EX-1 2 financials4q12.txt FINANCIAL STATEMENTS Exhibit 99.1 PRESS RELEASE Company: National Bancshares Corporation OTC Bulletin Board - NBOH Contact: Mark R. Witmer, President and CEO Address: 112 West Market Street Orrville, Ohio 44667 Phone: 330.682.1010 Fax: 330.682.4644 For Immediate Release: February 22, 2013 National Bancshares Corporation Announces 2012 Net Income of $2,811,000 Orrville, Ohio ~ National Bancshares Corporation, the holding company for First National Bank, reported net income of $2,811,000 for the year ended December 31, 2012, an increase of $199,000 or 7.6% from $2,612,000 in 2011. Earnings per share were $1.27 for 2012 compared to $1.18 for 2011. Net income for the three months ended December 31, 2012 was $937,000 compared to $774,000 for the same period in 2011. For the fourth quarter, basic and diluted earnings per share were $0.42 compared to $0.35 for the fourth quarter of 2011. Full-Year 2012 Business Highlights: ~ Net interest income for the year increased $864,000 to $14,227,000, an increase of 6.5% compared to $13,363,000 for the same period in 2011, the highest level of net interest income in the Bank`s history. ~ Mortgage banking activities were $560,000 in 2012, an increase of 118.8% compared to $256,000 in 2011. ~ Total loans increased $51.8 million or 23.9% from $217.1 million as of December 31, 2011 to $268.9 million as of December 31, 2012. The loan to asset ratio increased from 53% as of December 31, 2011 to 61% as of December 31, 2012. ~ Loans secured by farmland and agricultural production loans were $35.3 million as of December 31, 2012, an increase of $19.9 million, or 130.1% since year end 2011. ~ One-to-four family loans increased from $56.9 million at December 31, 2011 to $70.3 million at December 31, 2012. ~ Total deposits increased $26.4 million or 7.7% from $340.7 million as of December 31, 2011 to $367.1 million as of December 31, 2012. ~ Shareholder`s equity increased $2.6 million or 6.0% to $45.3 million as of December 31, 2012. 1 Full-Year 2012 Financial Summary: Net interest income for 2012 was $14,227,000, an increase of 6.5% from $13,363,000 for 2011. Net interest income was positively impacted by the growth in average balances of loans and lower-cost deposits, partially offset by a decline in the yield on earning assets. The provision for loan losses increased $774,000 from $600,000 in 2011 to $1,374,000 in 2012. The increase in the provision for loan losses is primarily related to changes in the collateral valuations based on information obtained in 2012 for two commercial real estate loan relationships. Noninterest income for 2012 decreased $135,000 or 4.5%, from $3,032,000 in 2011 to $2,897,000 in 2012. Mortgage banking activities were $560,000 in 2012, compared to $256,000 in 2011. Noninterest income in 2011 included $171,000 of gains recorded on the sale of the guaranteed portion of six Small Business Administration (SBA) loans and $214,000 of gains recorded on the sale of securities. No SBA loans or securities were sold in 2012. In 2011, $121,000 of income from the death benefit of an insurance policy was recorded. Noninterest expense for 2012 was $12,388,000, a decrease of 2.8% from $12,739,000 in 2011, due primarily to a decrease of $205,000 in professional and consulting expense, primarily related to a reduction of legal expenses and a reduction in the use of outside information technology consultants. Amortization of intangibles and Directors pension expense also decreased in 2012. These declines were partially offset by a $139,000 increase in salaries and employee benefits. December 31, 2012 Financial Condition: Total assets increased 8.6% to $440.8 million as of December 31, 2012, from $406.1 million at December 31, 2011. Securities available for sale totaled $121.7 million as of December 31, 2012, compared to $150.2 million at December 31, 2011. Loans, net of allowance for loan losses increased $51.6 million to $265.5 million as of December 31, 2012, compared to $214.0 million at December 31, 2011. Deposits increased 7.7% to $367.1 million as of December 31, 2012, compared to $340.7 million at December 31, 2011. Shareholders` equity increased 6.0% to $45.3 million at the end of 2012, from $42.7 million at the end of 2011. Accumulated other comprehensive income increased to $3.9 million as of December 31, 2012, compared to $3.6 million as of December 31, 2011. The change in accumulated other comprehensive income was a result of an increase in unrealized gains on securities available for sale, net of tax. The allowance for loan losses increased from $3,163,000 as of December 31, 2011 to $3,400,000 at December 31, 2012, or changed from 1.46% of total loans at year-end 2011 to 1.26% at December 31, 2012. Net charge-offs increased from $22,000 in 2011 to $1,137,000 in 2012. The provision for loan losses for 2012 was $1,374,000, compared to $600,000 in 2011. The increase in the allowance for loan losses in 2012 was primarily related to the increase in loans. 2 Total nonperforming loans decreased from $4.0 million as of December 31, 2011 to $1.2 million at December 31, 2012. Non-performing loans consist of loans placed on non-accrual status and loans past due over 90 days and still accruing interest. Loans past due between 30 and 90 days and still accruing decreased to $339 thousand at December 31, 2012 from $634 thousand as of December 31, 2011. In 2012, total classified loans decreased from $12.1 million to $8.7 million. Management believes the allowance for loan losses is adequate as of December 31, 2012. Fourth-Quarter 2012 Financial Summary: Net interest income for the quarter ended December 31, 2012 was $3,678,000, an increase of 6.4% from $3,457,000 for the same period in 2011. Noninterest income for the three month period ended December 31, 2012 decreased 4.4%, from $862,000 in 2011 to $824,000 in 2012. Mortgage banking activities increased from $111,000 during the quarter ended December 31, 2011 to $236,000 during the same period in 2012. In 2011, $121,000 of income from the death benefit of an insurance policy was recorded in other noninterest income. Noninterest expense for the quarter ended December 31, 2012 was $3,282,000, a decrease of 0.2% from $3,289,000 in 2011. Salaries and benefits expenses was $1,656,000 for the quarter ended December 31, 2012, an increase of $101,000 compared to the same period in 2011. Directors pension expense was $28,000 for the period ended December 31, 2012, a decrease of $106,000 compared to the quarter ended December 31, 2011. National Bancshares Corporation`s subsidiary, First National Bank, is headquartered in Orrville, Ohio with fourteen banking offices in Orrville, Massillon, Wooster, Apple Creek, Dalton, Fairlawn, Kidron, Lodi, Mt. Eaton, Seville and Smithville. 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 subject to many risks and uncertainties. Actual results could differ materially from those indicated by the forward-looking statements. These include factors such as 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 U.S. Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2011. The Company assumes no obligation to update any forward-looking statement. 3 Selected Consolidated Financial Data (Unaudited) Balance Sheet Data:

Income Statement Data: (dollars in thousands, except per share data) Twelve months ended

Income Statement Data: (dollars in thousands, except per share data) Three months ended

4 Quarterly Earnings Summary (Unaudited) Previous Eight Quarters:

Dec Sep Jun Mar 2011 2011 2011 2011 Interest income $ 3,926 $ 3,920 $ 3,892 $ 3,675 Interest expense 469 481 522 578 Net interest income 3,457 3,439 3,370 3,097 Provision for loan losses 153 150 150 147 Net interest income after provision for loan losses 3,304 3,289 3,220 2,950 Noninterest income 862 817 621 732 Noninterest expense 3,289 3,156 3,148 3,146 Income (loss) before income taxes 877 950 693 536 Income tax expense (benefit) 103 188 104 49 Net income $ 774 $ 762 $ 589 $ 487 Earnings per share: Basic and diluted $ 0.35 $ 0.34 $ 0.27 $ 0.22 Cash dividends per share $ 0.08 $ 0.08 $ 0.08 $ 0.08 Weighted average shares outstanding, basic 2,213,269 2,213,269 2,209,717 2,209,717 Weighted average shares outstanding, diluted 2,213,269 2,213,269 2,209,717 2,209,717

NATIONAL BANCSHARES CORP /OH/ 8-K