FOR IMMEDIATE RELEASE

National Bankshares, Inc. Reports Results for the Three Months Ended March 31, 2026

BLACKSBURG, VA., April 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 first quarter of 2026. The Company reported net income of $5.0 million or $0.78 per diluted common share for the three months ended March 31, 2026. This compares with net income of $3.2 million or $0.51 per diluted common share for the three months ended March 31, 2025. National Bankshares, Inc. ended March 31, 2026 with total assets of $1.83 billion.

President & CEO Lara E. Ramsey commented, “Our first quarter results reflect continued improvement in the net interest margin, with net income growth of over 50% from the first quarter of 2025. We are excited to continue our positive momentum in 2026, with an emphasis on new markets, deepening existing relationships, and offering new services. And we are confident that these efforts, combined with our legacy of efficient expense management, will continue to deliver outstanding shareholder value.”

Comparability

During the second quarter of 2025, the Company reclassified certain deposit products between savings deposits and time deposits, and made other minor reclassifications. Prior periods are presented on a comparable basis.

Highlights

Net Interest Income

The net interest margin improved when the three month period ended March 31, 2026 is compared with the three month periods ended December 31, 2025 and March 31, 2025, due to lower deposit costs and higher security yields. Loan yield improved when the first quarter of 2026 is compared with the first quarter of 2025 due to upward repricing and higher fair value accretion, and decreased when compared with the the fourth quarter of 2025 due to lower fair value accretion and lower average balance.

Noninterest Income

Credit and debit card fees, net, increased when the first quarter of 2026 is compared with the first quarter and last quarter of 2025. The Company's core system conversion and associated changes in 2025 resulted in improved terms for interchange fee income associated with credit and debit cards. Other service charges and fees increased due to a change in timing of recognition of safe deposit box fee income.

Noninterest Expense

Salaries and employee benefits increased when the first quarter of 2026 is compared with the fourth quarter of 2025 and the first quarter of 2025 due to higher medical insurance and incentive programs. Professional services increased due to higher audit and consulting expense.

Securities

The net unrealized loss on securities worsened when March 31, 2026 is compared with December 31, 2025, due to the impact of global uncertainty on bond valuations. The unrealized loss on securities improved when March 31, 2026 is compared with March 31, 2025 due to interest rate changes. The Company purchased $20 million in securities during the

first quarter of 2026. Analysis as of March 31, 2026 did not indicate credit risk concerns with any of the Company’s securities.

Deposits
Deposits increased from December 31, 2025 to March 31, 2026. Deposits decreased when compared with March 31, 2025, due to strategic decisions to reduce time deposit pricing in consideration of strong liquidity. The Company’s depositors within its market areas are diverse and include individuals, businesses and municipalities. The Company does not have any brokered deposits. Depositors are insured up to the FDIC maximum of $250 thousand. Municipal deposits, which account for 22% of the Company’s deposits, have additional security from bonds pledged as collateral, in accordance with state regulation. Of the Company’s non-municipal deposits, approximately 19.80% are uninsured.

Liquidity

The Company’s liquidity position remains solid. The Company maintains borrowing lines with the Federal Home Loan Bank of Atlanta (“FHLB”) and the Federal Reserve that provide substantial borrowing capacity. Combined with a low loan-to-deposit ratio and positive results of the latest liquidity stress testing, the Company believes it is well positioned to meet foreseeable liquidity demands.

Loans and Credit Quality

Loans decreased slightly from December 31, 2025 and March 31, 2025. The Company is positioned to continue to make every loan that meets its underwriting standards. Loan metrics continue to reflect low credit risk, with low charge-off and past due levels. The Company's measurement of credit risk resulted in a recovery to the allowance for credit losses on loans for the first quarter of 2026, reflecting an improvement in certain economic factors.

Stockholders’ Equity

Stockholders’ equity increased when March 31, 2026 is compared with December 31, 2025 due to net income. Net income in excess of dividends and improvement in the unrealized loss on securities increased stockholder's equity from March 31, 2025 to March 31, 2026. The Bank is considered well capitalized, with capital ratios substantially higher than minimum regulatory requirements, and meets all requirements for borrowing from the FHLB.

About National Bankshares

National Bankshares, Inc., headquartered in Blacksburg, Virginia, is the parent company of The National Bank of Blacksburg, which does business as National Bank, and of National Bankshares Financial Services, Inc. National Bank is a community bank operating from 28 full-service offices, primarily in southwestern, western and central Virginia, and one loan production office in Charlottesville, Virginia. National Bankshares Financial Services, Inc. is an investment and insurance subsidiary in the same trade area. The Company’s stock is traded on the Nasdaq Capital Market under the symbol “NKSH.” Additional information is available at www.nationalbankshares.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, forward-looking statements can be identified by use of words such as “may,” “will,” “anticipates,” “believes,” “expects,” “plans,” “estimates,” “potential,” “continue,” “should,” and similar words or phrases. These statements are based upon current and anticipated economic conditions, nationally and in the Company’s market, interest rates and interest rate policy, competitive factors, and other conditions which by their nature, are not susceptible to accurate forecast and are subject to significant uncertainty. Although we believe that our expectations with respect to forward-looking statements are based upon reasonable assumptions within the bounds of our existing knowledge of our business and operations, there can be no assurance that actual future results, performance, achievements, or trends will not differ materially from any projected future results, performance, achievements or trends expressed or implied by such forward-looking statements. Actual future results, performance, achievements or trends may differ materially from historical results or those anticipated depending on a variety of factors, including, but not limited to, the following: the level of inflation; interest rates; national and local economic conditions; monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury, the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Consumer Financial Protection Bureau and the Federal Deposit Insurance Corporation, and the impact of any policies or programs implemented pursuant to financial reform legislation; unanticipated increases in the level of unemployment in the Company’s market; the quality or composition of the loan and/or investment portfolios; the sufficiency of the Company’s allowance for credit losses; demand for loan products; deposit flows, including impact on liquidity; competition; demand for financial services in the Company’s market; the real estate market conditions in the Company’s market; laws, regulations and policies impacting financial institutions; adverse developments in the financial industry generally, responsive measures to mitigate and manage such developments, related supervisory and regulatory actions and costs, and related impacts on customer behavior; technological risks and developments, and cyber-threats, attacks or events; the Company’s technology initiatives; geopolitical conditions, including acts or threats of terrorism and/or military conflicts, or actions taken by the U.S. or other governments in response to acts or threats of terrorism and/or military conflicts; the occurrence of significant natural disasters, including severe weather conditions, floods, and other catastrophic events; the Company's ability to identify, attract, and retain experienced management, relationship managers, and support personnel, particularly in a competitive labor environment; performance by the Company’s counterparties or vendors; applicable accounting principles, policies and guidelines; the impact of public health events, including the adverse impact on our business and operations and on our customers; and other factors described from time to time in the Company’s reports (such as our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K) filed with the Securities and Exchange Commission. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. The Company does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions which may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

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Consolidated Balance Sheets

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Consolidated Statements of Income

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Net Interest Margin

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Key Ratios and Other Data

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Asset Quality Data

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Reconciliation of Non-GAAP Financial Measures

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In addition to financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), the Company uses certain non-GAAP financial measures that provide useful information for financial and operational decision making, evaluating trends, and comparing financial results to other financial institutions. Non-GAAP financial measures are supplemental and not a substitute for, or more important than, financial measures prepared in accordance with GAAP and may not be comparable to those reported by other financial institutions.

The non-GAAP financial measures presented in this document include the net interest margin, the efficiency ratio, the ratio of tangible common equity to tangible assets, adjusted return on average assets and adjusted return on average equity. For periods that are shorter than twelve months, the Company annualizes net income for the return on average assets and return on average equity. In order to prevent distortion, the Company does not annualize certain income and expense items that are significant and may not be indicative of near-term future expected activity.

The following tables present calculations underlying non-GAAP financial measures for the periods indicated.