Form 8-K NATIONAL BANKSHARES INC For: Nov 10

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

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Washington, D.C. 20549

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Form 8-K

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Current Report

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Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

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Date of Report (Date of earliest event reported) November 10, 2014

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National Bankshares, Inc.

(Exact name of Registrant as specified in its charter)

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Virginia	0-15204	54-1375874
(State or other jurisdiction of incorporation or organization)	(Commission File No.)	(I.R.S. Employer Identification No.)

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101 Hubbard Street

Blacksburg, VA 24060

(Address of principal executive offices)

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(540) 951-6300

(Registrants telephone number, including area code)

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(Former name or former address, if changed since last report) Not applicable

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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

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�����Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

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�����Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

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�����Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

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�����Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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ITEM 7.01.�����REGULATION FD DISCLOSURE.

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On November 10, 2014, National Bankshares, Inc., the parent company of The National Bank of Blacksburg, mailed the 2014 Third Quarter Report to stockholders containing financial information concerning the period ended September�30, 2014. A copy of the 2014 Third Quarter Report is furnished herewith as Exhibit 99.1.

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ITEM 9.01.�� ��FINANCIAL STATEMENTS AND EXHIBITS.

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(d)

Exhibits

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99.1�������� �2014 Third Quarter Report (period ended September 30, 2014).

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SIGNATURE

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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.

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NATIONAL BANKSHARES, INC.

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Date: November 10, 2014

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By:��������� /s/ JAMES G. RAKES

James G. Rakes Chairman President and CEO

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Page 2 of 2 Pages

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Exhibit 99.1

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Message to Our Stockholders:

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I write to report the earnings for National Bankshares, Inc. for the third quarter of 2014. Because we have seen tremendous growth over the years in the use of technology and access to information, this publication will be the final quarterly Message to Stockholders that we print and mail to stockholders. In the future, stockholders may view our quarterly earnings releases on our website www.nationalbankshares.com.

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For the period ended September 30, 2014, we reported net income of approximately $4.26 million for the three months ended September 30, 2014 compared to the $4.52 million reported for the same period in 2013. For the nine months ended September 30, 2014, your Company had net income of almost $12.78 million compared to $13.17 million reported for the first nine months of 2013. At September 30, 2014, the Company had total assets of $1.12 billion.

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Basic earnings per share were $1.84 which compares with $1.90 reported for the nine months ended September 30, 2013. Basic earnings per share for the third quarter of 2014 were $0.61 which compares with $0.65 for the third quarter last year. At the end of the third quarter 2014, book value per share was $23.43 which compares to $21.06 last year. The return on�average assets for the nine months ended September 30, 2014 was 1.53% compared to 1.61% in 2013. The return on average equity was 10.99% and 11.70% for the same two periods.

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In summary, we have had a solid three quarters of earnings. We continue to see loan and deposit growth. Our loans are up over $5 million from September 2013, our interest expense has improved while non-interest expenses remain stable, and our efficiency ratio continues to compare very favorably with our peer financial institutions.

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The Board of Directors, officers and employees remain focused on maintaining our commitment to our customers. Personalized service and local decision-making remain part of our community banking fundamentals and a key to our�success. On behalf of all of us, I thank you for your support and your investment.

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�	� James G. Rakes Chairman, President and Chief Executive Officer

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National Bankshares, Inc.

Board of Directors�

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Lawrence J. Ball President Moog Components Group	William A. Peery President Cargo Oil Co., Inc.
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John E. Dooley Chief Executive Officer Virginia Tech Foundation, Inc. � Charles E. Green, III Financial Planner AXA Advisors, LLC � Jack M. Lewis President New River Community College � Mary G. Miller President Interactive Design & Development, Inc.	James G. Rakes Chairman, President and CEO, National Bankshares, Inc.; Executive Chairman, National Bank; Chairman, President and CEO, National Bankshares Financial Services, Inc. � Glenn P. Reynolds President Reynolds Architects Incorporated � James M. Shuler Vice Chairman of the Board Virginia House of Delegates, Retired

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Mission Statement

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National Bankshares, Inc. strives to be an exceptional community bank holding company dedicated to providing shareholder value by offering financial services to customers through subsidiary financial institutions and affiliated companies in an efficient, friendly, personalized and cost-effective manner. We recognize that to do this, our financial institutions must retain the ability to make decisions locally and must actively participate in the communities they serve. We are committed to offering competitive and fair employment opportunities and to maintaining the highest standards in all aspects of our business.

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National Bankshares, Inc. and Subsidiaries

Consolidated Statements of Income

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(Unaudited)

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($ In thousands, except per share data)	�	September 30, 2014		�	�	September 30, 2013		�
Interest Income	�	�	�	�	�	�	�	�
Interest and fees on loans	�	$	23,520	�	�	$	24,707	�
Interest on interest-bearing deposits	�	�	193	�	�	�	161	�
Interest on securities - taxable	�	�	5,068	�	�	�	4,928	�
Interest on securities - nontaxable	�	�	4,410	�	�	�	4,847	�
Total interest income	�	�	33,191	�	�	�	34,643	�
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Interest Expense	�	�	�	�	�	�	�	�
Interest on time deposits of $100 or more	�	�	437	�	�	�	694	�
Interest on other deposits	�	�	3,320	�	�	�	3,921	�
Interests on other borrowed funds	�	�	---	�	�	�	---	�
Total interest expense	�	�	3,757	�	�	�	4,615	�
Net interest income	�	�	29,434	�	�	�	30,028	�
Provision for loan losses	�	�	1,160	�	�	�	1,329	�
Net interest income after provision for loan losses	�	�	28,274	�	�	�	28,699	�
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Noninterest Income	�	�	�	�	�	�	�	�
Service charges on deposit accounts	�	�	1,833	�	�	�	1,922	�
Other service charges and fees	�	�	145	�	�	�	139	�
Credit card fees	�	�	2,687	�	�	�	2,427	�
Trust income	�	�	921	�	�	�	867	�
Bank-owned life insurance	�	�	526	�	�	�	546	�
Other income	�	�	669	�	�	�	687	�
Realized securities gains (losses), net	�	�	5	�	�	�	(44	)
Total noninterest income	�	�	6,786	�	�	�	6,544	�
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Noninterest Expense	�	�	�	�	�	�	�	�
Salaries and employee benefits	�	�	8,954	�	�	�	8,963	�
Occupancy and furniture and fixtures	�	�	1,265	�	�	�	1,230	�
Data processing and ATM	�	�	1,183	�	�	�	1,288	�
FDIC assessment	�	�	411	�	�	�	408	�
Credit card processing	�	�	1,887	�	�	�	1,854	�
Intangibles and goodwill amortization	�	�	807	�	�	�	809	�
Net costs of other real estate owned	�	�	259	�	�	�	192	�
Franchise taxes	�	�	874	�	�	�	803	�
Other operating expense	�	�	2,738	�	�	�	2,697	�
Total noninterest expense	�	�	18,378	�	�	�	18,244	�
Income before income tax expense	�	�	16,682	�	�	�	16,999	�
Income tax expense	�	�	3,906	�	�	�	3,831	�
Net income	�	$	12,776	�	�	$	13,168	�
Basic net income per share	�	$	1.84	�	�	$	1.90	�

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National Bankshares, Inc. and Subsidiaries

Consolidated Balance Sheets

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(Unaudited)

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($ In thousands, except share data)	�	September 30, 2014		�	�	September 30, 2013		�
Assets	�	�	�	�	�	�	�	�
Cash and due from banks	�	$	12,815	�	�	$	13,806	�
Interest-bearing deposits	�	�	87,621	�	�	�	63,452	�
Securities available for sale, at fair value	�	�	205,020	�	�	�	190,264	�
Securities held to maturity (fair value 167,409 in 2014 and 160,676 in 2013)	�	�	162,457	�	�	�	164,752	�
Restricted Stock	�	�	1,089	�	�	�	1,414	�
Mortgage loans held for sale	�	�	725	�	�	�	617	�
Loans	�	�	�	�	�	�	�	�
Loans, net of unearned income and deferred fees	�	�	595,801	�	�	�	590,664	�
Less allowance for loan losses	�	�	(8,031	)	�	�	(8,090	)
Loans, net	�	�	587,770	�	�	�	582,574	�
Bank premises and equipment, net	�	�	9,445	�	�	�	10,025	�
Accrued interest receivable	�	�	5,708	�	�	�	6,044	�
Other real estate owned, net	�	�	5,145	�	�	�	973	�
Intangible assets	�	�	7,492	�	�	�	8,568	�
Bank-owned life insurance	�	�	21,643	�	�	�	21,020	�
Other assets	�	�	9,329	�	�	�	13,894	�
Total assets	�	$	1,116,259	�	�	�	1,077,403	�
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Liabilities and Stockholders' Equity	�	�	�	�	�	�	�	�
Noninterest-bearing demand deposits	�	$	153,118	�	�	$	147,928	�
Interest-bearing demand deposits	�	�	492,005	�	�	�	453,044	�
Savings deposits	�	�	79,870	�	�	�	73,952	�
Time deposits	�	�	223,930	�	�	�	248,574	�
Total deposits	�	�	948,923	�	�	�	923,498	�
Other borrowed funds	�	�	---	�	�	�	---	�
Accrued interest payable	�	�	67	�	�	�	97	�
Other liabilities	�	�	4,447	�	�	�	7,514	�
Total liabilities	�	�	953,437	�	�	�	931,109	�
Stockholders' equity	�	�	�	�	�	�	�	�
Preferred stock of no par value. Authorized 5,000,000 shares; none issued and outstanding	�	�	---	�	�	�	---	�
Common stock of $1.25 par value. Authorized 10,000,000 shares; issued and outstanding 6,950,474 shares in 2014 and 6,947,974 shares in 2013	�	�	8,688	�	�	�	8,685	�
Retained earnings	�	�	163,181	�	�	�	153,578	�
Accumulated other comprehensive loss, net	�	�	(9,047	)	�	�	(15,969	)
Total stockholders' equity	�	�	162,822	�	�	�	146,294	�
Total liabilities and stockholders' equity	�	$	1,116,259	�	�	$	1,077,403	�

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This financial information is a high level review and discussion of recent performance and activities. For a full discussion, investors should refer to the 10/23/14 Earnings Press Release and our SEC Filings found at www.sec.gov and on the companys web site at www.nationalbankshares.com.

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