BLACKSBURG, VA., July 15, 2021 -- National Bankshares, Inc. (NASDAQ: NKSH), parent company of The National Bank of Blacksburg, today announced its results of operations for the second quarter and first half of 2021. The Company reported net income of $9.38 million, or $1.49 per common share, for the six months ended June 30, 2021. This compares to net income of $6.96 million, or $1.07 per common share, for the six months ended June 30, 2020. National Bankshares, Inc. ended the first half of 2021 with total assets of $1.66 billion.
President and Chief Executive Officer F. Brad Denardo commented, “National Bankshares delivered increased earnings for the first half of 2021, driven by an improved loan volume, by good growth in noninterest income, by a large reduction in the loan loss provision, and by lower interest rates paid on deposits. We are excited to be serving our customers in our lobbies once again, and look forward to meeting and exceeding the needs of our customers, communities, and shareholders for the rest of 2021 and beyond. Thank you for your continued investment in National Bankshares.”
Highlights for the Six Months Ended June 30, 2021
Loan Modifications for Pandemic-Related Relief
- Of the loans modified for pandemic related hardships, at June 30, 2021, four loans totaling $5.7 million remained in an interest-only period. Each modification is governed by an agreement that provides a date at which the modification will expire.
Paycheck Protection Program Loans
- We continue to participate in the SBA’s Paycheck Protection Program (“PPP”). The Company assisted local businesses through the PPP by providing 1,259 loans totaling $83 million since the program’s inception in April of 2020. During the first six months of 2021, we funded 446 loans totaling $24.8 million and received pay-off of 463 loans with original amounts totaling $30.1 million. Gross PPP loans totaling $31.5 million remain on the balance sheet.
- For the six months ended June 30, 2021, contractual interest earned on PPP loans totaled $198 thousand, while net fees accreted to interest income totaled $233 thousand, and fees recognized at pay off or forgiveness totaled $662 thousand.
Income Statement
- Net income of $9.38 million for the six months ended June 30, 2021 benefitted from a reduced loan loss provision when compared with the six months ended June 30, 2020. Loan loss provision for the six months ended June 30, 2021 was $54 thousand, compared with $1.83 million for the six months ended June 30, 2020. We will continue to closely monitor our loan portfolio for indications of heightened credit risk and the resulting need for any additional provision for loan losses.
- The return on average assets and the return on average equity for the six months ended June 30, 2021 were 1.18% and 9.63% respectively, improved from 1.01% and 7.15% respectively, for the six months ended June 30, 2020.
- The low interest rate environment that impacted net interest income for the six months ended June 30, 2021 began with Federal Reserve rate cuts on March 3 and March 16, 2020, decreasing the target Fed Funds rate from 1.75% to 0.25%. The Company reacted by reducing interest rates on customer deposits. The cost of interest-bearing liabilities decreased from 0.74% for the six months ended June 30, 2020 to 0.32% for the six months ended June 30, 2021. The Company also experienced high levels of calls on securities and loan refinance activity that resulted in a decrease in the yield on earning assets(1) from 3.59% for the six months ended June 30, 2020 to 3.03% for the six months ended June 30, 2021.
- Fees and interest income from PPP loans helped increase our net interest margin(1). Our margin for the six months ended June 30, 2021 was 2.80%, down from 3.05% for the six months ended June 30, 2020. For the six months ended June 30, 2021, PPP loans increased average loans by $38.1 million and added $1.1 million in interest and fee income. If PPP loans are excluded, the net interest margin for the six months ended June 30, 2021 would have been 2.66%.
- Total noninterest income for the six months ended June 30, 2021 was up $395 thousand, or 10.18%, when compared to the six months ended June 30, 2020. Higher noninterest income was driven by increased credit and debit card fees and receipt of a one-time bonus from a partnership investment.
- Noninterest expense was up $439 thousand, or 3.50%, when the six months ended June 30, 2021 is compared with the six months ended June 30, 2020.
Balance Sheet
- Total assets increased by $228 million, or 15.90%, to $1.66 billion.
- Total deposits increased by $230 million, or 18.86%, to $1.45 billion, in part due to government stimulus funds received by depositors, especially municipal accounts.
- Gross loans outstanding were $807.2 million at June 30, 2021, an increase of $13.7 million from June 30, 2020. PPP loans decreased $26.3 million from June 30, 2020 to June 30, 2021, while non-PPP loans grew $40.1 million.
- Total stockholders’ equity at June 30, 2021 was $191.2 million. The Company’s capital position provides a source of great strength and continues to significantly exceed all regulatory capital guidelines.
Other Notable Information
- The Company repurchased 150,130 shares in the 2nd quarter of 2021.
- Nonperforming loans as a percentage of total loans were 0.47% at June 30, 2021, down slightly from 0.48% at June 30, 2020 and similar to 0.47% at March 31, 2021.
- The efficiency ratio(1) was 53.26% for the six months ended June 30, 2021, an improvement over 55.24% for the six months ended June 30, 2020, and a slight improvement from 53.87% for the quarter ended March 31, 2020.
- The allowance for loan losses to total loans was 1.00% at June 30, 2021. Excluding PPP loans, the ratio was 1.04%.
- The Company’s net charge offs for the six months ended June 30, 2021 were $458 thousand, compared with net charge offs of $386 thousand for the six months ended June 30, 2020.
- The book value per common share as of June 30, 2021 was $30.99, an improvement from $30.17 as of June 30, 2020, and up from $29.98 as of March 31, 2021.
(1)Non-GAAP Financial Measures
In addition to financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), the Company uses certain non-GAAP financial measures that provide useful information for financial and operational decision making, evaluating trends, and comparing financial results to other financial institutions. The non-GAAP financial measures presented in this document include the efficiency ratio and the net interest margin, which is presented on a fully taxable-equivalent (“FTE”) basis. Efficiency ratio is calculated as noninterest expense, less non-recurring items, divided by the sum of noninterest income and net interest income on an FTE basis. FTE basis is calculated using the federal statutory income tax rate of 21%. The Company believes certain non-GAAP financial measures enhance the understanding of its business and performance. Non-GAAP financial measures are supplemental and not a substitute for, or more important than, financial measures prepared in accordance with GAAP and may not be comparable to those reported by other financial institutions.
About National Bankshares
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.
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.
Consolidated Balance Sheets
(Unaudited)
|
($ in thousands, except for share and per share data)
|
|
June 30, 2021
|
|
|
June 30, 2020
|
|
|
December 31, 2020 |
|
|
Assets
|
|
|
Cash and due from banks
|
|
$ |
13,813 |
|
|
$ |
13,315 |
|
|
$ |
13,147 |
|
|
Interest-bearing deposits
|
|
|
150,708 |
|
|
|
73,251 |
|
|
|
120,725 |
|
|
Securities available for sale, at fair value
|
|
|
617,756 |
|
|
|
489,926 |
|
|
|
546,742 |
|
|
Restricted stock
|
|
|
845 |
|
|
|
1,279 |
|
|
|
1,279 |
|
|
Total securities
|
|
|
618,601 |
|
|
|
491,205 |
|
|
|
548,021 |
|
|
Mortgage loans held for sale
|
|
|
222 |
|
|
|
2,367 |
|
|
|
866 |
|
|
Loans:
|
|
|
Loans, net of unearned income and deferred fees and costs
|
|
|
805,194 |
|
|
|
791,002 |
|
|
|
768,799 |
|
|
Less: allowance for loan losses
|
|
|
(8,077 |
)
|
|
|
(8,308 |
)
|
|
|
(8,481 |
)
|
|
Loans, net
|
|
|
797,117 |
|
|
|
782,694 |
|
|
|
760,318 |
|
|
Premises and equipment, net
|
|
|
9,896 |
|
|
|
9,955 |
|
|
|
10,035 |
|
|
Accrued interest receivable
|
|
|
5,275 |
|
|
|
4,797 |
|
|
|
5,028 |
|
|
Other real estate owned, net
|
|
|
1,007 |
|
|
|
1,553 |
|
|
|
1,553 |
|
|
Intangible assets and goodwill
|
|
|
5,848 |
|
|
|
5,848 |
|
|
|
5,848 |
|
|
Bank-owned life insurance
|
|
|
41,860 |
|
|
|
36,007 |
|
|
|
36,444 |
|
|
Other assets
|
|
|
17,305 |
|
|
|
12,758 |
|
|
|
17,688 |
|
|
Total assets
|
|
$ |
1,661,652 |
|
|
$ |
1,433,750 |
|
|
$ |
1,519,673 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity
|
|
|
Noninterest-bearing deposits
|
|
$ |
332,944 |
|
|
$ |
263,113 |
|
|
$ |
276,793 |
|
|
Interest-bearing demand deposits
|
|
|
838,254 |
|
|
|
678,062 |
|
|
|
763,293 |
|
|
Savings deposits
|
|
|
190,094 |
|
|
|
160,551 |
|
|
|
167,475 |
|
|
Time deposits
|
|
|
88,332 |
|
|
|
117,882 |
|
|
|
89,582 |
|
|
Total deposits
|
|
|
1,449,624 |
|
|
|
1,219,608 |
|
|
|
1,297,143 |
|
|
Accrued interest payable
|
|
|
48 |
|
|
|
117 |
|
|
|
56 |
|
|
Other liabilities
|
|
|
20,745 |
|
|
|
18,244 |
|
|
|
21,867 |
|
|
Total liabilities
|
|
|
1,470,417 |
|
|
|
1,237,969 |
|
|
|
1,319,066 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
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 6,170,058 shares at June 30, 2021, 6,432,020 shares at December 31, 2020 and 6,489,574 at June 30, 2020
|
|
|
7,713 |
|
|
|
8,112 |
|
|
|
8,040 |
|
|
Retained earnings
|
|
|
188,580 |
|
|
|
186,733 |
|
|
|
189,547 |
|
|
Accumulated other comprehensive income (loss), net
|
|
|
(2,058 |
)
|
|
|
936 |
|
|
|
3,020 |
|
|
Total stockholders' equity
|
|
|
191,235 |
|
|
|
195,781 |
|
|
|
200,607 |
|
|
Total liabilities and stockholders' equity
|
|
$ |
1,661,652 |
|
|
$ |
1,433,750 |
|
|
$ |
1,519,673 |
|
National Bankshares, Inc.
Consolidated Statements of Income
(Unaudited)
| |
|
Three Months Ended |
|
|
Six Months Ended |
|
|
($ in thousands, except for share and per share data)
|
|
June 30, 2021
|
|
|
June 30, 2020
|
|
|
June 30, 2021
|
|
|
June 30, 2020
|
|
|
Interest Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and fees on loans
|
|
$ |
8,466 |
|
|
$ |
8,419 |
|
|
$ |
17,016 |
|
|
$ |
16,885 |
|
|
Interest on federal funds
|
|
|
--- |
|
|
|
--- |
|
|
|
--- |
|
|
|
--- |
|
|
Interest on interest-bearing deposits
|
|
|
39 |
|
|
|
14 |
|
|
|
67 |
|
|
|
231 |
|
|
Interest on securities - taxable
|
|
|
1,910 |
|
|
|
1,863 |
|
|
|
3,693 |
|
|
|
4,219 |
|
|
Interest on securities - nontaxable
|
|
|
482 |
|
|
|
454 |
|
|
|
1,003 |
|
|
|
803 |
|
|
Total interest income
|
|
|
10,897 |
|
|
|
10,750 |
|
|
|
21,779 |
|
|
|
22,138 |
|
|
Interest Expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest on time deposits
|
|
|
72 |
|
|
|
522 |
|
|
|
162 |
|
|
|
1,081 |
|
|
Interest on other deposits
|
|
|
762 |
|
|
|
1,076 |
|
|
|
1,527 |
|
|
|
2,313 |
|
|
Total interest expense
|
|
|
834 |
|
|
|
1,598 |
|
|
|
1,689 |
|
|
|
3,394 |
|
|
Net interest income
|
|
|
10,063 |
|
|
|
9,152 |
|
|
|
20,090 |
|
|
|
18,744 |
|
|
Provision for loan losses
|
|
|
4 |
|
|
|
1,352 |
|
|
|
54 |
|
|
|
1,831 |
|
|
Net interest income after provision for loan losses
|
|
|
10,059 |
|
|
|
7,800 |
|
|
|
20,036 |
|
|
|
16,913 |
|
|
Noninterest Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service charges on deposit accounts
|
|
|
471 |
|
|
|
377 |
|
|
|
940 |
|
|
|
959 |
|
|
Other service charges and fees
|
|
|
43 |
|
|
|
37 |
|
|
|
84 |
|
|
|
76 |
|
|
Credit card fees
|
|
|
479 |
|
|
|
386 |
|
|
|
913 |
|
|
|
692 |
|
|
Trust income
|
|
|
434 |
|
|
|
387 |
|
|
|
849 |
|
|
|
821 |
|
|
Bank-owned life insurance
|
|
|
210 |
|
|
|
219 |
|
|
|
416 |
|
|
|
440 |
|
|
Other income
|
|
|
304 |
|
|
|
277 |
|
|
|
1,068 |
|
|
|
810 |
|
|
Realized securities gain, net
|
|
|
--- |
|
|
|
62 |
|
|
|
5 |
|
|
|
82 |
|
|
Total noninterest income
|
|
|
1,941 |
|
|
|
1,745 |
|
|
|
4,275 |
|
|
|
3,880 |
|
|
Noninterest Expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits
|
|
|
3,952 |
|
|
|
3,498 |
|
|
|
7,858 |
|
|
|
7,371 |
|
|
Occupancy and furniture and fixtures
|
|
|
443 |
|
|
|
458 |
|
|
|
931 |
|
|
|
908 |
|
|
Data processing and ATM
|
|
|
786 |
|
|
|
806 |
|
|
|
1,564 |
|
|
|
1,597 |
|
|
FDIC assessment
|
|
|
93 |
|
|
|
40 |
|
|
|
176 |
|
|
|
40 |
|
|
Net cost of other real estate owned
|
|
|
1 |
|
|
|
(4 |
)
|
|
|
38 |
|
|
|
18 |
|
|
Franchise taxes
|
|
|
357 |
|
|
|
335 |
|
|
|
692 |
|
|
|
678 |
|
|
Other operating expenses
|
|
|
815 |
|
|
|
944 |
|
|
|
1,724 |
|
|
|
1,932 |
|
|
Total noninterest expense
|
|
|
6,447 |
|
|
|
6,077 |
|
|
|
12,983 |
|
|
|
12,544 |
|
|
Income before income tax expense
|
|
|
5,553 |
|
|
|
3,468 |
|
|
|
11,328 |
|
|
|
8,249 |
|
|
Income tax expense
|
|
|
940 |
|
|
|
486 |
|
|
|
1,949 |
|
|
|
1,288 |
|
|
Net Income
|
|
$ |
4,613 |
|
|
$ |
2,982 |
|
|
$ |
9,379 |
|
|
$ |
6,961 |
|
|
Basic net income per share
|
|
$ |
0.74 |
|
|
$ |
0.46 |
|
|
$ |
1.49 |
|
|
$ |
1.07 |
|
|
Fully diluted net income per share
|
|
$ |
0.74 |
|
|
$ |
0.46 |
|
|
$ |
1.49 |
|
|
$ |
1.07 |
|
|
Weighted average number of common shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
6,214,079 |
|
|
|
6,489,574 |
|
|
|
6,310,347 |
|
|
|
6,489,574 |
|
|
Diluted
|
|
|
6,214,079 |
|
|
|
6,489,574 |
|
|
|
6,310,347 |
|
|
|
6,489,574 |
|
|
Dividends declared per share
|
|
$ |
0.70 |
|
|
$ |
0.67 |
|
|
$ |
0.70 |
|
|
$ |
0.67 |
|
|
Dividend payout ratio
|
|
|
--- |
|
|
|
--- |
|
|
|
46.05 |
% |
|
|
62.46 |
% |
|
Book value per share
|
|
$ |
30.99 |
|
|
$ |
30.17 |
|
|
$ |
30.99 |
|
|
$ |
30.17 |
|
National Bankshares, Inc.
Consolidated Statements of Comprehensive Income (Loss)
(Unaudited)
| |
|
Three Months Ended
|
|
|
($ in thousands)
|
|
June 30, 2021
|
|
|
June 30, 2020
|
|
|
Net income
|
|
$ |
4,613 |
|
|
$ |
2,982 |
|
| |
|
|
|
|
|
|
|
|
|
Other Comprehensive Income, Net of Tax
|
|
|
|
|
|
|
|
|
|
Unrealized holding gain on available for sale securities net of tax of $1,922 for the period ended June 30, 2021 and $1,498 for the period ended June 30, 2020
|
|
|
7,235 |
|
|
|
5,637 |
|
|
Reclassification adjustment for gain included in net income, net of tax of ($13) for the period ended June 30, 2020
|
|
|
--- |
|
|
|
(49 |
)
|
|
Other comprehensive income, net of tax
|
|
$ |
7,235 |
|
|
$ |
5,588 |
|
|
Total Comprehensive Income
|
|
$ |
11,848 |
|
|
$ |
8,570 |
|
| |
|
Six Months Ended
|
|
|
($ in thousands)
|
|
June 30, 2021
|
|
|
June 30, 2020
|
|
|
Net income
|
|
$ |
9,379 |
|
|
$ |
6,961 |
|
| |
|
|
|
|
|
|
|
|
| Other Comprehensive Income, Net of Tax |
|
|
|
|
|
|
|
|
|
Unrealized holding gain (loss) on available for sale securities net of tax of ($1,349) for the period ended June 30, 2021 and $2,526 for the period ended June 30, 2020
|
|
|
(5,074 |
)
|
|
|
9,507 |
|
|
Reclassification adjustment for gain included in net income, net of tax of ($1) for the period ended June 30, 2021 and ($17) for the period ended June 30, 2020
|
|
|
(4 |
)
|
|
|
(65 |
)
|
|
Other comprehensive income (loss), net of tax
|
|
$ |
(5,078 |
)
|
|
$ |
9,442 |
|
|
Total Comprehensive Income
|
|
$ |
4,301 |
|
|
$ |
16,403 |
|
National Bankshares, Inc.
Key Ratios and Other Data
(Unaudited)
| |
|
Three Months Ended |
|
|
Six Months Ended |
|
|
($ in thousands)
|
|
June 30, 2021
|
|
|
June 30, 2020
|
|
|
June 30, 2021
|
|
|
June 30, 2020
|
|
|
Average Balances
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due from banks
|
|
$ |
12,102 |
|
|
$ |
11,466 |
|
|
$ |
11,885 |
|
|
$ |
11,335 |
|
|
Interest-bearing deposits
|
|
|
143,812 |
|
|
|
91,425 |
|
|
|
131,629 |
|
|
|
79,004 |
|
|
Securities available for sale
|
|
|
589,746 |
|
|
|
452,549 |
|
|
|
574,051 |
|
|
|
445,733 |
|
|
Restricted stock
|
|
|
845 |
|
|
|
1,279 |
|
|
|
1,036 |
|
|
|
1,252 |
|
|
Mortgage loans held for sale
|
|
|
409 |
|
|
|
1,406 |
|
|
|
631 |
|
|
|
949 |
|
|
Gross Loans
|
|
|
792,211 |
|
|
|
764,336 |
|
|
|
781,532 |
|
|
|
747,876 |
|
|
Loans, net
|
|
|
781,615 |
|
|
|
756,590 |
|
|
|
771,276 |
|
|
|
740,280 |
|
|
Intangible assets
|
|
|
5,848 |
|
|
|
5,848 |
|
|
|
5,848 |
|
|
|
5,848 |
|
|
Total assets
|
|
|
1,609,876 |
|
|
|
1,393,227 |
|
|
|
1,570,610 |
|
|
|
1,352,827 |
|
|
Total deposits
|
|
|
1,400,107 |
|
|
|
1,180,484 |
|
|
|
1,357,803 |
|
|
|
1,142,330 |
|
|
Stockholders' equity
|
|
|
189,394 |
|
|
|
193,260 |
|
|
|
192,477 |
|
|
|
191,388 |
|
|
Interest-earning assets(1)
|
|
|
1,520,458 |
|
|
|
1,303,352 |
|
|
|
1,480,379 |
|
|
|
1,268,209 |
|
|
Interest-bearing liabilities
|
|
|
1,075,058 |
|
|
|
931,099 |
|
|
|
1,050,279 |
|
|
|
917,589 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Ratios
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average assets(2)
|
|
|
1.15 |
% |
|
|
0.85 |
% |
|
|
1.18 |
% |
|
|
1.01 |
% |
|
Return on average equity(2)
|
|
|
9.77 |
% |
|
|
6.13 |
% |
|
|
9.63 |
% |
|
|
7.15 |
% |
|
Net interest margin(3)
|
|
|
2.72 |
% |
|
|
2.90 |
% |
|
|
2.80 |
% |
|
|
3.05 |
% |
|
Net interest income-fully taxable equivalent(3)
|
|
$ |
10,301 |
|
|
$ |
9,409 |
|
|
$ |
20,574 |
|
|
$ |
19,220 |
|
|
Efficiency ratio(4)
|
|
|
52.66 |
% |
|
|
54.79 |
% |
|
|
53.26 |
% |
|
|
55.24 |
% |
|
Average equity to average assets
|
|
|
11.76 |
% |
|
|
13.87 |
% |
|
|
12.25 |
% |
|
|
14.15 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for Loan Losses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance
|
|
$ |
8,536 |
|
|
$ |
7,240 |
|
|
$ |
8,481 |
|
|
$ |
6,863 |
|
|
Provision for losses
|
|
|
4 |
|
|
|
1,352 |
|
|
|
54 |
|
|
|
1,831 |
|
|
Charge-offs
|
|
|
(539 |
)
|
|
|
(365 |
)
|
|
|
(586 |
)
|
|
|
(540 |
)
|
|
Recoveries
|
|
|
76 |
|
|
|
81 |
|
|
|
128 |
|
|
|
154 |
|
|
Ending balance
|
|
$ |
8,077 |
|
|
$ |
8,308 |
|
|
$ |
8,077 |
|
|
$ |
8,308 |
|
|
(1)
|
Does not included the unrealized gain/loss on securities available for sale or the allowance for loan losses.
|
|
(2)
|
The return on average assets and return on average equity are calculated by annualizing net income and dividing by average year-to-date assets or equity, respectively. When net income includes certain nonrecurring items, the annualization factor magnifies their effect. In order to reduce distortion, the Company removes from net income certain non-recurring items prior to annualization, applies the annualization factor to the adjusted net income and then adds back the items to annualized net income.
|
|
(3)
|
The net interest margin is calculated by dividing annualized taxable equivalent net interest income by total average earning assets. Because a portion of interest income earned by the Company is nontaxable, the tax equivalent net interest income is considered in the calculation of this ratio. Tax equivalent net interest income is calculated by adding the tax benefit realized from interest income that is nontaxable to total interest income then subtracting total interest expense. The tax rate utilized in calculating the tax benefit is 21%.
|
|
(4)
|
The efficiency ratio is calculated as noninterest expense divided by the sum of noninterest income, less non-recurring items, and net interest income on a fully taxable equivalent basis.
|
National Bankshares, Inc.
Asset Quality Data
(Unaudited)
|
($ in thousands)
|
|
June 30, 2021
|
|
|
June 30, 2020
|
|
|
Nonperforming Assets
|
|
|
|
|
|
|
|
|
|
Nonaccrual loans
|
|
$ |
713 |
|
|
$ |
943 |
|
|
Nonaccrual restructured loans
|
|
|
3,109 |
|
|
|
2,887 |
|
|
Total nonperforming loans
|
|
|
3,822 |
|
|
|
3,830 |
|
|
Other real estate owned
|
|
$ |
1,007 |
|
|
$ |
1,553 |
|
|
Total nonperforming assets
|
|
$ |
4,829 |
|
|
$ |
5,383 |
|
|
Accruing restructured loans
|
|
|
3,011 |
|
|
|
1,453 |
|
|
Loans 90 days or more past due
|
|
$ |
28 |
|
|
$ |
237 |
|
| |
|
|
|
|
|
|
|
|
|
Asset Quality Ratios
|
|
|
|
|
|
|
|
|
|
Nonperforming assets to loans(1) plus other real estate owned
|
|
|
0.60 |
% |
|
|
0.68 |
% |
|
Allowance for loans losses to total loans(1)
|
|
|
1.00 |
% |
|
|
1.05 |
% |
|
Allowance for loan losses to total loans(1), excluding SBA PPP loans
|
|
|
1.04 |
% |
|
|
1.13 |
% |
|
Allowance for loan losses to nonperforming loans
|
|
|
211.33 |
% |
|
|
216.92 |
% |
|
Loans past due 90 days or more to loans(1)
|
|
|
0.00 |
% |
|
|
0.03 |
% |
|
(1)
|
Loans are net of unearned income and deferred fees and costs
|