National Bankshares, Inc. reported a net income of $5.03 million for the second quarter of 2026, a significant increase from $2.29 million in the same period last year. This translates to a basic net income per share of $0.79, up from $0.36 in the prior year. For the first half of 2026, the company achieved a net income of $10.01 million, compared to $5.53 million in the first half of 2025. The increase in profitability is attributed to a higher net interest margin, which rose to 3.00% from 2.56% year-over-year, alongside a reduction in noninterest expenses due to the absence of core system conversion costs that impacted the previous year.
Total assets for National Bankshares increased slightly to $1.83 billion as of June 30, 2026, compared to $1.82 billion at the end of 2025. The company’s loan portfolio grew to $1.01 billion, up from $999.93 million, driven primarily by a 77% increase in real estate construction loans, which rose to $72.22 million. However, commercial real estate loans saw a decline of 2.48%, reflecting a strategic shift in lending focus. The total deposits also saw a modest increase to $1.63 billion, up from $1.63 billion, with noninterest-bearing demand deposits remaining stable.
In terms of operational developments, National Bankshares has implemented new deposit products and a treasury management suite for commercial and municipal customers, following a core system conversion completed in 2025. The company has also expanded its branch network, opening new locations in Roanoke and Lynchburg. The total employee headcount has increased slightly, reflecting the company's growth strategy and expansion efforts.
The company’s allowance for credit losses (ACLL) stood at $10.05 million, or 0.99% of total loans, consistent with the previous period. The provision for credit losses for the first half of 2026 was $260, down from $322 in the same period last year. National Bankshares continues to monitor economic conditions and credit quality indicators closely, particularly in light of inflationary pressures and changing market dynamics. The outlook remains cautiously optimistic, with management anticipating continued growth in net interest income and a stable credit environment, although they acknowledge potential risks related to inflation and economic conditions.
About NATIONAL BANKSHARES INC
National Bankshares, Inc. is a Virginia-based financial holding company operating primarily through its community bank subsidiary, the National Bank of Blacksburg. It offers retail and commercial banking services, including loans, deposits, wealth management, and insurance. Serving small to mid-sized businesses and individuals in Virginia, it emphasizes community focus, prudent lending, and diversified financial services within a regulated industry.
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