National Bankshares Reports $5.5 Million Net Income for Six Months Ended June 30, 2025

National Bankshares, Inc. (NBI) reported a net income of $5.5 million for the six months ended June 30, 2025, a significant increase from $1.9 million in the same period of 2024. This translates to a basic net income per share of $0.87, compared to $0.31 in the prior year. The company's total interest income rose to $36.7 million, up from $33.1 million, driven by an increase in interest and fees on loans, which reached $26.5 million, compared to $21.6 million in the previous year. The net interest margin improved to 2.49% from 2.10%, reflecting a favorable interest rate environment and effective management of interest-bearing liabilities.

In terms of operational changes, NBI completed the acquisition of Frontier Community Bank (FCB) on June 1, 2024, which expanded its market presence into Virginia's Waynesboro, Staunton, and Lynchburg areas. This acquisition added approximately $118.7 million in loans and $129.7 million in deposits to NBI's balance sheet. The integration of FCB's operations is expected to enhance the company's growth potential and operational efficiency. The company also completed a system conversion during the second quarter of 2025, which is anticipated to improve service offerings and operational efficiency.

As of June 30, 2025, NBI's total assets stood at $1.81 billion, a slight decrease from $1.81 billion at the end of 2024. Total loans increased to $1.01 billion, up from $988.6 million, with notable growth in consumer real estate loans and commercial real estate loans. The company reported a total deposit balance of $1.63 billion, down from $1.64 billion, with an increase in noninterest-bearing demand deposits, which rose to $306.4 million from $290.1 million. The overall customer base and engagement metrics have shown positive trends, contributing to the company's financial performance.

The allowance for credit losses (ACLL) increased to $10.4 million, or 1.03% of loans, compared to $10.3 million, or 1.04% of loans, at the end of 2024. The company reported a provision for credit losses of $322,000 for the six months ended June 30, 2025, down from $1.3 million in the same period of 2024. This reduction reflects improved asset quality and management's assessment of credit risk in the loan portfolio. The company continues to monitor economic conditions and credit quality indicators closely, particularly in light of inflation and interest rate fluctuations.

Looking ahead, NBI remains optimistic about its growth trajectory, supported by the successful integration of FCB and the anticipated benefits from the recent system conversion. The company is focused on maintaining its capital position, with a total stockholders' equity of $168.7 million as of June 30, 2025, up from $156.4 million at the end of 2024. NBI's capital ratios indicate a well-capitalized status, positioning the company to navigate potential market challenges while pursuing strategic growth opportunities.