8-K

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 15, 2009 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, VA 24060

(Address of principal executive offices)

(540) 951-6300

Registrant’s telephone number, including area code

Page 1 of 2 Pages

ITEM 2.02. RESULTS OF OPERATIONS, FINANCIAL STATEMENTS AND

EXHIBITS

On April 15, 2009, National Bankshares, Inc. issued a press release announcing its financial results for the first quarter ended March 31, 2009. 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 15, 2009.

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 15, 2009

By:       /s/ JAMES G. RAKES

James G. Rakes

Chairman

President and CEO

Page 2 of 2 Pages

EX-99

FOR IMMEDIATE RELEASE

CONTACTS: JAMES G. RAKES, CHAIRMAN, PRESIDENT & CEO

(540) 951-6236 jrakes@nbbank.com

DAVID K. SKEENS, TREASURER & CFO

(540) 951-6347 dskeens@nbbank.com

NATIONAL BANKSHARES, INC.

REPORTS HIGHER FIRST QUARTER EARNINGS

BLACKSBURG, VA, APRIL 15, 2009:       National Bankshares, Inc. (NASDAQ Capital Market: NKSH) today announced higher earnings for the first quarter ended March 31, 2009. The Company had net income of nearly $3.39 million, up by 6.48% over the $3.18 million reported for the quarter ended March 31, 2008. This translates to basic net income per share of $0.49, as compared with $0.46 per share last year. Net loans at the end of the first quarter were at $568.60 million, an 8.86% increase over the $522.34 million on March 31 last year. National Bankshares ended the first quarter with total assets of nearly $979.79 million, a 7.47% increase over the March 31, 2008 total of $911.72 million.

The Company’s Chairman, President & CEO, James G. Rakes said, “During the last quarter, our conservative approach to banking continued to serve our communities and stockholders well. Because we have strong capital levels and good liquidity, we have been able to continue making loans throughout the economic downturn. As traditional community bankers we have the advantage of knowing our customers and our markets. This helps us make solid loans, and total nonperforming loans have increased just 1.36%, from $1.32 million at March 31, 2008 to $1.34 million at the end of the first quarter this year. The Company has not fully escaped the effects of the current recession, and we have seen the total of other real estate owned grow to $1.92 million at March 31, 2009. However, even this number is modest when compared with our peers. In order to account for growth in the loan portfolio and to prepare for any difficulties that might be on the horizon if the downturn is extended, we have taken the opportunity to make prudent additions to the allowance for loan losses. At the end of the first quarter of 2009, the allowance stood at nearly $6.12 million, a 17.02% increase over the balance at March 31, 2008.” Mr. Rakes added, “At National Bankshares, we are committed to community banking, and our subsidiary, National Bank, has been doing business in good and bad times since 1891. We plan to work hard to continue this safe and sound tradition.”

National Bankshares, Inc., a financial holding company, is the parent of the National Bank of Blacksburg, which does business as National Bank from 26 offices throughout Southwest Virginia. National Bank offers a full range of banking products and services, including Trust services. The Company, which is headquartered in Blacksburg, Virginia has a financial services subsidiary doing business in the same market as National Bankshares Investment Services and National Bankshares Insurance Services. Company stock is traded on the NASDAQ Capital Market under the symbol “NKSH”. Additional information is available at www.nationalbankshares.com.

Forward-Looking Statements

Certain statements in this press release may be “forward-looking statements.” Forward-looking statements are statements that include projections, predictions, expectations or beliefs about future events or results that are not statements of historical fact and that involve significant risks and uncertainties. Although the Company believes that its expectations with regard to forward-looking statements are based upon reasonable assumptions within the bounds of its existing knowledge of its business and operations, there can be no assurance that actual Company results will not differ materially from any future results implied by the forward-looking statements. Actual results may be materially different from past or anticipated results because of many factors, some of which may include changes in economic conditions, the interest rate environment, legislative and regulatory requirements, new products, competition, changes in the stock and bond markets and technology. The Company does not update any forward-looking statements that it may make.

National Bankshares, Inc. And Subsidiaries

(000’s), except ratios and percent data
Three months ending	March 31, 2009			March 31, 2008			Change
Selected consolidated data:
Interest income	$	12,578		$	12,711			-1.05	%
Interest expense		4,412			5,407			-18.40	%
Net interest income		8,166			7,304			11.80	%
Provision for loan losses		370			100			270.00	%
Trust income		276			303			-8.91	%
Other noninterest income		1,831			1,993			-8.13	%
Salary and benefits		2,831			2,857			-0.91	%
Occupancy expense		469			456			2.85	%
Amortization of intangibles		278			284			-2.11	%
Other noninterest expense		2,052			1,860			10.32	%
Income taxes		-886			-862			2.78	%
Net income	$	3,387		$	3,181			6.48	%
Basic net income per share	$	0.49		$	0.46		$	0.03
Daily averages:
Gross loans	$	574,246		$	525,080			9.36	%
Loans, net		567,190			518,794			9.33	%
Total securities		286,479			275,887			3.84	%
Total deposits		839,828			774,962			8.37	%
Other borrowings		53			63			-15.87	%
Stockholders’ equity		113,111			107,036			5.68	%
Cash and due from		11,811			12,749			-7.36	%
Interest-earning assets		901,837			833,802			8.16	%
Interest-bearing liabilities		730,963			666,590			9.66	%
Intangible assets		13,601			14,717			-7.58	%
Total assets	$	960,824		$	889,104			8.07	%
Financial ratios: Note (1)
Return on average assets		1.43	%		1.44	%		-0.01	%
Return on average equity		12.14	%		11.95	%		0.19	%
Net interest margin		4.08	%		3.93	%		0.15	%
Efficiency ratio		50.34	%		52.33	%		-1.99	%
Average equity to average assets		11.77	%		12.04	%		-0.27	%
Note (1) Ratio change measured in bp
Allowance for loan losses:
Beginning balance	$	5,858		$	5,219			12.24	%
Provision for losses		370			100			270.00	%
Charge-offs		-123			-152			-19.08	%
Recoveries		13			61			-78.69	%
Ending balance	$	6,118		$	5,228			17.02	%
Year to Date		March 31, 2009			March 31, 2008			Change
Selected consolidated data:
Interest income	$	12,578		$	12,711			-1.05	%

Interest expense		4,412			5,407			-18.40	%
Net interest income		8,166			7,304			11.80	%
Provision for loan losses		370			100			270.00	%
Trust income		276			303			-8.91	%
Other noninterest income		1,831			1,993			-8.13	%
Salary and benefits		2,831			2,857			-0.91	%
Occupancy expense		469			456			2.85	%
Amortization of intangibles		278			284			-2.11	%
Other noninterest expense		2,052			1,860			10.32	%
Income taxes		-886			-862			2.78	%
Net income	$	3,387		$	3,181			6.48	%
Basic net income per share	$	0.49		$	0.46		$	0.03
Fully diluted net income per share	$	0.49		$	0.46		$	0.03
Dividends per share		---			---			---
Dividend payout ratio		---			---			---
Book value per share	$	16.39		$	15.72		$	0.67
Balance sheet at period-end:
Gross loans	$	575,787		$	528,684			8.91	%
Loans, net	$	568,600		$	522,343			8.86	%
Total securities		300,491			277,492			8.29	%
Cash and due from		13,253			18,742			-29.29	%
Total deposits		857,829			795,085			7.89	%
Other borrowings		51			61			-16.39	%
Stockholders’ equity		113,556			108,957			4.22	%
Intangible assets		13,441			14,554			-7.65	%
Total assets	$	979,787		$	911,721			7.47	%
Daily averages:
Gross loans	$	574,246		$	525,080			9.36	%
Loans, net		567,190			518,794			9.33	%
Total securities		286,479			275,887			3.84	%
Total deposits		839,828			774,962			8.37	%
Other borrowings		53			63			-15.87	%
Stockholders’ equity		113,111			107,036			5.68	%
Cash and due from		11,811			12,749			-7.36	%
Interest-earning assets		901,837			833,802			8.16	%
Interest-bearing liabilities		730,963			666,590			9.66	%
Intangible assets		13,601			14,717			-7.58	%
Total assets	$	960,824		$	889,104			8.07	%
Financial ratios: Note (1)
Return on average assets		1.43	%		1.44	%		-0.01	%
Return on average equity		12.14	%		11.95	%		0.19	%
Net interest margin		4.08	%		3.93	%		0.15	%
Efficiency ratio		50.34	%		52.33	%		-1.99	%
Average equity to average assets		11.77	%		12.04	%		-0.27	%
Note (1) Ratio change measured in bp
Allowance for loan losses:

Beginning balance	$	5,858		$	5,219		12.24	%
Provision for losses		370			100		270.00	%
Charge-offs		-123			-152		-19.08	%
Recoveries		13			61		-78.69	%
Ending balance	$	6,118		$	5,228		17.02	%
Nonperforming assets:
Nonaccrual loans	$	1,337		$	1,319		1.36	%
Restructured loans		---			---		---
Total nonperforming loans Note (2)		1,337			1,319		1.36	%
Other real estate owned		1,918			270		610.37	%
Total nonperforming assets	$	3,255		$	1,589		104.85	%
Asset quality ratios: Note (3)
Nonperforming loans to total loans		0.23	%		0.25	%	---
Allowance for loan losses to total loans		1.06	%		0.99	%	---
Allowance for loan losses to nonperforming loans		457.59	%		396.36	%	---
Note (2) Loans 90 days past due or more not included
Note (3) Ratio change measured in bp