National Bankshares, Inc. · NASDAQ:NKSH
National Bankshares — Investor Presentation (May 2023)
19 slides from National Bankshares's investor presentation, May 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 – 1st 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: Q1 2023 Highlights
Q1 2023 Highlights EPS ROAA ROATCE Efficiency Ratio UNADJUSTED(1) $0.77 1.13% 15.6% 57.4% CORE(1) $0.80 1.17% 16.2% 55.0% ✓ Reported net income for the quarter of $4.53 million or $0.77 per common share – core net income of $4.71 million or $0.80 per common share(1) ✓ Maintained solid liquidity posi
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 3/31/2023) Headquarters: Blacksburg, VA Assets $1.6 billion Ticker: NKSH (NASDAQ) Gross Loans $857 million Branches / LPOs: 24 branches / 3 LPOs Deposits $1.5 billion Shareho
Slide 6: Delivering Exceptional Returns to Our Shareholders
Delivering Exceptional Returns to Our Shareholders Total Shareholder Return: January 2000 to May 2023 Selected NKSH Peers(1) Financial Covid-19 Since January 2000 596% 233% Crisis Pandemic SVB Fallout (2) GFC Peak to Trough 1% -47% (2) GFC Peak to Current 181% 69% Pandemic Peak to Trough(3) -23% -36
Slide 7: Consistently Growing Our Dividend
Consistently Growing Our Dividend Common Dividends Declared Per Share: 2000 to 2023 YTD $1.50 Special Dividend $1.00 $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 7
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 1 7 $740 24.6% 46.8% Tazewell 1 7 260 21.1% 16.4% Pulaski 2 3 188 33.1% 11.9% #1 rank in Giles 1 3 151 60.0% 9.6% counties Wythe 1 1 138 17.8% 8.8% r
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 ‘15-’19 ✓ Limited reliance on time deposits and wholesale funding 4.51% Tight
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: A Safe Haven During Uncertain Times
A Safe Haven During Uncertain Times “More broadly, NKSH is one of the most consistent performers we cover, with the best deposit base in our universe, a conservative credit posture and clean balance sheet. All of these factors offer offensive and defensive characteristics in a highly uncertain envir
Slide 13: Outperforming During Periods of Stress
Outperforming During Periods of Stress TSR: Financial Crisis Peak to Trough(1) TSR: Financial Crisis Peak to Current(1) 1% 181% 69% -47% 10% -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 t
Slide 14: Peer-Leading Capital Levels and Return
Peer-Leading Capital Levels and Return Actual Well Dividend Payout Ratio % NBB at 3/31/2023 Ratio Capitalized 56 52 52 Total Capital 18.00% 10.00% 44 35 Tier 1 Capital 17.00% 8.00% Common Equity Tier 1 17.00% 6.50% Tier 1 Leverage 11.01% 5.00% 2018 2019 2020 2021 2022 ✓ NKSH and NBB possess robust r
Slide 15: 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 16: Appendix
| Appendix
Slide 17: 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 18: Non-GAAP Reconciliations
Non-GAAP Reconciliations As of or for the period ended 3/31/2023 Tangible common equity: Unadjusted efficiency ratio: Total stockholders' equity (GAAP) $131,043 Noninterest income (GAAP) $2,199 Less: Goodwill (5,848) Net interest income, FTE (Non-GAAP) 11,155 Tangible common equity (non-GAAP) 125,19
Slide 19: Non-GAAP Reconciliations
Non-GAAP Reconciliations As of or for the period ended 3/31/2023 Unadjusted ROATCE: Net income (GAAP) $4,531 Average tangible common equity (non-GAAP) 118,148 Unadjusted ROATCE (non-GAAP) 15.6% Core ROATCE: Core net income (non-GAAP) $4,706 Average tangible common equity (non-GAAP) 118,148 Core ROAT
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