8-K
NATIONAL BANKSHARES INC (NKSH)
UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, 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): October 23, 2025 |
|---|
National Bankshares Inc.
(Exact name of Registrant as Specified in Its Charter)
| Virginia | 0-15204 | 54-1375874 |
|---|---|---|
| (State or Other Jurisdiction<br>of Incorporation) | (Commission File Number) | (IRS Employer<br>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<br>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 October 23, 2025, National Bankshares, Inc. issued a press release reporting its financial results for the period ended September 30, 2025. 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 October 23, 2025
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: | October 23, 2025 | By: | /s/ Lara Ramsey |
| Lara Ramsey<br>President and CEO |
EX-99.1
EXHIBIT 99.1
FOR IMMEDIATE RELEASE
| CONTACTS: | Lara 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 and Nine Months Ended September 30, 2025
BLACKSBURG, VA., October 23, 2025 -- 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 third quarter of 2025. The Company reported net income of $9.95 million or $1.56 per diluted common share for the nine months ended September 30, 2025. This compares with net income of $4.54 million or $0.75 per diluted common share for the nine months ended September 30, 2024. For the three month period ended September 30, 2025, the Company reported net income of $4.42 million or $0.69 per diluted common share. This compares with net income for the three month period ended September 30, 2024 of $2.68 million or $0.42 per diluted common share. National Bankshares, Inc. ended September 30, 2025 with total assets of $1.80 billion.
Lara E. Ramsey, President and CEO, commented, "We are pleased to report improvement in net income through the third quarter of 2025, compared with the previous year. Growing returns on loans and lower deposit costs have had a positive impact on our net interest margin.”
Ms. Ramsey continued, “In the third quarter, we leveraged our new technology and our expanded branch network to position ourselves as the community bank of choice throughout southwest, western, and central Virginia. Our core system upgrade, completed in the second quarter, improved many facets of our customer experience and increased our operational efficiency. Our new Roanoke, Virginia full-service office continues to develop our footprint in this key market. The upcoming relocation of our Lynchburg, Virginia, office will offer customers a modern, more convenient location. We are excited about the transformational changes we have made this year, and we remain focused on expanding service, responding to community needs, and delivering value to shareholders.."
Comparability
The Company acquired Frontier Community Bank ("FCB") on June 1, 2024. In accordance with generally accepted accounting principles, periods prior to June 1, 2024 have not been restated and do not include assets acquired, liabilities assumed or results of operations related to FCB prior to acquisition. On the date of merger, the transaction increased the Company's stockholders' equity by $14.3 million and added loans of $118.7 million, goodwill of $4.9 million, core deposit intangibles of $2.1 million, and customer deposits of $129.7 million. More information about assets acquired and liabilities assumed is provided in the Company's 2024 Form 10-K.
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
Lower deposit costs and higher loan yields drove improvement in the net interest margin when the third quarter of 2025 is compared with the second quarter of 2025 and the third quarter of 2024, and when the nine month period ended September 30, 2025 is compared with the nine month period ended September 30, 2024.
Noninterest Income
Growth in trust income and an incentive payment recognized in credit and debit card fees, net drove the improvements in noninterest income when the third quarter of 2025 is compared with the second quarter of 2025, and when the three and
101 Hubbard Street / Blacksburg, Virginia 24060
P.O. Box 90002 / Blacksburg, Virginia 24062-9002
540 951-6300 / 800 552-4123
www.nationalbankshares.com
nine month periods ended September 30, 2025 are compared with the respective periods of 2024. When comparing the nine month periods ended September 30, 2025 and 2024, higher service charges on deposits and growth in BOLI income are reflective of the FCB acquisition.
Noninterest Expense
Noninterest expense decreased when the third quarter of 2025 is compared with the second quarter of 2025 due to expense recognized in the second quarter for the Company's core system conversion. When comparing the nine month periods ended September 30, 2025 and 2024, higher noninterest expense is reflective of both the core system conversion and operations of the combined Company, which include the acquired operations of FCB. Noninterest expense in 2024 includes merger expenses related to the FCB acquisition.
Securities and Borrowings
The Company purchased $49.86 million in securities during the third quarter of 2025. The purchases were funded with borrowings, providing a small spread until the borrowings are repaid by the end of 2026, after which the Company expects to fully benefit from the yield. Analysis as of September 30, 2025 did not indicate credit risk concerns with any of the Company’s securities.
Deposits 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 21.2% 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 20.4% 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, positive results of the latest liquidity stress testing and success of deposit marketing, the Company believes it is well positioned to meet foreseeable liquidity demands.
Loans and Credit Quality
Loans increased from June 30, 2025, primarily driven by growth in construction, consumer real estate and commercial non real estate loans. 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 recorded a larger provision for the third quarter of 2025 when compared with the second quarter of 2025, reflecting portfolio growth and an increase in the allowance for credit losses related to certain economic factors.
Stockholders’ Equity
The Company paid a semiannual dividend of $0.73 to shareholders on June 1, 2025. Stockholders’ equity increased when September 30, 2025 is compared with June 30, 2025 due to net income and improvement in unrealized losses on available for sale securities, which are reflected, net of tax, in accumulated other comprehensive loss. Accumulated other comprehensive loss is excluded from the Bank’s regulatory capital and does not affect regulatory capital ratios. The Bank is considered well capitalized, with capital ratios substantially higher than minimum regulatory requirements, and meets all requirements for borrowing from the FHLB.
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, such as the recent bank failures, 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.
National Bankshares, Inc.
Consolidated Balance Sheets
(Unaudited)
| (in thousands, except share and per share data) | September 30, | June 30, | September 30, | ||||||
|---|---|---|---|---|---|---|---|---|---|
| 2025 | 2025 | 2024 | |||||||
| Assets | |||||||||
| Cash and due from banks | $ | 9,192 | $ | 9,798 | $ | 15,990 | |||
| Interest-bearing deposits | 33,113 | 83,051 | 33,707 | ||||||
| Federal funds sold | - | - | 73 | ||||||
| Total cash and cash equivalents | 42,305 | 92,849 | 49,770 | ||||||
| Securities available for sale, at fair value | 630,483 | 590,021 | 622,271 | ||||||
| Mortgage loans held for sale | 535 | 1,072 | 457 | ||||||
| Loans: | |||||||||
| Real estate construction loans | 46,381 | 44,529 | 71,920 | ||||||
| Consumer real estate loans | 324,597 | 317,949 | 306,012 | ||||||
| Commercial real estate loans | 490,968 | 494,755 | 473,018 | ||||||
| Commercial non real estate loans | 53,532 | 51,383 | 52,699 | ||||||
| Public sector and IDA loans | 54,332 | 56,347 | 58,109 | ||||||
| Consumer non real estate loans | 47,135 | 46,172 | 40,483 | ||||||
| Total loans | 1,016,945 | 1,011,135 | 1,002,241 | ||||||
| Less: deferred fees and costs | (543 | ) | (438 | ) | (582 | ) | |||
| Loans, net of deferred fees and costs | 1,016,402 | 1,010,697 | 1,001,659 | ||||||
| Less: allowance for credit losses | (10,579 | ) | (10,422 | ) | (10,328 | ) | |||
| Loans, net | 1,005,823 | 1,000,275 | 991,331 | ||||||
| Premises and equipment, net | 19,812 | 17,829 | 17,514 | ||||||
| Accrued interest receivable | 6,677 | 6,413 | 6,648 | ||||||
| Goodwill | 10,718 | 10,718 | 10,718 | ||||||
| Core deposit intangible, net | 1,579 | 1,671 | 1,963 | ||||||
| Bank-owned life insurance | 48,262 | 47,958 | 47,071 | ||||||
| Other assets | 36,213 | 37,804 | 37,290 | ||||||
| Total assets | $ | 1,802,407 | $ | 1,806,610 | $ | 1,785,033 | |||
| Liabilities and Stockholders' Equity | |||||||||
| Noninterest-bearing demand deposits | $ | 312,578 | $ | 306,427 | $ | 296,469 | |||
| Interest-bearing demand deposits | 793,552 | 852,405 | 819,947 | ||||||
| Savings deposits | 140,635 | 140,285 | 142,176 | ||||||
| Time deposits | 315,139 | 328,558 | 344,361 | ||||||
| Total deposits | 1,561,904 | 1,627,675 | 1,602,953 | ||||||
| Borrowings | 50,000 | - | - | ||||||
| Accrued interest payable | 1,616 | 1,522 | 2,074 | ||||||
| Other liabilities | 9,667 | 8,677 | 12,224 | ||||||
| Total liabilities | 1,623,187 | 1,637,874 | 1,617,251 | ||||||
| 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 6,366,001 (including 5,028 unvested) shares at September 30, 2025 and June 30, 2025, and 6,360,973 (including 4,379 unvested) shares at September 30, 2024 | $ | 21,974 | $ | 21,925 | $ | 21,796 | |||
| Retained earnings | 201,643 | 197,223 | 198,225 | ||||||
| Accumulated other comprehensive loss, net | (44,397 | ) | (50,412 | ) | (52,239 | ) | |||
| Total stockholders' equity | 179,220 | 168,736 | 167,782 | ||||||
| Total liabilities and stockholders' equity | $ | 1,802,407 | $ | 1,806,610 | $ | 1,785,033 |
National Bankshares, Inc.
Consolidated Statements of Income
(Unaudited)
| Three Months Ended | |||||||
|---|---|---|---|---|---|---|---|
| (in thousands, except share and per share data) | September 30, | June 30, | September 30, | ||||
| 2025 | 2025 | 2024 | |||||
| Interest Income | |||||||
| Interest and fees on loans | $ | 14,232 | $ | 13,495 | $ | 13,174 | |
| Interest on federal funds sold | - | 2 | 13 | ||||
| Interest on interest-bearing deposits | 740 | 978 | 954 | ||||
| Interest on securities – taxable | 3,704 | 3,725 | 4,177 | ||||
| Interest on securities – nontaxable | 334 | 337 | 333 | ||||
| Total interest income | 19,010 | 18,537 | 18,651 | ||||
| Interest Expense | |||||||
| Interest on time deposits | 2,907 | 3,058 | 3,668 | ||||
| Interest on other deposits | 4,362 | 4,488 | 5,550 | ||||
| Interest on borrowings | 67 | - | – | ||||
| Total interest expense | 7,336 | 7,546 | 9,218 | ||||
| Net interest income | 11,674 | 10,991 | 9,433 | ||||
| Provision for (recovery of) credit losses | 306 | 36 | (5 | ) | |||
| Net interest income after provision for (recovery of) credit losses | 11,368 | 10,955 | 9,438 | ||||
| Noninterest Income | |||||||
| Service charges on deposit accounts | 681 | 735 | 758 | ||||
| Other service charges and fees | 72 | 72 | 67 | ||||
| Credit and debit card fees, net | 492 | 366 | 344 | ||||
| Trust income | 700 | 578 | 580 | ||||
| BOLI income | 304 | 297 | 295 | ||||
| Gain on sale of mortgage loans | 92 | 54 | 50 | ||||
| Other income | 196 | 177 | 194 | ||||
| Total noninterest income | 2,537 | 2,279 | 2,288 | ||||
| Noninterest Expense | |||||||
| Salaries and employee benefits | 5,114 | 5,203 | 4,953 | ||||
| Occupancy, furniture and fixtures | 770 | 731 | 715 | ||||
| Data processing and ATM | 848 | 701 | 963 | ||||
| FDIC assessment | 210 | 210 | 211 | ||||
| Intangible asset amortization | 92 | 95 | 102 | ||||
| Franchise taxes | 350 | 358 | 373 | ||||
| Professional services | 361 | 509 | 254 | ||||
| Merger-related expenses | - | - | 150 | ||||
| Core system conversion expense | 50 | 1,977 | – | ||||
| Other operating expenses | 729 | 799 | 778 | ||||
| Total noninterest expense | 8,524 | 10,583 | 8,499 | ||||
| Income before income taxes | 5,381 | 2,651 | 3,227 | ||||
| Income tax expense | 961 | 362 | 550 | ||||
| Net Income | $ | 4,420 | $ | 2,289 | $ | 2,677 | |
| Basic net income per common share | $ | 0.70 | $ | 0.36 | $ | 0.42 | |
| Diluted net income per common share | $ | 0.69 | $ | 0.36 | $ | 0.42 | |
| Weighted average number of common shares outstanding, basic | 6,360,973 | 6,358,917 | 6,356,594 | ||||
| Weighted average number of common shares outstanding, diluted | 6,363,351 | 6,361,582 | 6,358,352 | ||||
| Dividends declared per common share | $ | - | $ | 0.73 | $ | - | |
| Book value per common share | $ | 28.15 | $ | 26.51 | $ | 26.38 |
National Bankshares, Inc.
Consolidated Statements of Income
(Unaudited)
| Nine Months Ended September 30, | ||||
|---|---|---|---|---|
| (in thousands, except share and per share data) | 2025 | 2024 | ||
| Interest Income | ||||
| Interest and fees on loans | $ | 40,686 | $ | 34,763 |
| Interest on federal funds sold | 5 | 23 | ||
| Interest on interest-bearing deposits | 2,757 | 3,312 | ||
| Interest on securities – taxable | 11,289 | 12,644 | ||
| Interest on securities – nontaxable | 1,007 | 1,010 | ||
| Total interest income | 55,744 | 51,752 | ||
| Interest Expense | ||||
| Interest on time deposits | 9,276 | 9,490 | ||
| Interest on other deposits | 13,486 | 15,920 | ||
| Interest on borrowings | 67 | 2 | ||
| Total interest expense | 22,829 | 25,412 | ||
| Net interest income | 32,915 | 26,340 | ||
| Provision for credit losses | 618 | 1,287 | ||
| Net interest income after provision for credit losses | 32,297 | 25,053 | ||
| Noninterest Income | ||||
| Service charges on deposit accounts | 2,114 | 2,069 | ||
| Other service charges and fees | 228 | 236 | ||
| Credit and debit card fees, net | 1,275 | 1,141 | ||
| Trust income | 1,857 | 1,596 | ||
| BOLI income | 893 | 822 | ||
| Gain on sale of mortgage loans | 171 | 132 | ||
| Other income | 838 | 774 | ||
| Total noninterest income | 7,376 | 6,770 | ||
| Noninterest Expense | ||||
| Salaries and employee benefits | 15,505 | 14,106 | ||
| Occupancy, furniture and fixtures | 2,240 | 1,975 | ||
| Data processing and ATM | 2,532 | 2,529 | ||
| FDIC assessment | 627 | 590 | ||
| Intangible asset amortization | 284 | 137 | ||
| Franchise taxes | 1,081 | 1,081 | ||
| Professional services | 1,169 | 766 | ||
| Merger-related expense | - | 2,891 | ||
| Core system conversion expense | 2,073 | 173 | ||
| Other operating expenses | 2,228 | 2,140 | ||
| Total noninterest expense | 27,739 | 26,388 | ||
| Income before income tax expense | 11,934 | 5,435 | ||
| Income tax expense | 1,989 | 891 | ||
| Net Income | $ | 9,945 | $ | 4,544 |
| Basic net income per common share | $ | 1.56 | $ | 0.75 |
| Diluted net income per common share | $ | 1.56 | $ | 0.75 |
| Weighted average number of common shares outstanding, basic | 6,359,443 | 6,092,468 | ||
| Weighted average number of common shares outstanding, diluted | 6,361,786 | 6,094,442 | ||
| Dividends declared per common share | $ | 0.73 | $ | 0.73 |
| Book value per common share | $ | 28.15 | $ | 26.38 |
National Bankshares, Inc.
Net Interest Margin
(Unaudited)
| Three Months Ended September 30, 2025 | Three Months Ended June 30, 2025 | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ($ in thousands) | Average<br>Balance | Interest | Average<br>Yield/Rate | Average<br>Balance | Interest | Average<br>Yield/Rate | ||||||||
| Interest-earning assets: | ||||||||||||||
| Loans (1)(2)(3) | $ | 1,010,041 | $ | 14,356 | 5.64 | % | $ | 1,008,401 | $ | 13,619 | 5.42 | % | ||
| Taxable securities (4) | 588,212 | 3,704 | 2.50 | % | 596,497 | 3,725 | 2.50 | % | ||||||
| Nontaxable securities (1)(4) | 62,730 | 454 | 2.87 | % | 62,847 | 457 | 2.92 | % | ||||||
| Federal funds sold | - | - | - | 197 | 2 | 4.07 | % | |||||||
| Interest-bearing deposits | 71,009 | 740 | 4.13 | % | 90,507 | 978 | 4.33 | % | ||||||
| Total interest-earning assets | $ | 1,731,992 | $ | 19,254 | 4.41 | % | $ | 1,758,449 | $ | 18,781 | 4.28 | % | ||
| Interest-bearing liabilities: | ||||||||||||||
| Interest-bearing demand deposits | $ | 827,977 | $ | 4,307 | 2.06 | % | $ | 853,516 | $ | 4,440 | 2.09 | % | ||
| Savings deposits | 141,197 | 55 | 0.15 | % | 143,470 | 48 | 0.13 | % | ||||||
| Time deposits | 322,782 | 2,907 | 3.57 | % | 330,906 | 3,058 | 3.71 | % | ||||||
| Borrowings | 6,630 | 67 | 4.01 | % | - | - | - | |||||||
| Total interest-bearing liabilities | $ | 1,298,586 | $ | 7,336 | 2.24 | % | $ | 1,327,892 | $ | 7,546 | 2.28 | % | ||
| Net interest income and interest rate spread | $ | 11,918 | 2.17 | % | $ | 11,235 | 2.00 | % | ||||||
| Net interest margin | 2.73 | % | 2.56 | % | ||||||||||
| Three Months Ended September 30, 2024 | ||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | |||||||
| ($ in thousands) | Average<br>Balance | Interest | Average<br>Yield/Rate | |||||||||||
| Interest-earning assets: | ||||||||||||||
| Loans (1)(2)(3) | $ | 994,744 | $ | 13,295 | 5.32 | % | ||||||||
| Taxable securities (4) | 622,284 | 4,177 | 2.67 | % | ||||||||||
| Nontaxable securities (1)(4) | 63,197 | 453 | 2.85 | % | ||||||||||
| Federal funds sold | 918 | 13 | 5.63 | % | ||||||||||
| Interest-bearing deposits | 69,264 | 954 | 5.48 | % | ||||||||||
| Total interest-earning assets | $ | 1,750,407 | $ | 18,892 | 4.29 | % | ||||||||
| Interest-bearing liabilities: | ||||||||||||||
| Interest-bearing demand deposits | $ | 852,126 | $ | 5,488 | 2.56 | % | ||||||||
| Savings deposits | 141,939 | 62 | 0.17 | % | ||||||||||
| Time deposits | 342,662 | 3,668 | 4.26 | % | ||||||||||
| Total interest-bearing liabilities | $ | 1,336,727 | $ | 9,218 | 2.74 | % | ||||||||
| Net interest income and interest rate spread | $ | 9,674 | 1.55 | % | ||||||||||
| Net interest margin | 2.20 | % |
- 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.
- Included in loan interest income are loan fees and net accretion of deferred fees and costs of $162, $113 and $71 for the three months ended September 30, 2025, June 30, 2025 and September 30, 2024, respectively. Also included are net accretion of acquisition discounts of $700, $363 and $369 for the three months ended September 30, 2025, June 30, 2025 and September 30, 2024, respectively.
- Includes loans held for sale and nonaccrual loans.
- Daily averages are shown at amortized cost.
| Nine Months Ended September 30, | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2025 | 2024 | |||||||||||||
| ($ in thousands) | Average<br>Balance | Interest | Average<br>Yield/Rate | Average<br>Balance | Interest | Average<br>Yield/Rate | ||||||||
| Interest-earning assets: | ||||||||||||||
| Loans (1)(2)(3) | $ | 1,004,552 | $ | 41,052 | 5.46 | % | $ | 919,369 | $ | 35,129 | 5.10 | % | ||
| Taxable securities (4) | 599,455 | 11,289 | 2.52 | % | 626,672 | 12,644 | 2.70 | % | ||||||
| Nontaxable securities (1)(4) | 62,846 | 1,367 | 2.91 | % | 63,730 | 1,373 | 2.88 | % | ||||||
| Federal funds sold | 152 | 5 | 4.40 | % | 702 | 23 | 4.38 | % | ||||||
| Interest-bearing deposits | 85,229 | 2,757 | 4.32 | % | 80,637 | 3,312 | 5.49 | % | ||||||
| Total interest-earning assets | $ | 1,752,234 | $ | 56,470 | 4.31 | % | $ | 1,691,110 | $ | 52,481 | 4.15 | % | ||
| Interest-bearing liabilities: | ||||||||||||||
| Interest-bearing demand deposits | $ | 850,676 | $ | 13,330 | 2.10 | % | $ | 839,211 | $ | 15,747 | 2.51 | % | ||
| Savings deposits | 142,874 | 156 | 0.15 | % | 140,628 | 173 | 0.16 | % | ||||||
| Time deposits | 331,602 | 9,276 | 3.74 | % | 303,355 | 9,490 | 4.18 | % | ||||||
| Borrowings | 2,234 | 67 | 4.01 | % | 76 | 2 | 3.52 | % | ||||||
| Total interest-bearing liabilities | $ | 1,327,386 | $ | 22,829 | 2.30 | % | $ | 1,283,270 | $ | 25,412 | 2.65 | % | ||
| Net interest income and interest rate spread | $ | 33,641 | 2.01 | % | $ | 27,069 | 1.50 | % | ||||||
| Net interest margin | 2.57 | % | 2.14 | % |
- 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.
- Included in loan interest income are loan fees and net accretion of deferred fees and costs of $361 and $174 for the nine months ended September 30, 2025 and September 30, 2024, respectively. Also included are net accretion of acquisition discounts of $1,324 and $480 for the nine months ended September 30, 2025 and September 30, 2024, respectively.
- Includes loans held for sale and nonaccrual loans.
- Daily averages are shown at amortized cost.
National Bankshares, Inc.
Key Ratios and Other Data
(Unaudited)
| As of and for the Three Months Ended | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| ($ in thousands) | September 30, | June 30, | September 30, | ||||||
| 2025 | 2025 | 2024 | |||||||
| Average Balances | |||||||||
| Cash and due from banks | $ | 8,588 | $ | 12,248 | $ | 13,443 | |||
| Interest-bearing deposits | 71,009 | 90,507 | 69,264 | ||||||
| Securities available for sale, at fair value | 587,811 | 591,249 | 611,615 | ||||||
| Mortgage loans held for sale | 494 | 495 | 419 | ||||||
| Loans, gross | 1,010,054 | 1,008,420 | 994,876 | ||||||
| Loans, net of deferred fees and costs | 1,009,547 | 1,007,906 | 994,325 | ||||||
| Loans, net of allowance for credit losses | 999,186 | 997,461 | 983,862 | ||||||
| Intangible assets | 12,354 | 12,447 | 12,755 | ||||||
| Total assets | 1,789,174 | 1,815,371 | 1,804,348 | ||||||
| Noninterest-bearing demand deposits | $ | 307,743 | $ | 307,888 | $ | 296,549 | |||
| Interest-bearing demand and savings deposits | 969,174 | 996,986 | 994,065 | ||||||
| Time deposits | 322,782 | 330,906 | 342,662 | ||||||
| Total deposits | 1,599,699 | 1,635,780 | 1,633,276 | ||||||
| Total stockholders' equity | 171,594 | 166,971 | 156,112 | ||||||
| Financial Ratios | |||||||||
| Return on average assets(1) | 0.99 | % | 0.77 | % | 0.61 | % | |||
| Return on average equity(1) | 10.29 | % | 8.37 | % | 7.10 | % | |||
| Efficiency ratio(2) | 58.62 | % | 63.68 | % | 69.80 | % | |||
| Average equity to average assets | 9.59 | % | 9.20 | % | 8.65 | % | |||
| Tangible common equity to tangible assets(3) | 9.32 | % | 8.71 | % | 8.75 | % | |||
| Allowance for Credit Losses on Loans | |||||||||
| Beginning balance | $ | 10,422 | $ | 10,490 | $ | 10,502 | |||
| Provision for credit losses | 259 | 45 | 5 | ||||||
| Charge-offs | (153 | ) | (141 | ) | (234 | ) | |||
| Recoveries | 51 | 28 | 55 | ||||||
| Ending Balance | $ | 10,579 | $ | 10,422 | $ | 10,328 |
- 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. Any significant nonrecurring items within net income are not annualized. See “Reconciliation of Non-GAAP Financial Measures” at the end of this release.
- 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 non-recurring items. See “Reconciliation of Non-GAAP Financial Measures” at the end of this release.
- Tangible common equity and tangible assets exclude goodwill and intangible assets of $12,297 as of September 30, 2025, $12,389 as of June 30, 2025 and $12,681 as of September 30, 2024. See “Reconciliation of Non-GAAP Financial Measures” at the end of this release.
National Bankshares, Inc.
Key Ratios and Other Data
(Unaudited)
| As of and for the Nine Months Ended | ||||||
|---|---|---|---|---|---|---|
| ($ in thousands) | September 30, 2025 | September 30, 2024 | ||||
| Average Balances | ||||||
| Cash and due from banks | $ | 11,430 | $ | 12,647 | ||
| Interest-bearing deposits | 85,229 | 80,637 | ||||
| Securities available for sale, at fair value | 593,896 | 609,499 | ||||
| Mortgage loans held for sale | 380 | 342 | ||||
| Loans, gross | 1,004,725 | 919,563 | ||||
| Loans, net of deferred fees and costs | 1,004,172 | 919,027 | ||||
| Loans, net of allowance for credit losses | 993,824 | 909,345 | ||||
| Intangible assets | 12,447 | 8,931 | ||||
| Total assets | 1,807,982 | 1,726,899 | ||||
| Noninterest-bearing demand deposits | $ | 302,373 | $ | 286,643 | ||
| Interest-bearing demand and savings deposits | 993,550 | 979,839 | ||||
| Time deposits | 331,602 | 303,355 | ||||
| Total deposits | 1,627,525 | 1,569,837 | ||||
| Total stockholders' equity | 166,579 | 143,444 | ||||
| Financial Ratios | ||||||
| Return on average assets(1) | 0.76 | % | 0.42 | % | ||
| Return on average equity(1) | 8.28 | % | 5.05 | % | ||
| Efficiency ratio(2) | 62.57 | % | 68.93 | % | ||
| Average equity to average assets | 9.21 | % | 8.31 | % | ||
| Tangible common equity to tangible assets(3) | 9.32 | % | 8.75 | % | ||
| Allowance for Credit Losses on Loans | ||||||
| Beginning balance | $ | 10,262 | $ | 9,094 | ||
| Provision for credit losses | 581 | 22 | ||||
| Acquisition-related provision | – | 1,290 | ||||
| Acquisition-related increase for purchased credit deteriorated loans | – | 175 | ||||
| Charge-offs | (406 | ) | (411 | ) | ||
| Recoveries | 142 | 158 | ||||
| Ending Balance | $ | 10,579 | $ | 10,328 |
- 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. Any significant nonrecurring items within net income are not annualized. See “Reconciliation of Non-GAAP Financial Measures” at the end of this release.
- 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 non-recurring items. See “Reconciliation of Non-GAAP Financial Measures” at the end of this release.
- Tangible common equity and tangible assets exclude goodwill and intangible assets of $12,297 as of September 30, 2025 and $12,681 as of September 30, 2024. See “Reconciliation of Non-GAAP Financial Measures” at the end of this release.
National Bankshares, Inc.
Asset Quality Data
(Unaudited)
| ($ in thousands) | September 30, | June 30, | September 30, | ||||||
|---|---|---|---|---|---|---|---|---|---|
| 2025 | 2025 | 2024 | |||||||
| Nonperforming Assets | |||||||||
| Nonaccrual loans | $ | 2,027 | $ | 2,111 | $ | 2,283 | |||
| Loans past due 90 days or more, and still accruing | $ | 283 | $ | 21 | $ | 71 | |||
| Asset Quality Ratios | |||||||||
| Ratio of nonperforming loans to total loans(1) | 0.20 | % | 0.21 | % | 0.23 | % | |||
| Allowance for credit losses on loans to total loans(1) | 1.04 | % | 1.03 | % | 1.03 | % | |||
| Ratio of ACLL to nonperforming loans | 521.90 | % | 493.70 | % | 452.39 | % | |||
| Loans past due 90 days or more to total loans (1) | 0.03 | % | 0.00 | % | 0.01 | % |
- Loans are net of deferred fees and costs.
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 and the ratio of tangible common equity to tangible assets. 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 significant non-recurring income and expense items.
The following tables present calculations underlying non-GAAP financial measures for the three month periods indicated.
| (in thousands) | Three Months Ended | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Net Interest Margin, FTE | September 30, 2025 | June 30, 2025 | September 30, 2024 | ||||||
| Interest income (GAAP) | $ | 19,010 | $ | 18,537 | $ | 18,651 | |||
| Add: FTE adjustment | 244 | 244 | 241 | ||||||
| Interest income, FTE (non-GAAP) | 19,254 | 18,781 | 18,892 | ||||||
| Interest expense (GAAP) | 7,336 | 7,546 | 9,218 | ||||||
| Net interest income, FTE (non-GAAP) | $ | 11,918 | $ | 11,235 | $ | 9,674 | |||
| Average balance of interest-earning assets | $ | 1,731,992 | $ | 1,758,449 | $ | 1,750,407 | |||
| Net interest margin | 2.73 | % | 2.56 | % | 2.20 | % | |||
| (in thousands) | Three Months Ended | ||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Efficiency Ratio | September 30, 2025 | June 30, 2025 | September 30, 2024 | ||||||
| Noninterest expense (GAAP) | $ | 8,524 | $ | 10,583 | $ | 8,499 | |||
| Less: merger-related expense | – | – | (150 | ) | |||||
| Less: core system conversion expense | (50 | ) | (1,977 | ) | – | ||||
| Adjusted noninterest expense (non-GAAP) | $ | 8,474 | $ | 8,606 | $ | 8,349 | |||
| Noninterest income (GAAP) | $ | 2,537 | $ | 2,279 | $ | 2,288 | |||
| Net interest income, FTE (non-GAAP) | 11,918 | 11,235 | 9,674 | ||||||
| Total income for efficiency ratio (non-GAAP) | $ | 14,455 | $ | 13,514 | $ | 11,962 | |||
| Efficiency ratio | 58.62 | % | 63.68 | % | 69.80 | % | |||
| (in thousands) | |||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | |
| June 30, | September 30, | ||||||||
| Annualized Net Income for Ratio Calculation | 2025 | 2024 | |||||||
| Net income per GAAP | 4,420 | $ | 2,289 | $ | 2,677 | ||||
| Less: expenses not annualized: | |||||||||
| Partnership loss net of tax of 8 for the period ended June 30, 2025 | – | 31 | – | ||||||
| Merger-related expense, net of tax of 6 for the period ended September 30, 2024 | – | – | 144 | ||||||
| Core system conversion expense, net of tax of 11 and 415 for the periods ended September 30, 2025 and June 30, 2025, respectively | 39 | 1,562 | – | ||||||
| Total non-annualized items | 39 | 1,593 | 144 | ||||||
| Adjusted net income | 4,459 | 3,882 | 2,821 | ||||||
| Adjusted net income, annualized | 17,691 | $ | 15,571 | $ | 11,223 | ||||
| Add: total non-annualized items | (39 | ) | (1,593 | ) | (144 | ) | |||
| Annualized net income for ratio calculation (non-GAAP) | 17,652 | $ | 13,978 | $ | 11,079 | ||||
| Return on average assets (GAAP) | 0.98 | % | 0.51 | % | 0.59 | % | |||
| Adjusted return on average assets (non-GAAP) | 0.99 | % | 0.77 | % | 0.61 | % | |||
| Return on average equity (GAAP) | 10.22 | % | 5.50 | % | 6.82 | % | |||
| Adjusted return on average equity (non-GAAP) | 10.29 | % | 8.37 | % | 7.10 | % |
All values are in US Dollars.
The following tables present calculations underlying non-GAAP financial measures for the nine month periods indicated.
| Nine Months Ended September 30, | ||||||
|---|---|---|---|---|---|---|
| Net Interest Margin, FTE | 2025 | 2024 | ||||
| Interest income (GAAP) | $ | 55,744 | $ | 51,752 | ||
| Add: FTE adjustment | 726 | 729 | ||||
| Interest income, FTE (non-GAAP) | 56,470 | 52,481 | ||||
| Interest expense (GAAP) | 22,829 | 25,412 | ||||
| Net interest income, FTE (non-GAAP) | $ | 33,641 | $ | 27,069 | ||
| Average balance of interest-earning assets | $ | 1,752,234 | $ | 1,691,110 | ||
| Net interest margin (non-GAAP) | 2.57 | % | 2.14 | % | ||
| Nine Months Ended September 30, | ||||||
| --- | --- | --- | --- | --- | --- | --- |
| Efficiency Ratio | 2025 | 2024 | ||||
| Noninterest expense (GAAP) | $ | 27,739 | $ | 26,388 | ||
| Less: merger-related expense | - | (2,891 | ) | |||
| Less: core system conversion expense | (2,073 | ) | (173 | ) | ||
| Adjusted noninterest expense (non-GAAP) | $ | 25,666 | $ | 23,324 | ||
| Noninterest income (GAAP) | $ | 7,376 | $ | 6,770 | ||
| Net interest income, FTE (non-GAAP) | 33,641 | 27,069 | ||||
| Total income for efficiency ratio (non-GAAP) | $ | 41,017 | $ | 33,839 | ||
| Efficiency ratio (non-GAAP) | 62.57 | % | 68.93 | % | ||
| (in thousands) | ||||||
| --- | --- | --- | --- | --- | --- | |
| Annualized Net Income for Ratio Calculation | 2024 | |||||
| Net income per GAAP | 9,945 | $ | 4,544 | |||
| Less: expense (income) not annualized: | ||||||
| Partnership income net of tax of (44) and (35) for the periods ended September 30, 2025 and 2024, respectively | (166 | ) | (134 | ) | ||
| Provision related to merger, net of tax of 271 | – | 1,019 | ||||
| Merger-related expense, net of tax of 417 for the period ended September 30, 2024 | – | 2,474 | ||||
| Core system conversion expense, net of tax of 435 and 36 for the periods ended September 30, 2025 and September 30, 2024, respectively | 1,638 | 137 | ||||
| Total non-annualized items | 1,472 | 3,496 | ||||
| Adjusted net income | 11,417 | $ | 8,040 | |||
| Adjusted net income, annualized | 15,264 | $ | 10,740 | |||
| Add: total non-annualized items | (1,472 | ) | (3,496 | ) | ||
| Annualized net income for ratio calculation (non-GAAP) | 13,792 | $ | 7,244 | |||
| Return on average assets (GAAP) | 0.74 | % | 0.35 | % | ||
| Adjusted return on average assets (non-GAAP) | 0.76 | % | 0.42 | % | ||
| Return on average equity (GAAP) | 7.98 | % | 4.23 | % | ||
| Adjusted return on average equity (non-GAAP) | 8.28 | % | 5.05 | % |
All values are in US Dollars.
The following table presents calculations underlying non-GAAP financial measures as of the dates indicated.
| As of | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| (in thousands) | September 30, | June 30, | September 30, | ||||||
| 2025 | 2025 | 2024 | |||||||
| Tangible Assets | |||||||||
| Total assets (GAAP) | $ | 1,802,407 | $ | 1,806,610 | $ | 1,785,033 | |||
| Less: goodwill and intangible assets | (12,297 | ) | (12,389 | ) | (12,681 | ) | |||
| Tangible assets (non-GAAP) | $ | 1,790,110 | $ | 1,794,221 | $ | 1,772,352 | |||
| Tangible Common Equity | |||||||||
| Total stockholders' equity (GAAP) | $ | 179,220 | $ | 168,736 | $ | 167,782 | |||
| Less: goodwill and intangible assets | (12,297 | ) | (12,389 | ) | (12,681 | ) | |||
| Tangible common equity (non-GAAP) | $ | 166,923 | $ | 156,347 | $ | 155,101 |