BLACKSBURG, VA., October 20, 2022 -- National Bankshares, Inc. (NASDAQ: NKSH), parent company of The National Bank of Blacksburg, today announced its results of operations for the third quarter and nine months ended September 30, 2022. The Company reported net income of $16.62 million, or $2.77 per common share, for the nine months ended September 30, 2022. This compares to net income of $15.13 million, or $2.42 per common share, for the nine months ended September 30, 2021. National Bankshares, Inc. ended September 30, 2022 with total assets of $1.70 billion.
President & CEO F. Brad Denardo commented, “We are pleased to share another good earnings report, with a nice increase in net income compared to the same period last year. Our talented team of banking professionals continued to grow the Company, bringing in quality new deposits and loans while providing excellent service to all of our customers. The backing of our communities and the investment of our shareholders remain vital to our success, and we thank them for their continued trust and support.”
Highlights for the Nine Months Ended September 30, 2022
Income Statement
When results for the nine months ended September 30, 2022 and September 30, 2021 are compared, the $1.49 million increase in net income was generated by growth in net interest income and service charges on deposit accounts, as well as decreased pension expense.
Net Interest Income
Net interest income benefitted from a decrease in interest expense and expansion in the yield on earning assets. Interest expense for the nine months ended September 30, 2022 was $2.01 million, improved from $2.41 million for the nine months ended September 30, 2021. The cost of interest-bearing liabilities improved from an annualized 0.30% for the nine months ended September 30, 2021 to 0.23% for the nine months ended September 30, 2022. Elevated levels of deposits and liquidity within the Company and across the general banking industry supported favorable deposit pricing during the nine months ended September 30, 2022.
Federal Reserve interest rate increases in 2022 as well as growth in earning assets expanded interest income. The fully taxable equivalent (“FTE”) interest income
(1) was $36.82 million for the nine months ended September 30, 2022, compared with $34.16 million for the nine months ended September 30, 2021. The FTE yield on earning assets for the nine months ended September 30, 2022 was 2.96%, compared with 3.03% for the nine months ended September 30, 2021. During the nine months ended September 30, 2021, $2.03 million in interest and fees from Paycheck Protection Program (PPP) loans contributed 18 basis points to the FTE yield on earning assets. PPP loans were essentially paid off by December 31, 2021. On a comparable basis, excluding PPP loans from 2021, the yield on earning assets for the nine months ended September 30, 2021 was 2.85%.
The Company expects further rate increases from the Federal Reserve, which will continue to benefit asset yields, but will also put upward pressure on deposit costs.
Service Charges on Deposit Accounts and Pension Expense
Service charges on deposit accounts increased $338 thousand when the nine months ended September 30, 2022 are compared with the same period of 2021. Fees for overdraft and nonsufficient funds provided most of the increase, as depositor activity recovered from lower levels earlier in the COVID-19 pandemic. The Company offers depositors various overdraft solutions and provides disclosures on its fees.
Pension expense is determined at the beginning of each year by actuarial calculations incorporating demographic and market assumptions. When the nine months ended September 30, 2022 are compared with the same period of 2021, the decrease in pension cost lowered salary expense by $111 thousand, and decreased other noninterest expense by $448 thousand. Pension expense is subject to fluctuations in equity and bond markets and may differ in coming years.
Balance Sheet
Deposits
Customer deposits increased $137.92 million or 9.63% from September 30, 2021 to September 30, 2022.
Loans
Healthy demand grew loans, net of unearned income and deferred cost, by $55.37 million or 6.94% when September 30, 2022 is compared with September 30, 2021. At September 30, 2021, PPP loans were $12.09 million. On a comparable basis, excluding PPP loans, loan growth would have been $67.26 million or 8.56%. Due to the rise in interest rates, we expect loan demand to soften during coming quarters.
Loan quality continues to reflect low credit risk, with net charge-offs of $163 thousand or 0.03% of average loans for the nine months ended September 30, 2022. This compares with $445 thousand or 0.08% for the nine months ended September 30, 2021. The allowance for loan losses as a percentage of loans was 0.96% at September 30, 2022 and 0.97% at September 30, 2021.
Securities
Securities available for sale at September 30, 2022 grew $15.92 million or 2.48% from September 30, 2021. Securities are reported net of unrealized gains and losses, and yields on securities typically move inversely to interest rate movements. Beginning in March 2022, the Federal Reserve increased rates 300 basis points, leading to an unrealized loss of $107.96 million at September 30, 2022. This compares with an unrealized gain of $5.93 million at September 30, 2021. The Company’s Asset Liability Management Committee is closely monitoring interest rate risk on all of the Company’s financial assets and liabilities. At this time, the Company has high liquidity and a relatively low loan-to-deposit ratio. No securities sales are anticipated and the unrealized loss is not expected to impact net income.
Stockholders’ Equity
Stockholders’ Equity decreased $78.67 million or 41.22% from September 30, 2021 to September 30, 2022. The ratio of tangible common equity to tangible assets
(1) decreased from 11.29% at September 30, 2021 to 6.28% at September 30, 2022. The decrease stems from the unrealized loss on securities that is reflected in the equity component, Accumulated Other Comprehensive Loss. Accumulated Other Comprehensive Loss is excluded from the Bank’s regulatory capital and does not impact regulatory capital ratios. The Bank is considered well capitalized, with capital ratios considerably higher than minimum regulatory requirements.
During the third quarter of 2022, the Company repurchased 23,500 shares under its publicly announced repurchase program.
Key Ratios
Key ratios improved when results for the nine months ended September 30, 2022 are compared with those for the same period of 2021, including the return on average equity, return on average assets and efficiency ratio. The return on average equity for the nine months ended September 30, 2022 was 14.04%, compared with 10.36% for the nine months ended September 30, 2021. If Accumulated Other Comprehensive Income (Loss) is excluded, the return on average equity for the nine months ended September 30, 2022 was 11.09%, improved from 10.18% for the nine months ended September 30, 2021.
The return on average assets improved from 1.25% for the nine months ended September 30, 2021 to 1.29% for the nine months ended September 30, 2022. The Company’s efficiency ratio
(1) improved from 51.54% for the nine months ended September 30, 2021 to 48.03% for the nine months ended September 30, 2022.
(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 tangible common equity to tangible assets, the net interest margin and the efficiency ratio.
Tangible common equity and tangible assets exclude goodwill. The net interest margin is presented on a fully taxable equivalent basis (“FTE”), using the federal statutory income tax rate of 21%. 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. 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. 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)
|
|
September 30,
2022
|
|
|
September 30,
2021
|
|
|
December 31,
2021
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due from banks
|
|
$ |
10,957 |
|
|
$ |
11,728 |
|
|
$ |
8,768 |
|
|
Interest-bearing deposits
|
|
|
79,466 |
|
|
|
118,863 |
|
|
|
130,021 |
|
|
Securities available for sale, at fair value
|
|
|
657,410 |
|
|
|
641,486 |
|
|
|
686,080 |
|
|
Restricted stock
|
|
|
941 |
|
|
|
845 |
|
|
|
845 |
|
|
Mortgage loans held for sale
|
|
|
- |
|
|
|
235 |
|
|
|
615 |
|
|
Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans, net of unearned income and deferred fees and costs
|
|
|
852,863 |
|
|
|
797,494 |
|
|
|
803,248 |
|
| Less: allowance for loan losses |
|
|
(8,207 |
) |
|
|
(7,698 |
) |
|
|
(7,674 |
) |
|
Loans, net
|
|
|
844,656 |
|
|
|
789,796 |
|
|
|
795,574 |
|
|
Premises and equipment, net
|
|
|
10,183 |
|
|
|
9,823 |
|
|
|
9,722 |
|
|
Accrued interest receivable
|
|
|
5,822 |
|
|
|
5,161 |
|
|
|
5,104 |
|
|
Other real estate owned, net
|
|
|
907 |
|
|
|
957 |
|
|
|
957 |
|
|
Intangible assets and goodwill
|
|
|
5,848 |
|
|
|
5,848 |
|
|
|
5,848 |
|
|
Bank-owned life insurance
|
|
|
43,072 |
|
|
|
42,108 |
|
|
|
42,354 |
|
|
Other assets
|
|
|
39,684 |
|
|
|
17,181 |
|
|
|
16,287 |
|
|
Total assets
|
|
$ |
1,698,946 |
|
|
$ |
1,644,031 |
|
|
$ |
1,702,175 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing deposits
|
|
$ |
358,772 |
|
|
$ |
328,893 |
|
|
$ |
317,430 |
|
|
Interest-bearing demand deposits
|
|
|
917,449 |
|
|
|
819,730 |
|
|
|
890,124 |
|
|
Savings deposits
|
|
|
217,405 |
|
|
|
201,656 |
|
|
|
208,065 |
|
|
Time deposits
|
|
|
77,023 |
|
|
|
82,455 |
|
|
|
78,968 |
|
|
Total deposits
|
|
|
1,570,649 |
|
|
|
1,432,734 |
|
|
|
1,494,587 |
|
|
Accrued interest payable
|
|
|
40 |
|
|
|
46 |
|
|
|
48 |
|
|
Other liabilities
|
|
|
16,070 |
|
|
|
20,398 |
|
|
|
15,789 |
|
|
Total liabilities
|
|
|
1,586,759 |
|
|
|
1,453,178 |
|
|
|
1,510,424 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
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 5,957,275 shares at September 30, 2022, 6,063,937 shares at December 31, 2021 and 6,096,958 at September 30, 2021
|
|
|
7,447 |
|
|
|
7,621 |
|
|
|
7,580 |
|
|
Retained earnings
|
|
|
196,941 |
|
|
|
188,693 |
|
|
|
188,229 |
|
| Accumulated other comprehensive loss, net |
|
|
(92,201 |
) |
|
|
(5,461 |
) |
|
|
(4,058 |
) |
|
Total stockholders' equity
|
|
|
112,187 |
|
|
|
190,853 |
|
|
|
191,751 |
|
|
Total liabilities and stockholders' equity
|
|
$ |
1,698,946 |
|
|
$ |
1,644,031 |
|
|
$ |
1,702,175 |
|
National Bankshares, Inc.
Consolidated Statements of Income
(Unaudited)
| |
|
Three Months Ended
September 30
|
|
|
Nine Months Ended
September 30
|
|
|
($ in thousands, except for share and per share data)
|
|
2022
|
|
|
2021
|
|
|
2022
|
|
|
2021
|
|
|
Interest Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and fees on loans
|
|
$ |
8,816 |
|
|
$ |
9,088 |
|
|
$ |
25,240 |
|
|
$ |
26,104 |
|
|
Interest on federal funds
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Interest on interest-bearing deposits
|
|
|
506 |
|
|
|
56 |
|
|
|
757 |
|
|
|
123 |
|
|
Interest on securities - taxable
|
|
|
3,425 |
|
|
|
2,043 |
|
|
|
8,847 |
|
|
|
5,736 |
|
|
Interest on securities - nontaxable
|
|
|
408 |
|
|
|
469 |
|
|
|
1,283 |
|
|
|
1,472 |
|
|
Total interest income
|
|
|
13,155 |
|
|
|
11,656 |
|
|
|
36,127 |
|
|
|
33,435 |
|
|
Interest Expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest on time deposits
|
|
|
31 |
|
|
|
61 |
|
|
|
105 |
|
|
|
223 |
|
|
Interest on other deposits
|
|
|
722 |
|
|
|
658 |
|
|
|
1,950 |
|
|
|
2,185 |
|
|
Total interest expense
|
|
|
753 |
|
|
|
719 |
|
|
|
2,055 |
|
|
|
2,408 |
|
|
Net interest income
|
|
|
12,402 |
|
|
|
10,937 |
|
|
|
34,072 |
|
|
|
31,027 |
|
|
Provision for (recovery of) loan losses
|
|
|
252 |
|
|
|
(392 |
) |
|
|
696 |
|
|
|
(338 |
) |
|
Net interest income after provision for loan losses
|
|
|
12,150 |
|
|
|
11,329 |
|
|
|
33,376 |
|
|
|
31,365 |
|
|
Noninterest Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service charges on deposit accounts
|
|
|
661 |
|
|
|
548 |
|
|
|
1,826 |
|
|
|
1,488 |
|
|
Other service charges and fees
|
|
|
51 |
|
|
|
50 |
|
|
|
157 |
|
|
|
134 |
|
|
Credit card fees
|
|
|
448 |
|
|
|
460 |
|
|
|
1,423 |
|
|
|
1,373 |
|
|
Trust income
|
|
|
492 |
|
|
|
433 |
|
|
|
1,374 |
|
|
|
1,282 |
|
|
Bank-owned life insurance
|
|
|
239 |
|
|
|
248 |
|
|
|
718 |
|
|
|
664 |
|
|
Other income
|
|
|
249 |
|
|
|
253 |
|
|
|
1,045 |
|
|
|
1,321 |
|
|
Realized securities gain, net
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
5 |
|
|
Total noninterest income
|
|
|
2,140 |
|
|
|
1,992 |
|
|
|
6,543 |
|
|
|
6,267 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest Expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits
|
|
|
4,144 |
|
|
|
3,909 |
|
|
|
12,133 |
|
|
|
11,767 |
|
|
Occupancy and furniture and fixtures
|
|
|
476 |
|
|
|
447 |
|
|
|
1,432 |
|
|
|
1,378 |
|
|
Data processing and ATM
|
|
|
774 |
|
|
|
728 |
|
|
|
2,354 |
|
|
|
2,292 |
|
|
FDIC assessment
|
|
|
114 |
|
|
|
120 |
|
|
|
336 |
|
|
|
296 |
|
|
Net cost of other real estate owned
|
|
|
68 |
|
|
|
11 |
|
|
|
78 |
|
|
|
49 |
|
|
Franchise taxes
|
|
|
375 |
|
|
|
367 |
|
|
|
1,108 |
|
|
|
1,059 |
|
|
Other operating expenses
|
|
|
785 |
|
|
|
785 |
|
|
|
2,219 |
|
|
|
2,509 |
|
|
Total noninterest expense
|
|
|
6,736 |
|
|
|
6,367 |
|
|
|
19,660 |
|
|
|
19,350 |
|
|
Income before income tax expense
|
|
|
7,554 |
|
|
|
6,954 |
|
|
|
20,259 |
|
|
|
18,282 |
|
|
Income tax expense
|
|
|
1,392 |
|
|
|
1,202 |
|
|
|
3,637 |
|
|
|
3,151 |
|
|
Net Income
|
|
$ |
6,162 |
|
|
$ |
5,752 |
|
|
$ |
16,622 |
|
|
$ |
15,131 |
|
|
Basic and fully diluted net income per share
|
|
$ |
1.03 |
|
|
$ |
0.94 |
|
|
$ |
2.77 |
|
|
$ |
2.42 |
|
|
Weighted average number of common shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and Diluted
|
|
|
5,974,961 |
|
|
|
6,142,538 |
|
|
|
6,008,607 |
|
|
|
6,253,796 |
|
|
Dividends declared per share
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
0.72 |
|
|
$ |
0.70 |
|
|
Dividend payout ratio
|
|
|
- |
|
|
|
- |
|
|
|
25.98 |
% |
|
|
28.54 |
|
|
Book value per share
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
18.83 |
|
|
$ |
31.30 |
|
National Bankshares, Inc.
Consolidated Statements of Comprehensive (Loss) Income
(Unaudited)
| |
|
Three Months Ended
September 30,
|
|
| ($ in thousands) |
|
2022 |
|
|
2021 |
|
| Net income |
|
$ |
6,162 |
|
|
$ |
5,752 |
|
| Other Comprehensive Loss, Net of Tax |
|
|
|
|
|
|
|
|
| Unrealized holding loss on available for sale securities net of tax of ($7,822) for the period ended September 30, 2022 and ($905) for the period ended September 30, 2021 |
|
|
(29,424 |
) |
|
|
(3,403 |
) |
| Other comprehensive loss, net of tax |
|
$ |
(29,424 |
) |
|
$ |
(3,403 |
) |
| Total Comprehensive (Loss) Income |
|
$ |
(23,262 |
) |
|
$ |
2,349 |
|
| |
|
Nine Months Ended
September 30,
|
|
| ($ in thousands) |
|
2022 |
|
|
2021 |
|
| Net income |
|
$ |
16,622 |
|
|
$ |
15,131 |
|
| Other Comprehensive Loss, Net of Tax |
|
|
|
|
|
|
|
|
| Unrealized holding loss on available for sale securities net of tax of ($23,431) for the period ended September 30, 2022 and ($2,254) for the period ended September 30, 2021 |
|
$ |
(88,143 |
) |
|
$ |
(8,477 |
) |
| Reclassification adjustment for gain included in net income, net of tax of ($1) for the period ended September 30, 2021 |
|
|
- |
|
|
|
(4 |
) |
| Other comprehensive loss, net of tax |
|
$ |
(88,143 |
) |
|
$ |
(8,481 |
) |
| Total Comprehensive (Loss) Income |
|
$ |
(71,521 |
) |
|
$ |
6,650 |
|
National Bankshares, Inc.
Net Interest Margin
(Unaudited)
| |
|
Three Months Ended September 30,
|
|
| |
|
2022
|
|
|
2021
|
|
| |
|
Average
Balance
|
|
|
Interest
|
|
|
Average
Yield/
Rate
|
|
|
Average
Balance
|
|
|
Interest
|
|
|
Average
Yield/
Rate
|
|
|
Interest-earning assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans (1)(2)(4)(5)
|
|
$ |
849,929 |
|
|
$ |
8,900 |
|
|
|
4.15 |
%
|
|
$ |
798,807 |
|
|
$ |
9,172 |
|
|
|
4.56 |
%
|
|
Taxable securities (6)(7)
|
|
|
683,490 |
|
|
|
3,425 |
|
|
|
1.99 |
%
|
|
|
540,854 |
|
|
|
2,043 |
|
|
|
1.50 |
%
|
|
Nontaxable securities (1)(6)
|
|
|
74,670 |
|
|
|
556 |
|
|
|
2.95 |
%
|
|
|
79,097 |
|
|
|
626 |
|
|
|
3.14 |
%
|
|
Interest-bearing deposits
|
|
|
89,165 |
|
|
|
506 |
|
|
|
2.25 |
%
|
|
|
145,759 |
|
|
|
56 |
|
|
|
0.15 |
%
|
|
Total interest-earning assets
|
|
$ |
1,697,254 |
|
|
$ |
13,387 |
|
|
|
3.13 |
%
|
|
$ |
1,564,517 |
|
|
$ |
11,897 |
|
|
|
3.02 |
%
|
|
Interest-bearing liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing demand deposits
|
|
$ |
936,368 |
|
|
$ |
686 |
|
|
|
0.29 |
%
|
|
$ |
839,477 |
|
|
$ |
617 |
|
|
|
0.29 |
%
|
|
Savings deposits
|
|
|
217,637 |
|
|
|
36 |
|
|
|
0.07 |
%
|
|
|
195,767 |
|
|
|
41 |
|
|
|
0.08 |
%
|
|
Time deposits
|
|
|
78,198 |
|
|
|
31 |
|
|
|
0.16 |
%
|
|
|
86,379 |
|
|
|
61 |
|
|
|
0.28 |
%
|
|
Total interest-bearing liabilities
|
|
$ |
1,232,203 |
|
|
$ |
753 |
|
|
|
0.24 |
%
|
|
$ |
1,121,623 |
|
|
$ |
719 |
|
|
|
0.25 |
%
|
|
Net interest income and interest rate spread
|
|
|
|
|
|
$ |
12,634 |
|
|
|
2.89 |
%
|
|
|
|
|
|
$ |
11,178 |
|
|
|
2.77 |
%
|
|
Net yield on average interest‑earning assets
|
|
|
|
|
|
|
|
|
|
|
2.95 |
%
|
|
|
|
|
|
|
|
|
|
|
2.83 |
%
|
| |
|
Nine Months Ended September 30,
|
|
| |
|
2022
|
|
|
2021
|
|
| |
|
Average
Balance
|
|
|
Interest
|
|
|
Average
Yield/
Rate
|
|
|
Average
Balance
|
|
|
Interest
|
|
|
Average
Yield/
Rate
|
|
|
Interest-earning assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans(1)(3)(4)(5)
|
|
$ |
829,133 |
|
|
$ |
25,484 |
|
|
|
4.11 |
%
|
|
$ |
786,613 |
|
|
$ |
26,341 |
|
|
|
4.48 |
%
|
|
Taxable securities(6)(7)
|
|
|
662,824 |
|
|
|
8,847 |
|
|
|
1.78 |
%
|
|
|
505,134 |
|
|
|
5,736 |
|
|
|
1.52 |
%
|
|
Nontaxable securities(1)(6)
|
|
|
75,806 |
|
|
|
1,728 |
|
|
|
3.05 |
%
|
|
|
80,596 |
|
|
|
1,960 |
|
|
|
3.25 |
%
|
|
Interest-bearing deposits
|
|
|
97,917 |
|
|
|
757 |
|
|
|
1.03 |
%
|
|
|
136,391 |
|
|
|
123 |
|
|
|
0.12 |
%
|
|
Total interest-earning assets
|
|
$ |
1,665,680 |
|
|
$ |
36,816 |
|
|
|
2.96 |
%
|
|
$ |
1,508,734 |
|
|
$ |
34,160 |
|
|
|
3.03 |
%
|
|
Interest-bearing liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing demand deposits
|
|
$ |
911,926 |
|
|
$ |
1,839 |
|
|
|
0.27 |
%
|
|
$ |
799,593 |
|
|
$ |
2,053 |
|
|
|
0.34 |
%
|
|
Savings deposits
|
|
|
216,691 |
|
|
|
111 |
|
|
|
0.07 |
%
|
|
|
186,720 |
|
|
|
132 |
|
|
|
0.09 |
%
|
|
Time deposits
|
|
|
79,981 |
|
|
|
105 |
|
|
|
0.18 |
%
|
|
|
88,009 |
|
|
|
223 |
|
|
|
0.34 |
%
|
|
Total interest-bearing liabilities
|
|
$ |
1,208,598 |
|
|
$ |
2,055 |
|
|
|
0.23 |
%
|
|
$ |
1,074,322 |
|
|
$ |
2,408 |
|
|
|
0.30 |
%
|
|
Net interest income and interest rate spread
|
|
|
|
|
|
$ |
34,761 |
|
|
|
2.73 |
%
|
|
|
|
|
|
$ |
31,752 |
|
|
|
2.73 |
%
|
|
Net yield on average interest‑earning assets
|
|
|
|
|
|
|
|
|
|
|
2.79 |
%
|
|
|
|
|
|
|
|
|
|
|
2.81 |
%
|
|
(1)
|
Interest on nontaxable loans and securities is computed on a fully taxable equivalent basis using a Federal income tax rate of 21%.
|
|
(2)
|
Included in interest income are loan fees of $82 and $911 for the three months ended September 30, 2022 and 2021, respectively.
|
|
(3)
|
Included in interest income are loan fees of $195 and $1,855 for the nine months ended September 30, 2022 and 2021, respectively.
|
|
(4)
|
Nonaccrual loans are included in average balances for yield computations.
|
|
(5)
|
Includes loans held for sale.
|
|
(6)
|
Daily averages are shown at amortized cost.
|
|
(7)
|
Includes restricted stock.
|
National Bankshares, Inc.
Key Ratios and Other Data
(Unaudited)
| |
|
Three Months Ended
September 30,
|
|
|
Nine Months Ended
September 30,
|
|
|
($ in thousands)
|
|
2022
|
|
|
2021
|
|
|
2022
|
|
|
2021
|
|
|
Average Balances
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due from banks
|
|
$ |
11,275 |
|
|
$ |
11,412 |
|
|
$ |
11,676 |
|
|
$ |
11,725 |
|
|
Interest-bearing deposits
|
|
|
89,165 |
|
|
|
145,759 |
|
|
|
97,917 |
|
|
|
136,391 |
|
|
Securities available for sale
|
|
|
686,303 |
|
|
|
631,320 |
|
|
|
693,303 |
|
|
|
593,350 |
|
|
Mortgage loans held for sale
|
|
|
194 |
|
|
|
569 |
|
|
|
184 |
|
|
|
610 |
|
|
Loans, gross
|
|
|
850,175 |
|
|
|
799,984 |
|
|
|
829,400 |
|
|
|
787,750 |
|
|
Loans, net of unearned income and deferred fees and costs
|
|
|
849,735 |
|
|
|
798,238 |
|
|
|
828,949 |
|
|
|
786,003 |
|
|
Loans, net
|
|
|
841,619 |
|
|
|
790,186 |
|
|
|
821,082 |
|
|
|
777,649 |
|
|
Intangible assets
|
|
|
5,848 |
|
|
|
5,848 |
|
|
|
5,848 |
|
|
|
5,848 |
|
|
Total assets
|
|
|
1,728,040 |
|
|
|
1,662,897 |
|
|
|
1,716,907 |
|
|
|
1,601,711 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest bearing deposits
|
|
|
341,030 |
|
|
|
326,478 |
|
|
|
334,727 |
|
|
|
313,911 |
|
|
Interest-bearing and savings deposits
|
|
|
1,154,005 |
|
|
|
1,035,244 |
|
|
|
1,128,617 |
|
|
|
986,313 |
|
|
Time deposits
|
|
|
78,198 |
|
|
|
86,379 |
|
|
|
79,981 |
|
|
|
88,009 |
|
|
Total deposits
|
|
|
1,573,233 |
|
|
|
1,448,101 |
|
|
|
1,543,325 |
|
|
|
1,388,233 |
|
|
Stockholders' equity
|
|
|
138,787 |
|
|
|
194,573 |
|
|
|
157,540 |
|
|
|
193,184 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Ratios
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average assets(1)
|
|
|
1.41 |
% |
|
|
1.32 |
% |
|
|
1.29 |
% |
|
|
1.25 |
% |
|
Return on average equity(1)
|
|
|
17.61 |
% |
|
|
11.26 |
% |
|
|
14.04 |
% |
|
|
10.36 |
% |
|
Efficiency ratio(2)
|
|
|
45.59 |
% |
|
|
48.34 |
% |
|
|
48.03 |
% |
|
|
51.54 |
% |
|
Average equity to average assets
|
|
|
8.03 |
% |
|
|
11.70 |
% |
|
|
9.18 |
% |
|
|
12.06 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for Loan Losses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance
|
|
$ |
8,069 |
|
|
$ |
8,077 |
|
|
$ |
7,674 |
|
|
$ |
8,481 |
|
|
Provision for (recovery of) losses
|
|
|
252 |
|
|
|
(392 |
)
|
|
|
696 |
|
|
|
(338 |
)
|
|
Charge-offs
|
|
|
(181 |
)
|
|
|
(104 |
)
|
|
|
(316 |
)
|
|
|
(690 |
)
|
|
Recoveries
|
|
|
67 |
|
|
|
117 |
|
|
|
153 |
|
|
|
245 |
|
|
Ending balance
|
|
$ |
8,207 |
|
|
$ |
7,698 |
|
|
$ |
8,207 |
|
|
$ |
7,698 |
|
| |
(1)
|
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. Any significant nonrecurring items within net income are not annualized.
|
| |
(2)
|
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)
|
|
September 30,
2022
|
|
|
September 30,
2021
|
|
|
Nonperforming Assets
|
|
|
|
|
|
|
|
|
|
Nonaccrual loans
|
|
$ |
118 |
|
|
$ |
39 |
|
|
Nonaccrual restructured loans
|
|
|
2,770 |
|
|
|
3,075 |
|
|
Total nonperforming loans
|
|
|
2,888 |
|
|
|
3,114 |
|
|
Other real estate owned
|
|
$ |
907 |
|
|
$ |
957 |
|
|
Total nonperforming assets
|
|
$ |
3,795 |
|
|
$ |
4,071 |
|
|
Accruing restructured loans
|
|
|
279 |
|
|
|
3,009 |
|
|
Loans 90 days or more past due
|
|
$ |
48 |
|
|
$ |
62 |
|
| |
|
|
|
|
|
|
|
|
|
Asset Quality Ratios
|
|
|
|
|
|
|
|
|
|
Nonperforming assets to loans(1) plus other real estate owned
|
|
|
0.44 |
% |
|
|
0.51 |
% |
|
Allowance for loans losses to total loans(1)
|
|
|
0.96 |
% |
|
|
0.97 |
% |
|
Allowance for loan losses to total loans(1), excluding SBA PPP loans
|
|
|
0.96 |
% |
|
|
0.98 |
% |
|
Allowance for loan losses to nonperforming loans
|
|
|
284.18 |
% |
|
|
247.21 |
% |
|
Loans past due 90 days or more to loans(1)
|
|
|
0.01 |
% |
|
|
0.01 |
% |
|
(1)
|
Loans are net of unearned income and deferred fees and costs
|