National Bankshares (NKSH) investor relations material

Executive summary

• Net income for Q2 2026 was $5.03 million ($0.79 per share), up from $2.29 million ($0.36 per share) in Q2 2025; six-month net income rose to $10.01 million ($1.57 per share) from $5.53 million ($0.87 per share) year-over-year.

• Earnings growth was driven by net interest margin expansion, lower noninterest expense, and a significant gain on sale of equity investment, partially offset by a loss on securities repositioning.

• The company completed a core system conversion in 2025, enabling new deposit products and operational efficiencies.

• Total assets at June 30, 2026 were $1.83 billion.

• Strategic repositioning of the securities portfolio is expected to enhance profitability and net interest margin.

Financial highlights

• Net interest income for Q2 2026 was $13.1 million, up from $11.0 million in Q2 2025; six-month net interest income was $25.67 million, up from $21.24 million.

• Net interest margin improved to 3.00% in Q2 2026 from 2.56% in Q2 2025; for the six months ended June 30, 2026, it was 2.99%, up from 2.48% year-over-year.

• Noninterest income for Q2 2026 was $2.6 million, up 16% year-over-year, including a $6.6 million gain on sale of equity investment and a $6.5 million loss on sale of securities; six-month noninterest income was $5.33 million.

• Noninterest expense decreased 12% year-over-year for Q2 2026 and was $18.63 million for the six months, down from $19.22 million.

• Basic and diluted EPS for Q2 2026 were $0.79, up from $0.36 in Q2 2025; six-month EPS was $1.57, up from $0.87.

Outlook and guidance

• Management expects improved earnings from the securities portfolio repositioning, with the loss on sale expected to be recovered within 1.8 years and annual interest income to increase by $4.25 million.

• Additional deposit product releases and operational enhancements are planned for the remainder of 2026, with a focus on market share growth and technology optimization.