Here are 1-3 brief analogies for National Bankshares (NKSH):

• It's like a localized Bank of America, primarily serving communities in Virginia and West Virginia.
• Imagine a community-focused PNC Financial Services, but operating on a smaller scale across its specific Mid-Atlantic footprint.
• Think of it as a traditional regional bank, similar to Truist, but with a much more concentrated focus on Virginia and West Virginia.

• Deposit Accounts: These services allow individuals and businesses to securely store funds in various account types such as checking, savings, money market, and certificates of deposit.
• Lending Services: The bank provides loans to consumers and businesses, including residential mortgages, commercial real estate loans, business loans, and consumer loans like auto and personal loans.
• Wealth Management & Trust Services: These offerings include financial planning, investment management, and trust administration for individuals, families, and businesses.

National Bankshares (symbol: NKSH) is a bank holding company that operates through its subsidiary, The National Bank of Blacksburg. As a community bank, NKSH provides a full range of banking and financial services to a broad base of local customers rather than relying on a few major named corporate clients. Therefore, it sells primarily to individuals, businesses, and organizations within its service areas.

The up to three major categories of customers that National Bankshares serves are:

1. Individuals/Consumers: This category includes retail customers who utilize a variety of personal banking services such as checking accounts, savings accounts, money market accounts, certificates of deposit (CDs), mortgage loans, home equity loans, personal loans, and credit cards.
2. Businesses (Small to Medium-sized): This category encompasses local commercial enterprises that use business checking and savings accounts, commercial real estate loans, commercial and industrial (C&I) loans, lines of credit, equipment financing, treasury management services, and other business banking solutions. Given its nature as a community bank, these are typically local businesses.
3. Organizations: This category includes local non-profit organizations, churches, educational institutions, and potentially local governmental entities that require banking and financial services for their operations, including deposit accounts and specialized lending products.

• Fiserv, Inc. (FI)
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Lara E. Ramsey President & CEO

Ms. Ramsey has been with National Bankshares since 1996. She previously held roles as Senior Vice President of Administration, where she oversaw investment, human resources, marketing, training, and corporate secretary functions, and Executive Vice President & Chief Operating Officer. She was appointed President and CEO of National Bankshares, Inc. and The National Bank of Blacksburg effective July 1, 2025. Ms. Ramsey holds bachelor's degrees in Psychology and Economics and a Master's Degree in Industrial and Organizational Psychology from Radford University. She is also a graduate of the Virginia Bankers Association's School of Bank Management, the American Bankers Association's Stonier Graduate School of Banking, and The New River Valley Leadership program, and is a certified Senior Professional in Human Resources.

Lora M. Jones Executive Vice President & Chief Financial Officer

Ms. Jones joined National Bankshares in 2010 as a Corporate Analyst. She was promoted to Corporate Analysis Officer in 2011 and named Controller in 2014 before becoming Executive Vice President and Chief Financial Officer. Prior to her tenure at National Bankshares, Ms. Jones worked as a Supervisory Senior Accountant at Yount, Hyde, and Barbour, P.C. She is a Certified Public Accountant and earned both a Bachelor's Degree in Finance and a Master's Degree in Accounting and Information Systems from Virginia Tech.

Paul M. Mylum Executive Vice President & Chief Lending Officer

Mr. Mylum joined The National Bank of Blacksburg in 2012 as Senior Vice President of Loans. He brings over 30 years of extensive commercial lending experience, having previously served as a lender with financial institutions such as Bank of America, First Citizens Bank, and First Bank and Trust. Mr. Mylum is a graduate of Virginia Tech.

David K. Skeens Executive Vice President & Chief Risk Officer

Mr. Skeens began his career with National Bankshares in 1990. During his time with the company, he has held various positions including Auditor, Senior Vice President of Operations and Risk Management, and Chief Financial Officer. He holds a Bachelor's Degree in Accounting from Radford University and is a graduate of the Graduate School of Banking at Louisiana State University. Mr. Skeens also holds Certified Financial Services Auditor and Certified Trust Auditor designations.

Bobby D. Sanders, II Senior Vice President & Chief Credit Officer

Mr. Sanders joined The National Bank of Blacksburg in 2022, bringing with him nineteen years of experience in lending and credit administration. His previous roles include serving as Chief Credit Officer at First Peoples Bank Tennessee and Chief Credit Administration Officer at the former Entegra Bank. Mr. Sanders holds a Bachelor of Business Administration degree from Western Carolina University and is a graduate of the American Bankers Association Stonier Graduate School of Banking.

The key risks to National Bankshares (NKSH) include interest rate fluctuations impacting net interest margin, the persistent threat of cybersecurity attacks, and the significant regulatory burden faced by financial institutions.

1. Interest Rate Risk and Net Interest Margin Compression: National Bankshares, like other financial institutions, is significantly affected by changes in interest rates. The company has explicitly noted that sustained Federal Reserve interest rate hikes have pressured net interest margins and increased the cost of funds. While there have been periods of improvement in net interest margin due to lower deposit costs and higher loan yields, the fluctuation in the value of the company's securities portfolio is primarily driven by market interest rate expectations.
2. Cybersecurity Threats: The company identifies cybersecurity risks as having the potential to materially affect its business, financial condition, and results of operations. The sophistication of cyber threats and attack methods continues to evolve, and the company acknowledges that its cybersecurity risk management strategies may not protect against all potential incidents.
3. Regulatory Burden and Competition: National Bankshares operates in a highly regulated environment. Substantial regulatory burdens on banking place financial institutions like NKSH at a disadvantage compared to less regulated competitors, leading to higher operating costs. The company also faces competition from other financial institutions within its market area concerning interest rates offered on deposits and charged on loans.

The clear emerging threat stems from the rapid digital transformation of the financial services industry. This includes the rise of digital-first banks (neobanks) and specialized fintech companies that offer banking services with superior digital experiences, lower fees, and often higher interest rates, directly competing for customer deposits, payments, and basic lending. Simultaneously, large technology companies are increasingly leveraging their vast ecosystems and data to offer integrated financial products, further disintermediating traditional banking relationships and challenging community banks like National Bankshares to keep pace with evolving customer expectations for digital convenience and innovation.

National Bankshares (symbol: NKSH) operates as a community bank holding company, offering a range of retail and commercial banking products and services, as well as wealth management, trust, and estate services, primarily in Southwest and Central Virginia.

Addressable Market Sizes:

Community Banking

The U.S. community banking market was valued at approximately USD 6.35 billion in 2024, with a projected compound annual growth rate (CAGR) of 3.8%. Globally, the community banking market was estimated at USD 16.76 billion in 2024 and is projected to reach USD 30.46 billion by 2035, growing at a CAGR of 5.58%. North America holds approximately 60% of this global market share. Another source estimates the global community banking market to expand from USD 17.79 billion in 2024 to USD 19.39 billion in 2025 with a CAGR of 9.0%, and reach USD 26.98 billion by 2029 with a CAGR of 8.6%.

Commercial Lending

The U.S. commercial banking market size is estimated at USD 226.44 billion in 2024 and is expected to reach USD 269.28 billion by 2029, growing at a CAGR of over 2%. Commercial lending constituted 44.34% of the U.S. commercial banking market share in 2024. Globally, the commercial lending market was valued at USD 14.15 trillion in 2023 and grew to USD 16.44 trillion in 2024, with a CAGR of 16.2%. It is projected to reach USD 30.09 trillion by 2028 at a CAGR of 16.3%. North America is the largest market for commercial lending, with the U.S. accounting for approximately 75% of the market share.

Wealth Management

The U.S. wealth management market is expected to gain USD 170.26 billion. The global wealth management market was valued at approximately USD 1.8 trillion in 2023 and around USD 1636.83 billion in 2024. It is predicted to grow to approximately USD 4893.17 billion by 2034, at a CAGR of roughly 10.6% between 2025 and 2034. North America was the largest region in the global wealth management market, accounting for 51.63% or USD 937.45 billion in 2023, and contributing about two-thirds of the global wealth management market revenue in 2022.

Here are 3-5 expected drivers of future revenue growth for National Bankshares (NKSH) over the next 2-3 years:

1. Acquisitions and Branch Network Expansion: National Bankshares has recently expanded its branch network through the acquisition of Frontier Community Bank, which includes three new branches in Waynesboro, Staunton, and Lynchburg, Virginia. This expansion into new markets is expected to contribute to future revenue growth. The company is also developing a new full-service office in Roanoke, Virginia, and relocating its Lynchburg office to a more modern and convenient location, further extending its footprint in key markets.
2. Loan Growth Across Segments: The company anticipates continued loan growth, specifically driven by increases in commercial real estate, consumer real estate, consumer non-real estate, and construction loans. National Bankshares is committed to making loans that meet its underwriting standards, indicating a focus on expanding its loan portfolio while maintaining low credit risk.
3. Improved Net Interest Margin: National Bankshares has seen and expects continued improvement in its net interest margin, primarily due to higher asset yields on loans and lower deposit costs. Commentary suggests that Federal Reserve interest rate cuts also positively impacted earnings in late 2024 and are expected to continue aiding earnings in 2025.
4. Technological Investments and Core System Upgrade: The company has made strategic investments in technology, including a significant enterprise-level core systems upgrade completed in the second quarter of 2025. This upgrade aims to enhance operational efficiency, provide customers with a modernized digital banking suite (including an improved mobile app and online banking), and enable the rollout of new product and service enhancements, all of which are expected to drive future growth and profitability.
5. Growth in Noninterest Income: National Bankshares is focused on increasing noninterest income, with growth observed and anticipated in areas such as service charges on deposits, credit and debit card transactions, and trust income. The acquisition of Frontier Community Bank has contributed to this growth in noninterest income categories, and the company aims to improve the contributions from its Bank Card and Wealth Management divisions in 2025 and beyond.

Share Repurchases

• On May 14, 2025, the Board of Directors of National Bankshares, Inc. renewed authorization for a stock repurchase plan, allowing for the purchase of up to 250,000 shares of the company's common stock in the open market from June 1, 2025, to May 31, 2026.
• In May 2024, the Board approved a similar authorization to repurchase up to 250,000 shares between June 1, 2024, and May 31, 2025; however, no shares were repurchased during 2024 under this program.
• The company repurchased 111,832 shares during the first quarter of 2021 and stated expectations to continue repurchasing shares throughout 2021.

Share Issuance

• Restricted stock awards were granted to non-employee directors in 2023 and 2024 as part of their semi-annual retainer.
• These awards are issued under a plan that has a maximum limit of 120,000 shares available for issuance.

Outbound Investments

• National Bankshares, Inc. completed the acquisition of Frontier Community Bank (FCB) on June 1, 2024.
• This acquisition expanded the company's market footprint into new areas including Waynesboro, Staunton, and Lynchburg, Virginia.
• The merger contributed an increase of $118.7 million in loans and $4.9 million in goodwill to the company's assets.

Capital Expenditures

• In mid-2025, National Bankshares upgraded to a new core banking system, aiming to enhance technology for both customers and overall bank operations.
• The company is actively expanding its branch network, which includes a new full-service office in Roanoke, Virginia, and an anticipated relocation of its Lynchburg, Virginia office in 2025.
• According to the 2024 Form 10-K, existing facilities were deemed adequate for current needs and to accommodate anticipated growth.