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NKSH Nasdaq· National Bankshares Inc
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NKSH Nasdaq· National Bankshares Inc
Earnings report Q3 2023

National Bankshares, Inc. Reports Strong Revenue Growth in Latest Quarter

Segments of revenue

In the latest quarter, National Bankshares, Inc. (NKSH) reported total interest income of $14.68 million, representing a significant increase from $13.16 million in the same quarter last year. This growth was primarily driven by higher interest and fees on loans, which amounted to $9.82 million, compared to $8.82 million in the previous year's quarter. Additionally, interest on securities – taxable increased to $4.08 million from $3.43 million, while interest on securities – nontaxable decreased slightly to $0.34 million from $0.41 million.

Strengths

National Bankshares, Inc. demonstrated strong revenue growth in the latest quarter, primarily due to increased interest and fees on loans. This indicates a healthy loan portfolio and suggests that the company is effectively generating interest income from its lending activities. The management comments in the report highlight the bank's focus on expanding its loan portfolio and maintaining a strong credit quality, which has contributed to the positive revenue performance.

Challenges

Despite the overall revenue growth, National Bankshares, Inc. faced challenges in managing its interest expense. The company reported interest expense of $6.04 million in the latest quarter, a significant increase from $0.75 million in the same quarter last year. This increase was primarily driven by higher interest on time deposits and other deposits. The management should closely monitor and manage interest expense to ensure it remains in line with the company's overall financial objectives.

Noteworthy

It is noteworthy that National Bankshares, Inc. reported a recovery of $0.40 million for credit losses in the latest quarter, compared to a provision of $0.25 million in the previous year's quarter. This indicates improved credit quality and a lower risk of loan defaults. The company's ability to recover credit losses reflects effective risk management practices and a favorable economic environment.

Summary

National Bankshares, Inc. delivered a strong revenue performance in the latest quarter, driven by increased interest and fees on loans. The company's focus on expanding its loan portfolio and maintaining a strong credit quality has contributed to this growth. However, the management should closely monitor and manage interest expense to ensure it remains in line with the company's financial objectives. The recovery of credit losses indicates improved credit quality and reflects effective risk management practices. Overall, National Bankshares, Inc. demonstrated positive financial performance in the latest quarter.

Source documents

Form 10-Q  filed on Nov 08, 2023
85 pages scanned

Reference data

Company financials Q3 revenue 11.6M
Analyst estimates Q3 EPS beat by 16.71%
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