ORRVILLE, Ohio, July 20 /PRNewswire-FirstCall/ -- National Bancshares
Corporation (OTC: NBOH), the holding company of First National Bank
(http://www.fnborrville.com) reported on their second quarter 2006.
"Earning results for the second quarter of 2006 were disappointing,"
said Charles J. Dolezal, President. "Net income for the first six months of
2006 was down approximately 30% from the same period of the previous year.
This decline was driven by an increase in marketing expenses, as well as a
decline in our loan portfolio and an increase in our cost of funds. The
increase in marketing expenditures is fueling a strategic realignment of
our marketing efforts to target long run benefits from these initiatives,"
explained Dolezal. "Total assets as of June 30, 2006 were somewhat flat
when compared to the end of the second quarter of the previous year. Net
loans declined by over $13 million during this period, as commercial loan
activity slowed and we initiated more sales of fixed rate mortgage loans
into the secondary market. Total deposits increased by over $1.6 million
from June 30, 2005, as increasing interest rates attracted more time
deposits."
Dolezal concluded, "As First National Bank celebrates 125 years of
serving its communities, I, also, am celebrating a milestone. This year
marks my 30th anniversary with First National and my 25th year serving as
President and CEO. There have been many changes here during the past 30
years. The bank has grown fivefold. We have experienced branch and bank
acquisitions. We opened two new branch offices as well as an operations
center. Our holding company, National Bancshares Corporation, was formed.
We started a partially owned title company, First Kropf Title and sold a
partially owned data processing company, Bancamation, Inc. Many new lines
of loan and deposit products have been initiated, while some were
discontinued. We have experienced many changes with new laws and
regulations, which necessitate changing the way we do business. We have
seen many economic changes, particularly in interest rates, from the
double-digit rates of the early eighties to the low single digit rates of
recent years. Over these past 30 years there have been many changes and
many challenges. Through them all, it has been a privilege serving you.
Now, it is time for me to move on. At the annual meeting of shareholders on
April 27th, I announced my retirement from First National Bank. I will
continue to be with the organization until around the end of October to
help facilitate a transition to a new President and CEO. I will be moving
on to the next phase of my career as I evaluate new challenges and
opportunities elsewhere. I thank you for your support over these many years
and wish the board, management and the staff all the best in the years to
come."
National Bancshares Corporation's subsidiary, First National Bank, is
headquartered in Orrville, Ohio, with fourteen banking offices located in
Orrville, Wooster, Dalton, Kidron, Smithville, Apple Creek, Mt. Eaton,
Massillon, Lodi and Seville.
Forward-looking Statements -- This press release contains
forward-looking statements as referenced in the Private Securities
Litigation Reform Act of 1995. Forward-looking statements are necessarily
subject to many risks and uncertainties. A number of things could cause
actual results to differ materially from those indicated by the
forward-looking statements. These include factors such as changes in the
competitive marketplace, changes in the interest rate environment, economic
conditions, changes in the regulatory environment, changes in business
conditions and inflation, risks associated with credit quality and other
factors discussed in the Company's filings with the Security and Exchange
Commission, including its Annual Report on Form 10-K for the year ended
December 31, 2005. The company disclaims any obligation to publicly update
or revise any forward-looking statements on the occurrence of future
events, the receipt of new information of otherwise.
NATIONAL BANCSHARES CORPORATION
CONSOLIDATED BALANCE SHEETS (Unaudited)
June 30, 2006 June 30, 2005
ASSETS:
Cash and due from banks $9,872,781 $12,037,052
Federal funds sold 5,230,000 8,545,000
Total cash and cash equivalents 15,102,781 20,582,052
Interest bearing deposits with banks - -
Securities available for sale 65,767,433 49,227,538
Securities held to maturity 16,888,358 16,474,817
Federal bank stock 3,051,650 2,927,950
Loans held for sale 160,900 -
Total loans (excluding unearned
income) 187,936,960 201,156,848
Less: allowance for
loan losses 1,878,683 2,036,711
Loans, net 186,058,277 199,120,137
Accrued interest receivable 1,658,257 1,499,216
Premises and equipment 5,167,474 5,221,738
Other assets 9,498,266 9,029,642
TOTAL $303,353,396 $304,083,090
LIABILITIES:
Deposits:
Demand $44,234,393 $44,151,131
Savings and N.O.W.s 115,362,382 127,364,354
Time 87,086,415 73,547,407
Total deposits 246,683,190 245,062,892
Securities sold under repurchase
agreements 4,961,694 3,859,277
Federal reserve note account 92,687 475,934
Federal Home Loan Bank advances 15,000,000 17,000,000
Accrued interest payable 848,074 512,799
Other liabilities 1,966,709 2,301,634
Total liabilities 269,552,354 269,212,536
SHAREHOLDERS' EQUITY
Common Stock, without par value:
6,000,000 shares authorized
and 2,289,528 shares issued 11,447,640 11,447,640
Additional paid-in-capital 4,689,800 4,689,800
Retained earnings 20,019,363 19,635,304
Accumulated other comprehensive
income (1,166,268) 287,303
Less: Treasury shares, 55,040
shares, at cost (1,189,493) (1,189,493)
Total shareholders' equity 33,801,042 34,870,554
TOTAL $303,353,396 $304,083,090
NATIONAL BANCSHARES CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
For Six Months Ended June 30, 2006 and June 30, 2005
June 30, 2006 June 30, 2005
INTEREST & DIVIDEND INCOME:
Loans, including fees $6,159,403 $5,912,359
Federal funds sold 195,771 47,670
Interest and dividends on investments
US government obligations 755,500 451,207
Obligations of states and
political subdivisions 402,482 422,745
Other securities 839,331 969,858
Total interest & dividend income 8,352,487 7,803,839
INTEREST EXPENSE:
Deposits 2,232,866 1,348,596
Short term borrowings 80,263 31,150
Federal Home Loan Bank advances 423,612 447,313
Total interest expense 2,736,741 1,827,059
Net interest income 5,615,746 5,976,780
PROVISION FOR LOAN LOSSES - 292,500
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 5,615,746 5,684,280
NONINTEREST INCOME 812,061 883,219
NONINTEREST EXPENSE:
Salaries and employee benefits 2,934,279 2,903,862
Net occupancy expense 360,391 382,451
Other expenses 2,398,609 2,127,256
Total noninterest expense 5,693,279 5,413,569
INCOME BEFORE INCOME TAXES 734,528 1,153,930
INCOME TAXES 67,468 201,192
NET INCOME $667,060 $952,738
NET INCOME PER COMMON SHARE $0.30 $0.43