National Bankshares, Inc. And Subsidiaries (Unaudited) (000's), except ratios and percent data Three months ending December 31, December 31, Selected Consolidated Data : 2006 2005 Change ----------- ----------- --------- Interest income $ 12,427 $ 11,594 7.18% ----------- ----------- --------- Interest expense 5,261 4,095 28.47% ----------- ----------- --------- Net interest income 7,166 7,499 -4.44% ----------- ----------- --------- Provision for loan losses 9 10 -10.00% ----------- ----------- --------- Trust income 469 336 39.58% ----------- ----------- --------- Other noninterest income 1,830 1,690 8.28% ----------- ----------- --------- Salary and benefits 2,760 2,731 1.06% ----------- ----------- --------- Occupancy expense 478 481 -0.62% ----------- ----------- --------- Amortization of intangibles 284 285 -0.35% ----------- ----------- --------- Other noninterest expense 1,852 1,742 6.31% ----------- ----------- --------- Income taxes -881 -1,051 -16.18% ----------- ----------- --------- Net income $ 3,201 $ 3,225 -0.74% ----------- ----------- --------- Basic net income per share $ 0.46 $ 0.46 $ 0.00 ----------- ----------- --------- Daily averages: ----------- ----------- --------- Gross loans $ 498,366 $ 495,920 0.49% ----------- ----------- --------- Loans,net 492,104 489,479 0.54% ----------- ----------- --------- Total securities 272,644 263,887 3.32% ----------- ----------- --------- Total deposits 751,639 736,500 2.06% ----------- ----------- --------- Other borrowings 0 177 -100.00% ----------- ----------- --------- Stockholders' equity 97,741 92,426 5.75% ----------- ----------- --------- Cash and due from 15,795 17,430 -9.38% ----------- ----------- --------- Interest-earning assets 792,919 780,753 1.56% ----------- ----------- --------- Interest-bearing liabilities 646,673 622,233 3.93% ----------- ----------- --------- Intangible assets 16,138 17,444 -7.49% ----------- ----------- --------- Total assets 854,040 832,999 2.53% ----------- ----------- --------- Financial ratios: Note (1) ----------- ----------- --------- Return on average assets 1.49% 1.54% -0.05 ----------- ----------- --------- Return on average equity 12.99% 13.84% -0.85 ----------- ----------- --------- Net interest margin 4.06% 4.17% -0.11 ----------- ----------- --------- Average equity to average assets 11.44% 11.10% 0.35 ----------- ----------- --------- Note (1) Ratio change measured in bp Allowance for loan losses: ----------- ----------- --------- Beginning balance $ 5,252 $ 5,620 -6.55% ----------- ----------- --------- Provision for losses 9 10 -10.00% ----------- ----------- --------- Charge-offs -114 -289 -60.55% ----------- ----------- --------- Recoveries 10 108 -90.74% ----------- ----------- --------- Ending balance $ 5,157 $ 5,449 -5.36% ----------- ----------- --------- Year to Date December 31, December 31, Selected Consolidated Data : 2006 2005 Change ----------- ----------- --------- Interest income $ 47,901 $ 45,380 5.56% ----------- ----------- --------- Interest expense 18,564 14,180 30.92% ----------- ----------- --------- Net interest income 29,337 31,200 -5.97% ----------- ----------- --------- Provision for loan losses 49 567 -91.36% ----------- ----------- --------- Trust income 1,528 1,398 9.30% ----------- ----------- --------- Other noninterest income 7,274 6,215 17.04% ----------- ----------- --------- Salary and benefits 11,466 11,265 1.78% ----------- ----------- --------- Occupancy expense 1,957 1,931 1.35% ----------- ----------- --------- Amortization of intangibles 1,137 1,117 1.79% ----------- ----------- --------- Other noninterest expense 7,110 7,585 -6.26% ----------- ----------- --------- Income taxes -3,788 -3,924 -3.47% ----------- ----------- --------- Net income $ 12,632 $ 12,424 1.67% ----------- ----------- --------- Basic net income per share $ 1.80 $ 1.77 $ 0.03 ----------- ----------- --------- Fully diluted net income per share $ 1.80 $ 1.76 $ 0.04 ----------- ----------- --------- Dividends per share .73 .71 $ 0.02 ----------- ----------- --------- Dividend payout ratio 40.44 40.17 $ 0.27 ----------- ----------- --------- Book value per share $ 13.86 13.10 $ 0.76 ----------- ----------- --------- Balance sheet at period-end: ----------- ----------- --------- Gross loans $ 501,702 $ 493,524 1.66% ----------- ----------- --------- Loans, net $ 495,486 $ 487,162 1.71% ----------- ----------- --------- Total securities 285,489 272,541 4.75% ----------- ----------- --------- Cash and due from 15,283 20,115 -24.02% ----------- ----------- --------- Total deposits 764,692 745,649 2.55% ----------- ----------- --------- Other borrowings 73 357 -79.55% ----------- ----------- --------- Stockholders' equity 96,755 91,939 5.24% ----------- ----------- --------- Intangible assets 15,976 17,113 -6.64% ----------- ----------- --------- Total assets 868,203 841,498 3.17% ----------- ----------- --------- Daily averages: ----------- ----------- --------- Gross loans $ 494,945 $ 493,668 0.26% ----------- ----------- --------- Loans,net 488,624 487,130 0.31% ----------- ----------- --------- Total securities 271,066 261,743 3.56% ----------- ----------- --------- Total deposits 741,071 724,015 2.36% ----------- ----------- --------- Other borrowings 53 420 -87.38% ----------- ----------- --------- Stockholders' equity 94,194 90,470 4.12% ----------- ----------- --------- Cash and due from 15,968 15,976 -0.05% ----------- ----------- --------- Interest-earning assets 779,018 769,931 1.18% ----------- ----------- --------- Interest-bearing liabilities 632,514 610,534 3.60% ----------- ----------- --------- Intangible assets 16,025 17,500 -8.43% ----------- ----------- --------- Total assets 840,080 819,341 2.53% ----------- ----------- --------- Financial ratios: Note (1) ----------- ----------- --------- Return on average assets 1.50% 1.52% -0.02 ----------- ----------- --------- Return on average equity 13.41% 13.73% -0.32 ----------- ----------- --------- Net interest margin 4.14% 4.44% -0.30 ----------- ----------- --------- Efficiency ratio 52.74% 52.39% 0.35 ----------- ----------- --------- Average equity to average assets 11.21% 11.04% 0.17 ----------- ----------- --------- Note (1) Ratio change measured in bp Allowance for loan losses: ----------- ----------- --------- Beginning balance $ 5,449 $ 5,729 -4.89% ----------- ----------- --------- Provision for losses 49 567 -91.36% ----------- ----------- --------- Charge-offs -459 -1,101 -58.31% ----------- ----------- --------- Recoveries 118 254 -53.54% ----------- ----------- --------- Ending balance $ 5,157 $ 5,449 -5.36% ----------- ----------- --------- Nonperforming assets: ----------- ----------- --------- Nonaccrual loans 0 $ 178 -100.00% ----------- ----------- --------- Restructured loans --- --- --- ----------- ----------- --------- Total nonperforming loans Note (2) 0 178 -100.00% ----------- ----------- --------- Other real estate owned 390 376 3.72% ----------- ----------- --------- Total nonperforming assets $ 390 $ 554 -29.60% ----------- ----------- --------- Asset quality ratios: Note (3) ----------- ----------- --------- Nonperforming loans to total loans 0.000% 0.04% -100.00% ----------- ----------- --------- Allowance for loan losses to total loans 1.03% 1.11% -7.99% ----------- ----------- --------- Allowance for loan losses to nonperforming loans --- 3061.24% -100.00% ----------- ----------- --------- Note (2) Loans 90 days past due or more not included Note (3) Ratio change measured in bp
Contact Information: CONTACTS: James G. Rakes Chairman, President & CEO (540) 951-6236 J. Robert Buchanan Treasurer (276) 979-0341