National Bankshares : Investor Presentation - 4th Quarter 2025

Published: 2026-04-14 11:56:15 ET NKSH

Published on 04/14/2026 at 11:56 am EDT

Successfully Executing Strategy to Drive Long-Term Value for All Shareholders

National Bankshares Investor Presentation - 4th Quarter 2025

Non-GAAP Financial Measures

This presentation contains financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The Company's management uses these non-GAAP financial measures in its analysis of the Company's performance. These measures typically adjust GAAP performance measures to exclude intangibles and include the tax benefit associated with revenue items that are tax-exempt, as well as adjust income available to common shareholders for certain significant activities or transactions that are infrequent in nature. Management believes presentations of these non-GAAP financial measures provide useful supplemental information that is essential to a proper understanding of the operating results of the Company's core businesses. These non-GAAP disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.

ington

Branch

Loan production office ("LPO")

Staunton

Charlottesville

Roanoke

Financial Highlights

(as of or for the quarter ended 12/31/2025)

Assets

$1.8B

Gross Loans

$1.0B

Deposits

$1.6B

Shareholders' Equity

$185M

TCE / TA(1)

9.53%

GAAP Net Income

$5.9M

Core ROAA(1)

1.18%

Core ROATCE(1)

12.57%

Core Efficiency Ratio(1)

55.77%

NKSH at a Glance

Valuation Highlights (3/4/2026 mkt close)

Market Capitalization

$242M

Price / Tangible Book Value(1)

1.40x

Price / 2026E EPS(2)

13.5x

Dividend Yield(3)

4.0%

Sources: S&P Capital IQ Pro, Company filings; (1) Unadjusted figures prepared in accordance with GAAP. Core figures are non-GAAP measures and exclude non-recurring items. See appendix for non-GAAP reconciliations; (2) Based on mean of Wall Street research estimates for NKSH; (3) Based on calendar year 2025 dividend of $1.51

Q4 2025 Highlights

EPS

ROAA

ROATCE

Efficiency Ratio

$0.92

1.29%

13.76%

55.78%

UNADJUSTED(1)

$0.84

1.18%

12.57%

55.77%

CORE(1)

Reported net income for the quarter of $5.88 million or $0.92 per common share and core net income of $5.37 million or $0.84 per common share(1)

Core earnings primarily reflect $509 thousand after-tax reduction for ACLL recovery

Continued earnings improvement driven by favorable asset and liability repricing

Maintained strong liquidity position and credit quality

Recently upgraded core banking system brings improved technology to customers and to nearly every facet of the

Bank's operations

New branch facilities in Roanoke and Lynchburg open the door for expansion in markets with dynamic economies

Source: Company filings; (1) Unadjusted figures prepared in accordance with GAAP. Core figures are non-GAAP measures and exclude non-recurring items. See appendix for non-GAAP reconciliations

Market

County Rank

Branches in Market

Deposits in Market ($M)

Deposit Market Share

% of Franchise

Montgomery

3

7

$664.8

22.2%

40.6%

Tazewell

1

7

256.5

19.8%

15.6%

Pulaski

1

3

195.1

35.7%

11.9%

Giles

1

3

177.6

64.1%

10.8%

Wythe

3

1

128.4

14.7%

7.8%

Waynesboro (City)

5

1

63.2

8.2%

3.9%

Radford (City)

4

1

47.9

13.2%

2.9%

Galax (City)

6

1

35.4

8.2%

2.2%

Staunton (City)

8

1

32.4

2.8%

2.0%

Washington

10

1

20.3

1.5%

1.2%

Bedford

12

1

11.0

0.6%

0.7%

Roanoke (City)

12

1

6.3

0.2%

0.4%

Total / Wtd. Avg.

5

28

$1,638.9

9.2%

100.0%

Dominant Market Share in Our Core Markets

Top 3 rank in counties representing >85% of deposits

Giles

Market

National Bankshares 1 64.1%

Truist 2 32.6%

Peterstown 3 3.2%

Montgomery

Market

Tazewell

Market

Pulaski

Market

Wythe

Market

Atlantic Union

1

23.9%

National Bankshares

1

19.8%

National Bankshares

1

35.7%

Truist

1

17.5%

Wells Fargo

2

22.6%

First Region

2

18.2%

Atlantic Union

2

26.8%

First Bancorp

2

16.0%

National Bankshares

3

22.2%

Truist

3

17.4%

Truist

3

12.4%

National Bankshares

3

14.7%

First Bancorp

4

9.2%

Wells Fargo

4

12.1%

First Community

4

8.5%

Atlantic Union

4

13.5%

Truist

5

7.3%

New Peoples

5

10.4%

First Bancorp

5

7.1%

First Community

5

12.7%

Source: S&P Capital IQ Pro; Note: Information as of 6/30/2025

We completed the acquisition of Frontier Community Bank in 2024, opening the door to attractive new markets in Waynesboro, Staunton and Lynchburg

Our newest markets offer strong growth prospects, providing an avenue to deploy our excess liquidity

We have been hiring and promoting seasoned bankers and relocating branches to capitalize on the opportunity:

George Vaughan: Joined NBB as Vice President/Loans in January 2026, to serve customers in Lynchburg and surrounding areas

Kevin Nixon: Joined NBB as a Loan Officer in December 2025 to serve customers throughout Augusta County, Rockingham County and the southern Shenandoah Valley from NBB's Waynesboro Office

Jon Cornett-McKee: Joined NBB as Vice President/Business Development in November 2025 to serve customers in the Roanoke Valley

Chelsea Grandfield: Promoted to Assistant Vice President/Regional Manager in November 2025 to oversee NBB's Roanoke, Lynchburg, Waynesboro and Staunton branches

New Markets Offer Attractive Growth Prospects

Projected Population Growth: 2026-2031(1)

3.0%

2.6%

1.9%

New Markets U.S. State of VA

Sources: S&P Capital IQ Pro, Company info

Unadjusted Efficiency Ratio(1)

∆ Since '24: -1,979 bps

We've Seen an Inflection in Margin and Profitability…

2.98% 2.81% 2.88%

2.73% 2.93%

2.38%

2.19%

2.41% 2.56%

Annualized Net Interest Margin

∆ Since '24: +74 bps

57.4%

53.8% 53.0% 50.9% 44.7%

61.5%

66.2%

59.0% 55.8%

3.36% 3.29%

75.6%

78.3%

2018 2019 2020 2021 2022 2023 2024 Q1 Q2

2025 2025

Q3 Q4 2025 2025

2018 2019 2020 2021 2022 2023 2024 Q1 Q2

2025 2025

Q3

2025

Q4

2025

Annualized Unadjusted PPNR(2) / Avg Assets

1.61%

1.76%

1.96%

1.58% 1.56%

1.13%

1.32%

1.50%

0.98%

0.65%

0. %

65

∆ Since '24: +85 bps

Annualized Unadjusted PPNR(2) Per Share(3)

$2.91

$3.36

$5.57

$3.42 $4.06

$4.29

$3.11

$3.70

$2.82

$1.84

$ 5

1.8

∆ Since '24: +133%

2018 2019 2020 2021 2022 2023 2024 Q1

2025

Q2 2025

Q3 2025

Q4 2025

2018 2019 2020 2021 2022 2023 2024 Q1

2025

Q2 2025

Q3 2025

Q4 2025

Source: S&P Capital IQ Pro, Company filings; (1) Noninterest expense (GAAP) divided by the sum of noninterest income (GAAP) and net interest income, FTE (non-GAAP); (2) Pre-provision net revenue (PPNR) is the sum of noninterest income (GAAP) and Net Interest Income, FTE (non-GAAP) less noninterest expense (GAAP); (3) Average basic shares outstanding; (4) Includes $3.8M pre-tax gain on sale of private equity investment in 2022, $2.9M pre-tax expense in connection with FCB acquisition in 2024 and pre-tax expense in connection with core systems conversion of $2.1M in 2025 and $173k in 2024.

…Supported by Continued Asset/Liability Repricing

Asset/Liability Repricing Overview Deposit Costs Have Inflected…

3.90%

2.05%

Net interest margin compression from the FOMC's 2022-2023 rate hiking campaign is improving as we manage deposit costs with a strong liquidity position

Asset yields are expanding as loan repricing accelerates and we optimize the securities portfolio for yield and interest rate risk

As a result, we expect to see continued margin expansion as deposit costs decline and assets reprice to higher market rates

As of 12/31/25, 100% of our securities portfolio (36% of total assets) is classified as available-for-sale and carried at fair value on our balance sheet

1Q2000

1Q2001

1Q2002

1Q2003

1Q2004

1Q2005

1Q2006

1Q2007

1Q2008

1Q2009

1Q2010

1Q2011

1Q2012

1Q2013

1Q2014

1Q2015

1Q2016

1Q2017

1Q2018

1Q2019

1Q2020

1Q2021

1Q2022

1Q2023

1Q2024

1Q2025

NBB Cost of IB Deposits Average Fed Funds Rate

…And Asset Yields are Expanding

4.50%

4.10%

1Q2000

1Q2001

1Q2002

1Q2003

1Q2004

1Q2005

1Q2006

1Q2007

1Q2008

1Q2009

1Q2010

1Q2011

1Q2012

1Q2013

1Q2014

1Q2015

1Q2016

1Q2017

1Q2018

1Q2019

1Q2020

1Q2021

1Q2022

1Q2023

1Q2024

1Q2025

NBB Yield on Earning Assets Average 10Y UST

Sources: S&P Capital IQ Pro, https://fred.stlouisfed.org/series/FEDFUNDS, https://fred.stlouisfed.org/series/DGS10

Revenue Diversification Enhances Income Stability

Q4 2025 Fee Income Mix Annualized Trust Income ($M)

$2.5

$2.2

$1.8

$1.8

$1.9

$1.6

$1.6

$1.7

18%

26%

2%

12%

3%

15%

23%

Fee Income / Revenue: 17%

2018 2019 2020 2021 2022 2023 2024 2025

Source: S&P Capital IQ Pro, Company filings

Strong Expense Management

Net Operating Expense / Average Assets (%)(1)

1.56%

1.49%

1.46%

1.35%

1.21%

1.23%

1.09%

0.85%

2018 2019 2020 2021 2022 2023 2024 2025

Source: S&P Capital IQ Pro; (1) Net operating expense is noninterest expense (GAAP) minus noninterest income (GAAP); (2) Includes $3.8M pre-tax gain on sale of private equity investment in 2022, $2.9M pretax expense in connection with FCB acquisition in 2024 and pre-tax expense in connection with core systems conversion of $2.1M in 2025 and $173k in 2024

Diversified and Resilient Deposit Franchise

Retail and small business-oriented deposit base

Rates have inflected since peaking in Q3 2024 and should see continued relief with further rate cuts

Strong liquidity position provides flexibility during times

of economic turmoil

3.90%

2.05%

NBB Cost of IB Deposits

Average Fed Funds Rate

NBB Cost of Interest-Bearing Deposits vs Fed Funds(1)

12/31/2025 Deposit Composition

20%

19%

9%

52%

1Q2000

1Q2001

1Q2002

1Q2003

1Q2004

1Q2005

1Q2006

1Q2007

1Q2008

1Q2009

1Q2010

1Q2011

1Q2012

1Q2013

1Q2014

1Q2015

1Q2016

1Q2017

1Q2018

1Q2019

1Q2020

1Q2021

1Q2022

1Q2023

1Q2024

1Q2025

Sources: S&P Capital IQ Pro, Company filings; (1) https://fred.stlouisfed.org/series/FEDFUNDS

Responsible Lending Drives Pristine Credit Quality

Net Charge-offs / Average Loans: 2008 to 2025

Conservative underwriting standards

No high-risk lending concentrations

Manageable CRE exposure

2.50%

2.00%

12/31/2025 Loan Composition

5% 4%

6%

5%

33%

47%

1.50%

1.00%

0.50%

0.00%

Sources: S&P Capital IQ Pro, Company filings

Delivering Exceptional Returns to Our Shareholders

Total Shareholder Return: January 2000 to December 2025

Financial Crisis

Covid-19 Pandemic

SVB Fallout

417%

810%

NKSH Dow Jones U.S. Small Cap Banks

Source: S&P Capital IQ

Proud History of Uninterrupted Dividend Payments

Common Dividends Declared Per Share: 2000 to 2025

$1.51

$0.43

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Source: S&P Capital IQ Pro; Note: 2023 includes $1.00 special dividend paid in Q1 2023

Robust Capital Levels and Return

NBB at 12/31/2025

Actual Ratio

Well Capitalized

Total Capital

17.02%

10.00%

Tier 1 Capital

16.16%

8.00%

Common Equity Tier 1

16.16%

6.50%

Tier 1 Leverage

10.42%

5.00%

Dividends + Share Repurchases / Net Income

NKSH and NBB possess robust regulatory capital levels

We carefully consider all options for our excess capital in

light of the operating environment

We have prudently returned capital to shareholders via common dividends and share repurchases

In February 2023, we paid a $1.00 special dividend after realizing a gain on sale of a private equity investment in the fourth quarter of 2022(1)

We renewed our stock repurchase plan in May 2025, authorizing the repurchase of up to 250,000 shares

159%

122%

109%

94%

67%

59%

61%

52%

2018 2019 2020 2021 2022 2023 2024 2025

Sources: S&P Capital IQ Pro, Company filings;

Strong Financial Position Provides Optionality

Contiguous and new markets offer more growth prospects than legacy markets

Open loan production offices in attractive markets (e.g., Charlottesville, VA)

Recently opened new branch in Roanoke, VA

Completed acquisition of Frontier Community Bank on June 1, 2024

Acquisition added three branch locations in Waynesboro, Staunton and Lynchburg

Will continue to weigh capital return against organic growth and M&A

Will not sacrifice position as a safe haven bank

1

Will look at business lines that may be synergistic with our existing lines

Will not pursue speculative new business initiatives

7

Appendix

Non-GAAP Reconciliations - Q4 2025

(In thousands, except per share data)

Tangible common equity:

Unadjusted efficiency ratio:

Total stockholders' equity (GAAP)

$184,908

Noninterest income (GAAP)

$2,626

Goodwill

(10,718)

Net interest income, FTE (non-GAAP)

12,923

Core deposit intangible, net

(1,490)

Total income for efficiency ratio (non-GAAP)

$15,549

Tangible common equity (non-GAAP)

$172,700

Total noninterest expense for efficiency ratio (GAAP)

$8,674

Unadjusted efficiency ratio (non-GAAP)

55.78%

Tangible assets:

Total assets (GAAP)

$1,824,506

Core efficiency ratio:

Goodwill

(10,718)

Noninterest income (GAAP)

$2,626

Core deposit intangible, net

(1,490)

Net interest income, FTE (non-GAAP)

12,923

Tangible assets (non-GAAP)

$1,812,298

Total income for efficiency ratio (non-GAAP)

$15,549

Total noninterest expense for efficiency ratio (GAAP)

$8,674

Tangible common equity / tangible assets (TCE/TA):

Conversion expense

(3)

Tangible common equity (non-GAAP)

$172,700

Noninterest expense for efficiency ratio (non-GAAP)

$8,671

Tangible assets (non-GAAP)

1,812,298

Core efficiency ratio (non-GAAP)

55.77%

Tangible common equity / tangible assets (non-GAAP)

9.53%

Core net income:

Tangible book value per share:

Net income (GAAP)

$5,881

Tangible common equity (non-GAAP)

$172,700

ACLL recovery, net of taxes

(509)

Common shares outstanding

6,368

Conversion expense, net of taxes

2

Tangible book value per share (non-GAAP)

$27.12

Core net income (non-GAAP)

$5,374

Average tangible common equity:

Unadjusted earnings per share (EPS):

Average stockholders' equity (GAAP)

$181,847

Net income (GAAP)

$5,881

Average intangible assets

(12,259)

Weighted average diluted shares outstanding

6,365

Average tangible common equity (non-GAAP)

$169,588

Unadjusted EPS (GAAP)

$0.92

Non-GAAP Reconciliations - Q4 2025

(In thousands, except per share data)

Unadjusted ROATCE:

Net income (GAAP)

$5,881

Average tangible common equity (non-GAAP)

169,588

Unadjusted ROATCE (non-GAAP)

13.76%

Core ROATCE:

Core net income (non-GAAP)

$5,374

Average tangible common equity (non-GAAP)

169,588

Core ROATCE (non-GAAP)

12.57%

Unadjusted ROAA:

Net income (GAAP)

$5,881

Average assets (GAAP)

1,814,520

Unadjusted ROAA (GAAP)

1.29%

Core ROAA:

Core net income (non-GAAP)

$5,374

Average assets (GAAP)

1,814,520

Core ROAA (non-GAAP)

1.18%

Core earnings per share (EPS):

Core net income (non-GAAP)

$5,374

Weighted average diluted shares outstanding

6,365

Core EPS (non-GAAP)

$0.84

Disclaimer

National Bankshares Inc. published this content on April 14, 2026, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on April 14, 2026 at 15:55 UTC.