National Bankshares, Inc. · NASDAQ:NKSH
National Bankshares — Q3 2023 Earnings Presentation
18 slides from National Bankshares's earnings presentation, October 2023
Slide 1: Successfully Executing Strategy to Drive Long-Term Value for All Shareholders
Successfully Executing Strategy to Drive Long-Term Value for All Shareholders National Bankshares Investor Presentation – 3rd Quarter 2023
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation of National Bankshares, Inc. (the “Company”) contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statement are subject to significant risks and uncertainties and are based u
Slide 3: Non-GAAP Financial Measures
Non-GAAP Financial Measures This presentation contains financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The Company’s management uses these non-GAAP financial measures in its analysis of the C
Slide 4: Q3 2023 Highlights
Q3 2023 Highlights EPS ROAA ROATCE Efficiency Ratio UNADJUSTED(1) $0.52 0.77% 10.1% 68.0% CORE(1) $0.47 0.69% 9.1% 68.0% ✓ Reported net income for the quarter of $3.07 million or $0.52 per common share and core net income of $2.76 million or $0.47 per common share(1) ✓ Experienced continued net inte
Slide 5: NKSH at a Glance
NKSH at a Glance Financial Highlights Founded: 1891 - The National Bank of Blacksburg (“NBB”) (as of or for the quarter ended 9/30/2023) Headquarters: Blacksburg, VA Assets $1.6 billion Ticker: NKSH (NASDAQ) Gross Loans $849 million Branches / LPOs: 25 branches(1) / 3 LPOs Deposits $1.5 billion Shar
Slide 6: Delivering Exceptional Returns to Our Shareholders
Delivering Exceptional Returns to Our Shareholders Total Shareholder Return: January 2000 to September 2023 Selected NKSH Peers(1) Financial Covid-19 Since January 2000 496% 242% Crisis Pandemic SVB Fallout (2) GFC Peak to Trough 1% -47% (2) GFC Peak to Current 141% 74% Pandemic Peak to Trough(3) -2
Slide 7: Consistently Growing Our Dividend
Consistently Growing Our Dividend Common Dividends Declared Per Share: 2000 to 2023 YTD $1.73 $1.50 $0.43 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 YTD Source: S&P Capital IQ Pro; Note: 2023 YTD includes $1.00 special divi
Slide 8: Peer-Leading Efficiency and Profitability
Peer-Leading Efficiency and Profitability Diluted Earnings Per Share 2022 Efficiency Ratio 59.3% $4.33 47.1% $3.28 NKSH Selected Peers(1) $2.65 $2.48 $2.32 2022 Pre-Provision Net Revenue / Average Assets 1.73% 1.51% 2018 2019 2020 2021 2022 NKSH Selected Peers(1) Sources: S&P Capital IQ Pro, Company
Slide 9: Dominant Market Share in Our Core Markets
Dominant Market Share in Our Core Markets Market Branches in Deposits in Deposit % of County Rank Market Market ($M) Market Share Franchise Montgomery 3 7 $683 23.4% 45.8% Tazewell 1 7 255 19.7% 17.1% Pulaski 1 3 198 39.4% 13.2% Top 3 rank in Giles 1 3 157 61.5% 10.5% counties Wythe 5 1 99 12.4% 6.6
Slide 10: Deposit Base Well Positioned for Higher Rates
Deposit Base Well Positioned for Higher Rates ✓ Retail- and small business-oriented deposit base NKSH Cost of Interest-Bearing Deposits vs Fed Funds(1) ‘22-??? ✓ Low deposit beta during last Fed tightening cycle Tightening ✓ Limited reliance on time deposits and wholesale funding ‘15-’19 Tightening
Slide 11: Responsible Lending Drives Pristine Credit Quality
Responsible Lending Drives Pristine Credit Quality ✓ Conservative underwriting standards Net Charge-offs / Average Loans: 2008 to 2022 ✓ No high-risk lending concentrations NKSH S&P U.S. BMI Banks 2.50% ✓ No lending to VC/PE industry ✓ Low LTVs and high DSCRs 2.00% ✓ Limited exposure to Covid-impact
Slide 12: Performance During Periods of Stress
Performance During Periods of Stress TSR: Financial Crisis Peak to Trough(1) TSR: Financial Crisis Peak to Current(1) 1% 141% 74% -47% 25% -80% NKSH Selected Peers(2) S&P U.S. BMI Banks NKSH Selected Peers(2) S&P U.S. BMI Banks TSR: Covid-19 Pandemic Peak to Trough(3) TSR: Covid-19 Pandemic Peak to
Slide 13: Peer-Leading Capital Levels and Return
Peer-Leading Capital Levels and Return Actual Well Dividend Payout Ratio % NBB at 9/30/2023 Ratio Capitalized 56 52 52 Total Capital 18.79% 10.00% 44 35 Tier 1 Capital 17.83% 8.00% Common Equity Tier 1 17.83% 6.50% Tier 1 Leverage 11.71% 5.00% 2018 2019 2020 2021 2022 ✓ NKSH and NBB possess robust r
Slide 14: Strong Financial Position Provides Optionality
Strong Financial Position Provides Optionality Organic Growth Mergers and ✓ Contiguous and new markets offer more growth Acquisitions prospects than legacy markets ✓ Several attractive potential Capital Return ✓ Recently established loan merger partners in and production offices in around our market
Slide 15: Appendix
| Appendix
Slide 16: Peer Group Detail
Peer Group Detail NKSH Selected Peers(1) ACNB Corporation First United Corporation American National Bankshares Inc. Limestone Bancorp Ameriserv Financial, Inc. Mid Penn Bancorp C&F Financial Corporation Old Point Financial Corporation Capstar Financial Holdings, Inc. Penns Woods Bancorp, Inc. Codor
Slide 17: Non-GAAP Reconciliations – Q3 2023
Non-GAAP Reconciliations – Q3 2023 Tangible common equity: Unadjusted efficiency ratio: Total stockholders' equity (GAAP) $116,113 Noninterest income (GAAP) $2,115 Less: Goodwill (5,848) Net interest income, FTE (Non-GAAP) 8,869 Tangible common equity (non-GAAP) 110,265 Total income for efficiency r
Slide 18: Non-GAAP Reconciliations – Q3 2023
Non-GAAP Reconciliations – Q3 2023 Unadjusted ROATCE: Net income (GAAP) $3,074 Average tangible common equity (non-GAAP) 120,764 Unadjusted ROATCE (non-GAAP) 10.10% Core ROATCE: Core net income (non-GAAP) $2,757 Average tangible common equity (non-GAAP) 120,764 Core ROATCE (non-GAAP) 9.06% Unadjuste