BLACKSBURG, VA, FEBRUARY 22, 2018: National Bankshares, Inc.
(NASDAQ Capital Market: NKSH)
today announced its results of operations for the three and twelve months ended December 31, 2017. The Company reported net income of $14.09 million or $2.03 per common share for the twelve months ended December 31, 2017 and $3.09 million or $0.44 per common share for the three months ended December 31, 2017. For the twelve months ended December 31, 2017, the return on average assets was 1.14% and the return on average equity was 7.64%. National Bankshares, Inc. ended 2017 with assets of $1.26 billion.
The Tax Cuts and Jobs Act (“the Act”) was enacted December 22, 2017 and is effective January 1, 2018. The Act will reduce the Company’s tax rate to 21%, from a top marginal rate of 35%. As a result of the change in the Company’s future tax rate, generally accepted accounting principles in the United States (“GAAP”) require revaluation in 2017 of deferred tax assets to the rate at which they are expected to be realized. During the fourth quarter, the Company recognized a revaluation adjustment of $1.59 million, with a corresponding charge to income tax expense.
Excluding the effect of the revaluation, earnings for the year ended December 31, 2017 were $15.68 million or $2.25 per common share, compared with earnings of $14.94 million or $2.15 for the twelve months ended December 31, 2016. Earnings for the three months ended December 31, 2017 would have been $4.68 million or $0.67 per common share, compared with $3.47 million or $.50 per common share for the three months ended December 31, 2016.
Commenting on National Bankshares’ 2017 results, CEO and President F. Brad Denardo said, “Last year was another good year for our Company, with steady growth in loans, improved asset quality and a reduction in our allowance for loan losses. We were also pleased to reward our shareholders with an increased dividend payment of $1.17 per share. While changes in the nation’s tax laws caused an unforeseen reduction in net income, in the longer term these changes should have a positive impact on our earnings.”
Mr. Denardo added, “At National Bankshares, we believe in banking built on values. Our core values of accountability, honesty, integrity and respect are reflected in our commitment to providing excellent customer service, enhancing shareholder value and focusing on stewardship in our communities. By staying true to these values we are confident that National Bankshares will remain a solid institution for years to come.”
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 25 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
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.