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National Bankshares FOR IMMEDIATE RELEASE CONTACTS : Lara Ramsey , President and CEO ( 540 ) 951-6250 Iramsey@nbbank.com Lora M. Jones , Treasurer & CFO ( 540 ) 951-6238 ljones@nbbank.com National Bankshares , Inc. Reports Results for the Three and Six Months Ended June 30 , 2026 BLACKSBURG , VA . , July 23 , 2026 -- National Bankshares , Inc. ( " the Company " ) ( Nasdaq : NKSH ) , parent company of The National Bank of Blacksburg ( " the Bank ” ) and National Bankshares Financial Services , Inc. , today announced its results of operations through the second quarter of 2026. The Company reported net income of $ 10.01 million or $ 1.57 per diluted common share for the six months ended June 30 , 2026. This compares with net income of $ 5.53 million or $ 0.87 per diluted common share for the six months ended June 30 , 2025. For the three month period ended June 30 , 2026 , the Company reported net income of $ 5.03 million or $ 0.79 per diluted common share . This compares with net income for the three month period ended June 30 , 2025 of $ 2.29 million or $ 0.36 per diluted common share . National Bankshares , Inc. ended June 30 , 2026 with total assets of $ 1.83 billion . Lara E. Ramsey , President and CEO , commented , " We are pleased to report our second quarter results , with net income significantly improved from the same period last year . Notably , during the second quarter of 2026 , we sold our stake in a community - bank insurance consortium and invested the proceeds in restructuring a portion of the securities portfolio to enhance profitability in the near and medium term . In the second half of 2026 and beyond , we continue to focus on building market share , especially through our recent expansions , while optimizing our products , technology , and training to deliver a top - notch personalized banking experience and outstanding shareholder value . " Comparability The Company made minor reclassifications during the current period . Prior periods are presented on a comparable basis . Highlights Gain on Sale of Equity Investment During the second quarter of 2026 , the Company recorded a gain of $ 6.57 million on the sale of its membership interest ( held by the Company's subsidiary , National Bankshares Financial Services , Inc. ) in Bearing Insurance Group , LLC . Securities Portfolio Repositioning Also during the second quarter , the Company completed a strategic repositioning of a portion of its securities available- for - sale portfolio . The Company sold agency securities with a total amortized cost of $ 110.69 million and mortgage- backed securities with a total amortized cost of $ 21.18 million . The securities sold had a weighted average yield of 1.80 % . Following the sale , the Company purchased mortgage - backed securities , designated available - for - sale , with a total amortized cost of $ 127.33 million and a weighted average yield of 5.26 % . The sale of securities resulted in a pre - tax loss of $ 6.55 million , which the Company expects to recover with improved earnings over approximately 1.8 years . The repositioning is expected to increase the Company's interest income by $ 4.25 million annually , adding 12 basis points to the projected net interest margin for 2026 and 24 basis points to the projected 2027 net interest margin . Net Interest Income The net interest margin improved when the second quarter of 2026 is compared with the first quarter of 2026 due to reduction in the cost of time deposits . When the second quarter of 2026 is compared with the second quarter of 2025 , improvement in net interest margin stemmed from higher yields on loans and taxable securities and lower cost of time deposits and interest bearing deposit accounts . When the six month period ended June 30 , 2026 is compared with the same 101 Hubbard Street / Blacksburg , Virginia 24060 P.O. Box 90002 / Blacksburg , Virginia 24062-9002 540 951-6300 / 800 552-4123 www.nationalbankshares.com