National Bankshares(NKSH) - 2025 Q3 - Quarterly Report

Financial Performance - Total interest income for the three months ended September 30, 2025, was $19,010,000, an increase of 1.9% from $18,651,000 in the same period of 2024[12] - Net income for the three months ended September 30, 2025, was $4,420,000, representing a 65% increase compared to $2,677,000 in the prior year[12] - Noninterest income for the three months ended September 30, 2025, was $2,537,000, an increase of 10.9% from $2,288,000 in the same period of 2024[12] - Basic net income per common share for the three months ended September 30, 2025, was $0.70, up from $0.42 in the same period of 2024[12] - Total comprehensive income for the three months ended September 30, 2025, was $10,435,000, down from $18,792,000 in the prior year[14] - Net income for the nine months ended September 30, 2025, was $9,945,000, a significant increase from $4,544,000 in the same period of 2024, representing a growth of 119%[26] - Cash dividends paid for the nine months ended September 30, 2025, totaled $4,645,000, compared to $4,303,000 in 2024, reflecting an increase of 8%[26] - The company reported a net cash provided by operating activities of $10,748,000 for the nine months ended September 30, 2025, compared to $4,020,000 in 2024, indicating a growth of 167%[26] Assets and Loans - Total assets as of September 30, 2025, were $1,802,407,000, a slight decrease from $1,811,636,000 as of December 31, 2024[10] - Total loans increased to $1,016,945,000 as of September 30, 2025, up from $988,613,000 at the end of 2024, marking a growth of 2.9%[10] - Total loans reached $1,016,945 million as of September 30, 2025, with a significant increase from $1,005,541 million in the prior period[58] - The gross loans portfolio as of September 30, 2025, was $1,016,945 million, up from $988,613 million at the end of 2024[43] - As of September 30, 2025, the total loans, net of deferred fees and costs, were $1,005,823 million, an increase from $977,688 million as of December 31, 2024[43] - The consumer real estate loans increased to $324.597 billion as of September 30, 2025, from $307.855 billion as of December 31, 2024[43] Credit Losses and Provisions - The provision for credit losses for the three months ended September 30, 2025, was $306,000, compared to a recovery of $5,000 in the same period of 2024[12] - The provision for credit losses was $618,000 for the nine months ended September 30, 2025, down from $1,287,000 in 2024, showing a decrease of 52%[26] - The provision for credit losses for the nine months ended September 30, 2025, was $581 million, compared to a recovery of $3 million in the same period of the previous year[47] - The allowance for credit losses on loans increased to $10,579 million as of September 30, 2025, compared to $10,262 million as of December 31, 2024[43] - The total provision for credit losses for the nine months ended September 30, 2025, was $37 million, reflecting ongoing risk management efforts[65] Acquisition and Market Expansion - The acquisition of Frontier Community Bank contributed $14,299,000 to additional paid-in capital as of December 31, 2023[23] - The acquisition of Frontier Community Bank expanded the company's operations into the Waynesboro, Staunton, and Lynchburg, Virginia markets, enhancing its market presence[37] - The total purchase price consideration for the acquisition of FCB was $16,349 million, consisting of $14,299 million in stock consideration and $2,050 million in cash consideration[41] - The fair value of identifiable assets acquired was $148,513 million, while the total identifiable liabilities assumed amounted to $137,038 million, resulting in a fair value of net assets acquired of $11,475 million[41] - Goodwill recorded from the acquisition was $4,874 million, reflecting expected management and operational synergies[41] Securities and Investments - As of September 30, 2025, the total amortized cost of securities available for sale was $687,097 million, with a fair value of $630,483 million, resulting in gross unrealized losses of $56,646 million[66] - The fair value of securities available for sale as of September 30, 2025, was $630.483 million, categorized under Level 2[90] - The company had 534 securities with a fair value of $603,882 million in an unrealized loss position, attributed to noncredit-related factors such as changes in interest rates[67] - The deferred tax asset for the net unrealized loss on securities available for sale was $11,889 million as of September 30, 2025, down from $16,506 million as of December 31, 2024[71] - The fair value of mortgage-backed securities was $177,663 million as of September 30, 2025, with an amortized cost of $181,664 million[66] Deposits and Equity - Total deposits decreased to $1,561,904,000 as of September 30, 2025, from $1,644,752,000 at the end of 2024, a decline of 5%[10] - The total carrying amount of deposits as of September 30, 2025, was $1.561 billion, with an estimated fair value of $1.561 billion[90] - The total stockholders' equity increased to $179,220 thousand as of September 30, 2025, up from $156,409 thousand as of December 31, 2024, representing an increase of 14.5%[10] Miscellaneous - The company recognized stock-based compensation expenses of $143,000 for the nine months ended September 30, 2025, up from $93,000 in 2024, representing a rise of 54%[26] - The company borrowed $40 million from the Federal Home Loan Bank of Atlanta and $10 million from the Federal Reserve Discount Window during Q3 2025, with a weighted average interest rate of 3.99%[113] - The company plans to keep the measurement of goodwill open until December 31, 2024, to reflect any adjustments to the fair value of assets acquired and liabilities assumed[41]