end 2008 to 1.17% at December 31, 2009. Because of this preparation and because our earnings and capital levels allow us to approach loan workouts in a deliberate fashion, we feel that we can respond appropriately to the increase in total nonperforming assets that is being reported for year-end 2009. Although having total nonperforming assets at almost $8.88 million at December 31, 2009 is high for our Company, the total remains quite low when compared with peers. The ratio of nonperforming loans to net loans was at 1.14% at year-end, a reasonable level in today's difficult economy." Mr. Rakes went on to say, "National Bankshares, Inc. is both people focused and value driven. We can trace our heritage back to the founding of National Bank in 1891. Despite the current challenges, we are proud to be traditional bankers, and we are committed to the communities we serve."
National Bankshares, Inc. is a financial holding company that is the parent of National Bank of Blacksburg, which does business as National Bank from 25 offices in Southwest Virginia. National Bank offers a full range of banking products and services, including Trust services. The Company has its headquarters in Blacksburg, Virginia. It also has a financial services subsidiary that does business in the same markets as National Bankshares Investment Services and National Bankshares Insurance Services. Its stock is traded on the NASDAQ Capital Market under the symbol "NKSH." Additional information is available at www.nationalbankshares.com :
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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)
($ in thousands, except for per share data)
December 31, December 31,
Assets 2009 2008
------------- -------------
Cash and due from banks $ 12,894 $ 16,316
Interest-bearing deposits 32,730 29,656
Federal funds sold --- ---
Securities available for sale 168,041 147,227
Securities held to maturity 129,376 117,772
------------- -------------
Total securities 297,417 264,999
------------- -------------
Mortgage loans held for sale 126 348
Loans:
Real estate construction loans 45,625 60,798
Real estate mortgage loans 165,542 162,757
Commercial and industrial loans 283,998 246,218
Consumer loans 95,844 106,907
------------- -------------
Total loans 591,009 576,680
Less: unearned income and deferred fees (1,062) (1,123)
------------- -------------
Loans, net of unearned income
and deferred fees 589,947 575,557
Less: allowance for loan losses (6,926) (5,858)
------------- -------------
Loans, net 583,021 569,699
------------- -------------
Bank premises and equipment, net 10,628 11,204
Accrued interest receivable 6,250 5,760
Other real estate owned 2,126 1,984
Intangible assets 12,626 13,719
Other assets 24,549 21,689
------------- -------------
Total assets $ 982,367 $ 935,374
============= =============
Liabilities and Stockholders' Equity
Noninterest-bearing deposits $ 122,549 $ 109,630
Interest-bearing demand deposits 310,629 256,416
Savings deposits 51,622 45,329
Time deposits 367,312 406,473
------------- -------------
Total deposits 852,112 817,848
------------- -------------
Other borrowed funds --- 54
Accrued interest payable 336 655
Other liabilities 7,843 6,709
------------- -------------
Total liabilities 860,291 825,266
------------- -------------
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
6,933,474 shares at December 31, 2009 and
6,929,474 shares at December 31, 2008 8,667 8,662
Retained earnings 113,901 105,356
Accumulated comprehensive income (492) (3,910)
------------- -------------
Total stockholders' equity 122,076 110,108
------------- -------------
Total liabilities and
stockholders' equity $ 982,367 $ 935,374
============= =============
National Bankshares, Inc. and Subsidiaries
Consolidated Statements of Income
(Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31, December 31, December 31,
2009 2008 2009 2008
------------ ------------ ------------ ------------
($ in thousands, except
for per share data)
Interest Income
Interest and fees on
loans $ 9,408 $ 9,426 $ 37,578 $ 37,108
Interest on federal
funds --- --- --- ---
Interest on interest-
bearing deposits 17 23 90 449
Interest on securities
- taxable 1,507 1,641 6,273 6,816
Interest on securities
- nontaxable 1,650 1,429 6,546 5,738
------------ ------------ ------------ ------------
Total interest
income 12,582 12,519 50,487 50,111
------------ ------------ ------------ ------------
Interest Expense
Interest on time
deposits 1,054 1,502 5,417 6,004
Interest on other
deposits 2,208 2,898 10,405 12,802
Interest on borrowed
funds 1 1 3 12
------------ ------------ ------------ ------------
Total interest
expense 3,263 4,401 15,825 18,818
------------ ------------ ------------ ------------
Net interest
income 9,319 8,118 34,662 31,293
Provision for loan
losses 681 604 1,634 1,119
------------ ------------ ------------ ------------
Net interest income
after provision
for loan losses 8,638 7,514 33,028 30,174
------------ ------------ ------------ ------------
Noninterest Income
Service charges on
deposit accounts 808 923 3,314 3,425
Other service charges
and fees 80 76 343 326
Credit card fees 743 707 2,803 2,808
Trust income 261 302 1,053 1,231
Bank owned life
insurance 202 238 756 684
Other income 230 124 491 438
Realized securities
gains (losses), net (11) (14) 44 175
------------ ------------ ------------ ------------
Total noninterest
income 2,313 2,356 8,804 9,087
------------ ------------ ------------ ------------
Noninterest Expense
Salaries and employee
benefits 2,927 2,773 11,336 11,168
Occupancy and furniture
and fixtures 448 423 1,792 1,751
Data processing and ATM 355 348 1,371 1,381
FDIC assessment 298 119 1,727 209
Credit card processing 570 535 2,121 2,105
Intangibles and goodwill
amortization 271 278 1,093 1,119
Net costs of other real
estate owned 293 36 393 100
Franchise taxes 219 204 885 823
Other operating expenses 771 1,013 3,135 3,367
------------ ------------ ------------ ------------
Total noninterest
expense 6,152 5,729 23,853 22,023
------------ ------------ ------------ ------------
Income before income
tax expense 4,799 4,141 17,979 17,238
Income tax expense 1,004 813 3,660 3,645
------------ ------------ ------------ ------------
Net income $ 3,795 $ 3,328 $ 14,319 $ 13,593
============ ============ ============ ============
Basic net income per
share $ 0.55 $ 0.48 $ 2.07 $ 1.96
============ ============ ============ ============
Fully diluted net
income per share $ 0.55 $ 0.48 $ 2.06 $ 1.96
============ ============ ============ ============
Weighted average
outstanding number
of common shares
Basic 6,933,474 6,928,632 6,932,126 6,929,755
============ ============ ============ ============
Diluted 6,953,970 6,932,755 6,945,530 6,935,950
============ ============ ============ ============
Dividends declared per
share --- --- $ 0.84 $ 0.80
============ ============ ============ ============
Dividend payout ratio --- --- 40.67 40.78
============ ============ ============ ============
Book value per share --- --- $ 17.61 $ 15.89
============ ============ ============ ============
Key Ratios and Other Data
(Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31, December 31, December 31,
Average Balances 2009 2008 2009 2008
----------- ----------- ----------- -----------
Cash and due from banks $ 11,858 $ 12,194 $ 11,879 $ 12,467
Interest-bearing
deposits 27,338 18,879 35,841 21,440
Securities available
for sale 167,023 148,292 166,592 157,291
Securities held to
maturity 130,924 125,525 131,645 124,076
Mortgage loans held for
sale 940 371 911 386
Gross loans 587,198 562,464 579,766 539,593
Loans, net 579,633 555,864 572,438 533,190
Intangible assets 12,781 13,878 13,187 14,296
Total assets 969,092 914,111 971,538 899,462
Total deposits 838,866 797,757 846,637 783,774
Other borrowings 44 55 49 297
Stockholders' equity 122,276 109,445 117,086 108,585
Interest-earning assets 909,411 854,414 913,091 841,675
Interest-bearing
liabilities 718,632 687,184 731,446 671,463
Financial Ratios
Return on average
assets 1.55% 1.45% 1.47% 1.51%
Return on average
equity 12.31% 12.10% 12.23% 12.52%
Net interest margin 4.51% 4.20% 4.23% 4.12%
Net interest income -
fully taxable
equivalent $ 10,331 $ 8,971 $ 38,595 $ 34,715
Efficiency ratio 48.61% 50.58% 50.32% 50.28%
Average equity to
average assets 12.62% 11.97% 12.05% 12.07%
Allowance for Loan
Losses
Beginning balance $ 6,453 $ 5,435 $ 5,858 $ 5,219
Provision for losses 681 604 1,634 1,119
Charge-offs (225) (202) (647) (611)
Recoveries 17 21 81 131
----------- ----------- ----------- -----------
Ending balance $ 6,926 $ 5,858 $ 6,926 $ 5,858
=========== =========== =========== ===========
Asset Quality Data
(Unaudited)
December 31, December 31,
Nonperforming assets 2009 2008
------------ ------------
Nonaccrual loans $ 4,098 $ 1,333
Restructured loans 2,652 ---
------------ ------------
Total nonperforming loans 6,750 1,333
Other real estate owned 2,126 1,984
------------ ------------
Total nonperforming assets $ 8,876 $ 3,317
============ ============
Loans 90 days or more past due $ 1,697 $ 1,127
============ ============
Asset Quality Ratios
Nonperforming loans to loans net of unearned
income and deferred fees, plus other real
estate owned 1.14% 0.23%
Allowance for loan losses to total loans 1.17% 1.02%
Allowance for loan losses to nonperforming
loans 169.01% 439.46%
Loans past due 90 days or more to loans net
of unearned income and deferred fees 0.29% 0.20%
CONTACTS:
James G. Rakes
Chairman, President & CEO
(540) 951-6236
David K. Skeens
Treasurer
(540) 951-6347
