National Bankshares Inc. has a market cap of $186.5 million; its shares were traded at around $26.9 with a P/E ratio of 11.75 and P/S ratio of 3.24. The dividend yield of National Bankshares Inc. stocks is 3.49%. National Bankshares Inc. had an annual average earning growth of 18.4% over the past 10 years.
Highlight of Business Operations:Securities increased by $7,606, or 2.41%, from $315,907 at December 31, 2010 to $323,513 at March 31, 2011. Net loans at March 31, 2011 were $579,657, up $10,878, or 1.91%, from $568,779 at December 31, 2010. Deposits increased 0.15%, from $884,583 at year-end to $885,895 at March 31, 2011, or $1,312. Total assets were $1,022,238 at December 31, 2010 and were $1,026,558 at March 31, 2011, an increase of $4,320, or 0.42%.
Total nonperforming loans at March 31, 2011 were $8,537, which compares with $8,421 at December 31, 2010 and $7,743 at March 31, 2010. Of the nonperforming loans, $884 are accruing restructured loans, $5,314 are nonaccrual restructured loans and $2,339 are other loans in nonaccrual status. At March 31, 2011, the ratio of nonperforming loans to loans net of unearned income and deferred fees was 1.45%.
The prolonged recession and the slow recovery of the national and local economies contributed to the increase in nonperforming loans. The higher level of nonperforming loans impacted the amount of the provision for loan losses. Among other factors, the total of nonperforming loans is considered in calculating the Company s allowance for loan losses, which in turn determines the amount needed in the provision for loan losses. The provision for loan losses for the three months ended March 31, 2011 was $800, and it was $647 for the three months ended March 31, 2010. This represents an increase of $153, or 23.65%, when the two periods are compared. At March 31, 2011, the ratio of the allowance for loan losses to loans was 1.40%, and it was 1.33% at December 31, 2010 and 1.21% at March 31, 2010. Prior year charge-off ratios are factored into the reserve calculations and contributed to the increase. Because known nonperforming loans have been included in the calculation for the allowance for loan losses, further additions to the provision for loan losses would be the result of the refinement of loss estimates and are not expected to dramatically affect net income.
The net charge-off ratio was 0.15% at March 31, 2011, 0.46% at December 31, 2010 and 0.30% at March 31, 2010. Loans past due 90 days or more and still accruing declined to $1,078 at March 2011, from $1,336 at December 31, 2010 and $2,217 at March 31, 2010. 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 was $2,222 at March 31, 2011, up from $1,723 at December 31, 2010 but down from $2,567 at March 31, 2010. Because of the level of nonperforming loans, it is likely that the total of other real estate owned will increase in the remaining three quarters of 2011, 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.
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