BLACKSBURG, VA., July 19, 2022 -- 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 2022. The Company reported net income of $10.46 million, or $1.74 per common share, for the six months ended June 30, 2022. This compares to net income of $9.38 million, or $1.49 per common share, for the six months ended June 30, 2021. National Bankshares, Inc. ended the first half of 2022 with total assets of $1.73 billion.
President and Chief Executive Officer F. Brad Denardo commented, “We are pleased to report good results for the first half of 2022, with solid growth in net income, loans, and fee income. We made key investments during the period, opening a new Loan Production Office in Charlottesville and adding Zelle
® payment services to our digital banking platform, all while maintaining costs at a level consistent with last year. Serving our customers, supporting our communities, and rewarding our shareholders have been and will remain our key priorities.”
Highlights for the Six Months Ended June 30, 2022
Income Statement
- The return on average assets for the six months ended June 30, 2022 was 1.22%, compared with 1.18% for the six months ended June 30, 2021.
- The return on average equity for the six months ended June 30, 2022 was 12.45%, up from 9.63% for the six months ended June 30, 2021.
- The cost of interest-bearing liabilities was 0.22% for the six months ended June 30, 2022, improved from 0.32% for the six months ended June 30, 2021.
- The yield on earning assets(1) decreased to 2.86% for the six months ended June 30, 2022, from 3.03% for the six months ended June 30, 2021. Excluding Paycheck Protection Plan (PPP) loans, the yield on earning assets(1) for the six months ended June 30, 2021 was 2.89%.
- Our net interest margin(1) for the six months ended June 30, 2022 was 2.70%, down from 2.80% for the six months ended June 30, 2021. Excluding PPP loans, the net interest margin for the six months ended June 30, 2021 would have been 2.66%.
Balance Sheet
- Total assets increased from June 30, 2021 by $67.94 million, or 4.09%, to $1.73 billion at June 30, 2022.
- Total deposits increased from June 30, 2021 by $128.21 million, or 8.84%, to $1.58 billion at June 30, 2022.
- Gross loans outstanding were $849.27 million at June 30, 2022, an increase of $42.07 million from June 30, 2021.
- Total stockholders’ equity at June 30, 2022 was $136.24 million, a decrease from $191.24 million at June 30, 2021. Accumulated other comprehensive loss, a component of total stockholders’ equity, worsened from a loss of $2.06 million at June 30, 2021 to a loss of $62.78 million at June 30, 2022, reflecting unrealized losses in the securities portfolio.
Other Notable Information
- The Company repurchased 41,977 shares in the 2nd quarter of 2022.
- Nonperforming loans as a percentage of total loans were 0.35% at June 30, 2022, down from 0.47% at June 30, 2021.
- The efficiency ratio(1) was 49.40% for the six months ended June 30, 2022, an improvement from the 53.26% reported for the six months ended June 30, 2021.
- The allowance for loan losses to total loans was 0.95% at June 30, 2022, down from 1.00% at June 30, 2021, a reflection of our continuing good credit quality.
- Net charge offs for the six months ended June 30, 2022 were $49 thousand, compared with net charge offs of $458 thousand for the six months ended June 30, 2021.
- The book value per common share as of June 30, 2022 was $22.78, down from $30.99 as of June 30, 2021.
- Following our Strategic Plan, we opened a loan production office in Charlottesville in June.
(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 24 full-service offices and two loan production 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.