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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

     ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

    

     For the quarterly period ended March 31, 2026

    

     ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

    

For the transition period from ________ to ________

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 incorporation or organization)	(I.R.S. Employer Identification No.)

101 Hubbard Street

Blacksburg, Virginia 24062-9002

(Address of principal executive offices) (Zip Code)

(540) 951-6300

(Registrant’s telephone number, including area code)

(Not applicable)

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $1.25 per share	NKSH	Nasdaq Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b–2 of the Exchange Act.


Large accelerated filer ☐	Accelerated filer ☐	Non-accelerated filer ☒	Smaller reporting company ☒	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

     Outstanding shares of common stock at May 13, 2026

    

     6,368,410

    

Table of Contents

NATIONAL BANKSHARES, INC.

Form 10-Q

Index


Part I – Financial Information		Page

Item 1	Financial Statements	3

	Consolidated Balance Sheets, March 31, 2026 (Unaudited) and December 31, 2025	3

	Consolidated Statements of Income for the Three Months Ended March 31, 2026 and 2025 (Unaudited)	4

	Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2026 and 2025 (Unaudited)	5

	Consolidated Statements of Changes in Stockholders’ Equity for the Three Months Ended March 31, 2026 and 2025 (Unaudited)	6

	Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2026 and 2025 (Unaudited)	7

	Notes to Consolidated Financial Statements (Unaudited)	9

Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27

Item 3	Quantitative and Qualitative Disclosures About Market Risk	38

Item 4	Controls and Procedures	38

Part II – Other Information

Item 1	Legal Proceedings	38

Item 1A	Risk Factors	38

Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	38

Item 3	Defaults Upon Senior Securities	38

Item 4	Mine Safety Disclosures	38

Item 5	Other Information	39

Item 6	Exhibits	39

Signatures		40

Table of Contents

Part I - FINANCIAL INFORMATION

Item 1. Financial Statements

National Bankshares, Inc.

Consolidated Balance Sheets


	(Unaudited)
(in thousands, except share and per share data)	March 31, 2026			December 31, 2025
Assets
Cash and due from banks	$	7,976		$	8,419
Interest-bearing deposits		54,177			50,831
Total cash and cash equivalents		62,153			59,250
Securities available for sale, at fair value		658,112			654,377
Mortgage loans held for sale		608			-
Loans:
Real estate construction loans		53,500			40,694
Consumer real estate loans		331,110			328,653
Commercial real estate loans		452,881			467,783
Commercial non real estate loans		50,736			52,018
Public sector and IDA loans		62,740			63,677
Consumer non real estate loans		45,097			47,101
Total loans		996,064			999,926
Less: deferred fees and costs		(674	)		(616	)
Loans, net of deferred fees and costs		995,390			999,310
Less: allowance for credit losses on loans		(9,739	)		(9,892	)
Loans, net		985,651			989,418
Premises and equipment, net		18,397			18,479
Accrued interest receivable		7,001			6,538
Goodwill		10,718			10,718
Core deposit intangible, net		1,403			1,490
Bank-owned life insurance ("BOLI")		48,869			48,568
Other assets		36,081			35,668
Total assets	$	1,828,993		$	1,824,506
Liabilities and Stockholders' Equity
Noninterest-bearing demand deposits	$	302,844		$	313,022
Interest-bearing demand deposits		866,848			853,756
Savings deposits		145,134			142,645
Time deposits		314,938			317,510
Total deposits		1,629,764			1,626,933
Accrued interest payable		1,600			1,581
Other liabilities		10,231			11,084
Total liabilities		1,641,595			1,639,598
Commitments and contingencies
Stockholders' Equity
Preferred stock, no par value, 5,000,000 shares authorized; none issued and outstanding	$	-		$	-
Common stock of $1.25 par value and additional paid in capital. Authorized 10,000,000 shares; issued and outstanding 6,368,410 (including 5,039 unvested) shares as of March 31, 2026 and December 31, 2025		22,086			22,024
Retained earnings		207,539			202,558
Accumulated other comprehensive loss, net		(42,227	)		(39,674	)
Total stockholders' equity		187,398			184,908
Total liabilities and stockholders' equity	$	1,828,993		$	1,824,506

See accompanying notes to consolidated financial statements.

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National Bankshares, Inc.

Consolidated Statements of Income

(Unaudited)


	For the Three Months Ended March 31,
(in thousands, except share and per share data)	2026			2025
Interest Income
Interest and fees on loans	$	13,944		$	12,960
Interest on federal funds sold		-			3
Interest on interest-bearing deposits		424			1,039
Interest on securities – taxable		4,233			3,860
Interest on securities – nontaxable		340			336
Total interest income		18,941			18,198
Interest Expense
Interest on time deposits		2,631			3,311
Interest on other deposits		3,687			4,636
Total interest expense		6,318			7,947
Net interest income		12,623			10,251
(Recovery of) provision for credit losses		(73	)		276
Net interest income after (recovery of) provision for credit losses		12,696			9,975

Noninterest Income
Service charges on deposit accounts		649			699
Other service charges and fees		142			83
Credit and debit card fees, net		457			417
Trust income		584			579
BOLI income		301			292
Gain on sale of mortgage loans held for sale		19			25
Other income		527			465
Total noninterest income		2,679			2,560

Noninterest Expense
Salaries and employee benefits		5,834			5,180
Occupancy, furniture and fixtures		884			739
Data processing		928			983
FDIC assessment		207			207
Intangible asset amortization		87			97
Franchise taxes		350			373
Professional services		373			299
Core system conversion expense		-			46
Other operating expenses		665			709
Total noninterest expense		9,328			8,633
Income before income tax expense		6,047			3,902
Income tax expense		1,066			666
Net Income	$	4,981		$	3,236
Basic net income per common share	$	0.78		$	0.51
Diluted net income per common share	$	0.78		$	0.51
Weighted average number of common shares outstanding, basic		6,363,371			6,358,410
Weighted average number of common shares outstanding, diluted		6,366,154			6,360,392

See accompanying notes to consolidated financial statements.

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National Bankshares, Inc.

Consolidated Statements of Comprehensive Income

Three Months Ended March 31, 2026 and 2025

(Unaudited)


	For the Three Months Ended March 31,
(in thousands)	2026			2025
Net Income	$	4,981		$	3,236

Other Comprehensive (Loss) Income, Net of Tax
Unrealized holding (loss) gain on available for sale securities net of tax of ($680) and $2,017 for the periods ended March 31, 2026 and 2025, respectively		(2,553	)		7,590
Other comprehensive (loss) income, net of tax		(2,553	)		7,590
Total Comprehensive Income	$	2,428		$	10,826

See accompanying notes to consolidated financial statements.

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National Bankshares, Inc.

Consolidated Statements of Changes in Stockholders’ Equity

Three Months Ended March 31, 2026 and 2025

(Unaudited)


(in thousands except per share data)	Common Stock and Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss			Total
Balances at December 31, 2024	$	21,831	$	196,343	$	(61,765	)	$	156,409
Net income		–		3,236		–			3,236
Other comprehensive income, net of tax of $2,017		–		–		7,590			7,590
Stock based compensation		43		–		–			43
Balances at March 31, 2025	$	21,874	$	199,579	$	(54,175	)	$	167,278

Balances at December 31, 2025	$	22,024	$	202,558	$	(39,674	)	$	184,908
Net income		–		4,981		–			4,981
Other comprehensive (loss), net of tax of ($680)		–		–		(2,553	)		(2,553	)
Stock based compensation		62		–		–			62
Balances at March 31, 2026	$	22,086	$	207,539	$	(42,227	)	$	187,398

See accompanying notes to consolidated financial statements.

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National Bankshares, Inc.

Consolidated Statements of Cash Flows

Three Months Ended March 31, 2026 and 2025

(Unaudited)


	For the Three Months Ended March 31,
(in thousands)	2026			2025
Cash Flows from Operating Activities
Net income	$	4,981		$	3,236
Adjustments to reconcile net income to net cash provided by operating activities:
(Recovery of) provision for credit losses		(73	)		276
Depreciation of premises and equipment		314			248
Amortization of premiums and accretion of discounts on securities, net		236			275
Amortization of core deposit intangible		87			97
Accretion of fair value of acquired loans		(417	)		(251	)
Amortization of fair value of acquired time deposits and leases		13			53
Origination of mortgage loans held for sale		(1,912	)		(1,442	)
Proceeds from sale of mortgage loans held for sale		1,323			1,148
Gain on sale of mortgage loans held for sale		(19	)		(25	)
Increase in cash value of bank-owned life insurance		(301	)		(292	)
Equity based compensation expense		62			43
Net change in:
Accrued interest receivable		(463	)		(204	)
Other assets		285			(395	)
Accrued interest payable		19			(28	)
Other liabilities		(835	)		(173	)
Net cash provided by operating activities		3,300			2,566

Cash Flows from Investing Activities
Proceeds from repayments of mortgage-backed securities		5,351			2,977
Proceeds from calls, sales and maturities of securities available for sale		7,000			12,000
Purchases of available for sale securities		(19,555	)		-
Net change in restricted stock		(24	)		-
Purchase of loan participations		(10,672	)		(15,977	)
Collection of loan participations		765			1,482
Loan originations and principal collections, net		14,061			(680	)
Recoveries on loans charged off		93			63
Purchases of premises and equipment		(229	)		(963	)
Net cash provided by investing activities		(3,210	)		(1,098	)

Cash Flows from Financing Activities
Net change in time deposits		(2,590	)		(14,013	)
Net change in other deposits		5,403			26,963
Net cash used in financing activities		2,813			12,950
Net change in cash and cash equivalents		2,903			14,418
Cash and cash equivalents at beginning of period		59,250			108,117
Cash and cash equivalents at end of period	$	62,153		$	122,535

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	For the Three Months Ended March 31,
(in thousands)	2026			2025
Supplemental Disclosures of Cash Flow Information
Cash payments for:
Interest on deposits and borrowings	$	6,281		$	7,975
Income taxes		1,110			-

Supplemental Disclosure of Noncash Activities
Loans charged against the allowance for credit losses	$	183		$	112
Unrealized holding (loss) gain on securities available for sale		(3,233	)		9,607

See accompanying notes to consolidated financial statements.

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National Bankshares, Inc.

Notes to Consolidated Financial Statements

March 31, 2026

(Unaudited)

$ in thousands, except per share data

Note 1: General and Summary of Significant Accounting Policies

The consolidated financial statements of National Bankshares, Inc. (“NBI”) and its wholly-owned subsidiaries, The National Bank of Blacksburg (the “Bank” or “NBB”) and National Bankshares Financial Services, Inc. (“NBFS”) (collectively, the “Company”), conform to accounting principles generally accepted in the United States of America (“GAAP”) and to general practices within the banking industry. All intercompany accounts and transactions between the Company and its subsidiaries have been eliminated. The accompanying interim period consolidated financial statements are unaudited; however, in the opinion of the Company’s management, all adjustments consisting of normal recurring adjustments, which are necessary for a fair presentation of the consolidated financial statements, have been included.

Application of the principles of GAAP and practices within the banking industry require management to make estimates, assumptions, and judgments that affect the amounts reported in the financial statements and accompanying notes. These estimates, assumptions, and judgments are based on information available as of the date of the financial statement; accordingly, as this information changes, the financial statements may reflect different estimates, assumptions, and judgments. Certain policies inherently rely more extensively on the use of estimates, assumptions, and judgments and as such may have a greater possibility of producing results that could be materially different than originally reported. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance of credit losses on loans and pension plan.

The results of operations for the three months ended March 31, 2026 are not necessarily indicative of results of operations for the full year or any other interim period. The interim period consolidated financial statements and financial information included in this Form 10-Q should be read in conjunction with the notes to consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 (“2025 Form 10-K”). The Company’s significant accounting policies followed in preparation of the unaudited consolidated financial statements are disclosed in Note 1 of the Company's 2025 Form 10-K. All amounts and disclosures included in this quarterly report as of December 31, 2025, were derived from the Company’s audited consolidated financial statements. Certain items in the prior period financial statements have been reclassified to conform to the current presentation. These reclassifications had no effect on prior year net income or stockholders’ equity. The Company posts all reports required to be filed under the Securities Exchange Act of 1934 on its web site at www.nationalbankshares.com.

Risks and Uncertainties

The Company is closely monitoring risks that may impact its business, including inflation, along with U.S. monetary policy maneuvers to manage inflation. Inflation and U.S. monetary policy maneuvers to reduce it may impact the Company’s customers’ demand for banking services and ability to qualify for and/or repay loans. These risks could adversely affect the Company’s business, financial condition, results of operations, cash flows, credit risk, asset valuations and capital position.

Recent Accounting Pronouncements

ASU 2025-08

In November 2025, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update (“ASU”) 2025-08, “Financial Instruments—Credit Losses (Topic 326): Purchased Loans.” The amendments in this ASU expand the population of acquired financial assets accounted for using the gross-up approach. Acquired loans (excluding credit cards) are deemed purchased seasoned loans and accounted for using the gross-up approach upon acquisition if criteria established by the new guidance are met. This change aims to enhance comparability, consistency, and better reflect the economics of acquiring financial assets. This ASU is effective for annual reporting periods beginning after December 15, 2026, and for interim reporting periods within those annual reporting periods. Early adoption is permitted in an interim or annual reporting period in which financial statements have not yet been issued or made available for issuance. If an entity adopts this ASU in an interim reporting period, it should apply it as of the beginning of that interim reporting period or the beginning of the annual reporting period that includes that interim reporting period. The Company does not expect the adoption of ASU 2025-08 to have a material impact on its consolidated financial statements.

ASU 2024-03

In November 2024, the FASB issued ASU 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses.” ASU 2024-03 requires public companies to disclose, in the notes to the financial statements, specific information about certain costs and expenses at each interim and annual reporting period. This includes disclosing amounts related to employee compensation, depreciation, and intangible asset54amortization. In addition, public companies will need to provide qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively. The FASB subsequently issued ASU 2025-01, “Income

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Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date”, which amends the effective date of ASU 2024-03 to clarify that all public business entities are required to adopt the guidance in ASU 2024-03 in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption of ASU 2024-03 is permitted. Implementation of ASU 2024-03 may be applied prospectively or retrospectively. The Company does not expect the adoption of ASU 2024-03 to have a material impact on its consolidated financial statements.

Note 2: Loans and Allowance for Credit Losses

Loans

Loans include acquired loans and originated loans. Acquired loans are presented at their outstanding principal balance, net of the remaining purchase discount of $5,134 as of March 31, 2026 and $5,551 as of December 31, 2025. Originated loans as of March 31, 2026 and December 31, 2025 are presented at amortized cost, net of deferred fees and costs. The following table presents the composition of the loan portfolio, excluding mortgage loans held for sale, as of the dates indicated.


	March 31,			December 31,
	2026			2025
Real estate construction	$	53,500		$	40,694
Consumer real estate		331,110			328,653
Commercial real estate		452,881			467,783
Commercial non real estate		50,736			52,018
Public sector and IDA		62,740			63,677
Consumer non real estate		45,097			47,101
Gross loans	$	996,064		$	999,926
Less: deferred fees and costs		(674	)		(616	)
Loans, net of deferred fees and costs	$	995,390		$	999,310
Allowance for credit losses on loans		(9,739	)		(9,892	)
Total loans, net	$	985,651		$	989,418

Accrued interest receivable of $3,568 at March 31, 2026 and $3,361 at December 31, 2025 is not included in total loans above and is also excluded from the Company's estimate of credit losses on loans.

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Past Due and Nonaccrual Loans

The following tables present the aging of past due loans, by loan pool, as of the dates indicated.


March 31, 2026	Accruing Current Loans		Accruing Loans 30 – 89 Days Past Due		Accruing Loans 90 or More Days Past Due		Nonaccrual Loans		Total Loans		Accruing and Nonaccrual 90 or More Days Past Due
Real Estate Construction
Construction, 1-4 family residential	$	12,410	$	-	$	-	$	-	$	12,410	$	-
Construction, other		41,071		19		-		-		41,090		-
Consumer Real Estate
Equity line		26,958		168		-		-		27,126		-
Residential closed-end first liens		198,367		1,382		-		-		199,749		-
Residential closed-end junior liens		11,317		5		-		-		11,322		-
Investor-owned residential real estate		92,672		241		-		-		92,913		-
Commercial Real Estate
Multifamily residential real estate		140,833		-		189		-		141,022		189
Commercial real estate owner-occupied		126,301		-		-		186		126,487		186
Commercial real estate, other		184,678		536		-		158		185,372		-
Commercial Non Real Estate
Commercial and industrial		50,643		93		-		-		50,736		-
Public Sector and IDA
States and political subdivisions		62,740		-		-		-		62,740		-
Consumer Non Real Estate
Credit cards		4,809		3		-		-		4,812		-
Automobile		12,777		225		-		-		13,002		-
Other consumer loans		27,027		215		41		-		27,283		41
Total	$	992,603	$	2,887	$	230	$	344	$	996,064	$	416


December 31, 2025	Accruing Current Loans		Accruing Loans 30 – 89 Days Past Due		Accruing Loans 90 or More Days Past Due		Nonaccrual Loans		Total Loans		Accruing and Nonaccrual 90 or More Days Past Due
Real Estate Construction
Construction, 1-4 family residential	$	11,282	$	-	$	-	$	-	$	11,282	$	-
Construction, other		29,101		311		-		-		29,412		-
Consumer Real Estate
Equity line		27,494		-		50		-		27,544		50
Residential closed-end first liens		196,857		1,447		-		-		198,304		-
Residential closed-end junior liens		11,154		6		-		-		11,160		-
Investor-owned residential real estate		91,471		174		-		-		91,645		-
Commercial Real Estate
Multifamily residential real estate		148,644		189		-		-		148,833		-
Commercial real estate owner-occupied		130,856		-		429		188		131,473		617
Commercial real estate, other		186,939		538		-		-		187,477		-
Commercial Non Real Estate
Commercial and industrial		51,435		248		335		-		52,018		335
Public Sector and IDA
States and political subdivisions		63,677		-		-		-		63,677		-
Consumer Non Real Estate
Credit cards		4,727		7		2		-		4,736		2
Automobile		12,707		245		14		-		12,966		14
Other consumer loans		28,991		357		51		-		29,399		51
Total	$	995,335	$	3,522	$	881	$	188	$	999,926	$	1,069

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The following table presents nonaccrual loans, by loan class, as of the dates indicated:


	March 31, 2026						December 31, 2025
	With No Allowance		With an Allowance		Total		With No Allowance		With an Allowance		Total
Commercial Real Estate
Commercial real estate, owner-occupied	$	-	$	186	$	186	$	-	$	188	$	188
Commercial real estate, other		-		158		158		-		-		-
Total	$	-	$	344	$	344	$	-	$	188	$	188

No accrued interest receivable was reversed against interest income during the three months ended March 31, 2026 or March 31, 2025.

Allowance for Credit Losses on Loans (“ACLL”)

The following tables present the activity in the ACLL by portfolio segment for the periods indicated:


	Activity in the ACLL for the Three Months Ended March 31, 2026
	Real Estate Construction		Consumer Real Estate		Commercial Real Estate			Commercial Non-Real Estate			Public Sector and IDA		Consumer Non-Real Estate			Total
Balance, December 31, 2025	$	337	$	3,823	$	3,805		$	849		$	308	$	770		$	9,892
Charge-offs		-		-		-			(22	)		-		(161	)		(183	)
Recoveries		-		-		-			13			-		80			93
Provision for (recovery of) credit losses		96		55		(62	)		(195	)		12		31			(63	)
Balance, March 31, 2026	$	433	$	3,878	$	3,743		$	645		$	320	$	720		$	9,739


	Activity in the ACLL for the Three Months Ended March 31, 2025
	Real Estate Construction			Consumer Real Estate			Commercial Real Estate		Commercial Non Real Estate			Public Sector and IDA		Consumer Non Real Estate			Total
Balance, December 31, 2024	$	350		$	3,945		$	4,320	$	658		$	338	$	651		$	10,262
Charge-offs		-			(3	)		-		-			-		(109	)		(112	)
Recoveries		-			-			8		30			-		25			63
Provision for (recovery of) credit losses		(17	)		(30	)		269		(21	)		14		62			277
Balance, March 31, 2025	$	333		$	3,912		$	4,597	$	667		$	352	$	629		$	10,490


	Activity in the ACLL for the Year Ended December 31, 2025
	Real Estate Construction			Consumer Real Estate			Commercial Real Estate			Commercial Non Real Estate			Public Sector and IDA			Consumer Non Real Estate			Total
Balance, December 31, 2024	$	350		$	3,945		$	4,320		$	658		$	338		$	651		$	10,262
Charge-offs		-			(3	)		-			(50	)		-			(529	)		(582	)
Recoveries		-			-			133			33			-			109			275
Provision for (recovery of) credit losses		(13	)		(119	)		(648	)		208			(30	)		539			(63	)
Balance, December 31, 2025	$	337		$	3,823		$	3,805		$	849		$	308		$	770		$	9,892

(1) Adjustment for PCD acquired loans.

The following tables present information about the ACLL for individually evaluated loans and collectively evaluated loans by portfolio segment as of the dates indicated.


	ACLL by Segment and Evaluation Method
March 31, 2026	Real Estate Construction		Consumer Real Estate		Commercial Real Estate		Commercial Non-Real Estate		Public Sector and IDA		Consumer Non-Real Estate		Total
Individually evaluated	$	–	$	24	$	82	$	–	$	–	$	–	$	106
Collectively evaluated		433		3,854		3,661		645		320		720		9,633
Total	$	433	$	3,878	$	3,743	$	645	$	320	$	720	$	9,739


	ACLL by Segment and Evaluation Method
December 31, 2025	Real Estate Construction		Consumer Real Estate		Commercial Real Estate		Commercial Non Real Estate		Public Sector and IDA		Consumer Non Real Estate		Total
Individually evaluated	$	-	$	26	$	80	$	-	$	-	$	-	$	106
Collectively evaluated		337		3,797		3,725		849		308		770		9,786
Total	$	337	$	3,823	$	3,805	$	849	$	308	$	770	$	9,892

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The following tables present information about individually evaluated loans and collectively evaluated loans by portfolio segment as of the dates indicated.


	Loans by Segment and Evaluation Method
March 31, 2026	Real Estate Construction		Consumer Real Estate		Commercial Real Estate		Commercial Non-Real Estate		Public Sector and IDA		Consumer Non-Real Estate
Individually evaluated	$	–	$	456	$	8,442	$	–	$	–	$	–
Collectively evaluated		53,500		330,654		444,439		50,736		62,740		45,097
Total	$	53,500	$	331,110	$	452,881	$	50,736	$	62,740	$	45,097


	Loans by Segment and Evaluation Method
December 31, 2025	Real Estate Construction		Consumer Real Estate		Commercial Real Estate		Commercial Non Real Estate		Public Sector and IDA		Consumer Non Real Estate		Total
Individually evaluated	$	-	$	465	$	8,337	$	-	$	-	$	-	$	8,802
Collectively evaluated		40,694		328,188		459,446		52,018		63,677		47,101		991,124
Total	$	40,694	$	328,653	$	467,783	$	52,018	$	63,677	$	47,101	$	999,926

Collateral Dependent Loans

Loans are collateral dependent when repayment is expected substantially through the operation or sale of the collateral and the borrower is experiencing financial difficulty. Collateral dependent loans are individually evaluated. The Company measures the ACLL on collateral dependent loans based upon the fair value of the collateral. Fair value of the collateral is adjusted for liquidation costs/discounts. If the fair value of the collateral falls below the amortized cost of the loan, the shortfall is recognized in the ACLL. If the fair value of the collateral exceeds the amortized cost, no ACLL is required.

As of March 31, 2026 and December 31, 2025, two of the Company’s individually evaluated loans were collateral dependent and secured by real estate. The following table provides detail on collateral dependent loans as of the dates indicated:

          
         March 31, 2026

         December 31, 2025

          
         Balance

         Related
Allowance

NATIONAL BANKSHARES INC 10-Q