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<SEC-DOCUMENT>0000796534-06-000031.txt : 20060421
<SEC-HEADER>0000796534-06-000031.hdr.sgml : 20060421
<ACCEPTANCE-DATETIME>20060421123302
ACCESSION NUMBER:		0000796534-06-000031
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20060331
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20060421
DATE AS OF CHANGE:		20060421

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:		06771842

	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
<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: April 20, 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 2.02.   RESULTS OF OPERATIONS, FINANCIAL STATEMENTS AND
             EXHIBITS

        On April 20, 2006, National Bankshares, Inc. issued a press release
announcing its financial results for the first quarter ended March 31, 2006. A
copy of the press release is attached as Exhibit 99.1.


ITEM 9.01.   FINANCIAL STATEMENTS AND EXHIBITS

(a)      Exhibits

99.1     National Bankshares, Inc. Press Release dated April 20, 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:    April 21, 2006             By:   /s/ JAMES G. RAKES
      --------------------                -------------------------------------
                                          James G. Rakes
                                          Chairman
                                          President and CEO





                                Page 2 of 2 Pages


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>2
<FILENAME>ex99.txt
<DESCRIPTION>1ST QUARTER 2006 PRESS RELEASE
<TEXT>
FOR IMMEDIATE RELEASE

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


                            NATIONAL BANKSHARES, INC.
                        ANNOUNCES FIRST QUARTER EARNINGS

BLACKSBURG, VA, APRIL 20, 2006: National Bankshares, Inc. (Nasdaq Capital
Market: NKSH) today announced first quarter net income of just over $3 million,
or basic net income of $0.43 per share (adjusted to reflect a 2-for-1 stock
split which was effective on March 31). This is a slight increase over the $2.99
million earned in the first quarter of 2005. At March 31, National Bankshares,
Inc, the parent company of the National Bank of Blacksburg, Bank of Tazewell
County and National Bankshares Financial Services had total assets of nearly
$848 million, up by 3.80% over the total on March 31, 2005.

        In making the earnings announcement, Chairman, President & CEO James G.
Rakes said, "We continue to experience the effects of compression of the net
interest margin, as regular interest rate increases by the Federal Reserve Bank
have continued longer than some had predicted. Pressure on the interest margin
has impacted earnings. However, we are pleased with the quality of the loan
portfolio and with solid asset growth. With the recently announced consolidation
of our two bank subsidiaries into National Bank, we are also taking steps to
streamline operations and position our Company for a positive future."

        National Bankshares, Inc. is a financial holding company headquartered
in Blacksburg, Virginia. It now has two community bank subsidiaries, The
National Bank of Blacksburg and Bank of Tazewell County, with its main office in
Tazewell, Virginia. Together, the banks operate from 26 locations throughout
Southwest Virginia. The company has a non-bank subsidiary, National Bankshares
Financial Services, Inc., which does business as National Bankshares Investment
Services and National Bankshares Insurance Services. 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 percent data

Three months ending                                   March 31, 2006         March 31, 2005                Change
<S>                                                       <C>                   <C>                            <C>
Selected Consolidated Data :
- ---------------------------------------------------------------------------------------------------------------------
Interest income                                           $11,583               $11,035                        4.97%
Interest expense                                            4,238                 3,043                       39.27%
Net interest income                                         7,345                 7,992                       -8.10%
Provision for loan losses                                      17                   190                      -91.05%
Trust income                                                  380                   408                       -6.86%
Other noninterest income                                    1,679                 1,360                       23.46%
Salary and benefits                                         2,911                 2,862                        1.71%
Occupancy expense                                             533                   479                       11.27%
Amortization of intangibles                                   284                   266                        6.77%
Other noninterest expense                                   1,771                 2,082                      -14.94%
Income taxes                                                 -885                  -888                       -0.34%
Net income                                                 $3,003                $2,993                        0.33%
Basic net income per share                                  $0.43                 $0.43                        $0.00
- ---------------------------------------------------------------------------------------------------------------------

Daily averages:
- ---------------------------------------------------------------------------------------------------------------------
Gross loans                                              $491,410              $484,551                        1.42%
Loans,net                                                 485,031               477,992                        1.47%
Total securities                                          272,644               256,117                        6.45%
Total deposits                                            741,941               707,254                        4.90%
Other borrowings                                              146                   204                      -28.43%
Stockholders' equity                                       93,417                88,109                        6.02%
Cash and due from                                          17,149                14,082                       21.78%
Interest-earning assets                                   777,400               753,895                        3.12%
Interest-bearing liabilities                              630,151               592,287                        6.39%
Intangible assets                                          16,988                17,121                       -0.78%
Total assets                                              839,478               802,861                        4.56%
- ---------------------------------------------------------------------------------------------------------------------

Financial ratios: Note (1)
- ---------------------------------------------------------------------------------------------------------------------
Return on average assets                                    1.45%                 1.51%                        -0.06
Return on average equity                                   13.04%                13.78%                        -0.74
Net interest margin                                         4.22%                 4.71%                        -0.49
Efficiency ratio                                              ---                   ---                          ---
Average equity to average assets                           11.13%                10.97%                         0.15
- ---------------------------------------------------------------------------------------------------------------------
 Note (1)  Ratio change measured in bp

Allowance for loan losses:
- ---------------------------------------------------------------------------------------------------------------------
Beginning balance                                          $5,449                $5,729                       -4.89%
Provision for losses                                           17                   190                      -91.05%
Charge-offs                                                   -87                  -253                      -65.61%
Recoveries                                                     39                    46                      -15.22%
Acquisition of CNB                                            ---                   ---                          ---
Ending balance                                             $5,418                $5,712                       -5.15%
- ---------------------------------------------------------------------------------------------------------------------


Year to Date                                         March 31, 2006            March 31, 2005                Change

Selected Consolidated Data :
- ---------------------------------------------------------------------------------------------------------------------
Interest income                                           $11,583               $11,035                        4.97%
Interest expense                                            4,238                 3,043                       39.27%
Net interest income                                         7,345                 7,992                       -8.10%
Provision for loan losses                                      17                   190                      -91.05%
Trust income                                                  380                   408                       -6.86%
Other noninterest income                                    1,679                 1,360                       23.46%
Salary and benefits                                         2,911                 2,862                        1.71%
Occupancy expense                                             533                   479                       11.27%
Amortization of intangibles                                   284                   266                        6.77%
Other noninterest expense                                   1,771                 2,082                      -14.94%
Income taxes                                                 -885                  -888                       -0.34%
Net income                                                 $3,003                $2,993                        0.33%
Basic net income per share                                  $0.43                 $0.43                        $0.00
Fully diluted net income per share                            ---                   ---                          ---
Dividends per share                                           ---                   ---                          ---
Dividend payout ratio                                         ---                   ---                          ---
Book value per share                                       $13.44                 12.61                        $0.83
- ---------------------------------------------------------------------------------------------------------------------

Balance sheet at period-end:
- ---------------------------------------------------------------------------------------------------------------------
Gross loans                                              $490,757              $495,355                       -0.93%
Loans, net                                               $484,391              $488,735                       -0.89%
Total securities                                          275,828               262,204                        5.20%
Cash and due From                                          18,270                14,043                       30.10%
Total deposits                                            749,222               723,873                        3.50%
Other borrowings                                               83                   431                      -80.74%
Stockholders' equity                                       94,260                88,793                        6.16%
Intangible assets                                          16,829                17,964                       -6.32%
Total assets                                              847,956               816,988                        3.79%
- ---------------------------------------------------------------------------------------------------------------------

Daily averages:
- ---------------------------------------------------------------------------------------------------------------------
Gross loans                                              $491,410              $484,551                        1.42%
Loans,net                                                 485,029               477,992                        1.47%
Total securities                                          272,644               256,117                        6.45%
Total deposits                                            741,941               707,254                        4.90%
Other borrowings                                              146                   204                      -28.43%
Stockholders' equity                                       93,419                88,109                        6.03%
Cash and due from                                          17,149                14,082                       21.78%
Interest-earning assets                                   777,400               753,895                        3.12%
Interest-bearing liabilities                              630,151               592,287                        6.39%
Intangible assets                                          16,988                17,121                       -0.78%
Total assets                                              839,478               802,861                        4.56%
- ---------------------------------------------------------------------------------------------------------------------

Financial ratios: Note (1)
- ---------------------------------------------------------------------------------------------------------------------
Return on average assets                                    1.45%                 1.51%                        -0.06
Return on average equity                                   13.04%                13.78%                        -0.74
Net interest margin                                         4.22%                 4.71%                        -0.49
Efficiency ratio                                           54.17%                54.12%                         0.05
Average equity to average assets                           11.13%                10.97%                         0.15
- ---------------------------------------------------------------------------------------------------------------------
 Note (1)  Ratio change measured in bp

Allowance for loan losses:
- ---------------------------------------------------------------------------------------------------------------------
Beginning balance                                          $5,449                $5,729                       -4.89%
Provision for losses                                           17                   190                      -91.05%
Charge-offs                                                   -87                  -253                      -65.61%
Recoveries                                                     39                    46                      -15.22%
Acquisition of CNB                                            ---                   ---                     -100.00%
Ending balance                                             $5,418                $5,712                       -5.15%
- ---------------------------------------------------------------------------------------------------------------------

Nonperforming assets:
- ---------------------------------------------------------------------------------------------------------------------
Nonaccrual loans                                              $92                  $347                      -73.49%
Restructured loans                                            ---                   ---                          ---
Total nonperforming loans Note (2)                             92                   347                      -73.49%
Other real estate owned                                       390                   715                      -45.45%
Total nonperforming assets                                   $482                $1,062                      -54.61%
- ---------------------------------------------------------------------------------------------------------------------

Asset quality ratios: Note (3)
- ---------------------------------------------------------------------------------------------------------------------
Nonperforming loans to total loans                          0.02%                 0.07%                        -0.05
Allowance for loan losses to total loans                    1.11%                 1.16%                        -0.05
Allowance for loan losses
  to nonperforming loans                                 5889.13%              1646.11%                      4243.02
- ---------------------------------------------------------------------------------------------------------------------
 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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