National Bankshares Inc. has a market cap of $174 million; its shares were traded at around $25.09 with a P/E ratio of 11.4 and P/S ratio of 2.9. The dividend yield of National Bankshares Inc. stocks is 3.5%. National Bankshares Inc. had an annual average earning growth of 7.4% over the past 10 years.
Highlight of Business Operations:Securities declined by $2,833, or 0.95%, from $297,417 at December 31, 2009 to $294,584 at June 30, 2010. Net loans at June 30, 2010 were $575,372, down $7,649, or 1.31%, from $583,021 at December 31, 2009. Deposits grew modestly, from $852,112 at year-end to $859,337 at June 30, 2010, an increase of $7,225, or 0.85%. Total assets were $982,367 at December 31, 2009 and were $994,875 at June 30, 2010, an increase of $12,508, or 1.27%.
Loans past due 90 days or more declined to $389 at June 30, 2010, from $1,697 at December 31, 2009 and $1,746 at June 30, 2009. The decline is the result of loans being charged-off or placed on nonaccrual status. Collateral that previously secured some charged-off loans is now in other real estate owned because of foreclosure or deeds in lieu of foreclosure. The total of other real estate owned grew to $3,170 at June 30, 2010, from $2,126 at December 31, 2009 and $1,869 at June 30, 2009. Because of the level of nonperforming loans, it is likely that the total of other real estate owned will increase in the last six months of 2010, as the real estate collateral associated with some of these loans is acquired in foreclosure. It is not possible to accurately predict the future total of other real estate owned, because property sold at foreclosure may be acquired by third parties and NBB s other real estate owned properties are regularly marketed and sold.
Service charges on deposit accounts totaled $1,486 for the six months ended June 30, 2010. This is a 9.45% decrease of $155, when compared with the same period in 2009. The decline was in large part the result of a decrease of $152 in fees from checking account overdrafts and fees for checks returned for insufficient funds.
Credit card fees for the first six months of 2010 were $1,426. This was an increase of $89, or 6.66%, when compared with the $1,337 total reported for the same period last year. The increase was due to a higher volume of merchant transaction fees and credit card fees. Management anticipates that this category of noninterest income may be negatively affected by provisions included in the Dodd-Frank Wall Street Reform and Consumer Protection Act. This recent legislation directs the Federal Reserve Bank to control the level of merchant fees. It is not yet known how greatly the legislation may impact the level of credit card fees or when that impact will occur.
Other income includes income that cannot be classified in another category. Some examples include net gains from the sales of fixed assets, rent from foreclosed properties and revenue from investment and insurance sales. Other income for the six months ended June 30, 2010 was $143. This represents a decrease of $42, or 22.70%, when compared with the six months ended June 30, 2009. This decrease came primarily from a decline in investment commissions of $24 and insurance commissions of $7 in the Company s financial services affiliate. These areas fluctuate with market conditions and because of competitive factors.
Salary and benefits expense decreased $115, or 2.04%, from $5,625 for the six months ended June 30, 2009 to $5,510 for the six months ended June 30, 2010. The decline is the result of the Company s efforts to control salary costs and an adjustment in the periodic accrual for the Company s salary continuation plan. This accrual may fluctuate because of changes in the number of plan participants and the performance of bank owned life insurance that is used to fund the plan. There was also an increase of $78 in net periodic pension expense associated with the Company s defined benefit pension plan. Net periodic expense varies because of changes in the number of plan participants, the age of participants, the investment performance of the plan trust and the interest rate environment.
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