Earnings Performance - National Bankshares reported quarterly earnings of $0 48 per share, in line with the Zacks Consensus Estimate, compared to $0 71 per share a year ago [1] - The company missed the Zacks Consensus Estimate for revenues by 1 71%, posting $12 25 million for the quarter ended December 2024, compared to $10 73 million a year ago [2] - Over the last four quarters, the company has not surpassed consensus EPS estimates and topped revenue estimates only once [2] Stock Performance and Market Comparison - National Bankshares shares have gained 3 8% since the beginning of the year, slightly outperforming the S&P 500's gain of 3 5% [3] - The stock's immediate price movement will depend on management's commentary during the earnings call [3] Earnings Outlook and Estimate Revisions - The current consensus EPS estimate for the coming quarter is $0 52 on $12 64 million in revenues, and $2 35 on $53 35 million in revenues for the current fiscal year [7] - The estimate revisions trend for National Bankshares is mixed, translating into a Zacks Rank 3 (Hold), indicating expected performance in line with the market [6] Industry Context - National Bankshares belongs to the Zacks Banks - Southeast industry, which is currently in the top 20% of Zacks industries [8] - The top 50% of Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1 [8] Peer Comparison - First National Corp (FXNC), another company in the same industry, is expected to report quarterly earnings of $0 47 per share, representing a year-over-year change of +435 7%, with revenues expected to be $21 5 million, up 54 9% from the year-ago quarter [9]

Financial Performance - National Bankshares, Inc. reported a net income of $7.62 million or $1.24 per share for the year ended December 31, 2024, and $3.08 million or $0.48 per share for the fourth quarter[2]. - Net income for the quarter was $3,079,000, compared to $4,185,000 in the same quarter last year, a decrease of 26.4%[22]. - Basic net income per common share was $0.48, up from $0.71 in the same quarter last year, reflecting a decrease of 32.4%[22]. - Adjusted net income for the year was $12,142, down from $13,080 in 2023[46]. Asset and Deposit Growth - Total assets increased to $1,811,636,000 as of December 31, 2024, up from $1,655,370,000 a year earlier, representing a growth of 9.45%[20]. - Total deposits rose to $1,644,752,000, up from $1,503,972,000 a year ago, marking an increase of 9.34%[20]. - Total deposits increased to $1,622,653 thousand as of December 31, 2024, compared to $1,481,154 thousand in the same period last year[31]. - Total deposits rose to $1,583,113, an increase of 7.57% compared to $1,471,847 in 2023[35]. Loan and Credit Metrics - Loans decreased as of December 31, 2024, compared to September 30, 2024, primarily due to payoffs of real estate construction loans, with low credit risk metrics maintained[14]. - Total loans decreased slightly to $988,613,000 from $1,002,241,000 in the previous quarter, a decline of 1.25%[20]. - The provision for credit losses showed a recovery of $60,000, compared to a loss of $893,000 in the same quarter last year[22]. - The allowance for credit losses on loans to total loans ratio remained stable at 1.04% compared to 1.06% in 2023[38]. Income and Expense Analysis - Noninterest income for the year increased due to service charges on deposits and trust income, while credit and debit card fees decreased due to higher processing costs[7]. - Noninterest expense increased in 2024 compared to 2023, primarily due to the FCB acquisition and contract termination expenses[9]. - Total noninterest expense increased to $8,620,000 from $6,563,000 in the same quarter last year, an increase of 31.2%[22]. - The efficiency ratio improved to 68.84% for the three months ended December 31, 2024, compared to 69.80% in the previous quarter[31]. Acquisition and Strategic Initiatives - The company completed the acquisition of Frontier Community Bank on June 1, 2024, recording assets of $153.39 million and deposits of $129.72 million[4]. - Stockholders' equity increased due to the FCB acquisition, with regular dividends of $1.51 per common share paid in 2024[15]. - The company is committed to enhancing customer experience through an enterprise system upgrade and has recruited new bankers to support future growth[3]. Interest and Margin Analysis - The net interest margin for the year ended December 31, 2024, decreased compared to 2023 due to higher deposit costs, but improved in Q4 2024 compared to Q3 2024 following a 100 basis point decrease by the Federal Reserve[5]. - Net interest income for the quarter was $10,004,000, an increase from $8,480,000 in the same quarter last year, reflecting a growth of 17.9%[22]. - Total interest-earning assets for the three months ended December 31, 2024, were $1,743,084 thousand, with net interest income of $10,243 thousand and a net interest margin of 2.34%[25]. - The net interest margin for the year ended December 31, 2024, was 2.19%, compared to 2.38% for the previous year[29].

Financial Performance - Total interest income for the three months ended September 30, 2024, was $18,666,000, an increase of 27.0% compared to $14,679,000 for the same period in 2023[7]. - Net income for the three months ended September 30, 2024, was $2,676,000, a decrease of 12.9% from $3,074,000 in the same period of 2023[9]. - Total noninterest income for the three months ended September 30, 2024, was $2,272,000, an increase of 7.4% from $2,115,000 in the same period of 2023[8]. - Total noninterest expense for the three months ended September 30, 2024, was $8,499,000, up from $7,435,000 in the same period of 2023, indicating an increase of 14.3%[8]. - Basic net income per common share for the three months ended September 30, 2024, was $0.42, down from $0.52 in the same period of 2023, a decrease of 19.2%[8]. - Total comprehensive income for the three months ended September 30, 2024, was $18,791,000, compared to a loss of $12,347,000 in 2023[10]. - Net income for the nine months ended September 30, 2024, was $4,544 million, a decrease from $11,506 million in the same period of 2023[140]. - Adjusted net income for the nine months ended September 30, 2024, was $8,040 million, compared to $10,904 million in 2023[140]. Assets and Liabilities - Total assets increased by 7.83% to $1,785,033 as of September 30, 2024, from $1,655,370 as of December 31, 2023[176]. - Total liabilities and stockholders' equity reached $1,785,033,000 as of September 30, 2024, up from $1,655,370,000 at the end of 2023, marking an increase of 7.8%[5]. - The carrying amount of deposits was $1,602,953 million, with an estimated fair value of $1,292,876 million as of September 30, 2024[90]. - The total past due loans as of September 30, 2024, were $996,553, with 3,250 loans being 30 days past due, and 2,283 loans being nonaccrual or past due[43]. - The allowance for credit losses on loans increased to $10,328 as of September 30, 2024, compared to $9,094 at the end of 2023, reflecting a rise of approximately 13.5%[42]. Equity and Stockholder Information - Total stockholders' equity increased to $167,782,000 as of September 30, 2024, compared to $140,522,000 as of December 31, 2023, reflecting a growth of 19.4%[5]. - The weighted average number of common shares outstanding for the three months ended September 30, 2024, was 6,356,594, compared to 5,889,687 for the same period in 2023, reflecting an increase of 7.9%[8]. - Common stock and additional paid-in capital surged by 194.38% to $21,796 from $7,404 as of December 31, 2023[182]. Credit Losses and Provisions - The provision for credit losses for the nine months ended September 30, 2024, was $1,312 million, compared to a recovery of $267 million for the same period in 2023[48]. - The company reported a provision for credit losses of $1,287,000 for the nine months ended September 30, 2024, compared to a recovery of $368,000 in 2023[11]. - The net charge-off ratio was 0.04% for the three months ended September 30, 2024, compared to 0.02% for the same period in 2023[159]. Acquisition and Goodwill - The company acquired Frontier Community Bank for $14,299,000 during the reporting period[17]. - The provisional goodwill recognized from the acquisition was $4.874 million, reflecting expected management and operational synergies[30]. - The identifiable assets acquired from FCB were valued at $148.513 million, while the identifiable liabilities assumed were valued at $137.038 million, resulting in a provisional fair value of net assets acquired of $11.475 million[30]. Loan Portfolio and Performance - As of September 30, 2024, total loans amounted to $1,002,241, an increase from $857,175 as of December 31, 2023, representing a growth of approximately 16.9%[42]. - The net loans, after accounting for unearned income and deferred fees, reached $991,331, up from $847,552, indicating a growth of about 16.9%[42]. - The company achieved a total of $1.5 billion in new loans originated in the quarter[55]. - The total balance of collectively evaluated loans as of September 30, 2024, was $10,243 million, with $4,210 million in Commercial Real Estate[49]. Noninterest Income and Expenses - Noninterest income for the nine months ended September 30, 2024, reached $6,717 million, compared to $7,105 million for the same period in 2023, reflecting a decrease of 5.5%[107]. - Service charges on deposit accounts increased to $2,150 million for the nine months ended September 30, 2024, up from $1,871 million in 2023, representing a growth of 14.9%[107]. - Total noninterest expense for the nine months ended September 30, 2024, was $26,388 million, a 16.43% increase from $22,665 million in 2023[156]. Market and Economic Conditions - The Company is closely monitoring risks such as high inflation and U.S. monetary policy, which may impact customer demand for banking services and loan repayment capabilities[25]. - The Federal Reserve's interest rate cut of 50 basis points in September 2024 is expected to benefit deposit costs in Q4 2024, despite competitive pressures leading to higher costs in 2023[150]. Future Guidance - Future guidance indicates a projected growth in total loans by approximately 5% for the next quarter[55]. - The Company expects that the adoption of ASU 2023-09 will not have a material impact on its consolidated financial statements[26].

Financial Performance - National Bankshares, Inc. reported net income of $4.54 million or $0.75 per basic common share for the nine months ended September 30, 2024, a decrease from $11.51 million or $1.95 per share for the same period in 2023[2]. - For the third quarter of 2024, net income was $2.68 million or $0.42 per share, compared to $3.07 million or $0.52 per share in the third quarter of 2023[2]. - Net income for the nine months ended September 30, 2024, was $4,544,000, a decline of 60.5% compared to $11,506,000 in the same period of 2023[22]. - Basic net income per common share decreased to $0.75 from $1.95, reflecting a 61.5% drop year-over-year[22]. - Net income for the three months ended September 30, 2024, was $2,676 thousand, compared to a net loss of $306 thousand for the three months ended June 30, 2024, and a net income of $3,074 thousand for the three months ended September 30, 2023[19]. Asset and Loan Growth - Total assets as of September 30, 2024, were $1,785,033 thousand, a decrease of 1.3% from $1,809,215 thousand on June 30, 2024, and an increase of 11.9% from $1,591,902 thousand on September 30, 2023[14]. - Total loans increased to $1,002,241 thousand as of September 30, 2024, up 1.3% from $989,898 thousand on June 30, 2024, and up 17.9% from $849,417 thousand on September 30, 2023[14]. - Gross loans reached $994,876, an increase of 17.9% compared to $843,892 in the same period last year[27]. - Loans increased from June 30, 2024, driven by growth in consumer and commercial real estate loans, with low credit risk metrics[10]. Income and Expenses - Total interest income for the nine months ended September 30, 2024, was $51,805,000, an increase of 19.4% from $43,320,000 in the same period of 2023[21]. - Total noninterest expense increased to $26,388,000, up 16.1% from $22,665,000 in the previous year[22]. - Noninterest income for the nine months ended September 30, 2024, increased due to service charges on deposits and trust income growth[6]. - Noninterest expenses increased due to the FCB acquisition and contract termination expenses, but decreased in Q3 2024 compared to Q2 2024[7]. Credit Losses and Allowances - The provision for credit losses was $1,287,000, compared to a recovery of $(368,000) in the previous year[21]. - The allowance for credit losses decreased to $10,328 thousand as of September 30, 2024, from $10,502 thousand on June 30, 2024, and increased from $10,181 thousand on September 30, 2023[14]. - The allowance for credit losses on loans to total loans ratio stood at 1.03%, down from 1.20% a year ago[29]. Equity and Shareholder Information - Stockholders' equity increased as of September 30, 2024, primarily due to the acquisition and improvement in unrealized losses on securities[11]. - Total shareholders' equity increased to $156,111, up from $126,612 in the same period last year, marking a growth of 23.2%[27]. - Book value per common share increased to $26.38 as of September 30, 2024, from $23.42 on June 30, 2024, and from $19.71 on September 30, 2023[19]. - The weighted average number of common shares outstanding increased to 6,092,468 from 5,889,687, indicating a growth in share count[22]. Efficiency and Margins - The net interest margin improved in Q3 2024 compared to Q2 2024, driven by increased loan yields outpacing deposit costs[5]. - The net interest margin for the nine months ended September 30, 2024, was 2.14%, compared to 2.45% in the same period of 2023[25]. - The efficiency ratio was reported at 69.80%, slightly higher than 67.96% from the previous year[27]. - Adjusted return on average assets (non-GAAP) is 0.42% for the nine months ended September 30, 2024, compared to 0.94% for the same period in 2023[37]. Acquisition Details - The company recorded merger-related expenses of $2.89 million during the nine months ended September 30, 2024, and a provision for credit loss of $1.29 million upon acquiring Frontier Community Bank loans[3]. - The acquisition of Frontier Community Bank totaled $16.35 million, including $14.30 million in common stock and $2.05 million in cash[4].

Core Viewpoint - National Bankshares reported a quarterly loss of $0.05 per share, significantly missing the Zacks Consensus Estimate of $0.32, and down from earnings of $0.66 per share a year ago, indicating a substantial earnings surprise of -115.63% [1] Financial Performance - The company posted revenues of $10.95 million for the quarter ended June 2024, missing the Zacks Consensus Estimate by 4.24%, and down from $12.01 million in the same quarter last year [2] - National Bankshares has not surpassed consensus EPS estimates over the last four quarters, indicating a consistent underperformance [2] Stock Performance - Shares of National Bankshares have declined approximately 10.1% since the beginning of the year, contrasting with the S&P 500's gain of 13.9% [3] - The current Zacks Rank for National Bankshares is 3 (Hold), suggesting that the stock is expected to perform in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.52 on revenues of $11.64 million, and for the current fiscal year, it is $1.94 on revenues of $44.87 million [7] - The trend of estimate revisions for National Bankshares is mixed, which could change following the recent earnings report [6] Industry Context - The Banks - Southeast industry, to which National Bankshares belongs, is currently ranked in the top 15% of over 250 Zacks industries, indicating a favorable outlook compared to lower-ranked industries [8]

FOR IMMEDIATE RELEASE CONTACTS: F. Brad Denardo, Chairman, President & CEO (540) 951-6213 bdenardo@nbbank.com Lora M. Jones, Treasurer & CFO (540) 951-6238 ljones@nbbank.com National Bankshares, Inc. Reports Results for the First Half of 2024 BLACKSBURG, VA., July 25, 2024 -- 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 for the first half of ...

Core Viewpoint - National Bankshares, Inc. has successfully completed the acquisition of Frontier Community Bank, enhancing its operational footprint and total assets [1][4]. Summary by Sections Acquisition Details - The acquisition of Frontier Community Bank was valued at approximately $16.07 million and became effective on June 1, 2024 [1][2]. - Following the merger, National Bankshares operates 27 full-service offices and two loan production offices, with total assets amounting to approximately $1.8 billion [1]. Shareholder Consideration - Each share of Frontier common stock was converted into either $14.48 in cash or 0.4250 shares of National Bankshares common stock, with shareholders having the option to elect their preferred form of consideration [2]. Operational Integration - The three former Frontier branches in Waynesboro, Staunton, and Lynchburg, Virginia, reopened under the National Bank name on June 3, 2024 [3]. Leadership and Cultural Alignment - F. Brad Denardo, President and CEO of National Bankshares, expressed enthusiasm about welcoming Frontier's customers and employees, emphasizing the commitment to personalized service and community engagement [4]. - Alan Sweet, former CEO of Frontier, will join the boards of directors of both National Bankshares and National Bank, highlighting the cultural and value alignment between the two organizations [4]. Company Overview - National Bankshares, Inc. is headquartered in Blacksburg, Virginia, and operates as the parent company of The National Bank of Blacksburg and National Bankshares Financial Services, Inc., with a focus on community banking [5].

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2024 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ________ Commission File Number 0-15204 NATIONAL BANKSHARES, INC. (Exact name of registrant as specified in its charter) Virginia (State or ot ...

Financial Performance - National Bankshares, Inc. reported a net income of $2.17 million for Q1 2024, a decrease from $4.19 million in Q4 2023 and $4.53 million in Q1 2023, with earnings per share of $0.37[3] - Net income for the first quarter of 2024 was $2,174 thousand, a decrease of 48.0% from $4,185 thousand in the previous quarter[26] - Basic net income per common share decreased to $0.37 from $0.71 in the previous quarter, a decline of 47.89%[26] - Adjusted net income for the three months ended March 31, 2024, was $2,516 thousand, down 23.7% from $3,297 thousand in the same period last year[45] Asset and Deposit Growth - Total assets as of March 31, 2024, were $1.69 billion, reflecting the company's financial position[3] - Total assets increased to $1,689,206 thousand as of March 31, 2024, up from $1,655,370 thousand at December 31, 2023, representing a growth of 2.04%[24] - Total deposits increased to $1,537,808 thousand, up from $1,503,972 thousand at the end of 2023, representing a growth of 2.25%[24] - Stockholders' equity increased to $136,039 thousand as of March 31, 2024, compared to $118,257 thousand as of December 31, 2023, representing a growth of 15.0%[32] Income and Expense Analysis - Noninterest income for Q1 2024 was similar to Q1 2023 but decreased from Q4 2023, where a one-time payment of $232 thousand was recognized[10] - Noninterest expenses increased in Q1 2024 due to costs associated with the acquisition preparation, contrasting with reversals of accruals in Q4 2023[11] - Net interest income for the three months ended March 31, 2024, was $8,245 thousand, down from $8,480 thousand in the previous quarter, a decrease of 2.77%[26] - Noninterest income for the first quarter of 2024 was $2,199 thousand, slightly down from $2,254 thousand in the previous quarter[26] Loan and Asset Quality - Loan quality remains strong with low charge-off and past due levels, reflecting a favorable economic outlook[5] - Total loans reached $864,091 thousand, a slight increase from $857,175 thousand at the end of 2023, reflecting a growth of 0.11%[24] - Nonperforming assets decreased to $2,591 thousand as of March 31, 2024, from $2,629 thousand as of December 31, 2023, showing an improvement in asset quality[36] - The allowance for credit losses on loans to total loans ratio was 1.05% as of March 31, 2024, slightly down from 1.06% in the previous quarter[36] Strategic Initiatives - The company plans to acquire Frontier Community Bank in Q2 2024, which is expected to enhance growth opportunities in new markets[4] - The company announced a planned merger with Frontier Community Bank in January 2024, incurring merger-related expenses[41] Interest Income and Margin - Interest income increased compared to Q4 2023, driven by the Federal Reserve's interest rate hikes, with expectations for further improvement as assets reprice[4][7] - Total interest income rose to $16,021 thousand, compared to $15,513 thousand in the prior quarter, an increase of 3.27%[26] - The net interest margin for the three months ended March 31, 2024, was 2.08%, compared to 2.15% in the previous quarter[28] Operational Efficiency - The efficiency ratio increased to 68.10% for the three months ended March 31, 2024, compared to 61.08% in the previous quarter, indicating a decline in operational efficiency[32] - Return on average assets decreased to 0.59% for the three months ended March 31, 2024, down from 0.87% in the previous quarter[32]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Fiscal Year Ended December 31, 2023 ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from ________ to ________. Commission File Number: 0-15204 NATIONAL BANKSHARES, INC. (Exact name of registrant as specified in its charter) Virginia (State or other ...