National Bankshares (NASDAQ: NKSH) Q1 2026 earnings climb to $5.0M

Rhea-AI Filing Summary

National Bankshares, Inc. reported strong first quarter 2026 results, with net income of $5.0 million, or $0.78 per diluted share, up from $3.2 million, or $0.51, a year earlier. Total assets were $1.83 billion at March 31, 2026.

Profitability improved as the fully tax-equivalent net interest margin rose to 2.98% from 2.40% in the first quarter of 2025, driven by lower deposit costs and higher securities yields. Adjusted return on average assets reached 1.08%, and adjusted return on average equity was 10.57%, both higher than a year ago.

Credit quality remained strong, with nonperforming loans at 0.03% of total loans and an allowance for credit losses of 0.98% of total loans. Deposits were diversified, municipal balances formed 22% of deposits, and approximately 19.80% of non-municipal deposits were uninsured.

Positive

• Q1 2026 earnings strengthened meaningfully, with net income rising to $5.0 million (diluted EPS $0.78) from $3.2 million ($0.51) in Q1 2025, reflecting improved profitability.
• Profitability and margins improved, as the fully tax-equivalent net interest margin increased to 2.98% from 2.40% a year earlier, and adjusted return on average equity reached 10.57%.
• Credit quality remained very strong, with nonperforming loans at 0.03% of total loans, loans past due 90 days or more at 0.02%, and an ACLL equal to 0.98% of total loans.

Negative

• None.

Insights

Bank equity analyst

National Bankshares posted stronger Q1 2026 earnings with better margins and solid credit quality.

National Bankshares delivered Q1 2026 net income of $5.0M, up from $3.2M in Q1 2025, as the net interest margin expanded to 2.98% from 2.40%. Higher securities yields and lower deposit costs supported the improvement.

Asset quality stayed favorable, with nonperforming loans at 0.03% of total loans and the ACLL at 0.98%. Returns also improved, with adjusted ROA at 1.08% and adjusted ROE at 10.57%, reflecting more efficient use of the balance sheet and equity base.

The bank maintained a strong capital and liquidity profile: tangible common equity to tangible assets was 9.65%, deposits were diverse across customer types, and the bank had borrowing capacity from the FHLB and Federal Reserve. Subsequent filings may provide additional detail on loan growth trends and deposit pricing as 2026 progresses.

8-K Event Classification

2 items: 2.02, 9.01

2 items

Item 2.02 Results of Operations and Financial Condition Financial

Disclosure of earnings results, typically an earnings press release or preliminary financials.

Item 9.01 Financial Statements and Exhibits Exhibits

Financial statements, pro forma financial information, and exhibit attachments filed with this report.

Key Figures

Net income Q1 2026: $4.981M Net income Q1 2025: $3.236M Diluted EPS Q1 2026: $0.78 per share +5 more

8 metrics

Net income Q1 2026 $4.981M Three months ended March 31, 2026

Net income Q1 2025 $3.236M Three months ended March 31, 2025

Diluted EPS Q1 2026 $0.78 per share Three months ended March 31, 2026

Total assets $1.829B As of March 31, 2026

Net interest margin 2.98% Three months ended March 31, 2026, FTE basis

Return on average assets 1.08% Adjusted, three months ended March 31, 2026

Nonperforming loans ratio 0.03% Nonperforming loans to total loans at March 31, 2026

Tangible common equity ratio 9.65% Tangible common equity to tangible assets at March 31, 2026

Key Terms

net interest margin, efficiency ratio, tangible common equity, allowance for credit losses on loans, +1 more

5 terms

net interest margin financial

"The net interest margin improved when the three month period ended March 31, 2026 is compared"

Net interest margin measures how much a bank earns from lending and investing compared with what it pays for funding, expressed as a percentage of its interest-earning assets. Think of it like a grocery store’s markup: it shows the gap between buying cost and selling price per dollar of goods — here, the cost is interest paid and the sale is interest received. Investors watch it because a higher margin usually means a bank is more profitable and better at managing interest rate and credit conditions.

efficiency ratio financial

"The efficiency ratio is calculated as noninterest expense divided by the sum of noninterest income"

A measure of how much a company spends to produce each dollar of revenue, usually shown as operating expenses divided by revenue and expressed as a percentage. Think of it as a household’s budget: a lower percentage means more of each dollar earned stays as profit, while a higher number means costs are eating into returns. Investors use it to judge cost control and compare how efficiently companies turn revenue into earnings, especially in banks and financial firms.

tangible common equity financial

"Tangible common equity and tangible assets exclude goodwill and intangible assets"

Tangible common equity is the portion of a company’s net worth that belongs to ordinary shareholders after removing intangible items (like goodwill or patents) and any preferred claims; it’s often expressed on a per-share basis. Think of it as the hard, sellable value left for common owners if you removed non-physical assets and paid off debts—investors use it to judge how much real cushion a company has and whether the stock might be under- or over-valued.

allowance for credit losses on loans financial

"Less: allowance for credit losses on loans ("ACLL")"

A bank's allowance for credit losses on loans is a reserve of money set aside to cover loans the lender expects may not be repaid. Think of it as a rainy-day fund for a loan portfolio: larger allowances signal more expected losses and reduce reported profits and available capital, so investors watch it to judge a lender’s risk exposure, earnings quality, and financial strength.

nonperforming assets financial

"National Bankshares, Inc. Asset Quality Data (Unaudited) Nonperforming Assets"

Nonperforming assets are loans or investments that are not generating expected payments or returns because the borrower has fallen behind on payments or the investment has lost value. They matter to investors because a high level of nonperforming assets can indicate financial trouble for a bank or institution, potentially affecting its stability and profitability.

Offering Details

earnings_snapshot

Offering

Offering Type earnings_snapshot

Understanding 8-K Material Events →

0000796534false00007965342026-04-232026-04-23

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 23, 2026

National Bankshares, Inc.

(Exact name of Registrant as Specified in Its Charter)

Virginia			0-15204	54-1375874
(State or Other Jurisdiction of Incorporation)			(Commission File Number)	(IRS Employer Identification No.)
101 Hubbard Street
Blacksburg, Virginia				24060
(Address of Principal Executive Offices)				(Zip Code)

Registrant’s Telephone Number, Including Area Code: 540 951-6300

Not applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $1.25 per share		NKSH		The Nasdaq Stock Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

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. ☐

Item 2.02 Results of Operations and Financial Condition.

On April 23, 2026, National Bankshares, Inc. issued a press release reporting its financial results for the period ended March 31, 2026. A copy of the press release is being furnished as an exhibit to this report and is incorporated by reference into this Item 2.02.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

99.1 National Bankshares, Inc. Press Release, dated April 23, 2026

104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

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 hereunto duly authorized.

			NATIONAL BANKSHARES, INC.
Date:	April 23, 2026	By:	/s/ Lara E. Ramsey
			Lara E. Ramsey President and CEO

EXHIBIT 99.1

FOR IMMEDIATE RELEASE

CONTACTS:	Lara E. Ramsey, President and CEO	Lora M. Jones, Treasurer & CFO
	(540) 951-6250 lramsey@nbbank.com	(540) 951-6238 ljones@nbbank.com

National Bankshares, Inc. Reports Results for the Three Months Ended March 31, 2026

BLACKSBURG, VA., April 23, 2026 -- National Bankshares, Inc. (“the Company”) (Nasdaq: NKSH), parent company of The National Bank of Blacksburg (“the Bank”) and National Bankshares Financial Services, Inc., today announced its results of operations through the first quarter of 2026. The Company reported net income of $5.0 million or $0.78 per diluted common share for the three months ended March 31, 2026. This compares with net income of $3.2 million or $0.51 per diluted common share for the three months ended March 31, 2025. National Bankshares, Inc. ended March 31, 2026 with total assets of $1.83 billion.

President & CEO Lara E. Ramsey commented, “Our first quarter results reflect continued improvement in the net interest margin, with net income growth of over 50% from the first quarter of 2025. We are excited to continue our positive momentum in 2026, with an emphasis on new markets, deepening existing relationships, and offering new services. And we are confident that these efforts, combined with our legacy of efficient expense management, will continue to deliver outstanding shareholder value.”

Comparability

During the second quarter of 2025, the Company reclassified certain deposit products between savings deposits and time deposits, and made other minor reclassifications. Prior periods are presented on a comparable basis.

Highlights

Net Interest Income

The net interest margin improved when the three month period ended March 31, 2026 is compared with the three month periods ended December 31, 2025 and March 31, 2025, due to lower deposit costs and higher security yields. Loan yield improved when the first quarter of 2026 is compared with the first quarter of 2025 due to upward repricing and higher fair value accretion, and decreased when compared with the the fourth quarter of 2025 due to lower fair value accretion and lower average balance.

Noninterest Income

Credit and debit card fees, net, increased when the first quarter of 2026 is compared with the first quarter and last quarter of 2025. The Company's core system conversion and associated changes in 2025 resulted in improved terms for interchange fee income associated with credit and debit cards. Other service charges and fees increased due to a change in timing of recognition of safe deposit box fee income.

Noninterest Expense

Salaries and employee benefits increased when the first quarter of 2026 is compared with the fourth quarter of 2025 and the first quarter of 2025 due to higher medical insurance and incentive programs. Professional services increased due to higher audit and consulting expense.

Securities

The net unrealized loss on securities worsened when March 31, 2026 is compared with December 31, 2025, due to the impact of global uncertainty on bond valuations. The unrealized loss on securities improved when March 31, 2026 is compared with March 31, 2025 due to interest rate changes. The Company purchased $20 million in securities during the

101 Hubbard Street / Blacksburg, Virginia 24060

P.O. Box 90002 / Blacksburg, Virginia 24062-9002

540 951-6300 / 800 552-4123

www.nationalbankshares.com

first quarter of 2026. Analysis as of March 31, 2026 did not indicate credit risk concerns with any of the Company’s securities.

Deposits
Deposits increased from December 31, 2025 to March 31, 2026. Deposits decreased when compared with March 31, 2025, due to strategic decisions to reduce time deposit pricing in consideration of strong liquidity. The Company’s depositors within its market areas are diverse and include 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, which account for 22% of the Company’s deposits, have additional security from bonds pledged as collateral, in accordance with state regulation. Of the Company’s non-municipal deposits, approximately 19.80% are uninsured.

Liquidity

The Company’s liquidity position remains solid. The Company maintains borrowing lines with the Federal Home Loan Bank of Atlanta (“FHLB”) and the Federal Reserve that provide substantial borrowing capacity. Combined with a low loan-to-deposit ratio and positive results of the latest liquidity stress testing, the Company believes it is well positioned to meet foreseeable liquidity demands.

Loans and Credit Quality

Loans decreased slightly from December 31, 2025 and March 31, 2025. The Company is positioned to continue to make every loan that meets its underwriting standards. Loan metrics continue to reflect low credit risk, with low charge-off and past due levels. The Company's measurement of credit risk resulted in a recovery to the allowance for credit losses on loans for the first quarter of 2026, reflecting an improvement in certain economic factors.

Stockholders’ Equity

Stockholders’ equity increased when March 31, 2026 is compared with December 31, 2025 due to net income. Net income in excess of dividends and improvement in the unrealized loss on securities increased stockholder's equity from March 31, 2025 to March 31, 2026. The Bank is considered well capitalized, with capital ratios substantially higher than minimum regulatory requirements, and meets all requirements for borrowing from the FHLB.

2

About National Bankshares

National Bankshares, Inc., headquartered in Blacksburg, Virginia, is the parent company of The National Bank of Blacksburg, which does business as National Bank, and of National Bankshares Financial Services, Inc. National Bank is a community bank operating from 28 full-service offices, primarily in southwestern, western and central Virginia, and one loan production office in Charlottesville, Virginia. National Bankshares Financial Services, Inc. is an investment and insurance subsidiary in the same trade area. The Company’s stock is traded on the Nasdaq Capital Market under the symbol “NKSH.” Additional information is available at www.nationalbankshares.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, forward-looking statements can be identified by use of words such as “may,” “will,” “anticipates,” “believes,” “expects,” “plans,” “estimates,” “potential,” “continue,” “should,” and similar words or phrases. These statements are based upon current and anticipated economic conditions, nationally and in the Company’s market, interest rates and interest rate policy, competitive factors, and other conditions which by their nature, are not susceptible to accurate forecast and are subject to significant uncertainty. Although we believe that our expectations with respect to forward-looking statements are based upon reasonable assumptions within the bounds of our existing knowledge of our business and operations, there can be no assurance that actual future results, performance, achievements, or trends will not differ materially from any projected future results, performance, achievements or trends expressed or implied by such forward-looking statements. Actual future results, performance, achievements or trends may differ materially from historical results or those anticipated depending on a variety of factors, including, but not limited to, the following: the level of inflation; interest rates; national and local economic conditions; monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury, the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Consumer Financial Protection Bureau and the Federal Deposit Insurance Corporation, and the impact of any policies or programs implemented pursuant to financial reform legislation; unanticipated increases in the level of unemployment in the Company’s market; the quality or composition of the loan and/or investment portfolios; the sufficiency of the Company’s allowance for credit losses; demand for loan products; deposit flows, including impact on liquidity; competition; demand for financial services in the Company’s market; the real estate market conditions in the Company’s market; laws, regulations and policies impacting financial institutions; adverse developments in the financial industry generally, responsive measures to mitigate and manage such developments, related supervisory and regulatory actions and costs, and related impacts on customer behavior; technological risks and developments, and cyber-threats, attacks or events; the Company’s technology initiatives; geopolitical conditions, including acts or threats of terrorism and/or military conflicts, or actions taken by the U.S. or other governments in response to acts or threats of terrorism and/or military conflicts; the occurrence of significant natural disasters, including severe weather conditions, floods, and other catastrophic events; the Company's ability to identify, attract, and retain experienced management, relationship managers, and support personnel, particularly in a competitive labor environment; performance by the Company’s counterparties or vendors; applicable accounting principles, policies and guidelines; the impact of public health events, including the adverse impact on our business and operations and on our customers; and other factors described from time to time in the Company’s reports (such as our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K) filed with the Securities and Exchange Commission. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. The Company does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions which may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

3

National Bankshares, Inc.

Consolidated Balance Sheets

(Unaudited)

(in thousands, except share and per share data)		March 31,				December 31,				March 31,
		2026				2025				2025
Assets
Cash and due from banks		$	7,976			$	8,419			$	14,892
Interest-bearing deposits			54,177				50,831				107,385
Federal funds sold			-				-				258
Total cash and cash equivalents			62,153				59,250				122,535
Securities available for sale, at fair value			658,112				654,377				596,253
Mortgage loans held for sale			608				-				938
Loans:
Real estate construction loans			53,500				40,694				42,942
Consumer real estate loans			331,110				328,653				311,549
Commercial real estate loans			452,881				467,783				497,116
Commercial non real estate loans			50,736				52,018				53,156
Public sector and IDA loans			62,740				63,677				56,981
Consumer non real estate loans			45,097				47,101				42,161
Total loans			996,064				999,926				1,003,905
Less: deferred fees and costs			(674	)			(616	)			(641	)
Loans, net of deferred fees and costs			995,390				999,310				1,003,264
Less: allowance for credit losses on loans ("ACLL")			(9,739	)			(9,892	)			(10,490	)
Loans, net			985,651				989,418				992,774
Premises and equipment, net			18,397				18,479				17,544
Accrued interest receivable			7,001				6,538				6,673
Goodwill			10,718				10,718				10,718
Core deposit intangible, net			1,403				1,490				1,766
Bank-owned life insurance ("BOLI")			48,869				48,568				47,661
Other assets			36,081				35,668				38,855
Total assets		$	1,828,993			$	1,824,506			$	1,835,717
Liabilities and Stockholders' Equity
Noninterest-bearing demand deposits		$	302,844			$	313,022			$	301,149
Interest-bearing demand deposits			866,848				853,756				879,215
Savings deposits			145,134				142,645				145,039
Time deposits			314,938				317,510				332,357
Total deposits			1,629,764				1,626,933				1,657,760
Accrued interest payable			1,600				1,581				1,434
Other liabilities			10,231				11,084				9,245
Total liabilities			1,641,595				1,639,598				1,668,439
Commitments and contingencies
Stockholders' Equity
Preferred stock, no par value, 5,000,000 shares authorized; none issued and outstanding			-				-				-
Common stock of $1.25 par value and additional paid in capital. Authorized 10,000,000 shares; issued and outstanding 6,368,410 (including 5,039 unvested) shares at March 31, 2026 and December 31, 2025, and 6,363,371 (including 4,961 unvested) shares at March 31, 2025		$	22,086			$	22,024			$	21,874
Retained earnings			207,539				202,558				199,579
Accumulated other comprehensive loss, net			(42,227	)			(39,674	)			(54,175	)
Total stockholders' equity			187,398				184,908				167,278
Total liabilities and stockholders' equity		$	1,828,993			$	1,824,506			$	1,835,717

4

National Bankshares, Inc.

Consolidated Statements of Income

(Unaudited)

		Three Months Ended
(in thousands, except share and per share data)		March 31, 2026				December 31, 2025				March 31, 2025
Interest Income
Interest and fees on loans		$	13,944			$	14,765			$	12,960
Interest on federal funds sold			-				-				3
Interest on interest-bearing deposits			424				426				1,039
Interest on securities – taxable			4,233				4,042				3,860
Interest on securities – nontaxable			340				336				336
Total interest income			18,941				19,569				18,198
Interest Expense
Interest on time deposits			2,631				2,792				3,311
Interest on other deposits			3,687				3,817				4,636
Interest on borrowings			-				314				-
Total interest expense			6,318				6,923				7,947
Net interest income			12,623				12,646				10,251
(Recovery of) provision for credit losses			(73	)			(634	)			276
Net interest income after (recovery of) provision for credit losses			12,696				13,280				9,975
Noninterest Income
Service charges on deposit accounts			649				690				699
Other service charges and fees			142				82				83
Credit and debit card fees, net			457				404				417
Trust income			584				615				579
BOLI income			301				306				292
Gain on sale of mortgage loans held for sale			20				55				25
Other income			526				474				465
Total noninterest income			2,679				2,626				2,560
Noninterest Expense
Salaries and employee benefits			5,834				5,353				5,180
Occupancy, furniture and fixtures			884				837				739
Data processing			928				889				983
FDIC assessment			207				204				207
Intangible asset amortization			87				89				97
Franchise taxes			350				350				373
Professional services			373				277				299
Core system conversion expense			-				3				46
Other operating expenses			665				672				709
Total noninterest expense			9,328				8,674				8,633
Income before income tax expense			6,047				7,232				3,902
Income tax expense			1,066				1,351				666
Net Income		$	4,981			$	5,881			$	3,236
Basic net income per common share		$	0.78			$	0.92			$	0.51
Diluted net income per common share		$	0.78			$	0.92			$	0.51
Weighted average number of common shares outstanding, basic			6,363,371				6,361,494				6,358,410
Weighted average number of common shares outstanding, diluted			6,366,154				6,364,638				6,360,392
Dividends declared per common share		$	-			$	0.78			$	-
Book value per common share		$	29.43			$	29.04			$	26.29

5

National Bankshares, Inc.

Net Interest Margin

(Unaudited)

		Three Months Ended March 31, 2026													Three Months Ended December 31, 2025
($ in thousands)		Average Balance				Interest				Average Yield/Rate					Average Balance				Interest				Average Yield/Rate
Interest-earning assets:
Loans (1)(2)(3)(4)		$	995,459			$	14,110				5.75	%			$	1,011,394			$	14,922				5.85	%
Taxable securities (4)			640,048				4,233				2.68	%				624,957				4,042				2.57	%
Nontaxable securities (1)(4)			62,500				430				2.79	%				62,266				425				2.71	%
Interest-bearing deposits			51,918				424				3.31	%				49,497				426				3.41	%
Total interest-earning assets		$	1,749,925			$	19,197				4.45	%			$	1,748,114			$	19,815				4.50	%
Interest-bearing liabilities:
Interest-bearing demand deposits		$	855,206			$	3,635				1.72	%			$	818,156			$	3,764				1.83	%
Savings deposits			144,444				52				0.15	%				141,577				53				0.15	%
Time deposits(5)			315,751				2,631				3.38	%				318,446				2,792				3.48	%
Borrowings			-				-				-					28,929				314				4.31	%
Total interest-bearing liabilities		$	1,315,401			$	6,318				1.95	%			$	1,307,108			$	6,923				2.10	%
Net interest income and interest rate spread						$	12,879				2.50	%							$	12,892				2.40	%
Net interest margin											2.98	%												2.93	%

		Three Months Ended March 31, 2025
(in thousands)		Average Balance				Interest				Average Yield/Rate
Interest-earning assets:
Loans (1)(2)(3)(4)		$	995,049			$	13,078				5.33	%
Taxable securities (4)			613,940				3,860				2.55	%
Nontaxable securities (1)(4)			62,964				425				2.74	%
Federal funds sold			261				3				4.66	%
Interest-bearing deposits			94,431				1,039				4.46	%
Total interest-earning assets		$	1,766,645			$	18,405				4.23	%
Interest-bearing liabilities:
Interest-bearing demand deposits		$	871,007			$	4,583				2.13	%
Savings deposits			143,987				53				0.15	%
Time deposits(5)			341,322				3,311				3.93	%
Total interest-bearing liabilities		$	1,356,316			$	7,947				2.38	%
Net interest income and interest rate spread						$	10,458				1.85	%
Net interest margin											2.40	%

(1)Interest on nontaxable loans and securities is computed on a fully taxable equivalent basis using a federal income tax rate of 21%. See “Reconciliation of Non-GAAP Financial Measures” at the end of this release.

(2)Included in loan interest income are loan fees and net accretion of deferred fees and costs of $202, $142 and $87 for the three months ended March 31, 2026, December 31, 2025 and March 31, 2025, respectively. Also included is net accretion of acquisition discounts of $417, $689 and $251 for the three months ended March 31, 2026, December 31, 2025 and March 31, 2025, respectively.

(3)Includes loans held for sale and nonaccrual loans.

(4)Daily averages are shown at amortized cost.

(5)Included in time deposit interest expense is net amortization of acquisition premiums of $18, $21 and $58 for the three months ended March 31, 2026, December 31, 2025 and March 31, 2025, respectively.

National Bankshares, Inc.

6

Key Ratios and Other Data

(Unaudited)

		As of or for the Three Months Ended
($ in thousands)		March 31, 2026				December 31, 2025				March 31, 2025
Average Balances
Cash and due from banks		$	7,353			$	8,299			$	13,504
Interest-bearing deposits			51,918				49,497				94,431
Securities available for sale, at fair value			653,722				633,461				602,794
Mortgage loans held for sale			145				252				147
Loans, gross			996,746				1,012,075				995,539
Loans, net of deferred fees and costs			995,314				1,011,142				994,902
Loans, net of deferred fees and costs and the ACLL			985,473				1,000,597				984,665
Intangible assets			12,173				12,259				12,542
Total assets			1,819,379				1,814,520				1,819,747
Noninterest-bearing demand deposits		$	306,202			$	313,250			$	291,234
Interest-bearing demand and savings deposits			999,650				959,733				1,014,994
Time deposits			315,751				318,446				341,323
Total deposits			1,621,603				1,591,429				1,647,551
Total stockholders' equity			185,707				181,847				161,133
Financial Ratios
Return on average assets(1)			1.08	%			1.20	%			0.69	%
Return on average equity(1)			10.57	%			12.00	%			7.84	%
Efficiency ratio(2)			59.96	%			55.77	%			65.96	%
Average equity to average assets			10.21	%			10.02	%			8.85	%
Tangible common equity to tangible assets(3)			9.65	%			9.53	%			8.49	%
Allowance for Credit Losses on Loans
Beginning balance		$	9,892			$	10,579			$	10,262
(Recovery of) provision for credit losses			(63	)			(644	)			277
Charge-offs			(183	)			(176	)			(112	)
Recoveries			93				133				63
Ending Balance		$	9,739			$	9,892			$	10,490

(1)The return on average assets and return on average equity are calculated by annualizing net income and dividing by average period-to-date assets or equity, respectively. The Company does not annualize certain income and expense items that are significant and may not be indicative of near-term future expected activity. See “Reconciliation of Non-GAAP Financial Measures” at the end of this release.

(2)The efficiency ratio is calculated as noninterest expense divided by the sum of noninterest income and net interest income on a fully taxable equivalent basis. Noninterest income and noninterest expense are adjusted for any unusual items. See “Reconciliation of Non-GAAP Financial Measures” at the end of this release.

(3)Tangible common equity and tangible assets exclude goodwill and intangible assets of $12,121 as of March 31, 2026, $12,208 as of December 31, 2025 and $12,484 as of March 31, 2025. See “Reconciliation of Non-GAAP Financial Measures” at the end of this release.

7

National Bankshares, Inc.

Asset Quality Data

(Unaudited)

		March 31,				December 31,				March 31,
($ in thousands)		2026				2025				2025
Nonperforming Assets
Nonaccrual loans		$	344			$	188			$	2,173
Total nonperforming assets		$	344			$	188			$	2,173
Loans past due 90 days or more, and still accruing		$	230			$	881			$	166
Asset Quality Ratios
Ratio of nonperforming loans to total loans(1)			0.03	%			0.02	%			0.22	%
ACLL to total loans(1)			0.98	%			0.99	%			1.05	%
Ratio of ACLL to nonperforming loans			2831.10	%			5261.70	%			482.74	%
Loans past due 90 days or more to total loans (1)			0.02	%			0.09	%			0.02	%

(1)Loans are net of deferred fees and costs.

8

National Bankshares, Inc.

Reconciliation of Non-GAAP Financial Measures

(Unaudited)

In addition to financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), the Company uses certain non-GAAP financial measures that provide useful information for financial and operational decision making, evaluating trends, and comparing financial results to other financial institutions. Non-GAAP financial measures are supplemental and not a substitute for, or more important than, financial measures prepared in accordance with GAAP and may not be comparable to those reported by other financial institutions.

The non-GAAP financial measures presented in this document include the net interest margin, the efficiency ratio, the ratio of tangible common equity to tangible assets, adjusted return on average assets and adjusted return on average equity. For periods that are shorter than twelve months, the Company annualizes net income for the return on average assets and return on average equity. In order to prevent distortion, the Company does not annualize certain income and expense items that are significant and may not be indicative of near-term future expected activity.

The following tables present calculations underlying non-GAAP financial measures for the periods indicated.

(in thousands)		For the Three Months Ended
Annualized Net Income for Ratio Calculation		March 31, 2026				December 31, 2025				March 31, 2025
Net income per GAAP		$	4,981			$	5,881			$	3,236
Less: expense (income) not annualized:
Partnership income net of tax of ($49) and ($52) for the periods ended March 31, 2026 and 2025, respectively			(184	)			-				(197	)
ACLL recovery, net of tax of ($135) for the period ended December 31, 2025			-				(509	)			-
Core system conversion expense, net of tax of $1 and $10 for the periods ended December 31, 2025 and March 31, 2025, respectively			-				2				36
Total non-annualized items			(184	)			(507	)			(161	)
Adjusted net income		$	4,797			$	5,374			$	3,075
Adjusted net income, annualized		$	19,455			$	21,321			$	12,471
Add: total non-annualized items			184				507				161
Annualized net income for ratio calculation (non-GAAP)		$	19,639			$	21,828			$	12,632
Return on average assets (GAAP)			1.11	%			1.29	%			0.72	%
Adjusted return on average assets (non-GAAP)			1.08	%			1.20	%			0.69	%
Return on average equity (GAAP)			10.88	%			12.83	%			8.14	%
Adjusted return on average equity (non-GAAP)			10.57	%			12.00	%			7.84	%

		For the Three Months Ended
Net Interest Margin, FTE		March 31, 2026				December 31, 2025				March 31, 2025
Interest income (GAAP)		$	18,941			$	19,569			$	18,198
Add: FTE adjustment			256				246				207
Interest income, FTE (non-GAAP)			19,197				19,815				18,405
Interest expense (GAAP)			6,318				6,923				7,947
Net interest income, FTE (non-GAAP)		$	12,879			$	12,892			$	10,458
Average balance of interest-earning assets		$	1,749,925			$	1,748,114			$	1,766,645
Net interest margin (non-GAAP)			2.98	%			2.93	%			2.40	%

9

The following tables present calculations underlying non-GAAP financial measures for the periods indicated.

		For the Three Months Ended
Efficiency Ratio		March 31, 2026				December 31, 2025				March 31, 2025
Noninterest expense (GAAP)		$	9,328			$	8,674			$	8,633
Less: core system conversion expense			—				(3	)			(46	)
Adjusted noninterest expense (non-GAAP)		$	9,328			$	8,671			$	8,587
Noninterest income (GAAP)		$	2,679			$	2,626			$	2,560
Net interest income, FTE (non-GAAP)			12,879				12,892				10,458
Total income for efficiency ratio (non-GAAP)		$	15,558			$	15,518			$	13,018
Efficiency ratio (non-GAAP)			59.96	%			55.77	%			65.96	%

		As of
		March 31,				December 31,				March 31,
(in thousands)		2026				2025				2025
Tangible Assets
Total assets (GAAP)		$	1,828,993			$	1,824,506			$	1,835,717
Less: goodwill and intangible assets			(12,121	)			(12,208	)			(12,484	)
Tangible assets (non-GAAP)		$	1,816,872			$	1,812,298			$	1,823,233
Tangible Common Equity
Total stockholders' equity (GAAP)		$	187,398			$	184,908			$	167,278
Less: goodwill and intangible assets			(12,121	)			(12,208	)			(12,484	)
Tangible common equity (non-GAAP)		$	175,277			$	172,700			$	154,794

10

FAQ

How did National Bankshares (NKSH) perform financially in Q1 2026?

National Bankshares reported net income of $5.0 million in Q1 2026, or $0.78 per diluted share. This compares with $3.2 million, or $0.51 per diluted share, in Q1 2025, indicating significantly higher quarterly profitability year over year.

What were National Bankshares (NKSH) total assets at March 31, 2026?

At March 31, 2026, National Bankshares had $1.83 billion in total assets. This balance sheet size reflects its community banking footprint, including loans of about $996 million and securities available for sale of roughly $658 million reported at fair value.

How did National Bankshares’ (NKSH) net interest margin change in Q1 2026?

For Q1 2026, National Bankshares’ fully tax-equivalent net interest margin was 2.98%. This compares with 2.40% in Q1 2025 and 2.93% in Q4 2025, reflecting better loan and securities yields combined with moderating deposit and borrowing costs.

What was National Bankshares’ (NKSH) asset quality at March 31, 2026?

Asset quality was strong, with $344 thousand in nonaccrual loans and total nonperforming loans representing 0.03% of total loans. Loans past due 90 days or more and still accruing were $230 thousand, or 0.02% of total loans, indicating limited problem credits.

How well capitalized is National Bankshares (NKSH)?

At March 31, 2026, National Bankshares reported total stockholders’ equity of $187.4 million and a tangible common equity to tangible assets ratio of 9.65%. Management stated the bank is considered well capitalized, with ratios substantially above minimum regulatory requirements.

What returns did National Bankshares (NKSH) generate in Q1 2026?

In Q1 2026, adjusted return on average assets was 1.08%, while adjusted return on average equity was 10.57%. These non-GAAP measures exclude certain non-annualized items to better reflect ongoing performance relative to the bank’s asset base and equity capital.

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