National Bankshares, Inc. and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
|
($ in thousands, except for share and per share data) |
September 30, 2018 |
September 30, 2017 |
December 31, 2017 |
|||||||||
|
Assets |
||||||||||||
|
Cash and due from banks |
$ | 11,533 | $ | 12,066 | $ | 12,926 | ||||||
|
Interest-bearing deposits |
28,328 | 58,260 | 51,233 | |||||||||
|
Securities available for sale, at fair value |
448,485 | 309,323 | 331,387 | |||||||||
|
Securities held to maturity |
--- | 129,750 | 127,164 | |||||||||
|
Restricted stock |
2,708 | 1,200 | 1,200 | |||||||||
|
Total securities |
451,193 | 440,273 | 459,751 | |||||||||
|
Mortgage loans held for sale |
1,027 | 505 | 260 | |||||||||
|
Loans: |
||||||||||||
|
Loans, net of unearned income and deferred fees and costs |
701,834 | 660,362 | 668,069 | |||||||||
|
Less: allowance for loan losses |
(7,713 |
) |
(8,473 |
) |
(7,925 |
) |
||||||
|
Loans, net |
694,121 | 651,889 | 660,144 | |||||||||
|
Premises and equipment, net |
8,727 | 8,458 | 8,221 | |||||||||
|
Accrued interest receivable |
5,589 | 5,123 | 5,297 | |||||||||
|
Other real estate owned, net |
2,214 | 2,923 | 2,817 | |||||||||
|
Intangible assets and goodwill |
5,861 | 5,911 | 5,898 | |||||||||
|
Bank-owned life insurance |
34,434 | 33,520 | 33,756 | |||||||||
|
Other assets |
15,262 | 13,555 | 16,454 | |||||||||
|
Total assets |
$ | 1,258,289 | $ | 1,232,483 | $ | 1,256,757 | ||||||
|
Liabilities and Stockholders' Equity |
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|
Noninterest-bearing deposits |
$ | 199,953 | $ | 184,483 | $ | 182,511 | ||||||
|
Interest-bearing demand deposits |
584,305 | 588,447 | 622,189 | |||||||||
|
Savings deposits |
141,751 | 140,324 | 140,150 | |||||||||
|
Time deposits |
96,167 | 118,719 | 114,884 | |||||||||
|
Total deposits |
1,022,176 | 1,031,973 | 1,059,734 | |||||||||
|
Other borrowed funds |
35,000 | --- | --- | |||||||||
|
Accrued interest payable |
165 | 51 | 62 | |||||||||
|
Other liabilities |
12,791 | 12,798 | 12,065 | |||||||||
|
Total liabilities |
1,070,132 | 1,044,822 | 1,071,861 | |||||||||
|
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 September 30, 2018, September 30, 2017 and December 31, 2017 |
8,698 | 8,698 | 8,698 | |||||||||
|
Retained earnings |
193,445 | 185,331 | 185,893 | |||||||||
|
Accumulated other comprehensive loss, net |
(13,986 |
) |
(6,368 |
) |
(9,695 |
) |
||||||
|
Total stockholders' equity |
188,157 | 187,661 | 184,896 | |||||||||
|
Total liabilities and stockholders' equity |
$ | 1,258,289 | $ | 1,232,483 | $ | 1,256,757 | ||||||
National Bankshares, Inc. and Subsidiaries
Consolidated Statements of Income
(Unaudited)
|
Three Months Ended |
Nine Months Ended |
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|
($ in thousands, except for share and per share data) |
September 30, 2018 |
September 30, 2017 |
September 30, 2018 |
September 30, 2017 |
||||||||||||
|
Interest Income |
||||||||||||||||
|
Interest and fees on loans |
$ | 8,005 | $ | 7,473 | $ | 23,159 | $ | 22,379 | ||||||||
|
Interest on federal funds |
--- | --- | --- | --- | ||||||||||||
|
Interest on interest-bearing deposits |
111 | 224 | 509 | 603 | ||||||||||||
|
Interest on securities - taxable |
1,771 | 1,426 | 5,125 | 4,225 | ||||||||||||
|
Interest on securities - nontaxable |
1,058 | 1,178 | 3,362 | 3,627 | ||||||||||||
|
Total interest income |
10,945 | 10,301 | 32,155 | 30,834 | ||||||||||||
|
Interest Expense |
||||||||||||||||
|
Interest on time deposits |
107 | 130 | 344 | 410 | ||||||||||||
|
Interest on other deposits |
1,034 | 891 | 3,023 | 2,687 | ||||||||||||
|
Interest on borrowed funds |
104 | --- | 104 | --- | ||||||||||||
|
Total interest expense |
1,245 | 1,021 | 3,471 | 3,097 | ||||||||||||
|
Net interest income |
9,700 | 9,280 | 28,684 | 27,737 | ||||||||||||
|
Provision for loan losses |
223 | 201 | 93 | 724 | ||||||||||||
|
Net interest income after provision for loan losses |
9,477 | 9,079 | 28,591 | 27,013 | ||||||||||||
|
Noninterest Income |
||||||||||||||||
|
Service charges on deposit accounts |
673 | 710 | 2,037 | 2,067 | ||||||||||||
|
Other service charges and fees |
20 | 42 | 87 | 152 | ||||||||||||
|
Credit card fees |
362 | 315 | 1,071 | 854 | ||||||||||||
|
Trust income |
355 | 365 | 1,131 | 1,127 | ||||||||||||
|
Bank-owned life insurance |
222 | 233 | 678 | 522 | ||||||||||||
|
Other income |
282 | 215 | 801 | 735 | ||||||||||||
|
Realized securities gain, net |
--- | 4 | --- | 8 | ||||||||||||
|
Total noninterest income |
1,914 | 1,884 | 5,805 | 5,465 | ||||||||||||
|
Noninterest Expense |
||||||||||||||||
|
Salaries and employee benefits |
3,639 | 3,478 | 10,878 | 10,420 | ||||||||||||
|
Occupancy and furniture and fixtures |
433 | 459 | 1,396 | 1,366 | ||||||||||||
|
Data processing and ATM |
684 | 565 | 2,024 | 1,673 | ||||||||||||
|
FDIC assessment |
88 | 93 | 269 | 279 | ||||||||||||
|
Intangibles and goodwill amortization |
12 | 13 | 37 | 56 | ||||||||||||
|
Net cost of other real estate owned |
274 | 58 | 523 | 142 | ||||||||||||
|
Franchise taxes |
314 | 332 | 965 | 983 | ||||||||||||
|
Write-down of insurance receivable |
--- | --- | 2,010 | --- | ||||||||||||
|
Other operating expenses |
1,019 | 1,033 | 2,949 | 3,369 | ||||||||||||
|
Total noninterest expense |
6,463 | 6,031 | 21,051 | 18,288 | ||||||||||||
|
Income before income tax expense |
4,928 | 4,932 | 13,345 | 14,190 | ||||||||||||
|
Income tax expense |
677 | 1,147 | 1,757 | 3,186 | ||||||||||||
|
Net Income |
$ | 4,251 | $ | 3,785 | $ | 11,588 | $ | 11,004 | ||||||||
|
Basic net income per share |
$ | 0.61 | $ | 0.54 | $ | 1.67 | $ | 1.58 | ||||||||
|
Fully diluted net income per share |
$ | 0.61 | $ | 0.54 | $ | 1.67 | $ | 1.58 | ||||||||
|
Weighted average number of common shares outstanding |
||||||||||||||||
|
Basic |
6,957,974 | 6,957,974 | 6,957,974 | 6,957,974 | ||||||||||||
|
Diluted |
6,957,974 | 6,957,974 | 6,957,974 | 6,957,974 | ||||||||||||
|
Dividends declared per share |
--- | --- | $ | 0.58 | $ | 0.56 | ||||||||||
|
Dividend payout ratio |
--- | --- | 34.83 | % | 35.41 | % | ||||||||||
|
Book value per share |
--- | --- | $ | 27.04 | $ | 26.97 | ||||||||||
National Bankshares, Inc. and Subsidiaries
Consolidated Statements of Comprehensive Income
(Unaudited)
|
Three Months Ended |
||||||||
|
($ in thousands) |
September 30, 2018 |
September 30, 2017 |
||||||
|
Net income |
$ | 4,251 | $ | 3,785 | ||||
|
Other Comprehensive Loss, net of tax |
||||||||
|
Unrealized holding loss on available for sale securities net of tax of ($517) in 2018 and ($219) in 2017 |
(1,945 |
) |
(407 |
) |
||||
|
Reclassification adjustment for loss included in net income, net of tax of ($1) in 2017 |
--- | (3 |
) |
|||||
|
Other comprehensive loss, net of tax of ($517) in 2018 and ($220) in 2017 |
$ | (1,945 |
) |
$ | (410 |
) |
||
|
Total Comprehensive Income |
$ | 2,306 | $ | 3,375 | ||||
|
Nine Months Ended |
||||||||
|
($ in thousands) |
September 30, 2018 |
September 30, 2017 |
||||||
|
Net income |
$ | 11,588 | $ | 11,004 | ||||
|
Other Comprehensive Income (Loss), net of tax |
||||||||
|
Unrealized holding gain (loss) on available for sale securities net of tax of ($1,378) in 2018 and $1,235 in 2017 |
(5,182 |
) |
2,294 | |||||
|
Reclassification adjustment for gain included in net income, net of tax of ($1) in 2017 |
--- | (3 |
) |
|||||
|
Unrealized holding gain on securities transferred from held to maturity to available for sale, net of tax of $237 for the period ended September 30, 2018 |
891 | --- | ||||||
|
Other comprehensive income (loss), net of tax of ($1,141) in 2018 and $1,234 in 2017 |
$ | (4,291 |
) |
$ | 2,291 | |||
|
Total Comprehensive Income |
$ | 7,297 | $ | 13,295 | ||||
Key Ratios and Other Data
(Unaudited)
|
Three Months Ended |
Nine Months Ended | |||||||||||||||
|
($ in thousands) |
September 30, 2018 |
September 30, 2017 |
September 30, 2018 |
September 30, 2017 |
||||||||||||
|
Average Balances |
||||||||||||||||
|
Cash and due from banks |
$ | 11,026 | $ | 11,182 | $ | 11,123 | $ | 11,291 | ||||||||
|
Interest-bearing deposits |
22,432 | 69,994 | 39,366 | 76,661 | ||||||||||||
|
Securities available for sale |
459,745 | 308,725 | 387,210 | 306,145 | ||||||||||||
|
Securities held to maturity |
--- | 130,140 | 73,690 | 132,349 | ||||||||||||
|
Restricted stock |
1,899 | 1,200 | 1,443 | 1,190 | ||||||||||||
|
Mortgage loans held for sale |
592 | 549 | 350 | 343 | ||||||||||||
|
Gross Loans |
694,606 | 651,577 | 677,363 | 651,566 | ||||||||||||
|
Loans, net |
686,366 | 642,521 | 669,116 | 642,547 | ||||||||||||
|
Intangible assets |
5,868 | 5,918 | 5,881 | 5,933 | ||||||||||||
|
Total assets |
1,254,055 | 1,243,789 | 1,254,684 | 1,233,997 | ||||||||||||
|
Total deposits |
1,037,798 | 1,036,317 | 1,051,123 | 1,037,947 | ||||||||||||
|
Other borrowings |
15,978 | --- | 5,385 | --- | ||||||||||||
|
Stockholders' equity |
187,996 | 185,967 | 186,078 | 183,549 | ||||||||||||
|
Interest-earning assets |
1,186,219 | 1,163,054 | 1,186,623 | 1,170,491 | ||||||||||||
|
Interest-bearing liabilities |
856,299 | 855,777 | 866,323 | 861,237 | ||||||||||||
|
Financial Ratios |
||||||||||||||||
|
Return on average assets(1) |
1.34 | % | 1.22 | % | 1.28 | % | 1.19 | % | ||||||||
|
Return on average equity(1) |
8.97 | % | 8.07 | % | 8.61 | % | 8.02 | % | ||||||||
|
Net interest margin |
3.38 | % | 3.44 | % | 3.37 | % | 3.45 | % | ||||||||
|
Net interest income-fully taxable equivalent |
$ | 10,096 | $ | 10,082 | $ | 29,886 | $ | 30,204 | ||||||||
|
Efficiency ratio(2) |
53.81 | % | 53.19 | % | 53.35 | % | 53.97 | % | ||||||||
|
Average equity to average assets |
14.99 | % | 15.06 | % | 14.83 | % | 14.87 | % | ||||||||
|
Allowance for Loan Losses |
||||||||||||||||
|
Beginning balance |
$ | 7,579 | $ | 8,372 | $ | 7,925 | $ | 8,300 | ||||||||
|
Provision for losses |
223 | 201 | 93 | 724 | ||||||||||||
|
Charge-offs |
(147 |
) |
(137 |
) |
(487 |
) |
(689 |
) |
||||||||
|
Recoveries |
58 | 37 | 182 | 138 | ||||||||||||
|
Ending balance |
$ | 7,713 | $ | 8,473 | $ | 7,713 | $ | 8,473 | ||||||||
|
(1) |
Return on average assets and return on average equity are calculated by annualizing net income to date. For 2018, the annualization factor was not applied to the insurance write-off. |
|
|
(2) |
Efficiency ratio is calculated as noninterest expense, less non-recurring items, divided by the sum of noninterest income and net interest income on a fully taxable equivalent basis. |
Asset Quality Data
(Unaudited)
|
($ in thousands) |
September 30, 2018 |
September 30, 2017 |
||||||
|
Nonperforming Assets |
||||||||
|
Nonaccrual loans |
$ | 220 | $ | 7 | ||||
|
Nonaccrual restructured loans |
2,856 | 3,149 | ||||||
|
Total nonperforming loans |
3,076 | 3,156 | ||||||
|
Other real estate owned |
$ | 2,214 | $ | 2,923 | ||||
|
Total nonperforming assets |
$ | 5,290 | $ | 6,079 | ||||
|
Accruing restructured loans |
7,843 | 4,815 | ||||||
|
Loans 90 days or more past due |
$ | 63 | $ | 250 | ||||
|
Asset Quality Ratios |
||||||||
|
Nonperforming assets to loans net of unearned income and deferred fees, plus other real estate owned |
0.75 | % | 0.92 | % | ||||
|
Allowance for loans losses to total loans |
1.10 | % | 1.28 | % | ||||
|
Allowance for loan losses to nonperforming loans |
250.75 | % | 268.47 | % | ||||
|
Loans past due 90 days or more to loans net of unearned income and deferred fees |
0.01 | % | 0.04 | % | ||||