National Bancshares Corporation Announces First Quarter Earnings

ORRVILLE, Ohio, April 23 /PRNewswire-FirstCall/ -- Highlights:

-- Net income increased 71.1% for the first three months of 2008 to
$491,000 or $0.22 per basic and diluted earnings per share from
$287,000 or $0.13 per basic and diluted earnings per share for the
three months ended March 31, 2007.

-- Net interest income before the provision for loan losses for the first
quarter 2008 increased 3.9% or $102,000 to $2,744,000 from $2,642,000
in the first quarter 2007.

-- Noninterest income increased 44.0% to $592,000 for the quarter ended
March 31, 2008, from $411,000 for the quarter ended March 31, 2007.

-- Noninterest expense decreased 6.8% for the quarter ended March 31, 2008
to $2,489,000, from $2,672,000 for the three months ended March 31,
2007.

National Bancshares Corporation (BULLETIN BOARD: NBOH) , the holding company for First National Bank, reported net income of $491,000 for the quarter ended March 31, 2008. The 2008 earnings compares to $287,000 for the same period in 2007. Earnings per share for the first quarter of 2008 and 2007 were $0.22 and $0.13, respectively.

Net interest income for the first quarter of 2008, was $2,744,000, an increase of 3.9% from $2,642,000 for the same period in 2007. Net interest income was impacted by both a decrease in the yields on earning assets and a decrease in the cost of funds. Noninterest income for the first quarter of 2008 increased 44.0%, from $411,000 in 2007 to $592,000 in 2008. Noninterest income was influenced by the enhancement of the deposit and service charge fee structure effective July 1, 2007 and a $71,000 gain recorded in the first quarter of 2008 in connection with the initial public offering from Visa, Inc. Noninterest expense for the first quarter of 2008 was $2,489,000, a decrease of 6.8% from $2,672,000 in 2007. The decrease in noninterest expense was due primarily to a reduction in salaries and employee benefits.

Total assets increased 0.7% to $308.8 million as of March 31, 2008, from $306.7 million at December 31, 2007. Securities available for sale totaled $87.8 million as of March 31, 2008, compared to $84.5 million at December 31, 2007. Loans, net of allowance for loan losses decreased $1.2 million or 0.6% to $190.3 million as of March 31, 2008, compared to $191.5 million at December 31, 2007. Deposits decreased 1.2% to $239.5 million as of March 31, 2008, compared to $242.5 million at December 31, 2007.

The allowance for loan losses decreased from $2,028,000 as of December 31, 2007 to $1,520,000 at March 31, 2008, or from 1.05% of total loans at yearend 2007 to .79% at March 31, 2008. The decrease in the allowance for loan losses was primarily related to a $676,000 partial charge-off of a $1.7 million Summit County commercial real estate loan. The provision for loan losses for the quarter ended March 31, 2008 was $187,000. Management believes the allowance for loan losses is adequate as of March 31, 2008.

The $1.7 million commercial real estate loan was included in the Bank's impaired loan and nonaccrual loan totals as of December 31, 2007. A significant portion of the partial charge-off had been included as a specific allocation in the December 31, 2007 allowance for loan losses. Nonaccrual loans have decreased from $2,645,000 as of December 31, 2007 to $2,151,000 at March 31, 2008.

National Bancshares Corporation's subsidiary, First National Bank, is headquartered in Orrville, Ohio with thirteen banking offices in Orrville, Massillon, Wooster, Apple Creek, Dalton, 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, 2007. The Company assumes no obligation to update any forward-looking statement.

Selected Consolidated Financial Data

Balance Sheet Data:
dollars in thousands Mar 31, Dec 31, Sep 30, Jun 30, Mar 31,
2008 2007 2007 2007 2007

Cash and cash
equivalents $12,578 $12,285 $9,598 $30,026 $20,498
Securities available
for sale 87,803 84,514 82,782 82,590 79,219
Loans, net 190,264 191,488 192,158 186,019 184,148
Deposits 239,507 242,523 242,133 257,016 247,920
Repurchase agreements 9,784 8,831 8,322 9,047 7,788
Federal Home Loan
Bank advances 18,000 17,000 14,000 14,000 14,000
Shareholders' equity 35,756 34,991 34,699 34,050 34,605
Total assets 308,833 306,651 303,055 317,563 307,559

Income Statement Data:
dollars in thousands, Quarter ended
except per share data Mar 31, Mar 31,
2008 2007 Change

Interest income $4,270 $4,352 -1.9%
Interest expense 1,526 1,710 -10.8%
Net interest income 2,744 2,642 3.9%

Provision for loan losses 187 27 592.6%
Net interest income after
provision for loan losses 2,557 2,615 -2.2%
Noninterest income 592 411 44.0%
Noninterest expense 2,489 2,672 -6.8%
Income before income taxes 660 354 86.4%
Income taxes 169 67 152.2%
Net income $491 $287 71.1%
Earnings per share
Basic and diluted 0.22 0.13 69.2%
Weighted average shares
outstanding
2,205,787 2,234,488

Quarterly Earnings Summary
Previous Eight Quarters:
dollars in thousands,
except per share data

Mar Dec Sep Jun
2008 2007 2007 2007

Interest income $4,270 $4,441 $4,497 $4,542
Interest expense 1,526 1,718 1,756 1,784
Net interest income 2,744 2,723 2,741 2,758

Provision for loan losses 187 120 - - Net interest income after
provision for loan losses 2,557 2,603 2,741 2,758
Noninterest income 592 602 553 424
Noninterest expense 2,489 2,387 2,620 2,821
Income before income taxes 660 818 674 361
Income taxes 169 215 167 47
Net income $491 $603 $507 $314
Earnings per share
Basic and diluted $0.22 $0.27 $0.23 $0.14
Cash dividends per share $0.16 $0.16 $0.16 $0.16
Weighted average shares
outstanding 2,205,787 2,222,115 2,234,488 2,234,488

Mar Dec Sep Jun
2007 2006 2006 2006

Interest income $4,352 $4,426 $4,379 $4,187
Interest expense 1,710 1,699 1,559 1,466
Net interest income 2,642 2,727 2,820 2,721

Provision for loan losses 27 120 40 - Net interest income after
provision for loan losses 2,615 2,607 2,780 2,721
Noninterest income 411 412 429 378
Noninterest expense 2,672 2,843 2,818 2,976
Income before income taxes 354 176 391 123
Income taxes 67 -18 88 -36
Net income $287 $194 $303 $159
Earnings per share
Basic and diluted $0.13 $0.09 $0.14 $0.07
Cash dividends per share $0.16 $0.16 $0.16 $0.16
Weighted average shares
outstanding 2,234,488 2,234,488 2,234,488 2,234,488

First Call Analyst:
FCMN Contact:

Source: National Bancshares Corporation

CONTACT: David C. Vernon, President and CEO of National Bancshares
Corporation, +1-330-682-1010, Fax: +1-330-684-2154

Web site: http://www.fnborrville.com/

2008-04-23 18:28:11 0343798 PRNEWSWIRE