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: September 14, 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 8.01    OTHER EVENTS

On September 14, 2009, National Bankshares, Inc. issued a press release reporting that the Company was named to Sandler O’Neill + Partners L.P.’s 2009 list of “Sm-All Stars”.  The list includes the nation’s top 30 small-cap publicly traded banks and bank holding companies, as identified by Sandler O’Neill’s performance measurement methodology.  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 September 14, 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:    September 24, 2009

By:           /s/ JAMES G. RAKES

James G. Rakes

Chairman

President and CEO

Page 2 of 2 Pages

EX-99

FOR IMMEDIATE RELEASE

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

(540) 951-6236   jrakes@nbbank.com

SANDLER O’NEILL NAMES

 NATIONAL BANKSHARES, INC.

A 2009 BANK & THRIFT SM-ALL STAR

BLACKSBURG, VA, SEPTEMBER 14, 2009:  The New York investment banking firm of Sandler O’Neill + Partners L.P. recently announced that National Bankshares, Inc. is included among the 30 banks and thrifts nationwide that make up its list of 2009 Sm-All Stars.   National Bankshares, Inc., of Blacksburg, Virginia, is the parent company of National Bank, a community bank with 25 offices throughout Southwest Virginia.  This year, Sandler O’Neil evaluated all 509 publicly traded banks with a market capitalization of less than $2 billion, and they identified the 30 small-cap depository institutions that “stand out from the pack.”  Sandler O’Neill analyzes growth, profitability and capital strength.  In announcing the Sm-All Stars, Sandler O’Neill’s Director of Research Mark Fitzgibbon and Associate Director Daniel Arnold wrote, “The performance metrics of the…30 institutions are outstanding, with the Class of 2009 delivering bottom line results that are markedly better than the industry as a whole…”

National Bankshares, Inc. Chairman, President & CEO, James G. Rakes, said, “It is an honor to be identified by Sandler O’Neill as being among the top 6% of  our peers nationwide.  Sandler O’Neill uses a comprehensive methodology that looks at performance in each of eight financial variables, and we are very pleased to be listed as one of their 2009 Sm-All Stars.”

National Bankshares, Inc.’s stock is traded on the NASDAQ Capital Market under the trading symbol “NKSH”.  Additional information can be found on the Company’s web site at www.nationalbankshares.com.

101 Hubbard Street / Blacksburg, Virginia 24060

P.O. Box 90002 / Blacksburg, Virginia 24062-9002

540 951-6300 / 800 552-4123

www.nationalbankshares.com