National Bankshares earns $15.5M in nine months of 2026
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
National Bankshares, Inc. (NKSH) reported net income of $15.498 million for the nine months ended September 30, 2026, compared with $9.945 million in the same 2025 period; net interest income was $39.520 million versus $32.915 million. In the third quarter, net income was $5.488 million, compared with $4.420 million a year earlier.
Net cash provided by operating activities for the nine months was $13.998 million, compared with $10.748 million. The company recorded an after-tax unrealized holding loss on available-for-sale securities of $24.628 million, versus a $17.368 million gain in the prior-year period. Total comprehensive loss was $3.956 million, compared with total comprehensive income of $27.313 million.
At September 30, 2026, total assets were $1,783.201 million and total deposits were $1,577.178 million, versus $1,824.506 million and $1,626.933 million, respectively, at December 31, 2025. Net loans were $1,007.282 million at September 30, 2026, compared with $989.418 million at December 31, 2025. Dividends declared for the nine months were $0.75 per common share.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointNine-month net income: $15.498 million versus $9.945 million.
- Moderate pointNine-month operating cash flow: $13.998 million versus $10.748 million.
Negative
- Moderate pointNine-month comprehensive loss: $3.956 million versus $27.313 million income.
Filing Explained
For the nine months ended September 30, 2026, income included a $6,566 thousand equity-sale gain and a $6,549 thousand securities-sale loss.
The Form 10-Q is an unaudited quarterly report; at
For the nine months ended September 30, 2026, the income statement records a
Key Figures
Key Terms
allowance for credit losses on loans financial
available for sale securities financial
nonaccrual loans financial
collateral dependent loans financial
amortized cost financial
accumulated other comprehensive loss financial
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What was NKSH's diluted EPS for the first nine months of 2026?
What dividend per share did NKSH declare in the first nine months of 2026?
AI-generated analysis. How Rhea-AI works. Not financial advice.
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly period ended |
For the transition period from ________ to ________
Commission File Number:
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
(Address of principal executive offices) (Zip Code)
(
(Registrant’s telephone number, including area code)
(Not applicable)
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b–2 of the Exchange Act.
Large accelerated filer ☐ |
Accelerated filer ☐ |
Smaller reporting company |
Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
Outstanding shares of common stock at November 12, 2026 |
Table of Contents
NATIONAL BANKSHARES, INC.
Form 10-Q
Index
Part I – Financial Information |
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Item 1 |
Financial Statements |
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Consolidated Balance Sheets, September 30, 2026 (Unaudited) and December 31, 2025 |
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Consolidated Statements of Income for the Three Months Ended September 30, 2026 and 2025 (Unaudited) |
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Consolidated Statements of Comprehensive (Loss) Income for the Three Months Ended September 30, 2026 and 2025 (Unaudited) |
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Consolidated Statements of Income for the Nine Months Ended September 30, 2026 and 2025 (Unaudited) |
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Consolidated Statements of Comprehensive (Loss) Income for the Nine Months Ended September 30, 2026 and 2025 (Unaudited) |
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Consolidated Statements of Changes in Stockholders’ Equity for the Three Months Ended September 30, 2026 and 2025 (Unaudited) |
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Consolidated Statements of Changes in Stockholders' Equity for the Nine Months Ended September 30, 2026 and 2025 (Unaudited) |
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Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2026 and 2025 (Unaudited) |
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Notes to Consolidated Financial Statements (Unaudited) |
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Item 2 |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
30 |
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Item 3 |
Quantitative and Qualitative Disclosures About Market Risk |
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Item 4 |
Controls and Procedures |
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Part II – Other Information |
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Item 1 |
Legal Proceedings |
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Item 1A |
Risk Factors |
44 |
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Item 2 |
Unregistered Sales of Equity Securities and Use of Proceeds |
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Item 3 |
Defaults Upon Senior Securities |
44 |
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Item 4 |
Mine Safety Disclosures |
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Item 5 |
Other Information |
44 |
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Item 6 |
Exhibits |
44 |
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Signatures |
46 |
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2
Table of Contents
Part I - FINANCIAL INFORMATION
Item 1. Financial Statements
National Bankshares, Inc.
Consolidated Balance Sheets
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(Unaudited) |
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(in thousands, except share and per share data) |
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September 30, 2026 |
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December 31, 2025 |
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Assets |
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Cash and due from banks |
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Interest-bearing deposits |
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Total cash and cash equivalents |
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Securities available for sale, at fair value |
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Mortgage loans held for sale |
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Loans: |
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Real estate construction loans |
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Consumer real estate loans |
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Commercial real estate loans |
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Commercial non real estate loans |
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Public sector and IDA loans |
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Consumer non real estate loans |
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Total loans |
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Less: deferred fees and costs |
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Loans, net of deferred fees and costs |
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Less: allowance for credit losses on loans |
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Loans, net |
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Premises and equipment, net |
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Accrued interest receivable |
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Goodwill |
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Core deposit intangible, net |
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Bank-owned life insurance ("BOLI") |
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Other assets |
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Total assets |
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$ |
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$ |
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Liabilities and Stockholders' Equity |
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Noninterest-bearing demand deposits |
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$ |
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$ |
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Interest-bearing demand deposits |
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Savings deposits |
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Time deposits |
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Total deposits |
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Borrowings |
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- |
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Accrued interest payable |
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Other liabilities |
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Total liabilities |
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Commitments and contingencies |
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Stockholders' Equity |
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Preferred stock, |
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$ |
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$ |
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Common stock of $ |
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Retained earnings |
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Accumulated other comprehensive loss, net |
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Total stockholders' equity |
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Total liabilities and stockholders' equity |
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$ |
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$ |
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See accompanying notes to consolidated financial statements.
3
Table of Contents
National Bankshares, Inc.
Consolidated Statements of Income
(Unaudited)
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Three Months Ended September 30, |
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(in thousands, except share and per share data) |
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2026 |
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2025 |
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Interest Income |
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Interest and fees on loans |
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$ |
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$ |
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Interest on interest-bearing deposits |
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Interest on securities – taxable |
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Interest on securities – nontaxable |
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Total interest income |
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Interest Expense |
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Interest on time deposits |
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Interest on other deposits |
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Interest on borrowings |
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Total interest expense |
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Net interest income |
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Provision for credit losses |
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Net interest income after provision for credit losses |
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Noninterest Income |
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Service charges on deposit accounts |
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Other service charges and fees |
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Credit and debit card fees, net |
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Trust income |
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BOLI income |
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Gain on sale of mortgage loans held for sale |
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Other income |
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Total noninterest income |
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Noninterest Expense |
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Salaries and employee benefits |
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Occupancy, furniture and fixtures |
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Data processing |
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FDIC assessment |
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Intangible asset amortization |
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Franchise taxes |
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Professional services |
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Core system conversion expense |
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Other operating expenses |
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Total noninterest expense |
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Income before income tax |
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Income tax expense |
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Net Income |
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$ |
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$ |
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Basic net income per common share |
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$ |
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$ |
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Diluted net income per common share |
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$ |
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$ |
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Weighted average number of common shares outstanding, basic |
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Weighted average number of common shares outstanding, diluted |
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See accompanying notes to consolidated financial statements.
4
Table of Contents
National Bankshares, Inc.
Consolidated Statements of Comprehensive (Loss) Income
Three Months Ended September 30, 2026 and 2025
(Unaudited)
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Three months ended September 30, |
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(in thousands) |
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2026 |
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2025 |
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Net Income |
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$ |
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$ |
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Other Comprehensive (Loss) Income, Net of Tax |
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Unrealized holding (loss) gain on available for sale securities net of tax of ($ |
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( |
) |
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Other comprehensive (loss) income, net of tax |
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( |
) |
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Total Comprehensive (Loss) Income |
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$ |
( |
) |
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$ |
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See accompanying notes to consolidated financial statements.
5
Table of Contents
National Bankshares, Inc.
Consolidated Statements of Income
(Unaudited)
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For the Nine Months Ended September 30, |
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(in thousands, except share and per share data) |
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2026 |
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2025 |
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Interest Income |
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Interest and fees on loans |
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$ |
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$ |
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Interest on federal funds sold |
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Interest on interest-bearing deposits |
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Interest on securities – taxable |
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Interest on securities – nontaxable |
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Total interest income |
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Interest Expense |
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Interest on time deposits |
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Interest on other deposits |
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Interest on borrowings |
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Total interest expense |
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Net interest income |
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Provision for credit losses |
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Net interest income after provision for credit losses |
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Noninterest Income |
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Service charges on deposit accounts |
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Other service charges and fees |
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Credit and debit card fees, net |
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Trust income |
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BOLI income |
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Gain on sale of mortgage loans held for sale |
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Other income |
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Gain on sale of equity investment |
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- |
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Loss on sale of securities, net |
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( |
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- |
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Total noninterest income |
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Noninterest Expense |
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Salaries and employee benefits |
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Occupancy, furniture and fixtures |
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Data processing |
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FDIC assessment |
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Intangible asset amortization |
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Franchise taxes |
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Professional services |
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Core system conversion expense |
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Other operating expenses |
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Total noninterest expense |
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Income before income tax expense |
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Income tax expense |
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Net Income |
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$ |
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$ |
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Basic net income per common share |
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$ |
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$ |
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Diluted net income per common share |
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$ |
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$ |
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Weighted average number of common shares outstanding, basic |
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Weighted average number of common shares outstanding, diluted |
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Dividends declared per common share |
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$ |
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$ |
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See accompanying notes to consolidated financial statements.
6
Table of Contents
National Bankshares, Inc.
Consolidated Statements of Comprehensive (Loss) Income
Nine Months Ended September 30, 2026 and 2025
(Unaudited)
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For the Nine Months Ended September 30, |
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(in thousands) |
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2026 |
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2025 |
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Net Income |
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$ |
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$ |
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Other Comprehensive (Loss) Income, Net of Tax |
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Unrealized holding (loss) gain on available for sale securities net of tax of ($ |
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( |
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Reclassification adjustment for loss included in net income, net of tax of $ |
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- |
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Other comprehensive (loss) income, net of tax |
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( |
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Total Comprehensive (Loss) Income |
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$ |
( |
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$ |
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See accompanying notes to consolidated financial statements.
7
Table of Contents
National Bankshares, Inc.
Consolidated Statements of Changes in Stockholders’ Equity
Three Months Ended September 30, 2026 and 2025
(Unaudited)
(in thousands except per share data) |
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Common Stock and Additional Paid-in Capital |
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Retained Earnings |
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Accumulated Other Comprehensive Loss |
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Total |
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Balances at June 30, 2025 |
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$ |
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$ |
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$ |
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$ |
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Net income |
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Other comprehensive income, net of tax of $ |
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Stock based compensation |
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Balances at September 30, 2025 |
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$ |
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$ |
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$ |
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$ |
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Balances at June 30, 2026 |
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$ |
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$ |
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$ |
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$ |
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Net income |
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Other comprehensive income, net of tax of ($ |
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Stock based compensation |
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Balances at September 30, 2026 |
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$ |
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$ |
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$ |
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$ |
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Nine Months Ended September 30, 2026 and 2025
(Unaudited)
(in thousands except per share data) |
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Common |
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Retained |
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Accumulated |
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Total |
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Balances at December 31, 2024 |
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$ |
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$ |
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$ |
( |
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$ |
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Net income |
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Cash dividends of $ |
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Other comprehensive income, net of tax of $ |
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Stock based compensation |
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Balances at September 30, 2025 |
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$ |
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$ |
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$ |
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$ |
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|
||||
Balances at December 31, 2025 |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
Net income |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash dividends of $ |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
Other comprehensive income, net of tax of ($ |
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
||
Stock based compensation |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Balances at September 30, 2026 |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
See accompanying notes to consolidated financial statements.
8
Table of Contents
National Bankshares, Inc.
Consolidated Statements of Cash Flows
Nine Months Ended September 30, 2026 and 2025
(Unaudited)
|
|
For the Nine Months Ended September 30, |
|
|||||
(in thousands) |
|
2026 |
|
|
2025 |
|
||
Cash Flows from Operating Activities |
|
|
|
|
|
|
||
Net income |
|
$ |
|
|
$ |
|
||
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
||
Provision for credit losses |
|
|
|
|
|
|
||
Depreciation of premises and equipment |
|
|
|
|
|
|
||
Amortization of premiums and accretion of discounts on securities, net |
|
|
|
|
|
|
||
Loss on sale of securities available for sale, net |
|
|
|
|
|
- |
|
|
Amortization of core deposit intangible |
|
|
|
|
|
|
||
Accretion of fair value of acquired loans |
|
|
( |
) |
|
|
( |
) |
Amortization of fair value of acquired time deposits and leases |
|
|
|
|
|
|
||
Origination of mortgage loans held for sale |
|
|
( |
) |
|
|
( |
) |
Proceeds from sale of mortgage loans held for sale |
|
|
|
|
|
|
||
Gain on sale of mortgage loans held for sale |
|
|
( |
) |
|
|
( |
) |
Increase in cash value of bank-owned life insurance |
|
|
( |
) |
|
|
( |
) |
Gain on disposal of premises and equipment, net |
|
|
( |
) |
|
|
( |
) |
Gain on sale of equity investment |
|
|
( |
) |
|
|
- |
|
Equity based compensation expense |
|
|
|
|
|
|
||
Net change in: |
|
|
|
|
|
|
||
Accrued interest receivable |
|
|
( |
) |
|
|
( |
) |
Other assets |
|
|
( |
) |
|
|
|
|
Accrued interest payable |
|
|
( |
) |
|
|
|
|
Other liabilities |
|
|
( |
) |
|
|
|
|
Net cash provided by operating activities |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Cash Flows from Investing Activities |
|
|
|
|
|
|
||
Proceeds from repayments of mortgage-backed securities |
|
|
|
|
|
|
||
Proceeds from calls, sales and maturities of securities available for sale |
|
|
|
|
|
|
||
Purchases of available for sale securities |
|
|
( |
) |
|
|
( |
) |
Net change in restricted stock |
|
|
( |
) |
|
|
( |
) |
Proceeds from sale of equity investment |
|
|
|
|
|
- |
|
|
Purchase of loan participations |
|
|
( |
) |
|
|
( |
) |
Collection of loan participations |
|
|
|
|
|
|
||
Loan originations and principal collections, net |
|
|
( |
) |
|
|
( |
) |
Recoveries on loans charged off |
|
|
|
|
|
|
||
Purchases of premises and equipment |
|
|
( |
) |
|
|
( |
) |
Proceeds from sale of premises and equipment |
|
|
|
|
|
|
||
Net cash (used in) provided by investing activities |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
||
Cash Flows from Financing Activities |
|
|
|
|
|
|
||
Net change in time deposits |
|
|
( |
) |
|
|
( |
) |
Net change in other deposits |
|
|
( |
) |
|
|
( |
) |
Cash dividends paid |
|
|
( |
) |
|
|
( |
) |
Net change in borrowings |
|
|
|
|
|
|
||
Net cash used in financing activities |
|
|
( |
) |
|
|
( |
) |
Net change in cash and cash equivalents |
|
|
( |
) |
|
|
( |
) |
Cash and cash equivalents at beginning of period |
|
|
|
|
|
|
||
Cash and cash equivalents at end of period |
|
$ |
|
|
$ |
|
||
9
Table of Contents
|
|
For the Nine Months Ended September 30, |
|
|||||
(in thousands) |
|
2026 |
|
|
2025 |
|
||
Supplemental Disclosures of Cash Flow Information |
|
|
|
|
|
|
||
Cash payments for: |
|
|
|
|
|
|
||
Interest on deposits and borrowings |
|
$ |
|
|
$ |
|
||
Income taxes |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Supplemental Disclosure of Noncash Activities |
|
|
|
|
|
|
||
Loans charged against the allowance for credit losses |
|
$ |
|
|
$ |
|
||
Unrealized holding (loss) gain on securities available for sale |
|
|
( |
) |
|
|
|
|
Lease liabilities arising from obtaining right-of-use assets during the period |
|
|
- |
|
|
|
|
|
See accompanying notes to consolidated financial statements.
10
Table of Contents
National Bankshares, Inc.
Notes to Consolidated Financial Statements
September 30, 2026
(Unaudited)
$ in thousands, except per share data
Note 1: General and Summary of Significant Accounting Policies
The consolidated financial statements of National Bankshares, Inc. (“NBI”) and its wholly-owned subsidiaries, The National Bank of Blacksburg (the “Bank” or “NBB”) and National Bankshares Financial Services, Inc. (“NBFS”) (collectively, the “Company”), conform to accounting principles generally accepted in the United States of America (“GAAP”) and to general practices within the banking industry. All intercompany accounts and transactions between the Company and its subsidiaries have been eliminated. The accompanying interim period consolidated financial statements are unaudited; however, in the opinion of the Company’s management, all adjustments consisting of normal recurring adjustments, which are necessary for a fair presentation of the consolidated financial statements, have been included.
Application of the principles of GAAP and practices within the banking industry require management to make estimates, assumptions, and judgments that affect the amounts reported in the financial statements and accompanying notes. These estimates, assumptions, and judgments are based on information available as of the date of the financial statement; accordingly, as this information changes, the financial statements may reflect different estimates, assumptions, and judgments. Certain policies inherently rely more extensively on the use of estimates, assumptions, and judgments and as such may have a greater possibility of producing results that could be materially different than originally reported. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for credit losses on loans and pension plan.
The results of operations for the three and nine months ended September 30, 2026 are not necessarily indicative of results of operations for the full year or any other interim period. The interim period consolidated financial statements and financial information included in this Form 10-Q should be read in conjunction with the notes to consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 (“2025 Form 10-K”). The Company’s significant accounting policies followed in preparation of the unaudited consolidated financial statements are disclosed in Note 1 of the Company's 2025 Form 10-K. All amounts and disclosures included in this quarterly report as of December 31, 2025, were derived from the Company’s audited consolidated financial statements. Certain items in the prior period financial statements have been reclassified to conform to the current presentation. These reclassifications had no effect on prior year net income or stockholders’ equity. The Company posts all reports required to be filed under the Securities Exchange Act of 1934 on its web site at www.nationalbankshares.com.
Risks and Uncertainties
The Company is closely monitoring risks that may impact its business, including inflation, along with U.S. monetary policy maneuvers to manage inflation. Inflation and U.S. monetary policy maneuvers to reduce it may impact the Company’s customers’ demand for banking services and ability to qualify for and/or repay loans. These risks could adversely affect the Company’s business, financial condition, results of operations, cash flows, credit risk, asset valuations and capital position.
Recent Accounting Pronouncements
ASU 2025-08
In November 2025, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update (“ASU”) 2025-08,“Financial Instruments—Credit Losses (Topic 326): Purchased Loans.” The amendments in this ASU expand the population of acquired financial assets accounted for using the gross-up approach. Acquired loans (excluding credit cards) are deemed purchased seasoned loans and accounted for using the gross-up approach upon acquisition if criteria established by the new guidance are met. This change aims to enhance comparability, consistency, and better reflect the economics of acquiring financial assets. This ASU is effective for annual reporting periods beginning after December 15, 2026, and for interim reporting periods within those annual reporting periods. Early adoption is permitted in an interim or annual reporting period in which financial statements have not yet been issued or made available for issuance. If an entity adopts this ASU in an interim reporting period, it should apply it as of the beginning of that interim reporting period or the beginning of the annual reporting period that includes that interim reporting period. The Company does not expect the adoption of ASU 2025-08 to have a material impact on its consolidated financial statements at the time of adoption; however, is considering the impacts to future acquisition activity.
ASU 2024-03
In November 2024, the FASB issued ASU 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses.” ASU 2024-03 requires public companies to disclose, in the notes to the financial statements, specified information about certain costs and expenses at each interim and annual reporting period. This includes disclosing amounts related to employee compensation, depreciation, and intangible asset amortization. In addition, public companies will need to provide qualitative description of the amounts remaining in relevant expense
11
Table of Contents
captions that are not separately disaggregated quantitatively. The FASB subsequently issued ASU 2025-01, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date”, which amends the effective date of ASU 2024-03 to clarify that all public business entities are required to adopt the guidance in ASU 2024-03 in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption of ASU 2024-03 is permitted. The Company does not expect the adoption of ASU 2024-03 to have a material impact on its consolidated financial statements.
Note 2: Loans and Allowance for Credit Losses
Loans
Loans include acquired loans and originated loans. Acquired loans are presented at their outstanding principal balance, net of the remaining purchase discount of $
Past Due and Nonaccrual Loans
The following tables present the aging of past due loans, by loan pool, as of the dates indicated.
September 30, 2026 |
|
Accruing |
|
|
Accruing |
|
|
Accruing |
|
|
Nonaccrual |
|
|
Total |
|
|
Accruing |
|
||||||
Real Estate Construction |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Construction, 1-4 family residential |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Construction, other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Consumer Real Estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Equity line |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Residential closed-end first liens |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Residential closed-end junior liens |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Investor-owned residential real estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Commercial Real Estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Multifamily residential real estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Commercial real estate owner-occupied |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Commercial real estate, other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Commercial Non Real Estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Commercial and industrial |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Public Sector and IDA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
States and political subdivisions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Consumer Non Real Estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Credit cards |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Automobile |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Other consumer loans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
12
Table of Contents
December 31, 2025 |
|
Accruing |
|
|
Accruing |
|
|
Accruing |
|
|
Nonaccrual |
|
|
Total |
|
|
Accruing |
|
||||||
Real Estate Construction |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Construction, 1-4 family residential |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Construction, other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Consumer Real Estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Equity line |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Residential closed-end first liens |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Residential closed-end junior liens |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Investor-owned residential real estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Commercial Real Estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Multifamily residential real estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Commercial real estate owner-occupied |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Commercial real estate, other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Commercial Non Real Estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Commercial and industrial |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Public Sector and IDA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
States and political subdivisions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Consumer Non Real Estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Credit cards |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Automobile |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Other consumer loans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
The following table presents nonaccrual loans, by loan class, as of the dates indicated:
|
|
September 30, 2026 |
|
|
December 31, 2025 |
|
||||||||||||||||||
|
|
With No |
|
|
With an |
|
|
Total |
|
|
With No |
|
|
With an |
|
|
Total |
|
||||||
Commercial Real Estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Commercial real estate owner-occupied |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Commercial real estate, other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
No accrued interest receivable was reversed against interest income during the three and nine months ended September 30, 2026 or September 30, 2025.
Allowance for Credit Losses on Loans (“ACLL”)
The following tables present the activity in the ACLL by portfolio segment for the periods indicated:
|
|
Activity in the ACLL for the Nine Months Ended September 30, 2026 |
|
|||||||||||||||||||||||||
|
|
Real Estate |
|
|
Consumer |
|
|
Commercial |
|
|
Commercial |
|
|
Public |
|
|
Consumer |
|
|
Total |
|
|||||||
Balance, December 31, 2025 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
Charge-offs |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
||||
Recoveries |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Provision for (recovery of) credit losses |
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|||||
Balance, September 30, 2026 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
13
Table of Contents
|
|
Activity in the ACLL for the Nine Months Ended September 30, 2025 |
|
|||||||||||||||||||||||||
|
|
Real Estate |
|
|
Consumer |
|
|
Commercial |
|
|
Commercial |
|
|
Public |
|
|
Consumer |
|
|
Total |
|
|||||||
Balance, December 31, 2024 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
Charge-offs |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
||||
Recoveries |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Provision for (recovery of) credit losses |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|||||
Balance, September 30, 2025 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
|
|
Activity in the ACLL for the Year Ended December 31, 2025 |
|
|||||||||||||||||||||||||
|
|
Real Estate |
|
|
Consumer |
|
|
Commercial |
|
|
Commercial |
|
|
Public |
|
|
Consumer |
|
|
Total |
|
|||||||
Balance, December 31, 2024 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
Charge-offs |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|||
Recoveries |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Provision for (recovery of) credit losses |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
Balance, December 31, 2025 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
The following tables present information about the ACLL for individually evaluated loans and collectively evaluated loans by portfolio segment as of the dates indicated.
|
|
ACLL by Segment and Evaluation Method |
|
|||||||||||||||||||||||||
September 30, 2026 |
|
Real Estate Construction |
|
|
Consumer Real Estate |
|
|
Commercial Real Estate |
|
|
Commercial Non-Real Estate |
|
|
Public Sector and IDA |
|
|
Consumer Non-Real Estate |
|
|
Total |
|
|||||||
Individually evaluated |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
Collectively evaluated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
|
|
ACLL by Segment and Evaluation Method |
|
|||||||||||||||||||||||||
December 31, 2025 |
|
Real Estate |
|
|
Consumer |
|
|
Commercial |
|
|
Commercial |
|
|
Public |
|
|
Consumer |
|
|
Total |
|
|||||||
Individually evaluated |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
Collectively evaluated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
The following tables present information about individually evaluated loans and collectively evaluated loans by portfolio segment as of the dates indicated.
|
|
Loans by Segment and Evaluation Method |
|
|
|
|
||||||||||||||||||||||
September 30, 2026 |
|
Real Estate Construction |
|
|
Consumer Real Estate |
|
|
Commercial Real Estate |
|
|
Commercial Non-Real Estate |
|
|
Public Sector and IDA |
|
|
Consumer Non-Real Estate |
|
|
Total |
|
|||||||
Individually evaluated |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
Collectively evaluated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
|
|
Loans by Segment and Evaluation Method |
|
|||||||||||||||||||||||||
December 31, 2025 |
|
Real Estate |
|
|
Consumer |
|
|
Commercial |
|
|
Commercial |
|
|
Public |
|
|
Consumer |
|
|
Total |
|
|||||||
Individually evaluated |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
Collectively evaluated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
Collateral Dependent Loans
Loans are collateral dependent when repayment is expected substantially through the operation or sale of the collateral and the borrower is experiencing financial difficulty. Collateral dependent loans are individually evaluated. The Company measures the ACLL on collateral dependent loans based upon the fair value of the collateral. Fair value of the collateral is adjusted for liquidation costs/discounts. If the fair value of the collateral falls below the amortized cost of the loan, the shortfall is recognized in the ACLL. If the fair value of the collateral exceeds the amortized cost, no ACLL is required.
14
Table of Contents
As of September 30, 2026 and December 31, 2025, two of the Company’s individually evaluated loans were collateral dependent and secured by real estate. The following table provides detail on collateral dependent loans as of the dates indicated:
|
|
September 30, 2026 |
|
|
December 31, 2025 |
|
||||||||||
|
|
Balance |
|
|
Related |
|
|
Balance |
|
|
Related |
|
||||
Commercial Real Estate |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Commercial real estate, other |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Total Loans |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Credit Quality
The Company categorizes loans by risk based on relevant information about the ability of borrowers to service their debt, including: collateral and financial information, payment history, credit documentation and current economic trends, among other factors. At origination, each loan is assigned a risk rating. Ongoing analysis of the loan portfolio adjusts risk ratings on an individual loan basis to reflect updated information. General descriptions of risk ratings are as follows:
The following tables present the amortized cost basis of the loan portfolio by year of origination, loan class and credit quality as of the dates indicated.
15
Table of Contents
|
|
Term Loans Amortized Cost Basis by Origination Year |
|
|
|
Revolving |
|
|
|
|||||||||||||||||||
September 30, 2026 |
|
Prior |
|
2022 |
|
2023 |
|
2024 |
|
2025 |
|
2026 |
|
Revolving |
|
to Term |
|
Total |
|
|||||||||
Construction, residential |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Pass |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|||||||||
Construction, other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Pass |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|||||||||
Equity lines |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Pass |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|||||||||
Classified |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|||||||||
Residential closed-end first liens |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Pass |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|||||||||
Special Mention |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Classified |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|||||||||
Residential closed-end junior liens |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Pass |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|||||||||
Investor-owned residential real estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Pass |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|||||||||
Classified |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|||||||||
Multifamily residential real estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Pass |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|||||||||
Classified |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|||||||||
Commercial real estate, owner-occupied |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Pass |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|||||||||
Classified |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|||||||||
Commercial real estate, other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Pass |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|||||||||
Special Mention |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Classified |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|||||||||
Commercial and industrial |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Pass |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|||||||||
Special Mention |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Classified |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|||||||||
Public sector and IDA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Pass |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|||||||||
Credit cards |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Pass |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|||||||||
Automobile |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Pass |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|||||||||
Classified |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|||||||||
Other consumer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Pass |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|||||||||
Special Mention |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Classified |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|||||||||
Total Loans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Pass |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|||||||||
Special Mention |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Classified |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|||||||||
16
Table of Contents
|
|
Term Loans Amortized Cost Basis by Origination Year |
|
|
|
Revolving |
|
|
|
|||||||||||||||||||
December 31, 2025 |
|
Prior |
|
2021 |
|
2022 |
|
2023 |
|
2024 |
|
2025 |
|
Revolving |
|
to Term |
|
Total |
|
|||||||||
Construction, residential |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Pass |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|||||||||
Construction, other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Pass |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|||||||||
Equity lines |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Pass |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|||||||||
Classified |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|||||||||
Residential closed-end first |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Pass |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|||||||||
Special mention |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- |
|
|
|
||||||||
Classified |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|||||||||
Residential closed-end junior |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Pass |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|||||||||
Investor-owned residential real |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Pass |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|||||||||
Classified |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|||||||||
Multifamily residential real |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Pass |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|||||||||
Classified |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|||||||||
Commercial real estate, owner |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Pass |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|||||||||
Special mention |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Classified |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|||||||||
Commercial real estate, other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Pass |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|||||||||
Classified |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|||||||||
Commercial and industrial |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Pass |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|||||||||
Special mention |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Classified |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|||||||||
Public sector and IDA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Pass |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|||||||||
Credit cards |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Pass |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|||||||||
Automobile |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Pass |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|||||||||
Classified |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|||||||||
Other Consumer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Pass |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|||||||||
Special mention |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Classified |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|||||||||
Total Loans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Pass |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|||||||||
Special mention |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Classified |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|||||||||
The following tables present gross charge offs during the periods indicated, by loan class and year of origination:
17
Table of Contents
|
|
Gross Charge Offs by Origination Year for the Nine Months Ended September 30, 2026 |
|
Revolving |
|
|
|
|||||||||||||||||||||
|
|
Prior |
|
2022 |
|
2023 |
|
2024 |
|
2025 |
|
2026 |
|
Revolving |
|
to Term |
|
Total |
|
|||||||||
Commercial and industrial |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|||||||||
Credit cards |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Automobile |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Other consumer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total gross charge-offs |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|||||||||
|
|
Gross Charge Offs by Origination Year for the Twelve Months Ended December 31, 2025 |
|
Revolving |
|
|
|
|||||||||||||||||||||
|
|
Prior |
|
2021 |
|
2022 |
|
2023 |
|
2024 |
|
2025 |
|
Revolving |
|
to Term |
|
Total |
|
|||||||||
Residential closed-end first liens |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|||||||||
Commercial and industrial |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Credit cards |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Automobile |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Other consumer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total gross charge-offs |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|||||||||
Loan Modifications to Borrowers Experiencing Financial Difficulty
The Company modifies loans for a variety of reasons. On the date a loan is modified, the Company assesses whether the borrower is experiencing financial difficulty. If the borrower is experiencing financial difficulty, the loan is risk rated special mention or classified, as appropriate. If the loan exceeds $
The Company modified one loan for a borrower experiencing financial difficulty during the three and nine months ended September 30, 2026. The loan is individually evaluated as of September 30, 2026.
September 30, 2026 |
|
Amortized |
|
|
% of |
|
|
Type of |
|
Financial Effect |
||
Commercial Real Estate |
|
|
|
|
|
|
|
|
|
|
||
Commercial real estate, other |
|
$ |
|
|
|
% |
|
Interest only payments |
|
|||
The Company closely monitors the performance of loans modified for borrowers experiencing financial difficulty to identify indicators of default. Any portion of the loan determined to be uncollectible is charged against the allowance for credit losses. The modified commercial real estate loan above is in current status as of September 30, 2025 and did not default during the three or nine months ended September 30, 2026.
Consumer Real Estate Loans In Process of Foreclosure
As of September 30, 2026, there were
ACL for Unfunded Commitments
The following tables present the balance and activity in the ACL for unfunded commitments for the nine months ended September 30, 2026 and 2025:
18
Table of Contents
Allowance for Credit Losses on Unfunded Commitments |
|
|||
Balance, December 31, 2025 |
|
$ |
|
|
Recovery of credit losses |
|
|
|
|
Balance, September 30, 2026 |
|
$ |
|
|
|
|
|
|
|
Balance, December 31, 2024 |
|
$ |
|
|
Provision for credit losses |
|
|
|
|
Balance, September 30, 2025 |
|
$ |
|
|
|
|
|
|
|
Note 3: Securities
The amortized cost and estimated fair value of securities available for sale along with gross unrealized gains and losses as of the dates indicated are summarized as follows:
September 30, 2026 |
|
Amortized |
|
|
Gross |
|
|
Gross |
|
|
Fair |
|
||||
U.S. government agencies and corporations |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
States and political subdivisions |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Mortgage-backed securities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Corporate debt securities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total securities available for sale |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
December 31, 2025 |
|
Amortized |
|
|
Gross |
|
|
Gross |
|
|
Fair |
|
||||
U.S. government agencies and corporations |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
States and political subdivisions |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Mortgage-backed securities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Corporate debt securities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total securities available for sale |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
The following tables present information pertaining to securities with gross unrealized losses aggregated by investment category and length of time that the individual securities have been in a continuous loss position, as of the dates indicated:
|
|
Less Than 12 Months |
|
|
12 Months or More |
|
||||||||||
September 30, 2026 |
|
Fair |
|
|
Gross |
|
|
Fair |
|
|
Gross |
|
||||
U.S. government agencies and corporations |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
State and political subdivisions |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Mortgage-backed securities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Corporate debt securities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total temporarily impaired securities |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
Less Than 12 Months |
|
|
12 Months or More |
|
||||||||||
December 31, 2025 |
|
Fair |
|
|
Gross |
|
|
Fair |
|
|
Gross |
|
||||
U.S. government agencies and corporations |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
State and political subdivisions |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Mortgage-backed securities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Corporate debt securities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total temporarily impaired securities |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
19
Table of Contents
The Company evaluates securities available for sale that are in unrealized loss positions to determine whether the impairment is due to credit-related factors or noncredit-related factors. Consideration is given to the extent to which the fair value is less than cost, the financial condition and near-term prospects of the issuer, and the intent and ability of the Company to retain its investment in the security for a period of time sufficient to allow for any anticipated recovery in fair value.
At September 30, 2026, the Company had
The amortized cost and fair value of securities available for sale at September 30, 2026, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Mortgage-backed securities included in these totals are categorized by final maturity.
September 30, 2026 |
|
Amortized Cost |
|
|
Fair Value |
|
||
Available for Sale: |
|
|
|
|
|
|
||
Due in one year or less |
|
$ |
|
|
$ |
|
||
Due after one year through five years |
|
|
|
|
|
|
||
Due after five years through ten years |
|
|
|
|
|
|
||
Due after ten years |
|
|
|
|
|
|
||
Total securities available for sale |
|
$ |
|
|
$ |
|
||
Accrued interest receivable on securities, included in accrued interest receivable on the Consolidated Balance Sheets, totaled $
The deferred tax asset for the net unrealized loss on securities available for sale was $
Realized Securities Gains and Losses
During 2026, the Company realized a loss of $
|
|
Sale of Available for Sale Securities |
|
|||||||||||||||||
For the Period Ended |
|
Proceeds |
|
|
Book Value |
|
|
Gross Gain |
|
|
Gross Loss |
|
|
Net Loss |
|
|||||
September 30, 2026 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|||
Restricted Stock
The Company held restricted stock of $
Redemption of FHLB stock is subject to certain limitations and conditions. At its discretion, the FHLB may declare dividends on the stock. In addition to dividends, NBB also benefits from its membership with FHLB through eligibility to borrow from the FHLB, using as collateral NBB’s capital stock investment in the FHLB and qualifying NBB real estate mortgage loans totaling $
20
Table of Contents
Note 4: Defined Benefit Plan
The following table presents components of net periodic benefit income for the periods indicated:
|
|
Net Periodic Benefit Income |
|
|||||
|
|
Three Months Ended September 30, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Service cost |
|
$ |
( |
) |
|
$ |
( |
) |
Interest cost |
|
|
( |
) |
|
|
( |
) |
Expected return on plan assets |
|
|
|
|
|
|
||
Net periodic benefit income |
|
$ |
|
|
$ |
|
||
|
|
Net Periodic Benefit Income |
|
|||||
|
|
Nine Months Ended September 30, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Service cost |
|
$ |
( |
) |
|
$ |
( |
) |
Interest cost |
|
|
( |
) |
|
|
( |
) |
Expected return on plan assets |
|
|
|
|
|
|
||
Net periodic benefit income |
|
$ |
|
|
$ |
|
||
The service cost component of net periodic benefit cost is included in salaries and employee benefits expense in the Consolidated Statements of Income. All other components are included in other operating expense in the Consolidated Statements of Income.
Note 5: Fair Value Measurements
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. GAAP requires that valuation techniques maximize the use of the observable inputs and minimize the use of the unobservable inputs. GAAP also establishes a fair value hierarchy which prioritizes the valuation inputs into three broad levels. Based on the underlying inputs, each fair value measurement in its entirety is reported in one of the three levels. These levels are:
|
Level 1 – |
|
Valuation is based on quoted prices in active markets for identical assets and liabilities. |
|
Level 2 – |
|
Valuation is based on observable inputs including: • quoted prices in active markets for similar assets and liabilities, • quoted prices for identical or similar assets and liabilities in less active markets, • inputs other than quoted prices that are observable, and • model-based valuation techniques for which significant assumptions can be derived primarily from or corroborated by observable data in the market. |
|
Level 3 – |
|
Valuation is based on model-based techniques that use one or more significant inputs or assumptions that are unobservable in the market. |
Fair value is best determined by quoted market prices. However, in cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, fair value estimates may not be realized in an immediate settlement of the instrument. Accounting guidance for fair value excludes certain financial instruments and all nonfinancial instruments from disclosure requirements. Consequently, the aggregate fair value amounts presented may not necessarily represent the underlying fair value of the Company. The following describes the valuation techniques used by the Company to measure certain financial assets and liabilities recorded at fair value on a recurring basis in the consolidated financial statements.
21
Table of Contents
Financial Instruments Measured at Fair Value on a Recurring Basis
Securities Available for Sale
Securities available for sale are recorded at fair value on a recurring basis. Fair value measurement is based upon quoted market prices, when available (Level 1). If quoted market prices are not available, fair values are measured utilizing independent valuation techniques of identical or similar securities for which significant assumptions are derived primarily from or corroborated by observable market data. Third party vendors compile prices from various sources and may determine the fair value of identical or similar securities by using pricing models that consider observable market data (Level 2). The following tables present the balances of financial assets measured at fair value on a recurring basis as of the dates indicated.
|
|
|
|
|
Fair Value Measurement Using |
|
||||||||||
September 30, 2026 |
|
Balance |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
||||
U.S. government agencies and corporations |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
States and political subdivisions |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Mortgage-backed securities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Corporate debt securities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total securities available for sale |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
Fair Value Measurement Using |
|
||||||||||
December 31, 2025 |
|
Balance |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
||||
U.S. government agencies and corporations |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
States and political subdivisions |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Mortgage-backed securities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Corporate debt securities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total securities available for sale |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
The Company’s securities portfolio is valued using Level 2 inputs. The Company relies on an independent third party vendor to provide market valuations. The inputs used to determine value include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data including market research publications. The third party vendor also monitors market indicators, industry activity and economic events as part of the valuation process. Central to the final valuation is the assumption that the indicators used are representative of the fair value of securities held within the Company’s portfolio. Level 2 inputs are subject to a certain degree of uncertainty and changes in these assumptions or methodologies in the future, if any, may impact securities fair value, deferred tax assets or liabilities, or expense.
Financial Instruments Measured at Fair Value on a Non-Recurring Basis
Certain financial instruments are measured at fair value on a nonrecurring basis in accordance with GAAP. Adjustments to the fair value of these assets usually result from the application of lower-of-cost-or-market accounting or write-downs of individual assets. The following describes the valuation techniques used by the Company to measure certain assets recorded at fair value on a nonrecurring basis in the consolidated financial statements.
Mortgage Loans Held for Sale
Mortgage loans held for sale are carried at the lower of cost or fair value. These loans currently consist of one-to-four family residential loans originated for sale in the secondary market. Fair value is based on the price secondary markets are currently offering for similar loans using observable market data which is not materially different than cost due to the short duration between origination and sale (Level 2). As such, the Company records any fair value adjustments on a nonrecurring basis.
Collateral Dependent Loans
Collateral dependent loans are measured on a non-recurring basis for the ACLL. If the fair value of the collateral is lower than the loan’s amortized cost basis, the shortfall is recognized in the ACLL. When repayment is expected from the operation of the collateral, fair value is estimated as the present value of expected cash flows. When repayment is expected from the sale of the collateral, fair value is estimated using measurement techniques discussed below and discounted by the estimated cost to sell. The ACLL may be zero if the fair value of the collateral at the measurement date exceeds the amortized cost basis of the financial asset.
22
Table of Contents
For loans secured by real estate, fair value of collateral is determined by the “as-is” value of appraisals or third party evaluations that are less than 24 months of age. Appraisals are prepared by independent, licensed appraisers. Appraisals are based upon observable market data analyzed through an income or sales valuation approach. Valuation falls within Level 2 categorization. The Company may further discount appraisals for marketing strategies, which results in Level 3 categorization.
The value of business equipment is based upon an outside appraisal (Level 2) if deemed significant, or the net book value on the applicable business’ financial statements (Level 3) if not considered significant. Likewise, values for inventory and accounts receivables collateral are based on financial statement balances or aging reports (Level 3).
As of September 30, 2026, two commercial real estate loans totaling $
Restricted Stock
The carrying value of restricted Federal Reserve Bank of Richmond and FHLB stock approximates fair value based upon the redemption provisions of each entity.
Fair Value Summary
The following presents the recorded amount, fair value, and placement in the fair value hierarchy of the Company’s financial instruments as of the dates indicated. Fair values are estimated using the exit price notion.
|
|
|
|
|
Estimated Fair Value |
|
||||||||||
September 30, 2026 |
|
Carrying Amount |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
||||
Financial assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash and due from banks |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Interest-bearing deposits |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Securities available for sale |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Restricted stock, at cost |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Mortgage loans held for sale |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Loans, net |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Accrued interest receivable |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Bank-owned life insurance |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Financial liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Deposits |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Accrued interest payable |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Borrowings |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
Estimated Fair Value |
|
||||||||||
December 31, 2025 |
|
Carrying Amount |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
||||
Financial assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash and due from banks |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Interest-bearing deposits |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Securities available for sale |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Restricted stock, at cost |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Loans, net |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Accrued interest receivable |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Bank-owned life insurance |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Financial liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Deposits |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Accrued interest payable |
|
|
|
|
|
|
|
|
|
|
|
|
||||
23
Table of Contents
Note 6: Components of Accumulated Other Comprehensive Loss
The following tables summarize the activity related to each component of accumulated other comprehensive loss for the periods indicated:
|
|
Net Unrealized Loss on Securities |
|
|
Adjustments Related to Pension Benefits |
|
|
Accumulated Other Comprehensive Loss |
|
|||
Balance at June 30, 2025 |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
Unrealized holding gain on available for sale securities, net of |
|
|
|
|
|
|
|
|
|
|||
Balance at September 30, 2025 |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|||
Balance at June 30, 2026 |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
Unrealized holding loss on available for sale securities, net of tax of ($ |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Balance at September 30, 2026 |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
|
|
Net |
|
|
Adjustments |
|
|
Accumulated |
|
|||
Balance at December 31, 2024 |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
Unrealized holding gain on available for sale securities, net of tax of $ |
|
|
|
|
|
|
|
|
|
|||
Balance at September 30, 2025 |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|||
Balance at December 31, 2025 |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
Unrealized holding loss on available for sale securities, net of tax of ($ |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Reclassification adjustment, net of tax of $ |
|
|
|
|
|
|
|
|
|
|||
Balance at September 30, 2026 |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
Note 7: Revenue Recognition
Substantially all of the Company’s revenue is generated from contracts with customers. Noninterest revenue streams such as service charges on deposit accounts, other service charges and fees, credit and debit card fees, trust income, and annuity and insurance commissions are recognized in accordance with Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“Topic 606”). Topic 606 does not apply to revenue associated with financial instruments, including revenue from loans and securities. In addition, certain noninterest income streams such as financial guarantees, derivatives, and certain credit card fees are outside the scope of the guidance. Noninterest revenue streams within the scope of Topic 606 are discussed below.
Service Charges on Deposit Accounts
Service charges on deposit accounts consist of monthly service fees, overdraft and nonsufficient funds fees, ATM fees, wire transfer fees, and other deposit account related fees. The Company’s performance obligation for monthly service fees is generally satisfied, and the related revenue recognized, over the period in which the service is provided. Payment for service charges on deposit accounts is primarily received immediately or in the following month through a direct charge to customers’ accounts. ATM fees are generated when a Company cardholder uses a non-Company ATM or a non-Company cardholder uses a Company ATM. Wire transfer fees, overdraft and nonsufficient funds fees and other deposit account related fees are transactional based, and therefore, the Company’s performance obligation is satisfied, and related revenue recognized, at the time of the transaction.
Other Service Charges and Fees
Other service charges include safe deposit box rental fees, check ordering charges, ATM fees to holders of cards issued by other banks and other service charges. Safe deposit box rental fees are charged to the customer on an annual basis and recognized upon receipt
24
Table of Contents
of payment. The Company determined that since rentals and renewals occur fairly consistently over time, revenue is recognized on a basis consistent with the duration of the performance obligation. Check ordering charges, ATM fees to holders of cards issued by other banks and other service charges are transaction based and therefore, the Company’s performance obligation is satisfied and related revenue recognized at a point in time.
Credit and Debit Card Fees
Credit and debit card fees are primarily comprised of interchange fee income and merchant services income. Interchange fees are earned whenever the Company’s debit and credit cards are processed through card payment networks such as Visa and MasterCard. Merchant services income mainly represents commission fees based upon merchant processing volume. The Company’s performance obligation for interchange fee income and merchant services income are largely satisfied, and related revenue recognized, when the services are rendered or upon completion. Payment is typically received immediately or in the following month. In compliance with Topic 606, credit and debit card fee income is presented net of associated expense.
Trust Income
Trust income is primarily comprised of fees earned from the management and administration of trusts and estates and other customer assets. The Company’s performance obligation is generally satisfied over time and the resulting fees are recognized monthly, based upon the month-end market value of the assets under management and the applicable fee rate. Payment is generally received a few days after month end through a direct charge to customers’ accounts. The Company does not earn performance-based incentives. Estate management fees are based upon the size of the estate. A partial fee is recognized half-way through the estate administration and the remainder of the fee is recognized when remaining assets are distributed and the estate is closed.
Insurance and Investment
Insurance income primarily consists of commissions received on insurance product sales. The Company acts as an intermediary between the Company’s customer and the insurance carrier. The Company’s performance obligation is generally satisfied upon the issuance of the insurance policy. Shortly after the insurance policy is issued, the carrier remits the commission payment to the Company, and the Company recognizes the revenue.
Investment income consists of recurring revenue streams such as commissions from sales of mutual funds, annuities and other investments. Commissions from the sale of mutual funds, annuities and other investments are recognized on trade date, which is when the Company has satisfied its performance obligation. The Company also receives periodic service fees (i.e., trailers) from mutual fund companies typically based on a percentage of net asset value. Trailer revenue is recorded over time, usually monthly or quarterly, as net asset value is determined.
The following presents noninterest income, segregated by revenue streams in-scope and out-of-scope of Topic 606, for the periods indicated:
|
|
Three Months Ended September 30, |
|
|||||
Noninterest Income |
|
2026 |
|
|
2025 |
|
||
In-scope of Topic 606: |
|
|
|
|
|
|
||
Service charges on deposit accounts |
|
$ |
|
|
$ |
|
||
Other service charges and fees |
|
|
|
|
|
|
||
Credit and debit card fees, net |
|
|
|
|
|
|
||
Trust income |
|
|
|
|
|
|
||
Insurance and Investment (1) |
|
|
|
|
|
|
||
Noninterest Income (in-scope of Topic 606) |
|
$ |
|
|
$ |
|
||
Noninterest Income (out-of-scope of Topic 606) |
|
|
|
|
|
|
||
Total noninterest income |
|
$ |
|
|
$ |
|
||
25
Table of Contents
|
|
Nine Months Ended September 30, |
|
|||||
Noninterest Income |
|
2026 |
|
|
2025 |
|
||
In-scope of Topic 606: |
|
|
|
|
|
|
||
Service charges on deposit accounts |
|
$ |
|
|
$ |
|
||
Other service charges and fees |
|
|
|
|
|
|
||
Credit and debit card fees, net |
|
|
|
|
|
|
||
Trust income |
|
|
|
|
|
|
||
Insurance and Investment (1) |
|
|
|
|
|
|
||
Noninterest Income (in-scope of Topic 606) |
|
$ |
|
|
$ |
|
||
Noninterest Income (out-of-scope of Topic 606) |
|
|
|
|
|
|
||
Total noninterest income |
|
$ |
|
|
$ |
|
||
(1)
Note 8: Leases
The Company categorizes leases as short-term, operating or finance leases. Leases with terms of 12 months or less are designated as short-term and are not capitalized. Operating and finance leases are capitalized as right-of-use assets and lease liabilities. Right-of-use assets, included in other assets, represent the Company’s right to use the underlying asset for the lease term and are calculated as the sum of the lease liability and if applicable, prepaid rent, initial direct costs and any incentives received from the lessor. Lease liabilities, included in other liabilities, represent the Company’s obligation to make lease payments and are reported at the net present value of the remaining contractual cash flows. Cash flows are discounted at the Company’s incremental borrowing rate in effect at the commencement date of the lease. The Company does not separate non-lease components from lease components within a single contract. Counterparties for the Company’s lease contracts are external to the Company and not related parties.
Lease payments
Short-term lease payments are recognized as lease expense on a straight-line basis over the lease term, or for variable lease payments, in the period in which the obligation was incurred. Operating and finance lease payments may be fixed for the term of the lease or variable. If the escalation factor for a variable lease payment is known, such as a specified percentage increase per year or a stated increase at a specified time, the variable payment is included in the cash flows used to determine the lease liability. If the variable payment is based upon an unknown escalator, such as the consumer price index at a future date, the increase is not included in the cash flows used to determine the lease liability.
Options to Extend, Residual Value Guarantees, Restrictions and Covenants
Certain of the Company’s operating leases offer the option to extend the lease term and the Company has included such extensions in its calculation of the lease liabilities to the extent the options are reasonably certain of being exercised. The lease agreements do not provide for residual value guarantees and have no restrictions or covenants that would impact dividends or require incurring additional financial obligations.
The following tables present information about leases as of the dates and for the periods indicated:
|
|
September 30, |
|
|
December 31, |
|
||
|
|
2026 |
|
|
2025 |
|
||
Lease liability |
|
$ |
|
|
$ |
|
||
Right-of-use asset |
|
$ |
|
|
$ |
|
||
Weighted average remaining lease term (in years) |
|
|
|
|
|
|
||
Weighted average discount rate |
|
|
% |
|
|
% |
||
|
|
For the Three Months Ended September 30, |
|
|||||
Lease Expense |
|
2026 |
|
|
2025 |
|
||
Operating lease expense |
|
$ |
|
|
$ |
|
||
Cash paid for amounts included in lease liabilities |
|
$ |
|
|
$ |
|
||
Right-of-use assets obtained in exchange for operating lease liabilities commencing during the period |
|
$ |
|
|
$ |
|
||
26
Table of Contents
|
|
For the Nine Months Ended September 30, |
|
|||||
Lease Expense |
|
2026 |
|
|
2025 |
|
||
Operating lease expense |
|
$ |
|
|
$ |
|
||
Cash paid for amounts included in lease liabilities |
|
$ |
|
|
$ |
|
||
Right-of-use assets obtained in exchange for operating lease liabilities commencing during the period |
|
$ |
|
|
$ |
|
||
The following table presents a maturity schedule of undiscounted cash flows that contribute to the lease liability:
Undiscounted Cash Flow for the Period |
|
As of |
|
|
Twelve months ending September 30, 2027 |
|
$ |
|
|
Twelve months ending September 30, 2028 |
|
|
|
|
Twelve months ending September 30, 2029 |
|
|
|
|
Twelve months ending September 30, 2030 |
|
|
|
|
Twelve months ending September 30, 2031 |
|
|
|
|
Thereafter |
|
|
|
|
Total undiscounted cash flows |
|
$ |
|
|
Less: discount |
|
|
( |
) |
Lease liability |
|
$ |
|
|
Note 9: Stock Based Compensation
The Company’s 2023 Stock Incentive Plan (“the Plan”) provides for the grant of various forms of stock-based compensation awards that may be settled in, or based upon the value of, the Company’s common stock. The maximum number of shares available for issuance under the Plan is
Restricted Stock Awards and Restricted Stock Units
As of December 31, 2025, the Company had nonvested restricted stock awards ("RSAs"), granted to non-employee directors, and restricted stock units ("RSUs"), granted to designated employees. During 2026, the Company awarded to designated employees additional RSUs that will vest in equal parts in 2027, 2028, and 2029. The Company also granted to directors additional RSAs that will vest in 2027.
The Company valued the RSAs and RSUs at the closing stock price on the grant date. The Company records expense over the associated vesting period. Stock based compensation expense charged against income was $
|
|
Shares |
|
|
Weighted-Average |
|
||
Nonvested at January 1, 2026 |
|
|
|
|
$ |
|
||
Granted |
|
|
|
|
|
|
||
Vested and released |
|
|
( |
) |
|
|
|
|
Forfeited |
|
|
( |
) |
|
|
|
|
Nonvested at September 30, 2026 |
|
|
|
|
$ |
|
||
27
Table of Contents
Note 10: Net Income Per Common Share
The factors used in the computation of net income per common share for the periods indicated are presented below:
|
|
For the Three Months Ended September 30, |
|
|||||||||||||||||||||
|
|
2026 |
|
|
2025 |
|
||||||||||||||||||
|
|
Net Income |
|
|
Common |
|
|
Per |
|
|
Net Income |
|
|
Common |
|
|
Per Share |
|
||||||
Basic net income per common share |
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
|
|
|
$ |
|
||||||
Dilutive shares |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Diluted net income per common share |
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
|
|
|
$ |
|
||||||
|
|
For the Nine Months Ended September 30, |
|
|||||||||||||||||||||
|
|
2026 |
|
|
2025 |
|
||||||||||||||||||
|
|
Net Income |
|
|
Common |
|
|
Per |
|
|
Net Income |
|
|
Common |
|
|
Per |
|
||||||
Basic net income per common share |
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
|
|
|
$ |
|
||||||
Dilutive shares |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Diluted net income per common share |
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
|
|
|
$ |
|
||||||
RSAs are disregarded in the computation of diluted net income per share if they are determined to be anti-dilutive. There were no anti-dilutive RSAs for the three and nine months ended September 30, 2026 and September 30, 2025.
Note 11: Goodwill and Other Intangibles
Core deposit intangible amortization expense was $
|
|
Beginning Balance |
|
|
Additions |
|
|
Accumulated Amortization |
|
|
Ending Balance |
|
||||
Goodwill |
|
$ |
|
|
$ |
|
|
$ |
- |
|
|
$ |
|
|||
Core deposit intangible |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
28
Table of Contents
As of September 30, 2026, estimated future remaining amortization of the core deposit intangible within the years ending December 31, is as follows:
|
|
Amortization Expense |
|
|
2026 |
|
$ |
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
2029 |
|
|
|
|
2030 |
|
|
|
|
2031 |
|
|
|
|
Thereafter |
|
|
|
|
Total amortizing core deposit intangible |
|
$ |
|
|
Note 12: Borrowings
During the third quarter of 2026, the Company borrowed $
29
Table of Contents
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
$ in thousands, except per share data
The purpose of this discussion and analysis is to provide information about the financial condition and results of operations of the Company. Please refer to the financial statements and other information included in this report as well as the Company’s 2025 Form 10-K for an understanding of the following discussion and analysis. References in the following discussion and analysis to “we” or “us” refer to the Company unless the context indicates that the reference is to the Bank.
Cautionary Statement Regarding Forward-Looking Statements
We make forward-looking statements in this Form 10-Q that are subject to significant risks and uncertainties. These forward-looking statements include statements regarding our profitability, liquidity, allowance for credit losses, interest rate sensitivity, market risk, growth strategy, and financial and other goals, and are based upon management’s views and assumptions as of the date of this report. The words “believes,” “expects,” “may,” “will,” “should,” “projects,” “contemplates,” “anticipates,” “forecasts,” “intends,” or other similar words or terms are intended to identify forward-looking statements.
These forward-looking statements are based upon or are affected by factors that could cause our actual results to differ materially from historical results or from any results expressed or implied by such forward-looking statements. These factors include, but are not limited to, effects of or changes in:
These risks and uncertainties should be considered in evaluating the forward-looking statements contained in this report. We caution readers not to place undue reliance on those statements, which speak only as of the date of this report. This discussion and analysis should be read in conjunction with the description of our “Risk Factors” in Item 1A of the Company's 2025 Form 10-K.
Overview
NBI is a financial holding company that was organized in 1986 under the laws of Virginia and is registered under the Bank Holding Company Act of 1956. NBI common stock is listed on the Nasdaq Capital Market and is traded under the symbol “NKSH.”
NBI has two wholly-owned subsidiaries; the National Bank of Blacksburg ("NBB") and National Bankshares Financial Services, Inc. ("NBFS"). NBB is a community bank and does business as National Bank from 28 office locations and one loan production office
30
Table of Contents
and operates 26 automated teller machines ("ATMs") in its service area. NBB is the source of nearly all of the Company’s revenue. NBFS does business as National Bankshares Investment Services and National Bankshares Insurance Services.
Critical Accounting Policies
The Company’s consolidated financial statements are prepared in accordance with GAAP. The financial information contained within our statements is, to a significant extent, based on measures of the financial effects of transactions and events that have already occurred. A variety of factors could affect the ultimate value obtained when earning income, recognizing expense, recovering an asset or relieving a liability. Although the economics of the Company’s transactions may not change, the timing of events that would impact the transactions could change.
Critical accounting policies are most important to the portrayal of the Company’s financial condition or results of operations and require management’s most difficult, subjective, and complex judgments about matters that are inherently uncertain. If conditions occur that differ from our assumptions, depending upon the severity of such differences, the Company’s financial condition or results of operations may be materially impacted. The Company designates as critical those policies governing the ACLL and the Pension Plan. The Company evaluates its critical accounting estimates and assumptions on an ongoing basis and updates them as needed.
ACLL
The ACLL represents the Company's best estimate of current expected credit losses on loans over the expected life as of the measurement date. The estimation utilizes internal and peer historical credit loss experience, current conditions and reasonable and supportable forecasts. The results are also dependent upon management's selection of methodologies, loan credit risk ratings, and determination of the impact of internal and external variables.
The Company employs a cash flow ("CF") model whereby each loan’s cash flows are projected according to contractual terms and modified by prepayment rates and loss rates. Prepayment rates are sourced from the Company’s historical experience. Loss rates are calculated using the probability of default ("PD") and loss given default ("LGD") sourced from internal and peer historical experience, and adjusted for a forecast variable. The modified cash flows are then discounted at the loan's contractual interest rate. Application of historical prepayment rates lowers the ACL and may not be representative of realized prepayment rates. Historical loss experience and the impact of the forecast variable may not be representative of realized loss experience.
Key to loss rate application is the Company's risk grading system, which is governed by a robust policy. Loss rates are calculated and applied by risk grade. Management relies upon risk grades to identify loans with risk characteristics that are different from other loans within a segment. Loans graded special mention or classified and that exceed a value threshold are individually evaluated. If management determines that a borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral, expected credit losses are based on the fair value of the collateral at the measurement date, adjusted for estimated selling costs if satisfaction of the loan depends on the sale of the collateral. Specific reserves for other individually evaluated loans are estimated using a CF approach. Cash flows are determined by analyzing the borrower's ability to repay and economic conditions affecting the borrower's industry, discounted at loss rates appropriate to the risk grade. The ultimate recoverability of the loan may be higher or lower than the specific reserve.
The Company adjusts collectively-evaluated CF model results for qualitative risk factors that are not inherent in historical losses, but are relevant in assessing expected credit losses within the loan portfolio. Risks considered include the impact of changes in (i) economic conditions, (ii) the nature and volume of the loan portfolio, (iii) the existence, growth and effect of any concentrations in credit, (iv) lending policies and procedures, including underwriting standards and practices, (v) the quality of the credit review function, (vi) the experience, ability and depth of lending management and staff, (vii) the volume and severity of past due loans, (viii) the value of underlying collateral for collateral-dependent loans, and (ix) other factors such as the regulatory, legal and competitive environments. Because of low loss rate history, statistical correlation between losses and qualitative risk factors is not possible and adjustments are based upon management judgment. Management assesses each factor and determines the adjustment to the ACLL based upon a documented and consistently applied methodology. Management's assessment may be higher or lower than actual impact.
The estimation of the ACLL involves analysis of internal and external variables, methodologies, assumptions and management’s judgment and experience. These judgments are inherently subjective and actual losses could be greater or less than the estimate. Future estimates of the ACLL could increase or decrease based on changes in the financial condition of individual borrowers, concentrations of various types of loans, economic conditions or the markets in which collateral may be sold. The estimate of the ACLL determines the amount of provision expense and directly affects our financial results.
Pension Plan
Pension obligations are determined through actuarial calculations based upon significant assumptions, including the IRS mortality table, an effective interest rate of 5.35% for 2026 and 5.32% for 2025, a discount rate of 5.25% for 2026 and 5.50% for 2025, anticipated rate of compensation increases of 4% for both 2026 and 2025, and an expected long-term rate of return of 7.50% for 2026 and 2025. Actual outcomes could vary from the assumptions and result in underaccrual or overaccrual of pension obligations.
For information on the Company's critical accounting policies, please refer to the Company’s 2025 Form 10-K, Note 1: Summary of Significant Accounting Policies.
31
Table of Contents
Performance Summary
The Company’s results of operations and financial position are heavily influenced by the interest rate environment. The rate environment during the first nine months of 2026 has allowed the Company's adjustable rate loans to reprice higher than their previous rates, and provided attractive investment opportunities in the securities portfolio. Also influential to the Company's results are a gain on the sale of an equity investment offset by a loss on the sale of securities in 2026, and a core system conversion completed during the second quarter of 2025, with core system conversion expense presented on the Consolidated Statements of Income. Expanded discussion of significant items for 2026 and 2025 is provided in subsequent sections.
The following table presents the Company’s key performance indicators for the periods indicated:
|
|
Three Months Ended September 30, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Net Income |
|
$ |
5,488 |
|
|
$ |
4,420 |
|
Return on average assets |
|
|
1.20 |
% |
|
|
0.98 |
% |
Adjusted return on average assets (1) |
|
|
1.20 |
% |
|
|
0.99 |
% |
Return on average equity |
|
|
11.52 |
% |
|
|
10.22 |
% |
Adjusted return on average equity (1) |
|
|
11.52 |
% |
|
|
10.29 |
% |
Basic net income per common share |
|
$ |
0.86 |
|
|
$ |
0.70 |
|
Diluted net income per common share(2) |
|
$ |
0.86 |
|
|
$ |
0.69 |
|
Net interest margin (1) |
|
|
3.21 |
% |
|
|
2.72 |
% |
Efficiency ratio (1) |
|
|
55.90 |
% |
|
|
58.75 |
% |
|
|
Nine Months Ended September 30, |
|
|||||
Summary Key Performance Indicators |
|
2026 |
|
|
2025 |
|
||
Net Income |
|
$ |
15,498 |
|
|
$ |
9,945 |
|
Return on average assets |
|
|
1.14 |
% |
|
|
0.74 |
% |
Adjusted return on average assets (1) |
|
|
1.13 |
% |
|
|
0.76 |
% |
Return on average equity |
|
|
11.22 |
% |
|
|
7.98 |
% |
Adjusted return on average equity (1) |
|
|
11.18 |
% |
|
|
8.28 |
% |
Basic net income per common share |
|
$ |
2.44 |
|
|
$ |
1.56 |
|
Diluted net income per common share(2) |
|
$ |
2.43 |
|
|
$ |
1.56 |
|
Net interest margin (1) |
|
|
3.07 |
% |
|
|
2.56 |
% |
Efficiency ratio (1) |
|
|
58.04 |
% |
|
|
62.72 |
% |
Net income for the three and nine months ended September 30, 2026 increased when compared with the comparable periods of 2025, due to net interest margin expansion and core conversion related expenses in 2025. The net interest margin as well as key noninterest income and expense items are discussed below.
Non-GAAP Financial Measures
This report refers to certain financial measures that are computed under a basis other than GAAP (“non-GAAP”). The Company uses certain non-GAAP financial measures to provide meaningful supplemental information regarding the Company’s operational performance and to enhance investors’ overall understanding of such financial performance. The methodology for determining these non-GAAP measures may differ among companies. Non-GAAP measures are supplemental and not a substitute for, or more important than, financial measures prepared in accordance with GAAP. Details on non-GAAP measures follow.
32
Table of Contents
Net Interest Margin
The Company uses the net interest margin (non-GAAP) to measure profitability of interest generating activities, as a percentage of total interest-earning assets. The Company’s net interest margin is calculated on a fully taxable equivalent (“FTE”) basis. The portion of interest income that is nontaxable is grossed up to the tax equivalent by adding the tax benefit based on a tax rate of 21%. Annualized FTE net interest income is divided by total average earning assets to calculate the net interest margin. The following tables present the reconciliation of tax equivalent net interest income, which is not a measurement under GAAP, to net interest income, for the periods indicated:
|
|
Three Months Ended September 30, |
|
|||||
Net Interest Margin, FTE |
|
2026 |
|
|
2025 |
|
||
Interest income (GAAP) |
|
$ |
20,287 |
|
|
$ |
19,010 |
|
Add: FTE adjustment |
|
|
247 |
|
|
|
213 |
|
Interest income, FTE (non-GAAP) |
|
|
20,534 |
|
|
|
19,223 |
|
Interest expense (GAAP) |
|
|
6,440 |
|
|
|
7,336 |
|
Net interest income, FTE (non-GAAP) |
|
$ |
14,094 |
|
|
$ |
11,887 |
|
Average balance of interest-earning assets |
|
$ |
1,740,565 |
|
|
$ |
1,731,992 |
|
Net interest margin |
|
|
3.21 |
% |
|
|
2.72 |
% |
|
|
Nine Months Ended September 30, |
|
|||||
Net Interest Margin, FTE |
|
2026 |
|
|
2025 |
|
||
Interest income (GAAP) |
|
$ |
58,682 |
|
|
$ |
55,744 |
|
Add: FTE adjustment |
|
|
753 |
|
|
|
633 |
|
Interest income, FTE (non-GAAP) |
|
|
59,435 |
|
|
|
56,377 |
|
Interest expense (GAAP) |
|
|
19,162 |
|
|
|
22,829 |
|
Net interest income, FTE (non-GAAP) |
|
$ |
40,273 |
|
|
$ |
33,548 |
|
Average balance of interest-earning assets |
|
$ |
1,751,943 |
|
|
$ |
1,752,234 |
|
Net interest margin (non-GAAP) |
|
|
3.07 |
% |
|
|
2.56 |
% |
Efficiency Ratio
The efficiency ratio (non-GAAP) is computed by dividing noninterest expense by the sum of FTE net interest income and noninterest income, excluding certain items the Company’s management deems unusual or non-recurring. This is a non-GAAP financial measure that the Company believes provides investors with important information regarding operational efficiency. The components of the efficiency ratio calculation for the periods indicated are summarized in the following table.
|
|
Three Months Ended September 30, |
|
|||||
Efficiency Ratio |
|
2026 |
|
|
2025 |
|
||
Noninterest expense (GAAP) |
|
$ |
9,318 |
|
|
$ |
8,524 |
|
Less: core system conversion expense |
|
|
- |
|
|
|
(50 |
) |
Adjusted noninterest expense (non-GAAP) |
|
$ |
9,318 |
|
|
$ |
8,474 |
|
Noninterest income (GAAP) |
|
$ |
2,574 |
|
|
$ |
2,537 |
|
Net interest income, FTE (non-GAAP) |
|
|
14,094 |
|
|
|
11,887 |
|
Total income for efficiency ratio (non-GAAP) |
|
$ |
16,668 |
|
|
$ |
14,424 |
|
Efficiency ratio |
|
|
55.90 |
% |
|
|
58.75 |
% |
33
Table of Contents
|
|
Nine Months Ended September 30, |
|
|||||
Efficiency Ratio |
|
2026 |
|
|
2025 |
|
||
Noninterest expense (GAAP) |
|
$ |
27,948 |
|
|
$ |
27,739 |
|
Less: core system conversion expense |
|
|
- |
|
|
|
(2,073 |
) |
Adjusted noninterest expense (non-GAAP) |
|
$ |
27,948 |
|
|
$ |
25,666 |
|
Noninterest income (GAAP) |
|
$ |
7,899 |
|
|
$ |
7,376 |
|
Less: gain on sale of equity investment |
|
|
(6,566 |
) |
|
|
- |
|
Less: loss on sale of securities, net |
|
|
6,549 |
|
|
|
- |
|
Adjusted noninterest income (non-GAAP) |
|
|
7,882 |
|
|
|
7,376 |
|
Net interest income, FTE (non-GAAP) |
|
|
40,273 |
|
|
|
33,548 |
|
Total income for efficiency ratio (non-GAAP) |
|
$ |
48,155 |
|
|
$ |
40,924 |
|
Efficiency ratio (non-GAAP) |
|
|
58.04 |
% |
|
|
62.72 |
% |
Adjusted Return on Average Assets and Adjusted Return on Average Equity
The adjusted return on average assets (non-GAAP) and adjusted return on average equity (non-GAAP) are measures of profitability, calculated by annualizing net income and dividing by average year-to-date assets or equity, respectively. Significant income or expenses that are unusual or not expected to recur during the year are not annualized, in order to reduce distortion within the ratios. The tables below present the reconciliation of adjusted annualized net income, which is not a measurement under GAAP, for the periods indicated.
|
|
Three Months Ended September 30, |
|
|||||
Annualized Net Income for Ratio Calculation |
|
2026 |
|
|
2025 |
|
||
Net income per GAAP |
|
$ |
5,488 |
|
|
$ |
4,420 |
|
Adjustments for items not annualized: |
|
|
|
|
|
|
||
Core system conversion expense, net of tax of $11 for the period ended September 30, 2025 |
|
|
- |
|
|
|
39 |
|
Total non-annualized items |
|
|
- |
|
|
|
39 |
|
Adjusted net income |
|
|
5,488 |
|
|
$ |
4,459 |
|
Adjusted net income, annualized |
|
$ |
21,773 |
|
|
$ |
17,691 |
|
Add: total non-annualized items |
|
|
- |
|
|
|
(39 |
) |
Annualized net income for ratio calculation (non-GAAP) |
|
$ |
21,773 |
|
|
$ |
17,652 |
|
Return on average assets (GAAP) |
|
|
1.20 |
% |
|
|
0.98 |
% |
Adjusted return on average assets (non-GAAP) |
|
|
1.20 |
% |
|
|
0.99 |
% |
Return on average equity (GAAP) |
|
|
11.52 |
% |
|
|
10.22 |
% |
Adjusted return on average equity (non-GAAP) |
|
|
11.52 |
% |
|
|
10.29 |
% |
34
Table of Contents
|
|
Nine Months Ended September 30, |
|
|||||
Annualized Net Income for Ratio Calculation |
|
2026 |
|
|
2025 |
|
||
Net income per GAAP |
|
$ |
15,498 |
|
|
$ |
9,945 |
|
Adjustments for items not annualized: |
|
|
|
|
|
|
||
Partnership income net of tax of ($49) and ($44) for the periods ended September 30, 2026 and 2025, respectively |
|
|
(184 |
) |
|
|
(166 |
) |
Gain on sale of equity investment, net of tax of ($1,379) for the period ended September 30, 2026 |
|
|
(5,187 |
) |
|
|
- |
|
Loss on sale of securities, net, net of tax of $1,375 for the period ended September 30, 2026 |
|
|
5,174 |
|
|
|
- |
|
Core system conversion expense, net of tax of $435 for the period ended September 30, 2025 |
|
|
- |
|
|
|
1,638 |
|
Total non-annualized items |
|
|
(197 |
) |
|
|
1,472 |
|
Adjusted net income |
|
$ |
15,301 |
|
|
$ |
11,417 |
|
Adjusted net income, annualized |
|
$ |
20,457 |
|
|
$ |
15,264 |
|
Add: total non-annualized items |
|
|
197 |
|
|
|
(1,472 |
) |
Annualized net income for ratio calculation (non-GAAP) |
|
$ |
20,654 |
|
|
$ |
13,792 |
|
Return on average assets (GAAP) |
|
|
1.14 |
% |
|
|
0.74 |
% |
Adjusted return on average assets (non-GAAP) |
|
|
1.13 |
% |
|
|
0.76 |
% |
Return on average equity (GAAP) |
|
|
11.22 |
% |
|
|
7.98 |
% |
Adjusted return on average equity (non-GAAP) |
|
|
11.18 |
% |
|
|
8.28 |
% |
Net Interest Income
The following tables present interest‑earning assets and interest‑bearing liabilities, the interest earned or paid, the average yield or rate on the daily average balance outstanding, net interest income and net interest margin for the periods indicated.
|
|
Three Months Ended September 30, |
|
||||||||||||||||||||||
|
|
2026 |
|
|
|
2025 |
|
||||||||||||||||||
($ in thousands) |
|
Average |
|
|
Interest |
|
|
Average |
|
|
|
Average |
|
|
Interest |
|
|
Average |
|
||||||
Interest-earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Loans (1)(2)(3)(4)(5) |
|
$ |
1,015,931 |
|
|
$ |
14,493 |
|
|
|
5.66 |
% |
|
|
$ |
1,010,041 |
|
|
$ |
14,356 |
|
|
|
5.64 |
% |
Taxable securities (5) |
|
|
635,031 |
|
|
|
5,354 |
|
|
|
3.34 |
% |
|
|
|
588,212 |
|
|
|
3,704 |
|
|
|
2.50 |
% |
Nontaxable securities (1)(5) |
|
|
62,276 |
|
|
|
429 |
|
|
|
2.73 |
% |
|
|
|
62,730 |
|
|
|
423 |
|
|
|
2.68 |
% |
Interest-bearing deposits |
|
|
27,327 |
|
|
|
258 |
|
|
|
3.75 |
% |
|
|
|
71,009 |
|
|
|
740 |
|
|
|
4.13 |
% |
Total interest-earning assets |
|
$ |
1,740,565 |
|
|
$ |
20,534 |
|
|
|
4.68 |
% |
|
|
$ |
1,731,992 |
|
|
$ |
19,223 |
|
|
|
4.40 |
% |
Interest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest-bearing demand deposits |
|
$ |
843,851 |
|
|
$ |
3,860 |
|
|
|
1.81 |
% |
|
|
$ |
827,977 |
|
|
$ |
4,307 |
|
|
|
2.06 |
% |
Savings deposits |
|
|
140,925 |
|
|
|
56 |
|
|
|
0.16 |
% |
|
|
|
141,197 |
|
|
|
55 |
|
|
|
0.15 |
% |
Time deposits(6) |
|
|
311,215 |
|
|
|
2,512 |
|
|
|
3.20 |
% |
|
|
|
322,782 |
|
|
|
2,907 |
|
|
|
3.57 |
% |
Borrowings |
|
|
1,241 |
|
|
|
12 |
|
|
|
3.84 |
% |
|
|
|
6,630 |
|
|
|
67 |
|
|
|
4.01 |
% |
Total interest-bearing liabilities |
|
$ |
1,297,232 |
|
|
$ |
6,440 |
|
|
|
1.97 |
% |
|
|
$ |
1,298,586 |
|
|
$ |
7,336 |
|
|
|
2.24 |
% |
Net interest income and interest rate spread |
|
|
|
|
$ |
14,094 |
|
|
|
2.71 |
% |
|
|
|
|
|
$ |
11,887 |
|
|
|
2.16 |
% |
||
Net interest margin |
|
|
|
|
|
|
|
|
3.21 |
% |
|
|
|
|
|
|
|
|
|
2.72 |
% |
||||
35
Table of Contents
|
|
Nine Months Ended September 30, |
|
||||||||||||||||||||||
|
|
2026 |
|
|
|
2025 |
|
||||||||||||||||||
($ in thousands) |
|
Average |
|
|
Interest |
|
|
Average |
|
|
|
Average |
|
|
Interest |
|
|
Average |
|
||||||
Interest-earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Loans (1)(2)(3)(4)(5) |
|
$ |
1,006,388 |
|
|
$ |
42,830 |
|
|
|
5.69 |
% |
|
|
$ |
1,004,552 |
|
|
$ |
41,052 |
|
|
|
5.46 |
% |
Taxable securities (5) |
|
|
637,118 |
|
|
|
14,026 |
|
|
|
2.94 |
% |
|
|
|
599,455 |
|
|
|
11,289 |
|
|
|
2.52 |
% |
Nontaxable securities (1)(5) |
|
|
62,387 |
|
|
|
1,292 |
|
|
|
2.77 |
% |
|
|
|
62,846 |
|
|
|
1,274 |
|
|
|
2.71 |
% |
Federal funds sold |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
152 |
|
|
|
5 |
|
|
|
4.40 |
% |
Interest-bearing deposits |
|
|
46,050 |
|
|
|
1,287 |
|
|
|
3.74 |
% |
|
|
|
85,229 |
|
|
|
2,757 |
|
|
|
4.32 |
% |
Total interest-earning assets |
|
$ |
1,751,943 |
|
|
$ |
59,435 |
|
|
|
4.54 |
% |
|
|
$ |
1,752,234 |
|
|
$ |
56,377 |
|
|
|
4.30 |
% |
Interest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest-bearing demand deposits |
|
$ |
855,993 |
|
|
$ |
11,298 |
|
|
|
1.76 |
% |
|
|
$ |
850,676 |
|
|
$ |
13,330 |
|
|
|
2.10 |
% |
Savings deposits |
|
|
142,237 |
|
|
|
161 |
|
|
|
0.15 |
% |
|
|
|
142,874 |
|
|
|
156 |
|
|
|
0.15 |
% |
Time deposits(6) |
|
|
312,969 |
|
|
|
7,684 |
|
|
|
3.28 |
% |
|
|
|
331,602 |
|
|
|
9,276 |
|
|
|
3.74 |
% |
Borrowings |
|
|
675 |
|
|
|
19 |
|
|
|
3.76 |
% |
|
|
|
2,234 |
|
|
|
67 |
|
|
|
4.01 |
% |
Total interest-bearing liabilities |
|
$ |
1,311,874 |
|
|
$ |
19,162 |
|
|
|
1.95 |
% |
|
|
$ |
1,327,386 |
|
|
$ |
22,829 |
|
|
|
2.30 |
% |
Net interest income and interest |
|
|
|
|
$ |
40,273 |
|
|
|
2.59 |
% |
|
|
|
|
|
$ |
33,548 |
|
|
|
2.00 |
% |
||
Net interest margin |
|
|
|
|
|
|
|
|
3.07 |
% |
|
|
|
|
|
|
|
|
|
2.56 |
% |
||||
When the three and nine months ended September 30, 2026 and 2025 are compared, improvement in the net interest margin stemmed from higher yields on loans and securities and lower cost of time deposits and interest bearing demand deposits, somewhat offset by lower yield on interest-bearing deposit assets. Taxable securities yield for the three and nine months ended September 30, 2026 benefited from the partial restructuring of the securities portfolio during June 2026.
Noninterest Income
|
|
Three Months Ended September 30, |
|
|
Change |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
Dollars |
|
|
Percent |
|
||||
Service charges on deposits |
|
$ |
748 |
|
|
$ |
681 |
|
|
$ |
67 |
|
|
|
9.84 |
% |
Other service charges and fees |
|
|
76 |
|
|
|
72 |
|
|
|
4 |
|
|
|
5.56 |
% |
Credit and debit card fees, net |
|
|
527 |
|
|
|
492 |
|
|
|
35 |
|
|
|
7.11 |
% |
Trust income |
|
|
687 |
|
|
|
700 |
|
|
|
(13 |
) |
|
|
(1.86 |
)% |
BOLI income |
|
|
310 |
|
|
|
304 |
|
|
|
6 |
|
|
|
1.97 |
% |
Gain on sale of mortgage loans |
|
|
55 |
|
|
|
92 |
|
|
|
(37 |
) |
|
|
(40.22 |
)% |
Other income |
|
|
171 |
|
|
|
196 |
|
|
|
(25 |
) |
|
|
(12.76 |
)% |
Total noninterest income |
|
$ |
2,574 |
|
|
$ |
2,537 |
|
|
$ |
37 |
|
|
|
1.46 |
% |
36
Table of Contents
|
|
Nine Months Ended September 30, |
|
|
Change |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
Dollars |
|
|
Percent |
|
||||
Service charges on deposits |
|
$ |
2,087 |
|
|
$ |
2,114 |
|
|
$ |
(27 |
) |
|
|
(1.28 |
)% |
Other service charges and fees |
|
|
287 |
|
|
|
228 |
|
|
|
59 |
|
|
|
25.88 |
% |
Credit and debit card fees, net |
|
|
1,528 |
|
|
|
1,275 |
|
|
|
253 |
|
|
|
19.84 |
% |
Trust income |
|
|
1,938 |
|
|
|
1,857 |
|
|
|
81 |
|
|
|
4.36 |
% |
BOLI income |
|
|
917 |
|
|
|
893 |
|
|
|
24 |
|
|
|
2.69 |
% |
Gain on sale of mortgage loans |
|
|
149 |
|
|
|
171 |
|
|
|
(22 |
) |
|
|
(12.87 |
)% |
Other income |
|
|
976 |
|
|
|
838 |
|
|
|
138 |
|
|
|
16.47 |
% |
Gain on sale of equity investment |
|
|
6,566 |
|
|
|
- |
|
|
|
6,566 |
|
|
NM |
|
|
Loss on sale of securities, net |
|
|
(6,549 |
) |
|
|
- |
|
|
|
(6,549 |
) |
|
NM |
|
|
Total noninterest income |
|
$ |
7,899 |
|
|
$ |
7,376 |
|
|
$ |
523 |
|
|
|
7.09 |
% |
When the three and nine months ended September 30, 2026 are compared with the comparable periods of 2025, noninterest income increased. Other service charges and fees increased when the three and nine months ended September 30, 2026 are compared with the comparable periods of 2025, primarily due to a change in recognition method for safe deposit box rent.
Credit and debit card fees, net, increased when the three and nine months ended September 30, 2026 are compared with the comparable periods of 2025, due to improved terms for interchange fee income stemming from the core system conversion in May of 2025.
Trust income increased when the nine months ended September 30, 2026 is compared with the comparable period of 2025 due to higher estate fee income in 2026.
Gain on sale of mortgage loans decreased when the three and nine months ended September 30, 2026 are compared with the comparable periods of 2025, due to lower volume.
Other income increased when the nine months ended September 30, 2026 is compared with the comparable periods of 2025, due to higher commissions on securities sales and income from equity investments.
During the second quarter of 2026, the Company recorded a gain on the sale of its equity interest in a community-bank insurance consortium. The Company also completed a strategic repositioning of a portion of its securities portfolio to enhance profitability and manage interest rate risk. The Company expects that incremental earnings improvement from the repositioning will recover the loss on the sale over a period of 1.8 years from the date of the transaction, and provide earnings accretion after the recovery period.
Noninterest Expense
|
|
Three Months Ended September 30, |
|
|
Change |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
Dollars |
|
|
Percent |
|
||||
Salaries and employee benefits |
|
$ |
5,819 |
|
|
$ |
5,114 |
|
|
$ |
705 |
|
|
|
13.79 |
% |
Occupancy, furniture and fixtures |
|
|
847 |
|
|
|
770 |
|
|
|
77 |
|
|
|
10.00 |
% |
Data processing |
|
|
1,016 |
|
|
|
848 |
|
|
|
168 |
|
|
|
19.81 |
% |
FDIC assessment |
|
|
211 |
|
|
|
210 |
|
|
|
1 |
|
|
|
0.48 |
% |
Intangible asset amortization |
|
|
82 |
|
|
|
92 |
|
|
|
(10 |
) |
|
|
(10.87 |
)% |
Franchise taxes |
|
|
352 |
|
|
|
350 |
|
|
|
2 |
|
|
|
0.57 |
% |
Professional services |
|
|
341 |
|
|
|
361 |
|
|
|
(20 |
) |
|
|
(5.54 |
)% |
Core system conversion expense |
|
|
- |
|
|
|
50 |
|
|
|
(50 |
) |
|
NM |
|
|
Other operating expenses |
|
|
650 |
|
|
|
729 |
|
|
|
(79 |
) |
|
|
(10.84 |
)% |
Total noninterest expense |
|
$ |
9,318 |
|
|
$ |
8,524 |
|
|
$ |
794 |
|
|
|
9.31 |
% |
37
Table of Contents
|
|
Nine Months Ended September 30, |
|
|
Change |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
Dollars |
|
|
Percent |
|
||||
Salaries and employee benefits |
|
$ |
17,441 |
|
|
$ |
15,505 |
|
|
$ |
1,936 |
|
|
|
12.49 |
% |
Occupancy, furniture and fixtures |
|
|
2,569 |
|
|
|
2,240 |
|
|
|
329 |
|
|
|
14.69 |
% |
Data processing |
|
|
2,909 |
|
|
|
2,532 |
|
|
|
377 |
|
|
|
14.89 |
% |
FDIC assessment |
|
|
625 |
|
|
|
627 |
|
|
|
(2 |
) |
|
|
(0.32 |
)% |
Intangible asset amortization |
|
|
253 |
|
|
|
284 |
|
|
|
(31 |
) |
|
|
(10.92 |
)% |
Franchise taxes |
|
|
1,053 |
|
|
|
1,081 |
|
|
|
(28 |
) |
|
|
(2.59 |
)% |
Professional services |
|
|
1,072 |
|
|
|
1,169 |
|
|
|
(97 |
) |
|
|
(8.30 |
)% |
Core system conversion expense |
|
|
- |
|
|
|
2,073 |
|
|
|
(2,073 |
) |
|
NM |
|
|
Other operating expenses |
|
|
2,026 |
|
|
|
2,228 |
|
|
|
(202 |
) |
|
|
(9.07 |
)% |
Total noninterest expense |
|
$ |
27,948 |
|
|
$ |
27,739 |
|
|
$ |
209 |
|
|
|
0.75 |
% |
Total noninterest expense increased when the three and nine months ended September 30, 2026 are compared with the comparable periods of 2025. During 2025, the Company recorded specific expense for the core system conversion, as well as associated marketing and mailing expense included in other noninterest expense.
Salaries and employee benefits include payroll taxes, health insurance, contributions to the employee stock ownership plan and employee 401(k), pension expense, incentives and salary continuation. When the three and nine months ended September 30, 2026 are compared with the comparable periods of 2025, the increase was driven by higher medical insurance expense, incentive programs and pension service cost.
Occupancy, furniture and fixtures expense increased when the three and nine months ended September 30, 2026 are compared with the comparable periods of 2025 due to depreciation and amortization of assets placed into service for the core system conversion in May 2025 and the Company's Roanoke and Lynchburg branch locations, opened in March 2025 and November 2025, respectively.
Data processing expense increased when three and nine months ended September 30, 2026 are compared with the comparable periods of 2025 due to higher maintenance and communications infrastructure expense, as well as expenses to manage cybersecurity risk. The cost of these measures was $131 for the three months ended September 30, 2026 and $114 for the three months ended September 30, 2025. For the nine months ended September 30, 2026, total cybersecurity expense was $413 compared with $255 for the nine months ended September 30, 2025. The Company places high priority on cybersecurity.
Professional services include legal, audit and consulting expenses, which decreased when the three and nine months ended September 30, 2026 are compared with the comparable periods of 2025 due to lower legal expense.
Other operating expenses decreased when the three and nine months ended September 30, 2026 are compared with the comparable periods of 2025 due to improvement in the non-service component of pension cost. The category of other operating expenses also includes expense for marketing and business development, supplies, and charitable donations, among others.
Income Tax
The Company’s income tax expense was $1,291 for the three months ended September 30, 2026 compared with $961 for the same period in 2025. The Company's income tax expense was $3,405 for the nine months ended September 30, 2026 and effective tax rate was 18.01%. For the nine months ended September 30, 2025, the Company’s income tax expense was $1,989 and effective tax rate was 16.67%. The effective tax rate increased due to comparable levels of nontaxable income while taxable earnings increased.
Asset Quality
Key indicators of the Company’s asset quality are presented in the following table.
|
|
September 30, |
|
|
December 31, |
|
||
|
|
2026 |
|
|
2025 |
|
||
Nonaccrual loans |
|
$ |
331 |
|
|
$ |
188 |
|
Loans past due 90 days or more, and still accruing |
|
|
151 |
|
|
|
881 |
|
ACLL to loans net of deferred fees and costs |
|
|
0.99 |
% |
|
|
0.99 |
% |
Year-to-date net charge-offs as a percentage of average loans(1) |
|
|
0.05 |
% |
|
|
0.03 |
% |
Ratio of nonaccrual loans to loans, net of |
|
|
0.03 |
% |
|
|
0.02 |
% |
Ratio of ACLL to nonaccrual loans |
|
|
3057.40 |
% |
|
|
5261.70 |
% |
38
Table of Contents
For information on the Company’s policies on the ACLL, please refer to the Company’s 2025 Form 10-K, Note 1: Summary of Significant Accounting Policies.
The Company’s risk analysis as of September 30, 2026 determined an ACLL of $10,120, or 0.99% of loans net of deferred fees and costs. This compares with an allowance of $9,892 as of December 31, 2025, or 0.99% of loans. To determine the appropriate level of the ACLL, the Company considers credit risk for individually evaluated loans and for groups of loans evaluated collectively.
Individually Evaluated Loans
Individually evaluated loans were $9,556 as of September 30, 2026 and $8,802 as of December 31, 2025. As of both reporting dates, two individually evaluated loans were collateral dependent but were adequately collateralized and did not result in an individual allocation. The remaining individually evaluated loans were measured using the discounted cash flow method, resulting in an allocation of $132 as of September 30, 2026 and $106 as of December 31, 2025.
Collectively Evaluated Loans
Collectively evaluated loans totaled $1,008,698, with an ACLL of $9,988 as of September 30, 2026. As of December 31, 2025, collectively evaluated loans totaled $991,124, with an allowance of $9,786.
Collectively evaluated loans are divided into classes based upon risk characteristics. Utilizing historical loss information and peer data, the Company calculates probability of default ("PD") and loss given default ("LGD") for each class, which is adjusted for a reasonable and supportable forecast. Cash flow projections based on each loan’s contractual terms are modified by the adjusted PD and LGD for its class. Loan classes are allocated additional loss estimates based upon the Company’s analysis of qualitative factors including economic measures, asset quality indicators, loan characteristics, and changes to internal Company policies and management.
Reasonable and Supportable Forecast
The Company applied a 12-month national unemployment forecast, with reversion to historical loss rates on a straight-line basis during the following 12 months. The forecast applied as of September 30, 2026 projects that unemployment will be slightly elevated from the current level, but will be at a lower level than the forecast applied as of December 31, 2025. The lower unemployment forecast decreased the required level of the ACLL when September 30, 2026 is compared with December 31, 2025.
Qualitative Factors: Economic
The Company sources economic data pertinent to its market from the most recently available publications, including business and personal bankruptcy filings, the residential vacancy rate and the inventory of new and existing homes.
Higher bankruptcy filings indicate heightened credit risk and increase the ACLL, while lower bankruptcy filings have a beneficial impact on credit risk. Compared with data available as of December 31, 2025, business bankruptcy filings and personal bankruptcy filings increased.
Residential vacancy rates and housing inventory are used to measure the housing market. The housing market directly or indirectly affects all loan classes. Higher vacancy and inventory levels increase credit risk. The residential vacancy rate available as of September 30, 2026 decreased compared to the data incorporated into the December 31, 2025 calculation, resulting in a lower allocation. Housing inventory increased when September 30, 2026 is compared with December 31, 2025, resulting in a higher allocation.
Qualitative Factors: Asset Quality Indicators
Accruing past due loans are analyzed at the class level and compared with previous levels. Increases in past due loans indicate heightened credit risk. Accruing loans past due 30-89 days were 0.29% of total loans as of September 30, 2026, a decrease from 0.35% as of December 31, 2025.
Qualitative Factors: Other Considerations
The Company considers other factors that impact credit risk, including the competitive, legal and regulatory environments, changes in lending policies and loan review, changes in lending management, and high risk loans.
Competitive, legal and regulatory environments were evaluated for changes that would affect credit risk. Higher competition for loans is deemed to increase credit risk, while lower competition is deemed to decrease credit risk. The Company's evaluation found slightly lower competitive pressure when compared with December 31, 2025. The legal and regulatory environments remain in a similar posture to December 31, 2025.
Lending policies, loan review procedures and management’s experience influence credit risk. Policies and procedures remain similar to those at December 31, 2025.
Levels of high risk loans are considered in the determination of the level of the ACLL. A decrease in the level of high risk loans within a class decreases the required allocation for the loan class, and an increase in the level of high risk loans within a class increases the required allocation for the loan class. Total high risk loans increased from the level at December 31, 2025.
The Company considers changes in experience and leadership of lending and credit risk management. During the second quarter of 2026, the Company's Chief Lending Officer announced his resignation and the Company promoted a seasoned lender to the position. The new CLO's long tenure and alignment with the Company's credit risk appetite and lending culture do not indicate a measurable
39
Table of Contents
increase in credit risk. However, due to the unexpected nature of the change, the Company determined an allocation was appropriate to recognize uncertainty. The Company removed an allocation associated with lending staff obtained through a 2024 acquisition.
The Company monitors local economic news and internal indicators to consider the presence of risk that may not be reflected in its standard analysis of qualitative factors. As of September 30, 2026, management identified elevated local unemployment data and collection activity, similar to December 31, 2025, as well as geopolitical concerns that impact inflation. The Company increased its allocation from December 31, 2025.
Conclusion
The estimate of the appropriate level for the ACLL requires management’s prudent and informed judgment. The Company's estimate is based on quantitative and qualitative analysis of historical indicators, asset quality and economic factors and represents a reasonable estimate of the credit risk in the loan portfolio as of September 30, 2026.
ACL on Unfunded Commitments
The ACL on unfunded commitments was $298, or 0.15% of unfunded commitments as of September 30, 2026. The ACL on unfunded commitments was $298, or 0.17% as of December 31, 2025.
Provision for Credit Losses
The provision for credit losses represents charges to earnings necessary to maintain an adequate allowance. The adequacy of the ACLL is reviewed quarterly and adjustments are made as determined necessary. The Company recorded a provision for credit losses on loans of $568 for the nine months ended September 30, 2026, compared with a provision for credit losses on loans of $581 and a provision of $37 for unfunded commitments for the nine months ended September 30, 2025. For the three month period ended September 30, 2026, the Company recorded a provision for credit losses on loans of $309 and a provision for credit losses on unfunded commitments of $15. For the three months ended September 30, 2025, the Company recorded a provision for credit losses on loans of $259 and a provision for credit losses on unfunded commitments of $47.
Loan Modifications
In the ordinary course of business the Company modifies loan terms on a case-by-case basis for a variety of reasons. Modifications may include rate reductions, payment extensions of varying lengths of time, a change in amortization term or method or other arrangements. Modifications to consumer loans generally involve short-term payment extensions to accommodate specific, temporary circumstances. Modifications to commercial loans may include, but are not limited to, changes in interest rate, maturity, amortization and financial covenants.
The Company reviews modifications to determine whether the borrower is experiencing financial difficulty, including indicators of default, bankruptcy, going concern, insufficient projected cash flows and inability to obtain financing from other sources. Please refer to Note 2: Loans and Allowance for Credit Losses in Part I, Item 1 of this report for more information on loans modified for borrowers experiencing financial difficulty.
During the three and nine months ended September 30, 2026 and 2025, the Company modified loans in the normal course of business for borrowers who were not experiencing financial difficulty. During the three months ended September 30, 2026, the Company modified 67 loans totaling $20,123. During the nine months ended September 30, 2026, the Company modified 194 loans totaling $60,019. During the three and nine months ended September 30, 2025, the Company provided 46 modifications to loans totaling $13,884 and 414 modifications totaling $55,739, respectively.
Key Assets and Liabilities
NBI’s key assets and liabilities and their change from December 31, 2025 are shown in the following table.
|
|
September 30, |
|
|
December 31, |
|
|
Change |
|
|||||||
|
|
2026 |
|
|
2025 |
|
|
Dollars |
|
|
Percent |
|
||||
Interest-bearing deposits |
|
$ |
18,890 |
|
|
$ |
50,831 |
|
|
$ |
(31,941 |
) |
|
|
(62.84 |
)% |
Securities available for sale, at fair value |
|
|
619,895 |
|
|
|
654,377 |
|
|
|
(34,482 |
) |
|
|
(5.27 |
)% |
Loans, net |
|
|
1,007,282 |
|
|
|
989,418 |
|
|
|
17,864 |
|
|
|
1.81 |
% |
Total assets |
|
|
1,783,201 |
|
|
|
1,824,506 |
|
|
|
(41,305 |
) |
|
|
(2.26 |
)% |
Deposits |
|
|
1,577,178 |
|
|
|
1,626,933 |
|
|
|
(49,755 |
) |
|
|
(3.06 |
)% |
40
Table of Contents
Average Balances
Year-to-date daily averages for the major balance sheet categories are as follows:
|
|
September 30, |
|
|
December 31, |
|
|
Change |
|
|||||||
|
|
2026 |
|
|
2025 |
|
|
Dollars |
|
|
Percent |
|
||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest-bearing deposits |
|
$ |
46,050 |
|
|
$ |
76,223 |
|
|
$ |
(30,173 |
) |
|
|
(39.59 |
)% |
Securities available for sale, at fair value |
|
|
646,345 |
|
|
|
603,869 |
|
|
|
42,476 |
|
|
|
7.03 |
% |
Loans, net |
|
|
996,267 |
|
|
|
995,531 |
|
|
|
736 |
|
|
|
0.07 |
% |
Total assets |
|
|
1,822,537 |
|
|
|
1,809,631 |
|
|
|
12,906 |
|
|
|
0.71 |
% |
Liabilities and stockholders’ equity |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Noninterest-bearing demand deposits |
|
$ |
314,800 |
|
|
$ |
305,115 |
|
|
$ |
9,685 |
|
|
|
3.17 |
% |
Interest-bearing demand deposits |
|
|
855,993 |
|
|
|
842,479 |
|
|
|
13,514 |
|
|
|
1.60 |
% |
Savings deposits |
|
|
142,237 |
|
|
|
142,547 |
|
|
|
(310 |
) |
|
|
(0.22 |
)% |
Time deposits |
|
|
312,969 |
|
|
|
328,286 |
|
|
|
(15,317 |
) |
|
|
(4.67 |
)% |
Stockholders’ equity |
|
|
184,744 |
|
|
|
170,428 |
|
|
|
14,316 |
|
|
|
8.40 |
% |
Lower interest bearing deposit assets reflect strategic investment in securities available for sale. Changes in securities, loans, deposits and stockholders’ equity are discussed below.
Securities
The Company's securities are designated as available for sale and as such, are reported at fair value. The following table presents information on securities available for sale as of the dates indicated:
|
|
September 30, |
|
|
December 31, |
|
|
Change |
|
|||||||
|
|
2026 |
|
|
2025 |
|
|
Dollars |
|
|
Percent |
|
||||
Amortized cost |
|
$ |
696,374 |
|
|
$ |
706,229 |
|
|
$ |
(9,855 |
) |
|
|
(1.40 |
)% |
Unrealized loss, net |
|
|
(76,479 |
) |
|
|
(51,852 |
) |
|
|
(24,627 |
) |
|
|
(47.49 |
)% |
Securities available for sale, at fair value |
|
$ |
619,895 |
|
|
$ |
654,377 |
|
|
$ |
(34,482 |
) |
|
|
(5.27 |
)% |
The Company repositioned a portion of the securities portfolio during the second quarter of 2026, selling securities with an amortized cost of $131,866 and weighted average yield of 1.80%, resulting in a loss of $6,549. The Company then purchased securities totalling $127,327 with a weighted average yield of 5.26%.
The unrealized loss in the Company’s investment portfolio is due to interest rate risk. Fair value of bonds moves inversely to interest rate changes and expectations of interest rate changes. The Company’s analysis of the securities portfolio determined no identifiable credit risk as of September 30, 2026 and no ACL has been recorded. Please refer to Note 1: General and Summary of Significant Accounting Policies of the Company's 2025 Form 10-K and Note 3: Securities in Part I, Item 1 of this report for additional information on the securities portfolio.
Loans
|
|
September 30, |
|
|
December 31, |
|
|
Change |
|
|||||||
|
|
2026 |
|
|
2025 |
|
|
Dollars |
|
|
Percent |
|
||||
Real estate construction |
|
$ |
73,137 |
|
|
$ |
40,694 |
|
|
$ |
32,443 |
|
|
|
79.72 |
% |
Consumer real estate |
|
|
338,917 |
|
|
|
328,653 |
|
|
|
10,264 |
|
|
|
3.12 |
% |
Commercial real estate |
|
|
450,871 |
|
|
|
467,783 |
|
|
|
(16,912 |
) |
|
|
(3.62 |
)% |
Commercial non real estate |
|
|
50,531 |
|
|
|
52,018 |
|
|
|
(1,487 |
) |
|
|
(2.86 |
)% |
Public sector and IDA |
|
|
60,027 |
|
|
|
63,677 |
|
|
|
(3,650 |
) |
|
|
(5.73 |
)% |
Consumer non real estate |
|
|
44,771 |
|
|
|
47,101 |
|
|
|
(2,330 |
) |
|
|
(4.95 |
)% |
Less: deferred fees and costs |
|
|
(852 |
) |
|
|
(616 |
) |
|
|
(236 |
) |
|
|
38.31 |
% |
Loans, net of deferred fees and costs |
|
$ |
1,017,402 |
|
|
$ |
999,310 |
|
|
$ |
18,092 |
|
|
|
1.81 |
% |
The Company anticipated the increase in real estate construction loans, as projects underlying previously approved loans reached development phases for advances. The Company is positioned to make every loan within its legal lending limit that meets its underwriting standards and strategic portfolio mix goals.
41
Table of Contents
Deposits
|
|
September 30, |
|
|
December 31, |
|
|
Change |
|
|||||||
|
|
2026 |
|
|
2025 |
|
|
Dollars |
|
|
Percent |
|
||||
Noninterest-bearing demand deposits |
|
$ |
318,753 |
|
|
$ |
313,022 |
|
|
$ |
5,731 |
|
|
|
1.83 |
% |
Interest-bearing demand deposits |
|
|
809,383 |
|
|
|
853,756 |
|
|
|
(44,373 |
) |
|
|
(5.20 |
)% |
Savings deposits |
|
|
140,845 |
|
|
|
142,645 |
|
|
|
(1,800 |
) |
|
|
(1.26 |
)% |
Time deposits |
|
|
308,197 |
|
|
|
317,510 |
|
|
|
(9,313 |
) |
|
|
(2.93 |
)% |
Total deposits |
|
$ |
1,577,178 |
|
|
$ |
1,626,933 |
|
|
$ |
(49,755 |
) |
|
|
(3.06 |
)% |
Deposits decreased when September 30, 2026 is compared with December 31, 2025, due to annual cyclicality in the Company's municipal deposit base. Historically, the Company's municipal deposits, which account for 19% of the Company's deposits as of September 30, 2026, reach a low point during the third quarter and increase during the fourth quarter.
The Company continues to develop and implement new deposit products that provide additional functionality and marketing opportunity, including a treasury management suite for commercial and municipal deposit customers and an online account opening platform. The Company’s depositors within its market area are diverse, including individuals, businesses and municipalities. The Company does not have any brokered deposits. Depositors are insured up to the FDIC maximum of $250 thousand. Municipal deposits have additional security from bonds pledged as collateral, in accordance with state regulation. Of the Company’s non-municipal deposits, approximately 21% are uninsured.
Capital Resources
|
|
September 30, |
|
|
December 31, |
|
|
Change |
|
|||||||
|
|
2026 |
|
|
2025 |
|
|
Dollars |
|
|
Percent |
|
||||
Common stock and additional paid in capital |
|
$ |
22,190 |
|
|
$ |
22,024 |
|
|
$ |
166 |
|
|
|
0.75 |
% |
Retained earnings |
|
|
213,277 |
|
|
|
202,558 |
|
|
|
10,719 |
|
|
|
5.29 |
% |
Accumulated other comprehensive loss |
|
|
(59,128 |
) |
|
|
(39,674 |
) |
|
|
(19,454 |
) |
|
|
(49.03 |
)% |
Total stockholders’ equity |
|
$ |
176,339 |
|
|
$ |
184,908 |
|
|
$ |
(8,569 |
) |
|
|
(4.63 |
)% |
The decrease in stockholders’ equity reflects greater unrealized losses on securities available for sale.
The Company qualifies as a small bank holding company under the Federal Reserve’s Small Bank Holding Company Policy Statement, which exempts bank holding companies with less than $5 billion in assets from reporting consolidated regulatory capital ratios and from minimum regulatory capital requirements. NBB is subject to various capital requirements administered by banking agencies, including an additional capital conservation buffer in order to make capital distributions or discretionary bonus payments. Risk-based capital ratios are calculated in compliance with OCC rules based on the Basel III Capital Rules. Capital ratios for NBB are shown in the following tables:
|
|
September 30, 2026 |
|
|
December 31, 2025 |
|
|
Regulatory |
|
|
Regulatory Capital |
|
||||
Common Equity Tier I Capital Ratio |
|
|
16.59 |
% |
|
|
16.16 |
% |
|
|
4.50 |
% |
|
|
7.00 |
% |
Tier I Capital Ratio |
|
|
16.59 |
% |
|
|
16.16 |
% |
|
|
6.00 |
% |
|
|
8.50 |
% |
Total Capital Ratio |
|
|
17.44 |
% |
|
|
17.02 |
% |
|
|
8.00 |
% |
|
|
10.50 |
% |
Leverage Ratio |
|
|
11.03 |
% |
|
|
10.42 |
% |
|
|
4.00 |
% |
|
|
4.00 |
% |
Liquidity
Liquidity measures the Company’s ability to meet its financial commitments at a reasonable cost. Demands on the Company’s liquidity include funding additional loan demand and accepting withdrawals of existing deposits. The Company has diverse liquidity sources, including customer and purchased deposits, customer repayments of loan principal and interest, sales, calls and maturities of securities, Federal Reserve discount window borrowing, short-term borrowing, and FHLB advances.
As of September 30, 2026, the Company had $287,834 of borrowing capacity from the FHLB and the Company had $159,997 of available capacity at the Federal Reserve Bank discount window. As of September 30, 2026, the Company had $17,900 in Federal Reserve Discount Window borrowings with a term of less than three months.
42
Table of Contents
The Company considers its security portfolio for typical liquidity needs, within accounting, legal and strategic parameters. Portions of the securities portfolio are pledged to meet state requirements for public funds deposits. Discount window borrowings also require pledged securities. Increased/decreased liquidity from public funds deposits or discount window borrowings results in increased/decreased liquidity from pledging requirements. The Company monitors public funds pledging requirements and unpledged available for sale securities accessible for liquidity needs.
Regulatory capital levels determine the Company’s ability to use purchased deposits and the Federal Reserve Bank discount window. As of September 30, 2026, the Company is considered well capitalized and does not have any restrictions on purchased deposits or borrowing ability at the Federal Reserve Bank discount window.
The Company monitors factors that may increase its liquidity needs. Some of these factors include deposit trends, large depositor activity, maturing deposit promotions, interest rate sensitivity, maturity and repricing timing gaps between assets and liabilities, the level of unfunded loan commitments and loan growth. As of September 30, 2026, the Company’s liquidity is sufficient to meet projected trends.
To monitor and estimate liquidity levels, the Company performs stress testing under varying assumptions on credit sensitive liabilities and the sources and amounts of balance sheet and external liquidity available to replace outflows. The Company’s Contingency Funding Plan sets forth avenues for rectifying liquidity shortfalls. As of September 30, 2026, the analysis indicated adequate liquidity under the tested scenarios.
The Company utilizes several other strategies to maintain sufficient liquidity. Loan and deposit growth are managed to keep the loan to deposit ratio within the Company’s internally-set target range. As of September 30, 2026, the loan to deposit ratio was 64.51%. The investment strategy takes into consideration the term of the investment, and securities in the available for sale portfolio are laddered based upon projected funding needs.
As of September 30, 2026, the Company was not aware of any other known trends, events or uncertainties that have or are reasonably likely to have a material impact on our liquidity. As of September 30, 2026, the Company has no material commitments for long-term debt for capital expenditures.
Off-Balance Sheet Arrangements
In the normal course of business, NBB extends lines of credit to its customers. Depending on their needs, customers may draw upon lines of credit at any time in any amount up to a pre-approved limit. The Bank also issues two types of standby letters of credit to customers: financial standby letters of credit that guarantee payments to facilitate customer purchases and performance letters of credit that guarantee payment if the customer fails to complete a specific obligation. Amounts drawn upon these lines and letters of credit vary at any given time depending on the business needs of the customers.
While it would be possible for customers to fully draw on approved lines of credit and for beneficiaries to call all letters of credit, historically this has not occurred. In the event of a sudden and substantial draw on these lines, the Company would manage liquidity using borrowing capacity, raising additional deposits, or selling securities available for sale or loans.
The Company sells mortgages on the secondary market subject to recourse agreements. The mortgages originated must meet strict underwriting and documentation requirements for the sale to be completed. To date, no recourse provisions have ever been invoked. If the Company identified a factor or trend that indicated recourse risk, a loss reserve would be recorded.
Contractual Obligations
The Company had no finance lease or purchase obligations and no long-term debt at September 30, 2026.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not applicable.
Item 4. Controls and Procedures
The Company’s management evaluated, with the participation of the Company’s principal executive officer and principal financial officer, the effectiveness of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e)) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as of the end of the period covered by this report. Based on that evaluation, the Company’s principal executive officer and principal financial officer concluded that the Company’s disclosure controls and procedures were effective as of September 30, 2026 to ensure that information required to be disclosed in the reports that the Company files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified by the Company's management, including the Company's principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.
There were no changes in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) that occurred during the three months ended September 30, 2026, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
Because of the inherent limitations in all control systems, the Company believes that no system of controls, no matter how well designed and operated, can provide absolute assurance that all control issues have been detected.
43
Table of Contents
Part II - OTHER INFORMATION
Item 1. Legal Proceedings
There are no pending or threatened legal proceedings to which the Company or any of its subsidiaries is a party or to which the property of the Company or any of its subsidiaries is subject that, in the opinion of management, may materially impact the financial condition of the Company.
Item 1A. Risk Factors
Please refer to the “Risk Factors” previously disclosed in Item 1A of the Company's 2025 Form 10-K and the factors discussed under “Cautionary Statement Regarding Forward-Looking Statements” in Part I. Item 2 of this Form 10-Q.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
Item 6. Exhibits
Index of Exhibits
Exhibit No. |
Description |
|
|
2(i) |
Agreement and Plan of Merger, dated as of January 23, 2024, by and among National Bankshares, Inc., The National Bank of Blacksburg and Frontier Community Bank |
|
(incorporated herein by reference to Exhibit 2.1 of the Form 8-K filed on January 24, 2024) |
3(i) |
Amended and Restated Articles of Incorporation of National Bankshares, Inc. |
|
(incorporated herein by reference to Exhibit 3.1 of the Form 8-K filed on March 16, 2006) |
3(ii) |
Amended and Restated Bylaws of National Bankshares, Inc. |
|
(incorporated herein by reference to Exhibit 3.2 of the Form 8-K filed on July 10, 2024) |
4 |
Specimen copy of certificate for National Bankshares, Inc. common stock |
|
(incorporated herein by reference to Exhibit 4(a) of the Annual Report on Form 10-K for fiscal year ended December 31, 1993) |
+31(i) |
Section 302 Certification of Chief Executive Officer |
|
Filed herewith |
+31(ii) |
Section 302 Certification of Chief Financial Officer |
|
Filed herewith |
+32(i) |
18 U.S.C. Section 1350 Certification of Chief Executive Officer |
|
Filed herewith |
+32(ii) |
18 U.S.C. Section 1350 Certification of Chief Financial Officer |
|
Filed herewith |
+101 |
The following materials from National Bankshares, Inc.’s Quarterly Report on Form 10-Q for the period ended September 30, 2026 are formatted in iXBRL (Inline Extensible Business Reporting Language), furnished herewith: (i) Consolidated Balance Sheets at September 30, 2026 and December 31, 2025; (ii) Consolidated Statements of Income for the three and nine months ended September 30, 2026 and 2025; (iii) Consolidated Statements of Comprehensive (Loss) Income for the three |
|
Filed herewith |
44
Table of Contents
|
and nine months ended September 30, 2026 and 2025; (iv) Consolidated Statements of Changes in Stockholders’ Equity for the three and nine months ended September 30, 2026 and 2025; (v) Consolidated Statements of Cash Flows for the nine months ended September 30, 2026 and 2025; and (vi) Notes to Consolidated Financial Statements. |
|
|
104 |
Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101) |
|
Filed herewith |
45
Table of Contents
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
NATIONAL BANKSHARES, INC. |
|
|
|
|
|
|
|
Date: November 12, 2026 |
|
/s/ Lara E. Ramsey |
|
|
By: Lara E. Ramsey |
|
|
President and Chief Executive Officer |
|
|
(Principal Executive Officer) |
|
|
|
|
|
|
|
|
|
Date: November 12, 2026 |
|
/s/ Lora M. Jones |
|
|
By: Lora M. Jones |
|
|
Treasurer and |
|
|
Chief Financial Officer |
|
|
(Principal Financial Officer) |
|
|
(Principal Accounting Officer) |
46