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<SEC-DOCUMENT>0000796534-06-000010.txt : 20060130
<SEC-HEADER>0000796534-06-000010.hdr.sgml : 20060130
<ACCEPTANCE-DATETIME>20060130153015
ACCESSION NUMBER:		0000796534-06-000010
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20051231
ITEM INFORMATION:		Other Events
FILED AS OF DATE:		20060130
DATE AS OF CHANGE:		20060130

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			NATIONAL BANKSHARES INC
		CENTRAL INDEX KEY:			0000796534
		STANDARD INDUSTRIAL CLASSIFICATION:	NATIONAL COMMERCIAL BANKS [6021]
		IRS NUMBER:				541375874
		STATE OF INCORPORATION:			VA
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-15204
		FILM NUMBER:		06561719

	BUSINESS ADDRESS:	
		STREET 1:		PO BOX 90002
		CITY:			BLACKSBURG
		STATE:			VA
		ZIP:			24062-9002
		BUSINESS PHONE:		5405522011

	MAIL ADDRESS:	
		STREET 1:		100 SOUTH MAIN STREET
		STREET 2:		PO BOX 90002
		CITY:			BLACKSBURG
		STATE:			VA
		ZIP:			24062-9002
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>form8k.txt
<DESCRIPTION>FORM 8K
<TEXT>
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                 --------------

                                    FORM 8-K
                                 CURRENT REPORT
                         PURSUANT TO SECTION 13 OR 15(d)
                                     OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                                  -------------

Date of Report: January 30, 2006              Commission File Number: 0-15204

                            National Bankshares, Inc.
- --------------------------------------------------------------------------------
             (Exact name of Registrant as specified in its charter)


          Virginia                                     54-1375874
- -------------------------------            ------------------------------------
(State or other jurisdiction of            (I.R.S. Employer Identification No.)
incorporation or organization)


        101 Hubbard Street
        Blacksburg, VA 24060
- ----------------------------------------
(Address of principal executive offices)

Registrant's telephone number, including area code (540) 951-6300
                                                   --------------






                                Page 1 of 2 Pages
<PAGE>



ITEM 5. OTHER EVENTS AND REGULATION FD DISCLOSURE

On January 30, 2006, National Bankshares, Inc. issued a press release announcing
earnings for 2005. A copy of the press release is attached as Exhibit 99.1.


Exhibit
99.1    National Bankshares, Inc. Press Release dated January 30, 2006.



                                    SIGNATURE

        Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                                    NATIONAL BANKSHARES, INC.


Date:    January 30, 2006                    By:   /s/JAMES G. RAKES
      -----------------------                      ------------------------
                                                   James G. Rakes
                                                   Chairman
                                                   President and
                                                   Chief Executive Officer





                                Page 2 of 2 Pages







</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>2
<FILENAME>ex99.txt
<DESCRIPTION>2005 EARNINGS PRESS RELEASE
<TEXT>
FOR IMMEDIATE RELEASE


CONTACTS:             James G. Rakes, Chairman, President & CEO  (540) 951-6236
                      J. Robert Buchanan, Treasurer (276) 979-0341


                            NATIONAL BANKSHARES, INC.
                            ANNOUNCES HIGHER EARNINGS
                                    FOR 2005


BLACKSBURG, VA, JANUARY 30, 2006: National Bankshares, Inc. (Nasdaq Capital
Market: NKSH) today announced 2005 net income of over $12.42 million, or basic
net income per share of $3.54. This represents an increase of 1.59% over the
record earnings posted by the company in 2004. For the year, National Bankshares
showed a return on average assets of 1.52% and a return on average equity of
13.73%. Net income attributable to the fourth quarter of 2005 was nearly $3.23
million, up by 3.40% over the fourth quarter of 2004. National Bankshares
experienced growth in total assets of 5.70%, as compared with December 31, 2004,
ending 2005 with total assets of $841.50 million.

In discussing year-end results, National Bankshares Chairman, President & CEO
James G. Rakes said, "Although National Bankshares achieved record earnings once
again in 2005, the year-over-year increase was not large. A major contributor
was the pattern of interest rate increases put into place by the Federal Reserve
during 2005, which compressed our net interest margin and, in turn, impacted
earnings. In addition, non-interest expense categories were higher this year as
compared with 2004, reflecting the first full year of expenses associated with a
bank acquired in mid-2004. However, we are pleased with the solid organic growth
in net assets achieved in 2005. National Bankshares also experienced a good
increase in net loans despite a highly competitive market, ending the year with
net loans of $487.16 million. Each of the measures of loan quality was
excellent, improving from 2004's fine levels." Rakes continued, "We are
committed to the future of community banking, because we believe that personal
relationships and trust are important to people dealing with their finances. The
employees in our banks and insurance and investment subsidiary believe in
working closely with customers to help them reach their goals. National
Bankshares strives to support them in these efforts by offering a full range of
financial services in convenient locations throughout our market area."

National Bankshares, Inc. is a financial holding company with two community bank
subsidiaries, The National Bank, headquartered in Blacksburg, Virginia, and Bank
of Tazewell County, with headquarters in Tazewell, Virginia. The two banks have
26 offices throughout Southwest Virginia. The company also operates a non-bank
financial services subsidiary, National Bankshares Financial Services, Inc.,
which does business in the same market as National Bankshares Investment
Services and National Bankshares Insurance Services. National Bankshares, Inc.
stock is traded on the Nasdaq Capital Market under the symbol "NKSH". Additional
information about the company is available on its web site at
www.nationalbankshares.com.

                            (unaudited tables follow)

<PAGE>

<TABLE>
<CAPTION>
                   National Bankshares, Inc. And Subsidiaries

(000's), except ratios and percentdata
Three months ending                               December 31, 2005      December 31, 2004            Change
<S>                                                     <C>                   <C>                    <C>
- ------------------------------------------------------------------------------------------------------------
Selected Consolidated Data :
Interest income                                         $11,594               $10,837                  6.99%
Interest expense                                          4,095                 2,963                 38.20%
Net interest income                                       7,499                 7,874                 -4.76%
Provision for loan losses                                    10                   304                -96.71%
Trust income                                                336                   331                  1.51%
Other noninterest income                                  1,690                 1,526                 10.75%
Salary and benefits                                       2,731                 2,683                  1.79%
Occupancy expense                                           481                   460                  4.57%
Amortization of intangibles                                 285                   268                  6.34%
Other noninterest expense                                 1,742                 1,915                 -9.03%
Income taxes                                             -1,051                  -982                  7.03%
Net income                                               $3,225                $3,119                  3.40%
Basic net income per share                                $0.92                 $0.89                  $0.03
- ------------------------------------------------------------------------------------------------------------
Daily averages:
Gross loans                                            $495,920              $475,790                  4.23%
Loans,net                                               489,479               469,159                  4.33%
Total securities                                        263,887               254,778                  3.58%
Total deposits                                          736,500               698,177                  5.49%
Other borrowings                                            177                   712                -75.14%
Stockholders' equity                                     92,426                87,990                  5.04%
Cash and due from                                        17,430                15,449                 12.82%
Interest-earning assets                                 780,753               742,079                  5.21%
Interest-bearing liabilities                            622,233               594,542                  4.66%
Intangible assets                                        17,444                17,426                  0.10%
Total assets                                            832,999               789,921                  5.45%
- ------------------------------------------------------------------------------------------------------------
Financial ratios: Note (1)
Return on average assets                                  1.54%                 1.57%                  -0.03
Return on average equity                                 13.84%                14.10%                  -0.26
Net interest margin                                       4.17%                 4.62%                  -0.45
Average equity to average assets                         11.10%                11.14%                  -0.04
 Note (1)  Ratio change measured in bp
- ------------------------------------------------------------------------------------------------------------
Allowance for loan losses:
Beginning balance                                        $5,620                $5,835                 -3.68%
Provision for losses                                         10                   304                -96.71%
Charge-offs                                                -289                  -459                -37.04%
Recoveries                                                  108                    49                120.41%
Ending balance                                           $5,449                $5,729                 -4.89%


Year to Date                                     December 31, 2005        December 31, 2004           Change
- ------------------------------------------------------------------------------------------------------------
Selected Consolidated Data :
Interest income                                         $45,380               $41,492                  9.37%
Interest expense                                         14,180                11,125                 27.46%
Net interest income                                      31,200                30,367                  2.74%
Provision for loan losses                                   567                 1,189                -52.31%
Trust income                                              1,398                 1,436                 -2.65%
Other noninterest income                                  6,215                 5,706                  8.92%
Salary and benefits                                      11,265                10,498                  7.31%
Occupancy expense                                         1,931                 1,797                  7.46%
Amortization of intangibles                               1,117                   967                 15.51%
Other noninterest expense                                 7,585                 7,074                  7.22%
Income taxes                                             -3,924                -3,754                  4.53%
Net income                                              $12,424               $12,230                  1.59%
Basic net income per share                                $3.54                 $3.48                  $0.06
Dividends per share                                       $1.42                 $1.28                    ---
Dividend payout ratio                                     40.17                 36.83                    ---
Book value per share                                     $26.19                 24.75                  $1.44
- ------------------------------------------------------------------------------------------------------------
Balance sheet at period-end:
Gross loans                                            $493,524              $478,809                  3.07%
Loans, net                                             $487,162              $472,199                  3.17%
Total securities                                        272,541               250,708                  8.71%
Cash and due From                                        20,115                12,493                 61.01%
Total deposits                                          745,649               705,932                  5.63%
Other borrowings                                            357                   297                 20.20%
Stockholders' equity                                     91,939                87,088                  5.57%
Intangible assets                                        17,113                16,924                  1.12%
Total assets                                            841,498               796,154                  5.70%
- ------------------------------------------------------------------------------------------------------------
Daily averages:
Gross loans                                            $493,668              $445,210                 10.88%
Loans,net                                               487,130               438,761                 11.02%
Total securities                                        261,743               250,305                  4.57%
Cash and due From                                        15,976                14,322                 11.55%
Total deposits                                          724,015               665,627                  8.77%
Other borrowings                                            420                   531                -20.90%
Stockholders' equity                                     90,470                84,479                  7.09%
Cash and due from                                        15,976                14,322                 11.55%
Interest-earning assets                                 769,931               711,789                  8.17%
Interest-bearing liabilities                            610,534               572,838                  6.58%
Intangible assets                                        17,500                13,736                 27.40%
Total assets                                            819,341               753,730                  8.70%
- ------------------------------------------------------------------------------------------------------------
Financial ratios: Note (1)
Return on average assets                                  1.52%                 1.62%                  -0.10
Return on average equity                                 13.73%                14.48%                  -0.75
Net interest margin                                       4.44%                 4.70%                  -0.26
Efficiency ratio                                         52.39%                50.21%                   2.18
Average equity to average assets                         11.04%                11.21%                  -0.17
 Note (1)  Ratio change measured in bp
- ------------------------------------------------------------------------------------------------------------
Allowance for loan losses:
Beginning balance                                        $5,729                $5,369                  6.71%
Provision for losses                                        567                 1,189                -52.31%
Charge-offs                                              -1,101                -1,550                -28.97%
Recoveries                                                  254                   223                 13.90%
Acquisition of CNB                                          ---                   498               -100.00%
Ending balance                                           $5,449                $5,729                 -4.89%
- ------------------------------------------------------------------------------------------------------------
Nonperforming assets:
Nonaccrual loans                                           $178                  $394                -54.82%
Total nonperforming loans Note (2)                          178                   394                -54.82%
Other real estate owned                                     376                   895                -57.99%
Total nonperforming assets                                 $554                $1,289                -57.02%
- ------------------------------------------------------------------------------------------------------------
Asset quality ratios: Note (3)
Nonperforming loans to total loans                        0.04%                 0.08%                  -0.05
Allowance for loan losses to total                        1.11%                 1.20%                  -0.09
loans
Allowance for loan losses to nonperforming loans       3061.24%              1454.06%                1607.18
 Note (2) Loans 90 days past due or more not included
 Note (3) Ratio change measured in bp
- ------------------------------------------------------------------------------------------------------------
</TABLE>


</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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