Board Takes Action to More Closely Align Long-Term Incentives
with Shareholders Through Compensation Plan Changes
Shareholders Should Return WHITE Proxy Card
BLACKSBURG, Va., March 27,
2023 /PRNewswire/ -- National Bankshares, Inc. (the
"Company") (Nasdaq: NKSH) has filed its definitive proxy
statement and form of WHITE proxy card with the Securities and
Exchange Commission (the "SEC") in connection with the
Company's Annual Meeting of Shareholders to be held on May 9, 2023. The Company urged shareholders to
vote for the Board of Directors ("Board") nominees supported by the
Company.
"These outstanding directors have earned shareholders' support
by driving a successful strategy and strong results," said F.
Brad Denardo, Chairman of the Board,
President and Chief Executive Officer of the Company and its
wholly-owned subsidiary bank, The National Bank of Blacksburg. "We urge shareholders to vote for
the nominees for the Board that the Company has put forward, and
not for those nominated by a dissident shareholder."
The Company pointed to performance highlights, including:
- Decades of uninterrupted profitability and increasing dividend
payments, including through the financial crisis and the Covid-19
pandemic
- ~870% total shareholder return since January 20001, more than 2x the peer
group selected by Institutional Shareholder Services ("ISS"), an
organization that advises institutional shareholders on how to vote
at shareholder meetings
- Top tier profitability metrics driven by a low-cost, efficient
operating model
- Robust capital and liquidity that provide considerable
flexibility and resiliency
- Low-cost core deposit franchise that provides a buffer against
high interest rates
The Nominating Committee of the Board interviewed the nominees
put forward by Driver Management Company, LLC, a New York activist investor, and found that
they would not bring additive skills or expertise to the Board.
"Now is not the time to overhaul our Board, strategy or
approach," said Denardo. "Our Board is well positioned to manage
challenging times and has deep experience through previous periods
of market and economic uncertainty. Given the recent volatility the
banking sector has seen, replacing seasoned directors with
inexperienced ones would be a mistake. This Board has ensured that
the Company has ample capital and liquidity, putting us in a strong
position to withstand any challenge. We have taken action on items
that investors have expressed interest in, including returning
capital to shareholders and evolving our compensation program. We
will remain open to any ideas from shareholders on how we can best
drive long-term value."
The Company also proposed that shareholders approve a new stock
incentive plan, which will support changes to the compensation
structure for senior management and the Board. This proposal, which
was based on feedback from shareholders and ISS, would allow the
Company to implement Board-approved changes to the current
compensation program from an all-cash framework to one where senior
management are compensated in part with Company stock based on
achievement of certain target performance metrics. The Board would
also be compensated partly in Company stock instead of
all-cash.
"We've created a compensation plan that even more closely aligns
the interests of shareholders, the Board and senior executives,"
said Denardo. "We appreciate hearing from investors on this topic
and have taken action that incorporates shareholders' suggestions.
We urge shareholders to support approval of the stock incentive
plan when they vote their proxy card."
About National Bankshares
National Bankshares, Inc., headquartered in Blacksburg, Virginia, is the parent company of
The National Bank of Blacksburg,
which does business as National Bank, and of National Bankshares
Financial Services, Inc. National Bank is a community bank
operating from 24 full-service offices, primarily in southwest
Virginia, and three loan
production offices. National Bankshares Financial Services,
Inc. is an investment and insurance subsidiary in the same trade
area. The Company's stock is traded on the Nasdaq Capital
Market under the symbol "NKSH."
Forward-looking Statements
This press release contains
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. In some cases,
forward-looking statements can be identified by use of words such
as "may," "will," "anticipates," "believes," "expects," "plans,"
"estimates," "potential," "continue," "should," and similar words
or phrases. These statements are based upon current and anticipated
economic conditions, nationally and in the Company's market,
interest rates and interest rate policy, competitive factors, and
other conditions which by their nature, are not susceptible to
accurate forecast and are subject to significant uncertainty.
Because of these uncertainties and the assumptions on which this
discussion and the forward-looking statements are based, actual
future operations and results in the future may differ materially
from those indicated herein. For details on factors that could
affect these expectations, see the risk factors and other
cautionary language included in the Company's Annual Report on Form
10-K for the year ended December 31,
2022 and in the Company's other periodic and current reports
filed with the SEC. Readers are cautioned against placing undue
reliance on any such forward-looking statements. The Company's past
results are not necessarily indicative of future performance.
Important Additional Information
The Company filed a
definitive proxy statement (the "Proxy Statement"), containing a
form of white universal proxy card, with the SEC on March 24, 2023 in connection with its upcoming
2023 Annual Meeting of Shareholders. SHAREHOLDERS OF THE COMPANY
ARE URGED TO READ THE PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR
SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT DOCUMENTS FILED WITH
THE SEC CAREFULLY AND IN THEIR ENTIRETY AS THEY WILL CONTAIN
IMPORTANT INFORMATION. The Company, its directors and its executive
officers may be deemed to be participants in the solicitation of
proxies from the Company's shareholders in connection with the 2023
Annual Meeting of Shareholders. Information about the Company's
directors and executive officers is included in the Proxy
Statement. To the extent holdings of the Company's securities by
our directors and executive officers reported in the Proxy
Statement have changed, such changes have been or will be reflected
on Statements of Change in Ownership on Forms 3, 4 or 5 filed with
the SEC. Shareholders can obtain the Proxy Statement, any
amendments or supplements to the Proxy Statement, and other
documents filed by the Company with the SEC at no charge at the
SEC's website at www.sec.gov. Copies of the Company's SEC filings
are also available at no charge on the Company's website at
www.nationalbankshares.com.
Company Contact:
F. Brad Denardo
(540) 951-6213
bdenardo@nbbank.com
Investor Contact:
William P. Fiske, Georgeson LLC
(212) 440-9128
Media Contact:
Andrew
Wilson, DrivePath Advisors
(773) 425-4991
awilson@drivepathadvisors.com
1 Source: S&P Capital IQ; Note: Data as of
3/1/2023 to remove volatility related
to Silicon Valley Bank and Signature Bank failures
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SOURCE National Bankshares, Inc.