8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K

Current Report

Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) November 10, 2014

National Bankshares, Inc.

(Exact name of Registrant as specified in its charter)

Virginia	0-15204	54-1375874
(State or other jurisdiction of incorporation or organization)	(Commission File No.)	(I.R.S. Employer Identification No.)

101 Hubbard Street

Blacksburg, VA 24060

(Address of principal executive offices)

(540) 951-6300

(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report) Not applicable

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐     Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐     Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐     Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐     Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 7.01.     REGULATION FD DISCLOSURE.

On November 10, 2014, National Bankshares, Inc., the parent company of The National Bank of Blacksburg, mailed the “2014 Third Quarter Report” to stockholders containing financial information concerning the period ended September 30, 2014. A copy of the 2014 Third Quarter Report is furnished herewith as Exhibit 99.1.

ITEM 9.01.     FINANCIAL STATEMENTS AND EXHIBITS.

(d) Exhibits

99.1          2014 Third Quarter Report (period ended September 30, 2014).

SIGNATURE

Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

NATIONAL BANKSHARES, INC.

Date: November 10, 2014

By:          /s/ JAMES G. RAKES

James G. Rakes

Chairman

President and CEO

Page 2 of 2 Pages

EX-99

Exhibit 99.1

 

Message to Our Stockholders:

I write to report the earnings for National Bankshares, Inc. for the third quarter of 2014. Because we have seen tremendous growth over the years in the use of technology and access to information, this publication will be the final quarterly “Message to Stockholders” that we print and mail to stockholders. In the future, stockholders may view our quarterly earnings releases on our website www.nationalbankshares.com.

For the period ended September 30, 2014, we reported net income of approximately $4.26 million for the three months ended September 30, 2014 compared to the $4.52 million reported for the same period in 2013. For the nine months ended September 30, 2014, your Company had net income of almost $12.78 million compared to $13.17 million reported for the first nine months of 2013. At September 30, 2014, the Company had total assets of $1.12 billion.

Basic earnings per share were $1.84 which compares with $1.90 reported for the nine months ended September 30, 2013. Basic earnings per share for the third quarter of 2014 were $0.61 which compares with $0.65 for the third quarter last year. At the end of the third quarter 2014, book value per share was $23.43 which compares to $21.06 last year. The return on average assets for the nine months ended September 30, 2014 was 1.53% compared to 1.61% in 2013. The return on average equity was 10.99% and 11.70% for the same two periods.

In summary, we have had a solid three quarters of earnings. We continue to see loan and deposit growth. Our loans are up over $5 million from September 2013, our interest expense has improved while non-interest expenses remain stable, and our efficiency ratio continues to compare very favorably with our peer financial institutions.

The Board of Directors, officers and employees remain focused on maintaining our commitment to our customers. Personalized service and local decision-making remain part of our community banking fundamentals and a key to our success. On behalf of all of us, I thank you for your support and your investment.

James G. Rakes

Chairman, President

and Chief Executive Officer

National Bankshares, Inc.

Board of Directors 

Lawrence J. Ball President Moog Components Group	William A. Peery President Cargo Oil Co., Inc.
John E. Dooley Chief Executive Officer Virginia Tech Foundation, Inc. Charles E. Green, III Financial Planner AXA Advisors, LLC Jack M. Lewis President New River Community College Mary G. Miller President Interactive Design & Development, Inc.	James G. Rakes Chairman, President and CEO, National Bankshares, Inc.; Executive Chairman, National Bank; Chairman, President and CEO, National Bankshares Financial Services, Inc. Glenn P. Reynolds President Reynolds Architects Incorporated James M. Shuler Vice Chairman of the Board Virginia House of Delegates, Retired

Mission Statement

National Bankshares, Inc. strives to be an exceptional community bank holding company dedicated to providing shareholder value by offering financial services to customers through subsidiary financial institutions and affiliated companies in an efficient, friendly, personalized and cost-effective manner. We recognize that to do this, our financial institutions must retain the ability to make decisions locally and must actively participate in the communities they serve. We are committed to offering competitive and fair employment opportunities and to maintaining the highest standards in all aspects of our business.

National Bankshares, Inc. and Subsidiaries

Consolidated Statements of Income

(Unaudited)

($ In thousands, except per share data)	September 30, 2014		September 30, 2013
Interest Income
Interest and fees on loans	$	23,520	$	24,707
Interest on interest-bearing deposits		193		161
Interest on securities - taxable		5,068		4,928
Interest on securities - nontaxable		4,410		4,847
Total interest income		33,191		34,643
Interest Expense
Interest on time deposits of $100 or more		437		694
Interest on other deposits		3,320		3,921
Interests on other borrowed funds		---		---
Total interest expense		3,757		4,615
Net interest income		29,434		30,028
Provision for loan losses		1,160		1,329
Net interest income after provision for loan losses		28,274		28,699
Noninterest Income
Service charges on deposit accounts		1,833		1,922
Other service charges and fees		145		139
Credit card fees		2,687		2,427
Trust income		921		867
Bank-owned life insurance		526		546
Other income		669		687
Realized securities gains (losses), net		5		(44	)
Total noninterest income		6,786		6,544
Noninterest Expense
Salaries and employee benefits		8,954		8,963
Occupancy and furniture and fixtures		1,265		1,230
Data processing and ATM		1,183		1,288
FDIC assessment		411		408
Credit card processing		1,887		1,854
Intangibles and goodwill amortization		807		809
Net costs of other real estate owned		259		192
Franchise taxes		874		803
Other operating expense		2,738		2,697
Total noninterest expense		18,378		18,244
Income before income tax expense		16,682		16,999
Income tax expense		3,906		3,831
Net income	$	12,776	$	13,168
Basic net income per share	$	1.84	$	1.90

National Bankshares, Inc. and Subsidiaries

Consolidated Balance Sheets

(Unaudited)

($ In thousands, except share data)	September 30, 2014			September 30, 2013
Assets
Cash and due from banks	$	12,815		$	13,806
Interest-bearing deposits		87,621			63,452
Securities available for sale, at fair value		205,020			190,264
Securities held to maturity (fair value 167,409 in 2014 and 160,676 in 2013)		162,457			164,752
Restricted Stock		1,089			1,414
Mortgage loans held for sale		725			617
Loans
Loans, net of unearned income and deferred fees		595,801			590,664
Less allowance for loan losses		(8,031	)		(8,090	)
Loans, net		587,770			582,574
Bank premises and equipment, net		9,445			10,025
Accrued interest receivable		5,708			6,044
Other real estate owned, net		5,145			973
Intangible assets		7,492			8,568
Bank-owned life insurance		21,643			21,020
Other assets		9,329			13,894
Total assets	$	1,116,259			1,077,403
Liabilities and Stockholders' Equity
Noninterest-bearing demand deposits	$	153,118		$	147,928
Interest-bearing demand deposits		492,005			453,044
Savings deposits		79,870			73,952
Time deposits		223,930			248,574
Total deposits		948,923			923,498
Other borrowed funds		---			---
Accrued interest payable		67			97
Other liabilities		4,447			7,514
Total liabilities		953,437			931,109
Stockholders' equity
Preferred stock of no par value. Authorized 5,000,000 shares; none issued and outstanding		---			---
Common stock of $1.25 par value. Authorized 10,000,000 shares; issued and outstanding 6,950,474 shares in 2014 and 6,947,974 shares in 2013		8,688			8,685
Retained earnings		163,181			153,578
Accumulated other comprehensive loss, net		(9,047	)		(15,969	)
Total stockholders' equity		162,822			146,294
Total liabilities and stockholders' equity	$	1,116,259		$	1,077,403

This financial information is a high level review and discussion of recent performance and activities. For a full discussion, investors should refer to the 10/23/14 Earnings Press Release and our SEC Filings found at www.sec.gov and on the company’s web site at www.nationalbankshares.com.