National Bankshares (NKSH) investor relations material

Executive summary

• Net income for Q1 2026 was $5.0 million ($0.78 per diluted share), up from $3.2 million ($0.51 per share) in Q1 2025, reflecting over 50% growth year-over-year, driven by net interest margin expansion and lower deposit costs after Federal Reserve rate cuts in late 2025.

• Return on average assets rose to 1.11% from 0.72% year-over-year; return on average equity increased to 10.88% from 8.14%.

• The company remains well-capitalized, with strong liquidity and no material legal or regulatory issues.

• Focus remains on expanding into new markets, deepening relationships, and introducing new services.

Financial highlights

• Net interest income increased to $12.6 million (Q1 2026) from $10.3 million (Q1 2025), with net interest margin improving to 2.98% from 2.40%.

• Total assets were $1.83 billion at March 31, 2026, up slightly from $1.82 billion at year-end 2025.

• Loans, net of deferred fees and costs, were $995.4 million, down slightly both sequentially and year-over-year.

• Deposits totaled $1.63 billion, up 0.17% sequentially, with a diverse and stable base and no brokered deposits.

• Noninterest income rose to $2.68 million, while noninterest expense was $9.33 million, nearly flat year-over-year.

• Book value per share increased to $29.43 at March 31, 2026.

• Basic and diluted EPS were $0.78, up from $0.51 in Q1 2025.

Outlook and guidance

• Management expects continued margin benefit from current interest rate levels as loans reprice, with a focus on efficient expense management and shareholder value, while monitoring inflation, monetary policy, and local economic conditions.

• No material impact is expected from recent accounting pronouncements.