National Bankshares, Inc. Announces Earnings for 2015
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BLACKSBURG, VA -- (Marketwired) -- 02/25/16 -- National Bankshares, Inc. (NASDAQ: NKSH) today announced its results of operations for the three and twelve months ended December 31, 2015. The Company reported net income of $15.83 million for the twelve months ended December 31, 2015, a decrease from the $16.91 million earned in 2014. The 2015 return on average assets and return on average equity were 1.37% and 9.22%, respectively. Basic earnings per share in 2015 were $2.28. National Bankshares, Inc. ended 2015 with total assets of almost $1.20 billion.
Commenting on the Company's financial results, National Bankshares Chairman, President & CEO James G. Rakes said, "As National Bank enters its 125th year, we continue to deliver on our promise of successful community banking to our customers, employees and stockholders. In the fourth quarter of 2015, we experienced unanticipated write downs in loans that contributed to the lower net income. Among other expenses, we had increased employee benefit expenses, mostly the result of pension related costs. We are working hard to deploy our capital in the communities we serve while preserving asset quality and our strong capital legacy."
Mr. Rakes continued, "We were pleased to return profits to our stockholders in the form of dividends of $1.14 per share in 2015. This per share dividend payment amount resulted in a dividend payout ratio of 50.09% in 2015 compared to 46.43% in 2014 and 43.74% in 2013."
National Bankshares, Inc., headquartered in Blacksburg, Virginia, is the parent company of The National Bank of Blacksburg, which does business as National Bank, and of National Bankshares Financial Services, Inc. National Bank is a community bank operating from 26 offices throughout Southwest Virginia. National Bankshares Financial Services, Inc. is an investment and insurance subsidiary in the same trade area. The Company's stock is traded on the NASDAQ Capital Market under the symbol "NKSH." Additional information is available at www.nationalbankshares.com.
Forward-Looking Statements Certain statements in this press release may be "forward-looking statements." Forward-looking statements are statements that include projections, predictions, expectations or beliefs about future events or results that are not statements of historical fact and that involve significant risks and uncertainties. Although the Company believes that its expectations with regard to forward-looking statements are based upon reasonable assumptions within the bounds of its existing knowledge of its business and operations, there can be no assurance that actual Company results will not differ materially from any future results implied by the forward-looking statements. Actual results may be materially different from past or anticipated results because of many factors, some of which may include changes in economic conditions, the interest rate environment, legislative and regulatory requirements, new products, competition, changes in the stock and bond markets and technology. The Company does not update any forward-looking statements that it may make.
National Bankshares, Inc. and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
($ in thousands, except for share and per share December December
data) 31, 2015 31, 2014
----------- -----------
Assets
Cash and due from banks $ 12,152 $ 12,894
Interest-bearing deposits 130,811 102,548
Federal funds sold --- ---
Securities available for sale, at fair value 236,131 222,844
Securities held to maturity 152,028 161,452
Restricted stock 1,129 1,089
----------- -----------
Total securities 389,288 385,385
----------- -----------
Mortgage loans held for sale 634 291
Loans:
Loans, net of unearned income and deferred fees 619,008 605,466
Less: allowance for loan losses (8,297) (8,263)
----------- -----------
Loans, net 610,711 597,203
----------- -----------
Premises and equipment, net 9,020 9,131
Accrued interest receivable 5,769 5,748
Other real estate owned 4,165 4,744
Intangible assets and goodwill 6,224 7,223
Bank-owned life insurance 22,401 21,797
Other assets 8,564 7,767
----------- -----------
Total assets $ 1,199,739 $ 1,154,731
=========== ===========
Liabilities and Stockholders' Equity
Noninterest-bearing deposits $ 166,453 $ 150,744
Interest-bearing demand deposits 569,787 533,641
Savings deposits 90,236 81,297
Time deposits 192,383 216,746
----------- -----------
Total deposits 1,018,859 982,428
----------- -----------
Other borrowed funds --- ---
Accrued interest payable 56 68
Other liabilities 8,710 5,932
----------- -----------
Total liabilities 1,027,625 988,428
----------- -----------
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 December 31, 2015 and
6,950,474 shares at December 31, 2014. 8,698 8,688
Retained earnings 171,353 163,287
Accumulated other comprehensive loss, net (7,937) (5,672)
----------- -----------
Total stockholders' equity 172,114 166,303
----------- -----------
Total liabilities and stockholders' equity $ 1,199,739 $ 1,154,731
=========== ===========
National Bankshares, Inc. and Subsidiaries
Consolidated Statements of Income
(Unaudited)
Three Months Ending Twelve Months Ending
($ in thousands, except for
share and per share December December December December
data) 31, 2015 31, 2014 31, 2015 31, 2014
---------- ---------- ---------- ----------
Interest Income
Interest and fees on loans $ 7,560 $ 7,652 $ 30,446 $ 31,058
Interest on federal funds --- --- --- ---
Interest on interest-bearing
deposits 81 69 254 262
Interest on securities -
taxable 1,652 1,730 6,776 6,798
Interest on securities -
nontaxable 1,343 1,416 5,438 5,826
---------- ---------- ---------- ----------
Total interest income 10,636 10,867 42,914 43,944
---------- ---------- ---------- ----------
Interest Expense
Interest on time deposits 290 346 1,233 1,479
Interest on other deposits 746 796 2,950 3,420
Interest on borrowed funds --- --- --- ---
---------- ---------- ---------- ----------
Total interest expense 1,036 1,142 4,183 4,899
---------- ---------- ---------- ----------
Net interest income 9,600 9,725 38,731 39,045
Provision for loan losses 1,275 481 2,009 1,641
---------- ---------- ---------- ----------
Net income after provision
for loan losses 8,325 9,244 36,722 37,404
---------- ---------- ---------- ----------
Noninterest Income
Service charges on deposit
accounts 574 601 2,250 2,434
Other service charges and
fees 51 42 215 187
Credit card fees 1,018 944 3,861 3,631
Trust income 327 292 1,229 1,213
Bank-owned life insurance 152 154 603 616
Other income 318 254 1,295 1,037
Realized securities gain
(loss), net 28 (3) 33 2
---------- ---------- ---------- ----------
Total noninterest income 2,468 2,284 9,486 9,120
---------- ---------- ---------- ----------
Noninterest Expense
Salaries and employee
benefits 3,089 2,716 12,522 11,606
Occupancy and furniture and
fixtures 432 453 1,728 1,703
Data processing and ATM 427 461 1,657 1,650
FDIC assessment 138 122 546 533
Credit card processing 706 706 2,692 2,593
Intangibles and goodwill
amortization 192 268 999 1,075
Net cost of other real estate
owned 39 110 608 369
Franchise taxes 329 308 1,288 1,182
Other operating expenses 905 974 3,595 3,721
---------- ---------- ---------- ----------
Total noninterest expense 6,257 6,118 25,635 24,432
---------- ---------- ---------- ----------
Income before income tax
expense 4,536 5,410 20,573 22,092
Income tax expense 978 1,272 4,740 5,178
---------- ---------- ---------- ----------
Net income $ 3,558 $ 4,138 $ 15,833 $ 16,914
========== ========== ========== ==========
Basic net income per share $ 0.51 $ 0.60 $ 2.28 $ 2.43
========== ========== ========== ==========
Fully diluted net income per
share $ 0.51 $ 0.59 $ 2.28 $ 2.43
========== ========== ========== ==========
Weighted average number of
common shares outstanding
Basic 6,957,213 6,950,474 6,953,849 6,948,789
========== ========== ========== ==========
Diluted 6,959,049 6,955,157 6,957,094 6,959,134
========== ========== ========== ==========
Dividends declared per share $ 0.61 $ 0.58 $ 1.14 $ 1.13
========== ========== ========== ==========
Dividend payout ratio --- --- 50.09% 46.43%
========== ========== ========== ==========
Book value per share --- --- $ 24.74 $ 23.93
========== ========== ========== ==========
National Bankshares, Inc. and Subsidiaries
Consolidated Statements of Comprehensive Income
(Unaudited)
Three Month Ended
December December
($ in thousands) 31, 2015 31, 2014
----------- -----------
Net income $ 3,558 $ 4,138
Other Comprehensive Income (Loss), net of tax
Unrealized holding gains (losses) on available for
sale securities net of deferred tax of ($237) in
2015 and $2,428 in 2014 (440) 4,511
Reclassification adjustment, net of tax of ($10)
in 2015 and $1 in 2014 (18) 1
Net pension loss arising during the period, net of
tax of ($597) in 2015 and ($574) in 2014 (1,108) (1,066)
Less: amortization of prior service cost included
in net periodic pension cost net of tax of ($38)
in 2015 and ($39) in 2014 (72) (71)
----------- -----------
Other comprehensive income (loss), net of tax of
($882) in 2015 and $1,816 in 2014 $ (1,638) $ 3,375
----------- -----------
Total Comprehensive Income (Loss) $ 1,920 $ 7,513
=========== ===========
Twelve Month Ended
December December
($ in thousands) 31, 2015 31, 2014
----------- -----------
Net income $ 15,833 $ 16,914
Other Comprehensive Income, net of tax
Unrealized holding gains (losses) on available for
sale securities net of deferred tax of ($571) in
2015 and $6,693 in 2014 (1,064) 12,430
Reclassification adjustment, net of tax of ($12)
in 2015 and ($1) in 2014 (21) (1)
Net pension loss arising during the period, net of
tax of ($597) in 2015 and ($574) in 2014 (1,108) (1,066)
Less: amortization of prior service cost included
in net periodic pension cost net of tax of ($38)
in 2015 and ($39) in 2014 (72) (71)
----------- -----------
Other comprehensive income (loss), net of tax of
($1,218) in 2015 and $6,079 in 2014 $ (2,265) $ 11,292
----------- -----------
Total Comprehensive Income $ 13,568 $ 28,206
=========== ===========
Key Ratios and Other Data
(Unaudited)
($ in thousands) Three Month Ended Twelve Month Ended
December December December December
Average Balances 31, 2015 31, 2014 31, 2015 31, 2014
--------- --------- --------- ---------
Cash and due from banks $ 12,166 $ 12,050 $ 11,672 $ 11,872
Interest-bearing deposits 111,162 107,512 96,677 103,320
Securities available for sale 223,245 207,081 222,937 196,960
Securities held to maturity 152,977 161,823 155,747 162,906
Restricted stock 1,129 1,089 1,121 1,162
Mortgage loans held for sale 861 453 802 383
Gross loans 624,754 597,690 620,594 593,829
Loans, net 615,801 588,819 611,554 584,857
Intangible assets 6,319 7,376 6,707 7,778
Total assets 1,172,07 1,136,28 1,155,59 1,120,84
1 7 4 8
Total deposits 989,853 965,415 976,597 957,684
Other borrowings --- --- --- ---
Stockholders' equity 174,258 164,907 $ 171,732 157,832
Interest-earning assets 1,116,75 1,081,53 1,099,51 1,069,94
9 6 7 0
Interest-bearing liabilities 822,540 812,171 816,768 811,152
Financial ratios
Return on average assets 1.20% 1.44% 1.37% 1.51%
Return on average equity 8.10% 9.96% 9.22% 10.72%
Net interest margin 3.74% 3.90% 3.86% 4.00%
Net interest income-fully
taxable equivalent $ 10,514 $ 10,631 $ 42,394 $ 42,771
Efficiency ratio 48.20% 47.37% 49.41% 47.08%
Average equity to average assets 14.87% 14.51% 14.86% 14.08%
Allowance for loan losses
Beginning balance $ 8,117 $ 8,031 $ 8,263 $ 8,227
Provision for losses 1,275 481 2,009 1,641
Charge-offs (1,118) (292) (2,120) (1,860)
Recoveries 23 43 145 255
--------- --------- --------- ---------
Ending balance $ 8,297 $ 8,263 $ 8,297 $ 8,263
========= ========= ========= =========
Asset Quality Data
(Unaudited)
December December
$ in thousands 31, 2015 31, 2014
--------- ---------
Asset Quality
Nonaccrual loans $ 2,043 $ 3,999
Nonaccrual restructured loans 4,639 5,288
--------- ---------
Total nonperforming loans $ 6,682 $ 9,287
Other real estate owned $ 4,165 $ 4,744
--------- ---------
Total nonperforming assets $ 10,847 $ 14,031
========= =========
Accruing restructured loans $ 8,814 $ 6,040
Loans 90 days or more past due $ 156 $ 207
Asset quality ratios
Nonperforming assets to loans net of unearned income
and deferred fees, plus other real estate owned 1.74% 2.30%
Allowance for loans losses to total loans 1.34% 1.36%
Allowance for loan losses to nonperforming loans 124.17% 88.97%
Loans past due 90 days or more to loans net of
unearned income and deferred fees 0.03% 0.03%
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.
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