NKSH National Bankshares Inc

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): January 23, 2025

 

 

National Bankshares Inc.

(Exact name of Registrant as Specified in Its Charter)

 

 

Virginia			0-15204	54-1375874
(State or Other Jurisdiction of Incorporation)			(Commission File Number)	(IRS Employer Identification No.)
101 Hubbard Street
Blacksburg, Virginia				24060
(Address of Principal Executive Offices)				(Zip Code)

 

Registrant’s Telephone Number, Including Area Code: 540 951-6300

 

Not applicable

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $1.25 per share		NKSH		The Nasdaq Stock Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

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Item 2.02 Results of Operations and Financial Condition.

On January 23, 2025, National Bankshares, Inc. issued a press release reporting its financial results for the period ended December 31, 2024. A copy of the press release is being furnished as an exhibit to this report and is incorporated by reference into this Item 2.02.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

 

99.1 National Bankshares, Inc. Press Release, dated January 23, 2025

 

104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

			NATIONAL BANKSHARES, INC.
Date:	January 23, 2025	By:	/s/ F. Brad Denardo
			F. Brad Denardo Chairman and CEO

 

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FOR IMMEDIATE RELEASE

CONTACTS:	F. Brad Denardo, Chairman and CEO	Lora M. Jones, Treasurer & CFO
	(540) 951-6213 bdenardo@nbbank.com	(540) 951-6238 ljones@nbbank.com

 

National Bankshares, Inc. Reports Results for the Fourth Quarter and Twelve Months Ended December 31, 2024

 

BLACKSBURG, VA., January 23, 2025 -- National Bankshares, Inc. (“the Company”) (Nasdaq: NKSH), parent company of The National Bank of Blacksburg (“the Bank”) and National Bankshares Financial Services, Inc., today announced its results of operations for the year and quarter ended December 31, 2024. The Company reported net income of $7.62 million or $1.24 per basic and diluted common share for the twelve months ended December 31, 2024. For the three month period ended December 31, 2024, the Company reported net income of $3.08 million or $0.48 per basic and diluted common share. National Bankshares, Inc. ended December 31, 2024 with total assets of $1.81 billion.

 

CEO F. Brad Denardo commented, "National Bankshares is uniquely positioned to provide our customers, communities, and shareholders with exceptional service and value today and well into the future. Over the past year we have expanded our reach, acquiring and building branches in neighboring markets with good growth potential, while maintaining a strong community banking ethos. In 2024 we also embarked on an enterprise system upgrade that will deliver a powerful and improved customer experience while increasing back-end efficiency. We have recruited talented new bankers, who along with our cadre of experienced professionals, possess the tools and know-how to propel our brand into a promising future. National Bankshares is committed to banking that is both personal and profitable, and we look forward to making good on that promise in 2025 and beyond."

 

Highlights

 

Merger:

The Company successfully completed the acquisition of Frontier Community Bank ("FCB") on June 1, 2024. The transaction was accounted for under the acquisition method of accounting, with acquired assets and liabilities recorded at fair value. Upon acquisition, the Company recorded assets, including goodwill, of $153.39 million, deposits of $129.72 million, equity of $16.35 million, and a provision for credit loss of $1.29 million. Merger-related expense of $2.92 million was recorded for the year ended December 31, 2024.

 

Net Interest Income

The net interest margin for the year ended December 31, 2024 was lower than for the year ended December 31, 2023, due to higher deposit costs that outpaced improvements in asset yields. However, the net interest margin improved when the fourth quarter of 2024 is compared with the third quarter of 2024, due to the Federal Reserve's 100 basis point decrease during the last four months of 2024 that immediately reduced the cost of the Company's adjustable-rate deposits and allowed lower repricing on maturing time deposits. The Company continuously monitors its deposit base and funding costs.

 

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Noninterest Income

When the year ended December 31, 2024 is compared with the year ended December 31, 2023, service charges on deposits increased due to an updated fee schedule and the FCB acquisition, trust income increased due to expansion in assets under management and credit and debit card fees, net, decreased due to higher processing costs. Noninterest income for 2023 reflects nonrecurring items including settlement of a BOLI policy, gain on the sale of an investment in VISA Class B shares, a gain on contract contingency, and loss on the sale of securities.

 

Noninterest income for the fourth quarter of 2024 decreased slightly when compared with the third quarter of 2024, due to a nonrecurring fee recorded during the third quarter.

 

Noninterest Expense

Noninterest expense increased when the year ended December 31, 2024 is compared with the year ended December 31, 2023, due to the FCB acquisition and a contract termination expense. During 2023 the Company reported expenses associated with a proxy contest, included in professional services.

 

When the fourth quarter of 2024 is compared with the third quarter of 2024, noninterest expense increased slightly, primarily due to normal fluctuation in salaries and employee benefits and data processing and ATM expense.

 

Securities

During 2024, the Company reduced its securities holdings by investing proceeds from matured securities in interest-bearing deposits. FCB's securities were sold upon acquisition. Fluctuation in the the value of the Company's securities portfolio are primarily due to market interest rate expectations. The Company’s Asset Liability Management Committee closely monitors interest rate risk on all of the Company’s financial assets and liabilities. As of December 31, 2024, the Company has the ability to hold securities until maturity. Analysis as of December 31, 2024 did not indicate credit risk concerns with any of the Company’s securities.

 

Deposits
The Company’s depositors within its market areas are diverse and include individuals, businesses and municipalities. The Company does not have any brokered deposits. Depositors are insured up to the FDIC maximum of $250 thousand. Municipal deposits, which account for approximately 23.6% of the Company’s deposits, have additional security from bonds pledged as collateral, in accordance with state regulation. Of the Company’s non-municipal deposits, approximately 22.4% are uninsured.

 

Liquidity

The Company’s liquidity position remains solid. The Company maintains borrowing lines with the Federal Home Loan Bank of Atlanta (“FHLB”) and the Federal Reserve that provide substantial borrowing capacity. During 2023, the Company accessed short-term borrowings with the FHLB and Federal Reserve to reinforce liquidity. The advances were fully repaid due to the success of the Company’s deposit strategy. Combined with a low loan-to-deposit ratio, positive results of the latest liquidity stress testing and success of deposit marketing, the Company believes it is well positioned to meet foreseeable liquidity demands.

 

Loans and Credit Quality

Loans as of December 31, 2024 decreased when compared with the level at September 30, 2024, driven by payoffs of real estate construction loans. The Company is positioned to continue to make every loan that meets its underwriting standards. Loan metrics continue to reflect low credit risk, with low charge-off and past due levels.

 

Stockholders’ Equity

Stockholders’ equity as of December 31, 2024 increased when compared with December 31, 2023 primarily due to the acquisition of FCB. During 2024, the Company paid regular dividends of $1.51 per common share and did not repurchase stock. The Bank is considered well capitalized, with capital ratios substantially higher than minimum regulatory requirements, and meets all requirements for borrowing from the FHLB.

 

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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 27 full-service offices, primarily in southwest and central Virginia, and two loan production offices in Roanoke and Charlottesville, 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.”

 

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, forward-looking statements can be identified by use of words such as “may,” “will,” “anticipates,” “believes,” “expects,” “plans,” “estimates,” “potential,” “continue,” “should,” and similar words or phrases. These statements are based upon current and anticipated economic conditions, nationally and in the Company’s market, interest rates and interest rate policy, competitive factors, and other conditions which by their nature, are not susceptible to accurate forecast and are subject to significant uncertainty. Although we believe that our expectations with respect to forward-looking statements are based upon reasonable assumptions within the bounds of our existing knowledge of our business and operations, there can be no assurance that actual future results, performance, achievements, or trends will not differ materially from any projected future results, performance, achievements or trends expressed or implied by such forward-looking statements. Actual future results, performance, achievements or trends may differ materially from historical results or those anticipated depending on a variety of factors, including, but not limited to, the following: the businesses of the Company and Frontier Community Bank (“FCB”) may not be combined successfully, or such combination may take longer, be more difficult, time-consuming or costly to accomplish than expected; the expected growth opportunities or cost savings from the merger with FCB may not be fully realized or may take longer to realize than expected; deposit attrition, operating costs, customer losses and business disruption prior to and following the merger with FCB, including adverse effects on relationships with employees and customers, may be greater than expected; the regulatory and shareholder approvals required for the merger with FCB may not be obtained; the level of inflation; interest rates; national and local economic conditions; monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury, the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Consumer Financial Protection Bureau and the Federal Deposit Insurance Corporation, and the impact of any policies or programs implemented pursuant to financial reform legislation; unanticipated increases in the level of unemployment in the Company’s market; the quality or composition of the loan and/or investment portfolios; the sufficiency of the Company’s allowance for credit losses; demand for loan products; deposit flows, including impact on liquidity; competition; demand for financial services in the Company’s market; the real estate market conditions in the Company’s market; laws, regulations and policies impacting financial institutions; adverse developments in the financial industry generally, such as the recent bank failures, responsive measures to mitigate and manage such developments, related supervisory and regulatory actions and costs, and related impacts on customer behavior; technological risks and developments, and cyber-threats, attacks or events; the Company’s technology initiatives; geopolitical conditions, including acts or threats of terrorism and/or military conflicts, or actions taken by the U.S. or other governments in response to acts or threats of terrorism and/or military conflicts; the occurrence of significant natural disasters, including severe weather conditions, floods, and other catastrophic events; the Company's ability to identify, attract, and retain experienced management, relationship managers, and support personnel, particularly in a competitive labor environment; performance by the Company’s counterparties or vendors; applicable accounting principles, policies and guidelines; the impact of public health events, including the adverse impact on our business and operations and on our customers; and other factors described from time to time in the Company’s reports (such as our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K) filed with the Securities and Exchange Commission. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. The Company does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions which may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

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National Bankshares, Inc.

Consolidated Balance Sheets

(Unaudited)

(in thousands, except share and per share data)		December 31, 2024				September 30, 2024				December 31, 2023
Assets
Cash and due from banks		$	13,564			$	15,990			$	12,967
Interest-bearing deposits			94,254				33,707				73,636
Federal funds sold			299				73				-
Securities available for sale, at fair value			601,898				622,271				618,601
Restricted stock, at cost			1,848				1,849				1,264
Mortgage loans held for sale			619				457				406
Loans:
Real estate construction loans			50,798				71,920				55,379
Consumer real estate loans			307,855				306,012				241,564
Commercial real estate loans			478,078				473,018				419,130
Commercial non real estate loans			51,844				52,699				41,555
Public sector and IDA loans			57,171				58,109				60,551
Consumer non real estate loans			42,867				40,483				38,996
Total loans			988,613				1,002,241				857,175
Less: unearned income and deferred fees and costs			(663	)			(582	)			(529	)
Loans, net of unearned income and deferred fees and costs			987,950				1,001,659				856,646
Less: allowance for credit losses			(10,262	)			(10,328	)			(9,094	)
Loans, net			977,688				991,331				847,552
Premises and equipment, net			16,878				16,165				11,109
Accrued interest receivable			6,469				6,648				6,313
Goodwill			10,718				10,718				5,848
Core deposit intangible, net			1,863				1,963				-
Bank-owned life insurance			47,369				47,071				43,583
Other assets			38,169				36,790				34,091
Total assets		$	1,811,636			$	1,785,033			$	1,655,370
Liabilities and Stockholders' Equity
Noninterest-bearing demand deposits		$	290,088			$	296,469			$	281,215
Interest-bearing demand deposits			864,753				819,947				821,661
Savings deposits			177,297				176,460				177,856
Time deposits			312,614				310,077				223,240
Total deposits			1,644,752				1,602,953				1,503,972
Accrued interest payable			1,462				2,074				1,416
Other liabilities			9,013				12,224				9,460
Total liabilities			1,655,227				1,617,251				1,514,848
Commitments and contingencies
Stockholders' Equity
Preferred stock, no par value, 5,000,000 shares authorized; none issued and outstanding		$	-			$	-			$	-
Common stock of $1.25 par value and additional paid in capital. Authorized 10,000,000 shares; issued and outstanding 6,363,371 (including 4,961 unvested) shares at December 31, 2024, 6,360,973 (including 4,379 unvested) shares at September 30, 2024, and 5,893,782 (including 4,095 unvested) shares at December 31, 2023			21,831				21,796				7,404
Retained earnings			196,343				198,225				197,984
Accumulated other comprehensive loss, net			(61,765	)			(52,239	)			(64,866	)
Total stockholders' equity			156,409				167,782				140,522
Total liabilities and stockholders' equity		$	1,811,636			$	1,785,033			$	1,655,370

 

 

 

 

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National Bankshares, Inc.

Consolidated Statements of Income

(Unaudited)

		Three Months Ended
(in thousands, except share and per share data)		December 31, 2024				September 30, 2024				December 31, 2023
Interest Income
Interest and fees on loans		$	13,142			$	13,164			$	10,131
Interest on federal funds sold			3				12				–
Interest on interest-bearing deposits			758				954				775
Interest on securities – taxable			4,079				4,203				4,268
Interest on securities – nontaxable			335				333				339
Total interest income			18,317				18,666				15,513
Interest Expense
Interest on time deposits			3,390				3,509				2,124
Interest on other deposits			4,923				5,709				4,909
Total interest expense			8,313				9,218				7,033
Net interest income			10,004				9,448				8,480
Recovery of credit losses			(60	)			(5	)			(893	)
Net interest income after recovery of credit losses			10,064				9,453				9,373
Noninterest Income
Service charges on deposit accounts			748				753				647
Other service charges and fees			53				82				44
Credit and debit card fees, net			307				344				402
Trust income			581				580				470
BOLI income			298				295				255
Gain on sale of mortgage loans			36				50				14
Other income			220				168				422
Total noninterest income			2,243				2,272				2,254
Noninterest Expense
Salaries and employee benefits			5,108				4,953				3,957
Occupancy, furniture and fixtures			598				641				505
Data processing and ATM			1,116				1,054				819
FDIC assessment			222				211				188
Intangible asset amortization			100				102				–
Net costs of other real estate owned			–				–				2
Franchise taxes			373				373				350
Professional services			285				254				184
Merger-related expenses			25				150				–
Other operating expenses			793				761				558
Total noninterest expense			8,620				8,499				6,563
Income before income tax expense			3,687				3,226				5,064
Income tax expense			608				550				879
Net Income		$	3,079			$	2,676			$	4,185
Basic net income per common share		$	0.48			$	0.42			$	0.71
Fully diluted net income per common share		$	0.48			$	0.42			$	0.71
Weighted average number of common shares outstanding, basic			6,356,949				6,356,594				5,889,687
Weighted average number of common shares outstanding, fully diluted			6,359,506				6,358,352				5,890,471
Dividends declared per common share		$	0.78			$	—			$	0.78
Book value per common share		$	24.58			$	26.38			$	23.86

 

 

 

 

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National Bankshares, Inc.

Consolidated Statements of Income

(Unaudited)

 

		Year Ended December 31,
(in thousands, except share and per share data)		2024				2023
Interest Income
Interest and fees on loans		$	47,884			$	38,924
Interest on federal funds sold			26				–
Interest on interest-bearing deposits			4,070				1,982
Interest on securities – taxable			16,797				16,536
Interest on securities – nontaxable			1,345				1,391
Total interest income			70,122				58,833
Interest Expense
Interest on time deposits			12,381				4,989
Interest on other deposits			21,342				16,261
Interest on borrowings			2				300
Total interest expense			33,725				21,550
Net interest income			36,397				37,283
Provision for (recovery of) credit losses			1,227				(1,261	)
Net interest income after provision for (recovery of) credit losses			35,170				38,544
Noninterest Income
Service charges on deposit accounts			2,898				2,518
Other service charges and fees			229				297
Credit and debit card fees, net			1,448				1,678
Trust income			2,177				1,901
BOLI income			1,120				2,026
Gain on sale of investment			–				2,971
Gain on sale of mortgage loans			168				107
Other income			920				1,193
Realized securities loss, net			–				(3,332	)
Total noninterest income			8,960				9,359
Noninterest Expense
Salaries and employee benefits			19,214				17,318
Occupancy, furniture and fixtures			2,339				2,005
Data processing and ATM			3,923				3,549
FDIC assessment			812				749
Intangible asset amortization			237				–
Net costs of other real estate owned			–				31
Franchise taxes			1,454				1,422
Professional services			1,051				1,739
Merger-related expenses			2,916				–
Contract termination			173				–
Other operating expenses			2,889				2,415
Total noninterest expense			35,008				29,228
Income before income tax expense			9,122				18,675
Income tax expense			1,499				2,984
Net Income		$	7,623			$	15,691
Basic net income per common share		$	1.24			$	2.66
Fully diluted net income per common share		$	1.24			$	2.66
Weighted average number of common shares outstanding, basic			6,161,428				5,889,687
Weighted average number of common shares outstanding, fully diluted			6,163,610				5,889,953
Dividends declared per common share		$	1.51			$	2.51

 

 

 

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National Bankshares, Inc.

Net Interest Margin

(Unaudited)

		Three Months Ended December 31, 2024													Three Months Ended September 30, 2024
(in thousands)		Average Balance				Interest				Average Yield/Rate					Average Balance				Interest				Average Yield/Rate
Interest-earning assets:
Loans (1)(2)(3)		$	995,259			$	13,261				5.30	%			$	994,744			$	13,285				5.31	%
Taxable securities (4)(5)			621,424				4,079				2.61	%				625,908				4,203				2.67	%
Nontaxable securities (1)(4)			63,079				455				2.87	%				63,197				453				2.85	%
Federal funds sold			294				3				4.06	%				918				12				5.20	%
Interest-bearing deposits			63,028				758				4.78	%				69,264				954				5.48	%
Total interest-earning assets		$	1,743,084			$	18,556				4.24	%			$	1,754,031			$	18,907				4.29	%
Interest-bearing liabilities:
Interest-bearing demand deposits		$	836,486			$	4,698				2.23	%			$	852,126			$	5,488				2.56	%
Savings deposits			177,040				225				0.51	%				176,354				221				0.50	%
Time deposits			308,979				3,390				4.36	%				308,247				3,509				4.53	%
Total interest-bearing liabilities		$	1,322,505			$	8,313				2.50	%			$	1,336,727			$	9,218				2.74	%
Net interest income and interest rate spread						$	10,243				1.74	%							$	9,689				1.55	%
Net interest margin											2.34	%												2.20	%

 

		Three Months Ended December 31, 2023
(in thousands)		Average Balance				Interest				Average Yield/Rate
Interest-earning assets:
Loans (1)(2)(3)		$	853,233			$	10,252				4.77	%
Taxable securities (4)(5)			637,349				4,268				2.66	%
Nontaxable securities (1)(4)			64,297				461				2.84	%
Interest-bearing deposits			56,132				775				5.48	%
Total interest-earning assets		$	1,611,011			$	15,756				3.88	%
Interest-bearing liabilities:
Interest-bearing demand deposits		$	801,000			$	4,669				2.31	%
Savings deposits			182,006				240				0.52	%
Time deposits			206,770				2,124				4.08	%
Total interest-bearing liabilities		$	1,189,776			$	7,033				2.35	%
Net interest income and interest rate spread						$	8,723				1.53	%
Net interest margin											2.15	%

 

 

 

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National Bankshares, Inc.

Net Interest Margin

(Unaudited)

		Year Ended December 31,
		2024												2023
		Average Balance				Interest				Average Yield/Rate				Average Balance				Interest				Average Yield/Rate
Interest-earning assets:
Loans (1)(2)(3)		$	938,446			$	48,369				5.15	%		$	851,221			$	39,320				4.62	%
Taxable securities (4)(5)			627,656				16,797				2.68	%			652,477				16,536				2.53	%
Nontaxable securities (1)(4)			63,566				1,828				2.88	%			65,309				1,885				2.89	%
Federal funds sold			600				26				4.33	%			-				-				-
Interest-bearing deposits			76,211				4,070				5.34	%			37,660				1,982				5.26	%
Total interest-earning assets		$	1,706,479			$	71,090				4.17	%		$	1,606,667			$	59,723				3.72	%
Interest-bearing liabilities:
Interest-bearing demand deposits		$	838,526			$	20,445				2.44	%		$	826,112			$	15,515				1.88	%
Savings deposits			176,014				897				0.51	%			195,592				746				0.38	%
Time deposits			278,535				12,381				4.45	%			150,395				4,989				3.32	%
Borrowings			57				2				3.51	%			6,198				300				4.84	%
Total interest-bearing liabilities		$	1,293,132			$	33,725				2.61	%		$	1,178,297			$	21,550				1.83	%
Net interest income and interest    rate spread						$	37,365				1.56	%						$	38,173				1.89	%
Net interest margin											2.19	%											2.38	%

 

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National Bankshares, Inc.

Key Ratios and Other Data

(Unaudited)

 

		As of and for the Three Months Ended
(in thousands)		December 31, 2024				September 30, 2024				December 31, 2023
Average Balances
Cash and due from banks		$	13,937			$	13,443			$	12,718
Interest-bearing deposits			63,028				69,264				56,132
Securities available for sale, at fair value			612,680				611,615				593,500
Mortgage loans held for sale			197				419				57
Loans, gross			995,669				994,876				853,683
Loans, net of unearned income and deferred fees and costs			995,062				994,325				853,176
Loans, net of allowance for credit losses			984,725				983,862				843,040
Intangible assets			12,643				12,755				5,848
Total assets		$	1,796,684			$	1,804,348			$	1,611,174
Noninterest-bearing demand deposits		$	300,148			$	296,549			$	291,378
Interest-bearing and savings deposits			1,013,526				1,028,480				983,006
Time deposits			308,979				308,247				206,770
Total deposits			1,622,653				1,633,276				1,481,154
Total shareholders' equity		$	159,476			$	156,111			$	118,257
Financial Ratios
Return on average assets(1)			0.68	%			0.61	%			0.87	%
Return on average equity(1)			7.63	%			7.09	%			11.81	%
Efficiency ratio(2)			68.84	%			69.80	%			61.08	%
Average equity to average assets			8.88	%			8.65	%			7.34	%
Tangible common equity to tangible assets(3)			7.99	%			8.75	%			8.16	%
Allowance for Loan Credit Losses
Beginning balance		$	10,328			$	10,502			$	10,181
Provision for (recovery of) credit losses			(70	)			5				(889	)
Charge-offs			(108	)			(234	)			(246	)
Recoveries			112				55				48
Ending Balance		$	10,262			$	10,328			$	9,094

 

 

 

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National Bankshares, Inc.

Key Ratios and Other Data

(Unaudited)

 

		As of and for the Twelve Months Ended
(in thousands)		December 31, 2024				December 31, 2023
Average Balances
Cash and due from banks		$	12,971			$	12,053
Interest-bearing deposits			76,211				37,660
Securities available for sale, at fair value			610,298				619,236
Mortgage loans held for sale			306				135
Loans, gross			938,694				851,537
Loans, net of unearned income and deferred fees and costs			938,140				851,086
Loans, net of allowance for credit losses			928,293				840,590
Intangible assets			9,864				5,848
Total assets		$	1,744,440			$	1,613,854
Noninterest-bearing demand deposits		$	290,038			$	299,748
Interest-bearing and savings deposits			1,014,540				1,021,704
Time deposits			278,535				150,395
Total deposits			1,583,113				1,471,847
Total shareholders' equity			147,474				124,641
Financial Ratios
Return on average assets			0.44	%			0.97	%
Return on average equity			5.17	%			12.59	%
Efficiency ratio(1)			68.90	%			61.01	%
Average equity to average assets			8.45	%			7.72	%
Tangible common equity to tangible assets(2)			7.99	%			8.16	%
Allowance for Loan Credit Losses
Beginning balance		$	9,094			$	8,225
Recovery of credit losses			(48	)			(1,278	)
Acquisition-related provision			1,290				–
Acquisition-related increase for purchased credit deteriorated loans			175				–
Charge-offs			(519	)			(478	)
Recoveries			270				283
Adoption of ASU 2016-13			–				2,342
Ending Balance		$	10,262			$	9,094

 

 

 

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National Bankshares, Inc.

Asset Quality Data

(Unaudited)

 

 

(in thousands)		December 31, 2024				September 30, 2024				December 31, 2023
Nonperforming Assets
Nonaccrual loans		$	2,222			$	2,283			$	2,629
Total nonperforming assets		$	2,222			$	2,283			$	2,629
Loans past due 90 days or more, and still accruing		$	548			$	71			$	188
Asset Quality Ratios
Ratio of nonperforming assets to loans(1) plus other real estate owned			0.22	%			0.23	%			0.31	%
Allowance for credit losses on loans to total loans(1)			1.04	%			1.03	%			1.06	%
Ratio of ACLL to nonperforming loans			461.84	%			452.39	%			345.91	%
Loans past due 90 days or more to loans (1)			0.06	%			0.01	%			0.02	%

 

 

 

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National Bankshares, Inc.

Reconciliation of Non-GAAP Financial Measures

(Unaudited)

 

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. 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.

 

The non-GAAP financial measures presented in this document include fully taxable equivalent (“FTE”) interest income used in the net interest margin, the efficiency ratio, and the ratio of tangible common equity to tangible assets. For periods that are shorter than twelve months, the Company annualizes net income for the return on average assets and return on average equity. In order to prevent distortion, the Company does not annualize significant non-recurring income and expense items.

 

The following tables present calculations underlying non-GAAP financial measures. All dollars are in thousands.

 

(in thousands)		Three Months Ended
Net Interest Margin, FTE		December 31, 2024				September 30, 2024				December 31, 2023
Interest income (GAAP)		$	18,317			$	18,666			$	15,513
Add: FTE adjustment			239				241				243
Interest income, FTE (non-GAAP)			18,556				18,907				15,756
Interest expense (GAAP)			8,313				9,218				7,033
Net interest income, FTE (non-GAAP)		$	10,243			$	9,689			$	8,723
Average balance of interest-earning assets		$	1,743,084			$	1,754,031			$	1,611,011
Net interest margin			2.34	%			2.20	%			2.15	%

 

(in thousands)		Three Months Ended
Efficiency Ratio		December 31, 2024				September 30, 2024				December 31, 2023
Noninterest expense (GAAP)		$	8,620			$	8,499			$	6,563
Less: merger-related expense			(25	)			(150	)			–
Adjusted noninterest expense (non-GAAP)		$	8,595			$	8,349			$	6,563
Noninterest income (GAAP)		$	2,243			$	2,272			$	2,254
Less: gain on sale of investment (1)			–				–				(232	)
Adjusted noninterest income (non-GAAP)		$	2,243			$	2,272			$	2,022
Net interest income, FTE (non-GAAP)			10,243				9,689				8,723
Total income for efficiency ratio (non-GAAP)		$	12,486			$	11,961			$	10,745
Efficiency ratio			68.84	%			69.80	%			61.08	%

 

 

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(in thousands)		Three Months Ended
Annualized Net Income for Ratio Calculation		December 31, 2024				September 30, 2024				December 31, 2023
Net income per GAAP		$	3,079			$	2,676			$	4,185
Less: items not annualized:
Gain on sale of investment(1), net of tax of ($49) for the period ended December 31, 2023			–				–				(183	)
ACL recovery(2), net of tax of ($13) and ($188) for the periods ended December 31, 2024 and December 31, 2023, respectively			(47	)			–				(705	)
Merger-related expense, net of tax of $5 and $6 for the periods ended December 31, 2024 and September 30, 2024, respectively			20				144				–
Total non-annualized items			(27	)			144				(888	)
Adjusted net income			3,052				2,820				3,297
Adjusted net income, annualized		$	12,142			$	11,219			$	13,080
Add: total non-annualized items			27				(144	)			888
Annualized net income for ratio calculation (non-GAAP)		$	12,169			$	11,075			$	13,968
Return on average assets (GAAP)			0.68	%			0.59	%			1.03	%
Adjusted return on average assets (non-GAAP)			0.68	%			0.61	%			0.87	%
Return on average equity (GAAP)			7.68	%			6.82	%			14.04	%
Adjusted return on average equity (non-GAAP)			7.63	%			7.09	%			11.81	%

 

 

		Year Ended December 31,
Net Interest Margin, FTE		2024				2023
Interest income (GAAP)		$	70,122			$	58,833
Add: FTE adjustment			968				890
Interest income, FTE (non-GAAP)			71,090				59,723
Interest expense (GAAP)			33,725				21,550
Net interest income, FTE (non-GAAP)		$	37,365			$	38,173
Average balance of interest-earning assets		$	1,706,479			$	1,606,667
Net interest margin			2.19	%			2.38	%

 

		Year Ended December 31,
Efficiency Ratio		2024				2023
Noninterest expense (GAAP)		$	35,008			$	29,228
Less: merger-related expense			(2,916	)			-
Less: contract termination expense (1)			(173	)			-
Less: proxy-related expense (2)			-				(786	)
Adjusted noninterest expense (non-GAAP)		$	31,919			$	28,442
Noninterest income (GAAP)		$	8,960			$	9,359
Less: realized securities loss, net			-				3,332
Less: gain on sale of investment (3)			-				(232	)
Less: gain on sale of investment (4)			-				(2,971	)
Less: gain on BOLI settlement			-				(1,044	)
Adjusted noninterest income (non-GAAP)			8,960				8,444
Net interest income, FTE (non-GAAP)			37,365				38,173
Total income for efficiency ratio (non-GAAP)		$	46,325			$	46,617
Efficiency ratio			68.90	%			61.01	%

 

 

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		As of
(in thousands)		December 31, 2024				September 30, 2024				December 31, 2023
Tangible Assets
Total assets (GAAP)		$	1,811,636			$	1,785,033			$	1,655,370
Less: goodwill and intangible asses			(12,581	)			(12,681	)			(5,848	)
Tangible assets (non-GAAP)		$	1,799,055			$	1,772,352			$	1,649,522
Tangible Common Equity
Total stockholders' equity (GAAP)		$	156,409			$	167,782			$	140,522
Less: goodwill and intangible assets			(12,581	)			(12,681	)			(5,848	)
Tangible common equity (non-GAAP)		$	143,828			$	155,101			$	134,674

 

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v3.24.4

Document And Entity Information	Jan. 23, 2025
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Jan. 23, 2025
Entity Registrant Name	National Bankshares Inc.
Entity Central Index Key	0000796534
Entity Emerging Growth Company	false
Entity File Number	0-15204
Entity Incorporation, State or Country Code	VA
Entity Tax Identification Number	54-1375874
Entity Address, Address Line One	101 Hubbard Street
Entity Address, City or Town	Blacksburg
Entity Address, State or Province	VA
Entity Address, Postal Zip Code	24060
City Area Code	540
Local Phone Number	951-6300
Entity Information, Former Legal or Registered Name	Not applicable
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, par value $1.25 per share
Trading Symbol	NKSH
Security Exchange Name	NASDAQ

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