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National Bankshares CONTACTS : F. Brad Denardo , Chairman , President & CEO ( 540 ) 951-6213 bdenardo@nbbank.com FOR IMMEDIATE RELEASE David K. Skeens , Treasurer & CFO ( 540 ) 951-6347 dskeens@nbbank.com Exhibit 99.1 National Bankshares , Inc. Reports Second Quarter and First Half Earnings BLACKSBURG , VA . , July 15 , 2021 -- National Bankshares , Inc. ( NASDAQ : NKSH ) , parent company of The National Bank of Blacksburg , today announced its results of operations for the second quarter and first half of 2021. The Company reported net income of $ 9.38 million , or $ 1.49 per common share , for the six months ended June 30 , 2021. This compares to net income of $ 6.96 million , or $ 1.07 per common share , for the six months ended June 30 , 2020. National Bankshares , Inc. ended the first half of 2021 with total assets of $ 1.66 billion . President and Chief Executive Officer F. Brad Denardo commented , " National Bankshares delivered increased earnings for the first half of 2021 , driven by an improved loan volume , by good growth in noninterest income , by a large reduction in the loan loss provision , and by lower interest rates paid on deposits . We are excited to be serving our customers in our lobbies once again , and look forward to meeting and exceeding the needs of our customers , communities , and shareholders for the rest of 2021 and beyond . Thank you for your continued investment in National Bankshares . " Highlights for the Six Months Ended June 30 , 2021 Loan Modifications for Pandemic - Related Relief Of the loans modified for pandemic related hardships , at June 30 , 2021 , four loans totaling $ 5.7 million remained in an interest - only period . Each modification is governed by an agreement that provides a date at which the modification will expire . Paycheck Protection Program Loans We continue to participate in the SBA's Paycheck Protection Program ( " PPP " ) . The Company assisted local businesses through the PPP by providing 1,259 loans totaling $ 83 million since the program's inception in April of 2020. During the first six months of 2021 , we funded 446 loans totaling $ 24.8 million and received pay - off of 463 loans with original amounts totaling $ 30.1 million . Gross PPP loans totaling $ 31.5 million remain on the balance sheet . For the six months ended June 30 , 2021 , contractual interest earned on PPP loans totaled $ 198 thousand , while net fees accreted to interest income totaled $ 233 thousand , and fees recognized at pay off or forgiveness totaled $ 662 thousand . Income Statement Net income of $ 9.38 million for the six months ended June 30 , 2021 benefitted from a reduced loan loss provision when compared with the six months ended June 30 , 2020. Loan loss provision for the six months ended June 30 , 2021 was $ 54 thousand , compared with $ 1.83 million for the six months ended June 30 , 2020. We will continue to closely monitor our loan portfolio for indications of heightened credit risk and the resulting need for any additional provision for loan losses . The return on average assets and the return on average equity for the six months ended June 30 , 2021 were 1.18 % and 9.63 % respectively , improved from 1.01 % and 7.15 % respectively , for the six months ended June 30 , 2020 . The low interest rate environment that impacted net interest income for the six months ended June 30 , 2021 began with Federal Reserve rate cuts on March 3 and March 16 , 2020 , decreasing the target Fed Funds rate from 1.75 % to 0.25 % . The Company reacted by reducing interest rates on customer deposits . The cost of interest - bearing liabilities decreased from 0.74 % for the six months ended June 30 , 2020 to 0.32 % for the six months ended June 30 , 2021. The Company also experienced high levels of calls on securities and loan refinance activity that resulted in a decrease in the yield on earning assets ( 1 ) from 3.59 % for the six months ended June 30 , 2020 to 3.03 % for the six months ended June 30 , 2021 . 101 Hubbard Street / Blacksburg , Virginia 24060 P.O. Box 90002 / Blacksburg , Virginia 24062-9002 540 951-6300 / 800 552-4123 www.nationalbankshares.com