NKSH · National Bankshares, Inc.

National Bankshares, Inc. reported strong first quarter 2026 results, with net income of $5.0 million ($0.78 per diluted share) compared to $3.2 million ($0.51) in the same quarter last year, a 54% increase. The improvement was driven primarily by a 23% rise in net interest income to $12.6 million, as the net interest margin benefited from lower deposit costs and higher security yields. Loan yields improved year-over-year due to upward repricing and higher fair value accretion, though they declined sequentially due to lower accretion and average balances. Noninterest income increased modestly to $2.7 million, supported by higher credit and debit card fees following a core system conversion in 2025. Noninterest expenses rose to $9.3 million, driven by higher salaries, benefits (medical insurance and incentives), and professional services. Credit quality remained strong, with a recovery of $73 thousand in the provision for credit losses, reflecting improved economic factors. The allowance for credit losses on loans stood at $9.7 million. Total assets were $1.83 billion, relatively flat sequentially. Deposits increased slightly from year-end 2025 but decreased year-over-year due to strategic reductions in time deposit pricing. The company maintained solid liquidity with borrowing lines from the FHLB and Federal Reserve. Stockholders' equity grew to $187.4 million, aided by net income exceeding dividends and improvement in unrealized losses on securities. Management expressed confidence in continued momentum, emphasizing new markets, deepening relationships, and efficient expense management.