National Bankshares(NKSH) - 2024 Q3 - Quarterly Results

Financial Performance - National Bankshares, Inc. reported net income of $4.54 million or $0.75 per basic common share for the nine months ended September 30, 2024, a decrease from $11.51 million or $1.95 per share for the same period in 2023[2]. - For the third quarter of 2024, net income was $2.68 million or $0.42 per share, compared to $3.07 million or $0.52 per share in the third quarter of 2023[2]. - Net income for the nine months ended September 30, 2024, was $4,544,000, a decline of 60.5% compared to $11,506,000 in the same period of 2023[22]. - Basic net income per common share decreased to $0.75 from $1.95, reflecting a 61.5% drop year-over-year[22]. - Net income for the three months ended September 30, 2024, was $2,676 thousand, compared to a net loss of $306 thousand for the three months ended June 30, 2024, and a net income of $3,074 thousand for the three months ended September 30, 2023[19]. Asset and Loan Growth - Total assets as of September 30, 2024, were $1,785,033 thousand, a decrease of 1.3% from $1,809,215 thousand on June 30, 2024, and an increase of 11.9% from $1,591,902 thousand on September 30, 2023[14]. - Total loans increased to $1,002,241 thousand as of September 30, 2024, up 1.3% from $989,898 thousand on June 30, 2024, and up 17.9% from $849,417 thousand on September 30, 2023[14]. - Gross loans reached $994,876, an increase of 17.9% compared to $843,892 in the same period last year[27]. - Loans increased from June 30, 2024, driven by growth in consumer and commercial real estate loans, with low credit risk metrics[10]. Income and Expenses - Total interest income for the nine months ended September 30, 2024, was $51,805,000, an increase of 19.4% from $43,320,000 in the same period of 2023[21]. - Total noninterest expense increased to $26,388,000, up 16.1% from $22,665,000 in the previous year[22]. - Noninterest income for the nine months ended September 30, 2024, increased due to service charges on deposits and trust income growth[6]. - Noninterest expenses increased due to the FCB acquisition and contract termination expenses, but decreased in Q3 2024 compared to Q2 2024[7]. Credit Losses and Allowances - The provision for credit losses was $1,287,000, compared to a recovery of $(368,000) in the previous year[21]. - The allowance for credit losses decreased to $10,328 thousand as of September 30, 2024, from $10,502 thousand on June 30, 2024, and increased from $10,181 thousand on September 30, 2023[14]. - The allowance for credit losses on loans to total loans ratio stood at 1.03%, down from 1.20% a year ago[29]. Equity and Shareholder Information - Stockholders' equity increased as of September 30, 2024, primarily due to the acquisition and improvement in unrealized losses on securities[11]. - Total shareholders' equity increased to $156,111, up from $126,612 in the same period last year, marking a growth of 23.2%[27]. - Book value per common share increased to $26.38 as of September 30, 2024, from $23.42 on June 30, 2024, and from $19.71 on September 30, 2023[19]. - The weighted average number of common shares outstanding increased to 6,092,468 from 5,889,687, indicating a growth in share count[22]. Efficiency and Margins - The net interest margin improved in Q3 2024 compared to Q2 2024, driven by increased loan yields outpacing deposit costs[5]. - The net interest margin for the nine months ended September 30, 2024, was 2.14%, compared to 2.45% in the same period of 2023[25]. - The efficiency ratio was reported at 69.80%, slightly higher than 67.96% from the previous year[27]. - Adjusted return on average assets (non-GAAP) is 0.42% for the nine months ended September 30, 2024, compared to 0.94% for the same period in 2023[37]. Acquisition Details - The company recorded merger-related expenses of $2.89 million during the nine months ended September 30, 2024, and a provision for credit loss of $1.29 million upon acquiring Frontier Community Bank loans[3]. - The acquisition of Frontier Community Bank totaled $16.35 million, including $14.30 million in common stock and $2.05 million in cash[4].