----

| [x]QUARTERLY REPORT PURSUANT TO      SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE      ACT   OF 1934 |
|-----------------------------------------------------------------------------------------------------------------------|
| For      the quarterly period ended March 31, 2010                                                                    |
| [  ]TRANSITION REPORT PURSUANT TO      SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT      OF 1934      |

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

| 101      Hubbard StreetP.      O. Box 90002Blacksburg,      VA |   24062-9002 |
|----------------------------------------------------------------|------------------------|
| (Address      of principal executive offices)                  | (Zip      Code)        |

| ClassCommon      Stock, $1.25 Par Value | Outstanding at April 30, 20106,933,474 |
|-----------------------------------------|----------------------------------------|

----

| Part I -      Financial Information |                                                                                                                                      | Page   |
|-------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                |                                                                                                                                      |   |
| Item      1                         | Financial Statements                                                                                                                      | 3      |
|                                |                                                                                                                                      |   |
|                                | Consolidated Balance Sheets, March 31, 2010      (Unaudited) and December 31, 2009                                                        | 3      |
|                                |                                                                                                                                      |   |
|                                | Consolidated Statements of Income for the Three      Months Ended March 31, 2010 and 2009(Unaudited)                                      | 4      |
|                                |                                                                                                                                      |   |
|                                | Consolidated Statements of Changes in      Stockholders’ Equity for the Three Months Ended March 31, 2010 and 2009      (Unaudited) | 5      |
|                                |                                                                                                                                      |   |
|                                | Consolidated Statements of Cash Flows for the      Three  Months Ended March 31, 2010 and 2009      (Unaudited)                 | 6      |
|                                |                                                                                                                                      |   |
|                                | Notes to Consolidated Financial Statements      (Unaudited)                                                                               | 7-15   |
|                                |                                                                                                                                      |   |
| Item      2                         | Management’s Discussion and Analysis of Financial      Condition and Results of Operations                                          | 15-22  |
|                                |                                                                                                                                      |   |
| Item      3                         | Quantitative and Qualitative Disclosures About      Market Risk                                                                 | 23     |
|                                |                                                                                                                                      |   |
| Item      4                         | Controls and Procedures                                                                                                                   | 23     |
|                                |                                                                                                                                      |   |
| Part II      - Other Information    |                                                                                                                                      |   |
|                                |                                                                                                                                      |   |
| Item      1                         | Legal Proceedings                                                                                                                         | 23     |
|                                |                                                                                                                                      |   |
| Item      1A                        | Risk Factors                                                                                                                              | 23     |
|                                |                                                                                                                                      |   |
| Item      2                         | Unregistered Sales of Equity Securities and Use of      Proceeds                                                                          | 23     |
|                                |                                                                                                                                      |   |
| Item      3                         | Defaults Upon Senior      Securities                                                                                                      | 23     |
|                                |                                                                                                                                      |   |
| Item      4                         | Reserved                                                                                                                                  | 24     |
|                                |                                                                                                                                      |   |
| Item      5                         | Other      Information                                                                                                                    | 24     |
|                                |                                                                                                                                      |   |
| Item      6                         | Exhibits                                                                                                                                  | 24     |
|                                |                                                                                                                                      |   |
| Signatures                          |                                                                                                                                      | 24     |
|                                |                                                                                                                                      |   |
| Index of Exhibits                   |                                                                                                                                      | 25-26  |

----

|                                                                                                                         |   | (Unaudited)    |    |   |              |   |
|------------------------------------------------------------------------------------------------------------------------------|--------|----------------|---------|--------|-------------------|--------|
|                                                                                                                         |   | March      31, |    |   | December      31, |   |
| $      in thousands, except per share data                                                                                   |   | 2010           |    |   | 2009              |   |
| Assets                                                                                                                       |   |           |    |   |              |   |   |   |
| Cash      and due from banks                                                                                                 |   | $              | 11,744  |   |              | $      | 12,894 |   |
| Interest-bearing      deposits                                                                                               |   |           | 55,706  |   |              |   | 32,730 |   |
| Securities      available for sale, at fair value                                                                            |   |           | 161,543 |   |              |   | 168,041 |   |
| Securities      held to maturity (fair value approximates $127,774 at March 31, 2010 and      $129,892 at December 31, 2009) |   |           | 125,547 |   |              |   | 129,376 |   |
| Mortgage      loans held for sale                                                                                            |   |           | 1,358   |   |              |   | 126 |   |
| Loans:                                                                                                                       |   |           |    |   |              |   |   |   |
| Real      estate construction loans                                                                                          |   |           | 47,245  |   |              |   | 45,625 |   |
| Real      estate mortgage loans                                                                                              |   |           | 165,604 |   |              |   | 165,542 |   |
| Commercial      and industrial loans                                                                                         |   |           | 284,242 |   |              |   | 283,998 |   |
| Loans      to individuals                                                                                                    |   |           | 92,035  |   |              |   | 95,844 |   |
| Total      loans                                                                                                             |   |           | 589,126 |   |              |   | 591,009 |   |
| Less      unearned income and deferred fees                                                                                  |   |           | (1,052  | )      |              |   |  (1,062 | ) |
| Loans,      net of unearned income and deferred fees                                                                         |   |           | 588,074 |   |              |   | 589,947 |   |
| Less      allowance for loan losses                                                                                          |   |           | (7,141  | )      |              |   | (6,926 | ) |
| Loans,      net                                                                                                              |   |           | 580,933 |   |              |   | 583,021 |   |
| Premises      and equipment, net                                                                                             |   |           | 10,729  |   |              |   | 10,628 |   |
| Accrued      interest receivable                                                                                             |   |           | 6,186   |   |              |   | 6,250 |   |
| Other      real estate owned, net                                                                                            |   |           | 2,567   |   |              |   | 2,126 |   |
| Intangible      assets and goodwill                                                                                          |   |           | 12,355  |   |              |   | 12,626 |   |
| Other      assets                                                                                                            |   |           | 24,276  |   |              |   | 24,549 |   |
| Total      assets                                                                                                            |   | $              | 992,944 |   |              | $      | 982,367 |   |
|                                                                                                                         |   |           |    |   |              |   |   |   |
| Liabilities      and Stockholders' Equity                                                                                    |   |           |    |   |              |   |   |   |
| Noninterest-bearing      demand deposits                                                                                     |   | $              | 116,153 |   |              | $      | 122,549 |   |
| Interest-bearing      demand deposits                                                                                        |   |           | 325,214 |   |              |   | 310,629 |   |
| Savings      deposits                                                                                                        |   |           | 53,977  |   |              |   | 51,622 |   |
| Time      deposits                                                                                                           |   |           | 362,124 |   |              |   | 367,312 |   |
| Total      deposits                                                                                                          |   |           | 857,468 |   |              |   | 852,112 |   |
| Accrued      interest payable                                                                                                |   |           | 392     |   |              |   | 336 |   |
| Other      liabilities                                                                                                       |   |           | 8,580   |   |              |   | 7,843 |   |
| Total      liabilities                                                                                                       |   |           | 866,440 |   |              |   | 860,291 |   |
| Commitments      and contingencies                                                                                           |   |           | ---     |   |              |   | --- |   |
|                                                                                                                         |   |           |    |   |              |   |   |   |
| Stockholders'      Equity                                                                                                    |   |           |    |   |              |   |   |   |
| Preferred stock, no par value,      5,000,000 sharesauthorized;                                                              |   |           |    |   |              |   |   |   |
|         none      issued and outstanding                                             |   |           | ---     |   |              |   | --- |   |
| Common stock of $1.25 par      value.                                                                                        |   |           |    |   |              |   |   |   |
| Authorized 10,000,000 shares;      issued and outstanding 6,933,474 shares in 2010 and in2009                                |   |           | 8,667   |   |              |   | 8,667 |   |
| Retained    earnings                                                                                                         |   |           | 117,670 |   |              |   | 113,901 |   |
| Accumulated other comprehensive      income (loss), net                                                                      |   |           | 167     |   |              |   | (492 | ) |
| Total stockholders'      equity                                                                                              |   |           | 126,504 |   |              |   | 122,076 |   |
| Total liabilities and      stockholders' equity                                                                              |   | $              | 992,944 |   |              | $      | 982,367 |   |

----

|                                                     |   | March      31, |      |   | March      31, |   |
|----------------------------------------------------------|--------|----------------|-----------|--------|----------------|--------|
| $      in thousands, except per share data               |   | 2010           |      |   | 2009           |   |
| Interest      Income                                     |   |           |      |   |           |   |   |   |
| Interest      and fees on loans                          |   | $              | 9,176     |   |           | $      | 9,462 |   |
| Interest      on interest-bearing deposits               |   |           | 19        |   |           |   | 24 |   |
| Interest      on securities – taxable              |   |           | 1,443     |   |           |   | 1,561 |   |
| Interest      on securities – nontaxable           |   |           | 1,602     |   |           |   | 1,531 |   |
| Total      interest income                               |   |           | 12,240    |   |           |   | 12,578 |   |
|                                                     |   |           |      |   |           |   |   |   |
| Interest      Expense                                    |   |           |      |   |           |   |   |   |
| Interest      on time deposits of $100,000 or more       |   |           | 946       |   |           |   | 1,491 |   |
| Interest      on other deposits                          |   |           | 2,033     |   |           |   | 2,920 |   |
| Interest      on borrowed funds                          |   |           | ---       |   |           |   | 1 |   |
| Total      interest expense                              |   |           | 2,979     |   |           |   | 4,412 |   |
| Net      interest income                                 |   |           | 9,261     |   |           |   | 8,166 |   |
| Provision      for loan losses                           |   |           | 647       |   |           |   | 370 |   |
| Net      interest income after provision for loan losses |   |           | 8,614     |   |           |   | 7,796 |   |
|                                                     |   |           |      |   |           |   |   |   |
| Noninterest      Income                                  |   |           |      |   |           |   |   |   |
| Service      charges on deposit accounts                 |   |           | 714       |   |           |   | 804 |   |
| Other      service charges and fees                      |   |           | 47        |   |           |   | 73 |   |
| Credit      card fees                                    |   |           | 666       |   |           |   | 625 |   |
| Trust      income                                        |   |           | 269       |   |           |   | 276 |   |
| BOLI      income                                         |   |           | 185       |   |           |   | 172 |   |
| Other      income                                        |   |           | 104       |   |           |   | 77 |   |
| Realized      securities gains (losses), net             |   |           | (14       | )      |           |   | 80 |   |
| Total      noninterest income                            |   |           | 1,971     |   |           |   | 2,107 |   |
|                                                     |   |           |      |   |           |   |   |   |
| Noninterest      Expense                                 |   |           |      |   |           |   |   |   |
| Salaries      and employee benefits                      |   |           | 2,856     |   |           |   | 2,831 |   |
| Occupancy      and furniture and fixtures                |   |           | 491       |   |           |   | 469 |   |
| Data      processing and ATM                             |   |           | 357       |   |           |   | 322 |   |
| FDIC      assessment                                     |   |           | 263       |   |           |   | 121 |   |
| Credit      card processing                              |   |           | 508       |   |           |   | 463 |   |
| Intangible      assets amortization                      |   |           | 271       |   |           |   | 278 |   |
| Net      costs of other real estate owned                |   |           | 33        |   |           |   | 60 |   |
| Franchise      taxes                                     |   |           | 239       |   |           |   | 227 |   |
| Other      operating expenses                            |   |           | 766       |   |           |   | 859 |   |
| Total      noninterest expense                           |   |           | 5,784     |   |           |   | 5,630 |   |
| Income      before income taxes                          |   |           | 4,801     |   |           |   | 4,273 |   |
| Income      tax expense                                  |   |           | 1,032     |   |           |   | 886 |   |
| Net      Income                                          |   | $              | 3,769     |   |           | $      | 3,387 |   |
|                                                     |   |           |      |   |           |   |   |   |
| Basic      net income per share                          |   | $              | 0.54      |   |           | $      | 0.49 |   |
| Fully      diluted net income per share                  |   | $              | 0.54      |   |           | $      | 0.49 |   |
| Weighted      average number of common                   |   |           |      |   |           |   |   |   |
| shares      outstanding – basic                    |   |           | 6,933,474 |   |           |   | 6,929,474 |   |
| Weighted      average number of common                   |   |           |      |   |           |   |   |   |
| shares      outstanding – diluted                  |   |           | 6,952,812 |   |           |   | 6,934,846 |   |
| Dividends      declared per share                        |   | $              | ---       |   |           | $      | --- |   |

----

| $      in thousands                                                              |   | Common      Stock |   |   | Retained      Earnings |   |    | Accumulated      Other Comprehensive Income (Loss) |   |   | Comprehensive      Income |   |   | Total  |   |
|----------------------------------------------------------------------------------|--------|-------------------|--------|--------|------------------------|--------|---------|----------------------------------------------------|--------|--------|---------------------------|--------|--------|--------|--------|
| Balances      at December 31, 2008                                               |   | $                 | 8,662  |   |                   | $      | 105,356 |                                               |   | $      | (3,910                    | )      |   |   |   |   | $ | 110,108 |   |
| Net      income                                                                  |   |              | ---    |   |                   |   | 3,387   |                                               |   |   | ---                       |   |   | $      | 3,387  |   |   |   | 3,387 |   |
| Other      comprehensive income, net of tax:                                     |   |              |   |   |                   |   |    |                                               |   |   |                      |   |   |   |   |   |   |   |   |   |
| Unrealized      gain on securities available for sale, net of income tax    $61  |   |              | ---    |   |                   |   | ---     |                                               |   |   | ---                       |   |   |   | 113    |   |   |   | --- |   |
| Reclass      adjustment, net of tax $(28)                                        |   |              | ---    |   |                   |   | ---     |                                               |   |   | ---                       |   |   |   | (52    | ) |   |   | --- |   |
| Other      comprehensive income, net of tax $33                                  |   |              | ---    |   |                   |   | ---     |                                               |   |   | 61                        |   |   |   | 61     |   |   |   | 61 |   |
| Comprehensive      income                                                        |   |              | ---    |   |                   |   | ---     |                                               |   |   | ---                       |   |   | $      | 3,448  |   |   |   | --- |   |
| Balances      at March 31, 2009                                                  |   | $                 | 8,662  |   |                   | $      | 108,743 |                                               |   | $      | (3,849                    | )      |   |   |   |   |   | $ | 113,556 |   |
|                                                                             |   |              |   |   |                   |   |    |                                               |   |   |                      |   |   |   |   |   |   |   |   |   |
| Balances      at December 31, 2009                                               |   | $                 | 8,667  |   |                   | $      | 113,901 |                                               |   | $      | (492                      | )      |   |   |   |   |   | $ | 122,076 |   |
| Net      income                                                                  |   |              | ---    |   |                   |   | 3,769   |                                               |   |   | ---                       |   |   | $      | 3,769  |   |   |   | 3,769 |   |
| Other      comprehensive income, net of tax:                                     |   |              |   |   |                   |   |    |                                               |   |   |                      |   |   |   |   |   |   |   |   |   |
| Unrealized      gain on securities available for sale, net of income tax    $350 |   |              | ---    |   |                   |   | ---     |                                               |   |   | ---                       |   |   |   | 650    |   |   |   | --- |   |
| Reclass      adjustment, net of tax $5                                           |   |              | ---    |   |                   |   | ---     |                                               |   |   | ---                       |   |   |   | 9      |   |   |   | --- |   |
| Other      comprehensive income, net of tax $355                                 |   |              | ---    |   |                   |   | ---     |                                               |   |   | 659                       |   |   |   | 659    |   |   |   | 659 |   |
| Comprehensive      income                                                        |   |              | ---    |   |                   |   | ---     |                                               |   |   | ---                       |   |   | $      | 4,428  |   |   |   | --- |   |
| Balances      at March 31, 2010                                                  |   | $                 | 8,667  |   |                   | $      | 117,670 |                                               |   | $      | 167                       |   |   |   |   |   |   | $ | 126,504 |   |

----

|                                                                                                     |   | March      31, |    |   | March      31, |   |
|----------------------------------------------------------------------------------------------------------|--------|----------------|---------|--------|----------------|--------|
| $      in thousands                                                                                      |   | 2010           |    |   | 2009           |   |
| Cash      Flows from Operating Activities                                                                |   |           |    |   |           |   |
| Net      income                                                                                          |   | $              | 3,769   |   |           | $      | 3,387 |   |
| Adjustments      to reconcile net income to net cash provided by operating      activities:              |   |           |    |   |           |   |   |   |
| Provision      for loan losses                                                                           |   |           | 647     |   |           |   | 370 |   |
| Depreciation      of bank premises and equipment                                                         |   |           | 223     |   |           |   | 235 |   |
| Amortization      of intangibles                                                                         |   |           | 271     |   |           |   | 278 |   |
| Amortization      of premiums and accretion of discounts, net                                            |   |           | 79      |   |           |   | 85 |   |
| (Gains)      losses on sales and calls of securities available for sale,      net                        |   |           | 14      |   |           |   | (75 | ) |
| (Gains)      on calls of securities held to maturity, net                                                |   |           | ---     |   |           |   | (5 | ) |
| Losses and write-downs on other      real estate owned                                                   |   |           | 29      |   |           |   | 49 |   |
| Net      change in:                                                                                      |   |           |    |   |           |   |   |   |
| Mortgage      loans held for sale                                                                        |   |           | (1,232  | )      |           |   | (650 | ) |
| Accrued      interest receivable                                                                         |   |           | 64      |   |           |   | (449 | ) |
| Other      assets                                                                                        |   |           | (63     | )      |           |   | 131 |   |
| Accrued      interest payable                                                                            |   |           | 56      |   |           |   | (5 | ) |
| Other      liabilities                                                                                   |   |           | 740     |   |           |   | 992 |   |
| Net cash provided by operating      activities                                                           |   |           | 4,597   |   |           |   | 4,343 |   |
|                                                                                                     |   |           |    |   |           |   |   |   |
| Cash      Flows from Investing Activities                                                                |   |           |    |   |           |   |   |   |
| Net      change interest-bearing deposits                                                                |   |           | (22,976 | )      |           |   | (12,273 | ) |
| Proceeds      from calls, principal payments, sales and maturities of securities      available for sale |   |           | 13,782  |   |           |   | 7,978 |   |
| Proceeds      from calls, principal payments and maturities of securities held to      maturity          |   |           | 9,833   |   |           |   | 14,541 |   |
| Purchases      of securities available for sale                                                          |   |           | (6,359  | )      |           |   | (26,648 | ) |
| Purchases      of securities held to maturity                                                            |   |           | (6,030  | )      |           |   | (31,277 | ) |
| Collections      of loan participations                                                                  |   |           | 66      |   |           |   | 68 |   |
| Loan      originations and principal collections, net                                                    |   |           | 671     |   |           |   | 648 |   |
| Proceeds      from disposal of other real estate owned                                                   |   |           | 210     |   |           |   | 17 |   |
| Recoveries      on loans charged off                                                                     |   |           | 24      |   |           |   | 13 |   |
| Additions      to bank premises and equipment                                                            |   |           | (324    | )      |           |   | (101 | ) |
| Net cash used in investing      activities                                                               |   |           | (11,103 | )      |           |   | (47,034 | ) |
|                                                                                                     |   |           |    |   |           |   |   |   |
| Cash      Flows from Financing Activities                                                                |   |           |    |   |           |   |   |   |
| Net      change in time deposits                                                                         |   |           | (5,188  | )      |           |   | 4,487 |   |
| Net      change in other deposits                                                                        |   |           | 10,544  |   |           |   | 35,494 |   |
| Net      change in other borrowed funds                                                                  |   |           | ---     |   |           |   | (3 | ) |
| Net cash provided by financing      activities                                                           |   |           | 5,356   |   |           |   | 39,978 |   |
| Net      change in cash and due from banks                                                               |   |           | (1,150  | )      |           |   | (2,713 | ) |
| Cash      and due from banks at beginning of period                                                      |   |           | 12,894  |   |           |   | 16,316 |   |
| Cash      and due from banks at end of period                                                            |   | $              | 11,744  |   |           | $      | 13,603 |   |
|                                                                                                     |   |           |    |   |           |   |   |   |
|                                                                                                     |   |           |    |   |           |   |   |   |
|                                                                                                     |   |           |    |   |           |   |   |   |
| Supplemental      Disclosures of Cash Flow Information                                                   |   |           |    |   |           |   |   |   |
| Interest      paid on deposits and borrowed funds                                                        |   | $              | 2,923   |   |           | $      | 4,417 |   |
| Income      taxes paid                                                                                   |   | $              | 576     |   |           | $      | --- |   |
|                                                                                                     |   |           |    |   |           |   |   |   |
| Supplemental      Disclosure of Noncash Activities                                                       |   |           |    |   |           |   |   |   |
| Loans      charged against the allowance for loan losses                                                 |   | $              | 456     |   |           | $      | 123 |   |
| Loans      transferred to other real estate owned                                                        |   | $              | 680     |   |           | $      | --- |   |
| Unrealized      gains on securities available for sale                                                   |   | $              | 1,014   |   |           | $      | 94 |   |

----

| Options                             |   | Shares |    |   | WeightedAverageExercisePrice |   |   | WeightedAverageRemainingContractualTerm |   |   | AggregateIntrinsicValue |   |
|-------------------------------------|--------|--------|---------|--------|------------------------------|--------|--------|-----------------------------------------|--------|--------|-------------------------|--------|
| Outstanding      at January 1, 2010 |   |   | 109,500 |   |                         | $      | 22.14  |                                    |   |   |                    |   |   |   |
| Exercised                           |   |   | ---     |   |                         |   | ---    |                                    |   |   |                    |   |   |   |
| Forfeited      or expired           |   |   | ---     |   |                         |   | ---    |                                    |   |   |                    |   |   |   |
| Outstanding      at March 31, 2010  |   |   | 109,500 |   |                         | $      | 22.14  |                                    |   |   | 5.24                    |   |   | $ | 559 |   |
| Exercisable      at March 31, 2010  |   |   | 109,500 |   |                         | $      | 22.14  |                                    |   |   | 5.24                    |   |   | $ | 559 |   |

----

|                                                                                                              |   | Three      Months endedMarch      31, |   |   | Year      endedDecember      31, |   |
|-------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------|--------|--------|----------------------------------|--------|
|                                                                                                              |   | 2010                                  |   |   | 2009                             |   |   | 2009 |   |
| Balance      at beginning of period                                                                               |   | $                                     | 6,926  |   |                             | $      | 5,858 |   |   | $ | 5,858 |   |
| Provision      for loan losses                                                                                    |   |                                  | 647    |   |                             |   | 370 |   |   |   | 1,634 |   |
| Loans      charged off                                                                                            |   |                                  | (456   | )      |                             |   | (123 | ) |   |   | (647 | ) |
| Recoveries      of loans previously charged off                                                                   |   |                                  | 24     |   |                             |   | 13 |   |   |   | 81 |   |
| Balance      at the end of period                                                                                 |   | $                                     | 7,141  |   |                             | $      | 6,118 |   |   | $ | 6,926 |   |
| Ratio      of allowance for loan losses to the end of period loans, net of unearned      income and deferred fees |   |                                  | 1.21   | %      |                             |   | 1.06 | % |   |   | 1.17 | % |
| Ratio      of net charge-offs to average loans, net of unearned income and deferred      fees(1)                  |   |                                  | 0.30   | %      |                             |   | 0.08 | % |   |   | 0.10 | % |
| Ratio      of allowance for loan losses to nonperforming loans(2)                                                 |   |                                  | 92.23  | %      |                             |   | 457.59 | % |   |   | 102.61 | % |

| (1)   | Net      charge-offs are on an annualizedbasis. |
|-----------------|-------------------------------------------------|

| (2)   | The      Company defines nonperforming loans as total nonaccrual and restructured      loans.  Loans 90 days past due and still accruing are      excluded. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                                                     |   | March      31, |   |   | December      31, |   |
|--------------------------------------------------------------------------------------------------------------------------|--------|----------------|--------|--------|-------------------|--------|
|                                                                                                                     |   | 2010           |   |   | 2009              |   |   | 2009 |   |
| Nonperforming      assets:                                                                                               |   |           |   |   |              |   |   |   |   |
| Nonaccrual      loans                                                                                                    |   | $              | 7,743  |   |              | $      | 1,337 |   |   | $ | 4,098 |   |
| Restructured      loans                                                                                                  |   |           | ---    |   |              |   | --- |   |   |   | 2,652 |   |
| Total      nonperforming loans                                                                                           |   |           | 7,743  |   |              |   | 1,337 |   |   |   | 6,750 |   |
| Other      real estate owned, net                                                                                        |   |           | 2,567  |   |              |   | 1,918 |   |   |   | 2,126 |   |
| Total      nonperforming assets                                                                                          |   | $              | 10,310 |   |              | $      | 3,255 |   |   | $ | 8,876 |   |
| Ratio      of nonperforming assets to loans, net of unearned income and deferred      fees, plus other real estate owned |   |           | 1.75   | %      |              |   | 0.56 | % |   |   | 1.50 | % |

|                                                                                                                          |   | March      31, |   |   | December      31, |   |
|-------------------------------------------------------------------------------------------------------------------------------|--------|----------------|--------|--------|-------------------|--------|
|                                                                                                                          |   | 2010           |   |   | 2009              |   |   | 2009 |   |
| Loans      past due 90 days or more and still accruing                                                                        |   | $              | 2,217  |   |              | $      | 1,607 |   |   | $ | 1,697 |   |
|  Ratio      of loans past due 90 days or more and still accruing to loans, net of      unearned income and deferred fees |   |           | 0.38   | %      |              |   | 0.28 | % |   |   | 0.29 | % |
| Impaired      loans:                                                                                                          |   |           |   |   |              |   |   |   |   |   |   |   |
| Total      impaired loans                                                                                                     |   | $              | 7,743  |   |              | $      | 3,208 |   |   | $ | 7,680 |   |
| Impaired      loans with a valuation allowance                                                                                |   | $              | 7,693  |   |              | $      | 2,176 |   |   | $ | 7,630 |   |
| Valuation      allowance                                                                                                      |   |           | (2,438 | )      |              |   | (893 | ) |   |   | (2,495 | ) |
| Impaired      loans, net of allowance                                                                                         |   | $              | 5,255  |   |              | $      | 1,283 |   |   | $ | 5,135 |   |
| Impaired      loans with no valuation allowance                                                                               |   | $              | 50     |   |              | $      | 1,032 |   |   | $ | 50 |   |
| Average      recorded investment in impaired loans                                                                            |   | $              | 7,712  |   |              | $      | 3,223 |   |   | $ | 7,851 |   |
| Income      recognized on impaired loans                                                                                      |   | $              | ---    |   |              | $      | 44 |   |   | $ | 169 |   |
| Amount      of income recognized on a cash basis                                                                              |   | $              | ---    |   |              | $      | --- |   |   | $ | --- |   |

----

|                                   |   | March      31, 2010 |    |
|----------------------------------------|--------|---------------------|---------|
|                                   |   | AmortizedCosts      |    |   | GrossUnrealizedGains |   |   | GrossUnrealizedLosses |   |   | FairValues |   |
| Available      for sale:               |   |                |    |   |   |   |   |   |   |   |   |   |
| U.S.      Treasury                     |   | $                   | 2,019   |   |   | $ | 144 |   |   | $ | --- |   |   | $ | 2,163 |   |
| U.S.      Government agencies          |   |                | 43,809  |   |   |   | 348 |   |   |   | 432 |   |   |   | 43,725 |   |
| Mortgage-backed      securities        |   |                | 14,833  |   |   |   | 759 |   |   |   | --- |   |   |   | 15,592 |   |
| States      and political subdivisions |   |                | 70,678  |   |   |   | 2,333 |   |   |   | 161 |   |   |   | 72,850 |   |
| Corporate                              |   |                | 21,938  |   |   |   | 750 |   |   |   | 5 |   |   |   | 22,683 |   |
| Federal      Home Loan Bank stock      |   |                | 1,677   |   |   |   | --- |   |   |   | --- |   |   |   | 1,677 |   |
| Federal      Reserve Bank stock        |   |                | 92      |   |   |   | --- |   |   |   | --- |   |   |   | 92 |   |
| Other      securities                  |   |                | 2,973   |   |   |   | --- |   |   |   | 212 |   |   |   | 2,761 |   |
| Total                                  |   | $                   | 158,019 |   |   | $ | 4,334 |   |   | $ | 810 |   |   | $ | 161,543 |   |

|                                   |   | March      31, 2010 |    |
|----------------------------------------|--------|---------------------|---------|
|                                   |   | AmortizedCosts      |    |   | GrossUnrealizedGains |   |   | GrossUnrealizedLosses |   |   | FairValues |   |
| Held      to maturity:                 |   |                |    |   |   |   |   |   |   |   |   |   |
| U.S.      Government agencies          |   | $                   | 21,079  |   |   | $ | 272 |   |   | $ | 136 |   |   | $ | 21,215 |   |
| Mortgage-backed      securities        |   |                | 1,389   |   |   |   | 97 |   |   |   | --- |   |   |   | 1,486 |   |
| States      and political subdivisions |   |                | 96,914  |   |   |   | 2,520 |   |   |   | 398 |   |   |   | 99,036 |   |
| Corporate                              |   |                | 6,165   |   |   |   | 47 |   |   |   | 175 |   |   |   | 6,037 |   |
| Total                                  |   | $                   | 125,547 |   |   | $ | 2,936 |   |   | $ | 709 |   |   | $ | 127,774 |   |

|                                   |   | March      31, 2010      |   |
|----------------------------------------|--------|--------------------------|--------|
|                                   |   | Less      Than 12 Months |   |   | 12      Months or More |   |
|                                   |   | FairValue                |   |   | UnrealizedLoss |   |   | FairValue |   |   | UnrealizedLoss |   |
| Temporarily      impaired securities:  |   |                     |   |   |   |   |   |   |   |   |   |   |
| U.S.      Government agencies          |   | $                        | 26,342 |   |   | $ | 456 |   |   | $ | 7,954 |   |   | $ | 112 |   |
| States      and political subdivisions |   |                     | 5,288  |   |   |   | 122 |   |   |   | 22,572 |   |   |   | 437 |   |
| Corporate                              |   |                     | 661    |   |   |   | 1 |   |   |   | 3,822 |   |   |   | 179 |   |
| Other      securities                  |   |                     | ---    |   |   |   | --- |   |   |   | 281 |   |   |   | 212 |   |
| Total                                  |   | $                        | 32,291 |   |   | $ | 579 |   |   | $ | 34,629 |   |   | $ | 940 |   |

----

|                                   |   | December      31, 2009   |   |
|----------------------------------------|--------|--------------------------|--------|
|                                   |   | Less      Than 12 Months |   |   | 12      Months or More |   |
|                                   |   | FairValue                |   |   | UnrealizedLoss |   |   | FairValue |   |   | UnrealizedLoss |   |
| Temporarily      impaired securities:  |   |                     |   |   |   |   |   |   |   |   |   |   |
| U.S.      Government agencies          |   | $                        | 42,876 |   |   | $ | 1,351 |   |   | $ | --- |   |   | $ | --- |   |
| States      and political subdivisions |   |                     | 28,537 |   |   |   | 571 |   |   |   | 13,382 |   |   |   | 698 |   |
| Corporate                              |   |                     | 662    |   |   |   | 1 |   |   |   | 3,517 |   |   |   | 483 |   |
| Other      securities                  |   |                     | ---    |   |   |   | --- |   |   |   | 277 |   |   |   | 217 |   |
| Total                                  |   | $                        | 72,075 |   |   | $ | 1,923 |   |   | $ | 17,176 |   |   | $ | 1,398 |   |

----

|                                              |   | Pension      Benefits             |   |
|---------------------------------------------------|--------|-----------------------------------|--------|
|                                              |   | Three      Months ended March 31, |   |
|                                              |   | 2010                              |   |   | 2009 |   |
| Service      cost                                 |   | $                                 | 100    |   |   | $ | 89 |   |
| Interest      cost                                |   |                              | 172    |   |   |   | 165 |   |
| Expected      return on plan assets               |   |                              | (152   | ) |   |   | (133 | ) |
| Amortization      of prior service cost           |   |                              | (25    | ) |   |   | (25 | ) |
| Amortization      of net obligation at transition |   |                              | (3     | ) |   |   | (3 | ) |
| Recognized      net actuarial loss                |   |                              | 62     |   |   |   | 84 |   |
| Net periodic benefit      cost                    |   | $                                 | 154    |   |   | $ | 177 |   |

----

|   | Level      1 – |   | Valuation      is based on quoted prices in active markets for identical assets and      liabilities.                                                                                                                                                                                                                                                                                       |
|--------|----------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | Level      2 – |   | Valuation      is based on observable inputs including quoted prices in active markets      for similar assets and liabilities, quoted prices for identical or similar      assets and liabilities in less active markets, and model-based valuation      techniques for which significant assumptions can be derived primarily from      or corroborated by observable data in the market. |
|   | Level      3 – |   | Valuation      is based on model-based techniques that use one or more significant inputs      or assumptions that are unobservable in the  market.                                                                                                                                                                                                                                         |

|                               |                                       |   | Fair      Value Measurements at March 31, 2010Using                                 |   |
|------------------------------------|--------------------------------------------|--------|-------------------------------------------------------------------------------------|--------|
| Description                        | Balance      as of March 31,2010 |   | Quoted      Pricesin      ActiveMarkets      forIdentical      Assets(Level      1) |   | SignificantOtherObservableInputs(Level      2) |   | SignificantUnobservable      Inputs(Level      3) |   |
| Assets:                            |                                       |   |                                                                                |   |   |   |   |   |   |   |   |   |
| Securities      available for sale |                                       | $      | 159,774                                                                             |   |   | $ | --- |   |   | $ | 159,774 |   |   | $ | --- |   |

----

|                                           |                                       |   | Carrying      Value at March 31, 2010                                               |   |
|------------------------------------------------|--------------------------------------------|--------|-------------------------------------------------------------------------------------|--------|
| Description                                    | Balance      as of March      31,2010 |   | Quoted      Pricesin      ActiveMarkets      forIdentical      Assets(Level      1) |   | SignificantOtherObservableInputs(Level      2) |   | SignificantUnobservable      Inputs(Level      3) |   |
| Assets:                                        |                                       |   |                                                                                |   |   |   |   |   |   |   |   |   |
| Impaired      loans net of valuation allowance |                                       | $      | 5,255                                                                               |   |   | $ | --- |   |   | $ | --- |   |   | $ | 5,255 |   |

|                                                    |                                       |   | Carrying      Value at March 31, 2010                                               |   |
|---------------------------------------------------------|--------------------------------------------|--------|-------------------------------------------------------------------------------------|--------|
| Description                                             | Balance      as of March      31,2010 |   | Quoted      Pricesin      ActiveMarkets      forIdentical      Assets(Level      1) |   | SignificantOtherObservableInputs(Level      2) |   | SignificantUnobservable      Inputs(Level      3) |   |
| Assets:                                                 |                                       |   |                                                                                |   |   |   |   |   |   |   |   |   |
| Other      real estate owned net of valuation allowance |                                       | $      | 1,770                                                                               |   |   | $ | --- |   |   | $ | --- |   |   | $ | 1,770 |   |

----

|                              |   | March      31, |    |
|-----------------------------------|--------|----------------|---------|
|                              |   | 2010           |    |
|                              |   | CarryingAmount |    |   | Estimated      Fair Value |   |
| Financial      assets:            |   |           |    |   |   |   |
| Cash and due from      banks      |   | $              | 11,744  |   |   | $ | 11,744 |   |
| Interest-bearing      deposits    |   |           | 55,706  |   |   |   | 55,706 |   |
| Securities                        |   |           | 287,090 |   |   |   | 289,317 |   |
| Mortgage loans held for      sale |   |           | 1,358   |   |   |   | 1,358 |   |
| Loans, net                        |   |           | 580,933 |   |   |   | 563,439 |   |
| Accrued interest      receivable  |   |           | 6,186   |   |   |   | 6,186 |   |
| Financial      liabilities:       |   |           |    |   |   |   |   |   |
| Deposits                          |   | $              | 857,468 |   |   | $ | 855,803 |   |
| Accrued interest      payable     |   |           | 392     |   |   |   | 392 |   |

----

| ·   | monetary      and fiscal policies of the U.S. Government, including policies of the U.S.      Treasury, the Office of the Comptroller of the Currency and the Federal      Reserve Board, and the impact of any policies or programs implemented      pursuant to the Emergency Economic Stabilization Act of 2008 (EESA) and      other financial reform legislation, |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|                                      |   | March      31,2010 |   |   | December      31,2009 |   |
|-------------------------------------------|--------|--------------------|--------|--------|-----------------------|--------|
| Return      on average assets             |   |               | 1.57   | %      |                  |   | 1.47 | % |
| Return      on average equity             |   |               | 12.27  | %      |                  |   | 12.23 | % |
| Basic      net earnings per share         |   | $                  | 0.54   |   |                  | $      | 2.07 |   |
| Fully      diluted net earnings per share |   | $                  | 0.54   |   |                  | $      | 2.06 |   |
| Net      interest margin (1)              |   |               | 4.57   | %      |                  |   | 4.23 | % |
| Noninterest      margin (2)               |   |               | 1.59   | %      |                  |   | 1.55 | % |

| (1)   | Net      interest margin: Year-to-date tax-equivalent net interest income divided      by year-to-date average earningassets. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------|

| (2)   | Noninterest      margin: Noninterest income (excluding securities gains and losses) less      noninterest expense (excluding the provision for bad debts and income      taxes) divided by average year-to-dateassets. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|              |   | March      31, 2010 |    |   | December      31, 2009 |   |    | Percent      Change |   |   |
|-------------------|--------|---------------------|---------|--------|------------------------|--------|---------|---------------------|--------|--------|
| Securities        |   | $                   | 287,090 |   |                   | $      | 297,417 |                |   |   | (3.47 | ) | % |
| Loans,      net   |   |                | 580,933 |   |                   |   | 583,021 |                |   |   | (0.36 | ) | % |
| Deposits          |   |                | 857,468 |   |                   |   | 852,112 |                |   |   | 0.63 |   | % |
| Total      assets |   |                | 992,944 |   |                   |   | 982,367 |                |   |   | 1.08 |   | % |

----

|                                                                                                                     |   | March      31, 2010 |   |   | December      31, 2009 |   |
|--------------------------------------------------------------------------------------------------------------------------|--------|---------------------|--------|--------|------------------------|--------|
| Nonperforming      loans                                                                                                 |   | $                   | 7,743  |   |                   | $      | 6,750 |   |
| Loans      past due 90 days or more                                                                                      |   |                | 2,217  |   |                   |   | 1,697 |   |
| Other      real estate owned                                                                                             |   |                | 2,567  |   |                   |   | 2,126 |   |
| Allowance      for loan losses to loans                                                                                  |   |                | 1.21   | %      |                   |   | 1.17 | % |
| Net      charge-off ratio                                                                                                |   |                | 0.30   | %      |                   |   | 0.10 | % |
| Ratio      of nonperforming assets to loans, net of unearned income and deferred      fees, plus other real estate owned |   |                | 1.75   | %      |                   |   | 1.50 | % |

----

|                                    |   | Three      Months ended |   |   |                |   |   |
|-----------------------------------------|--------|-------------------------|--------|--------|---------------------|--------|--------|
|                                    |   | March      31, 2010     |   |   | March      31, 2009 |   |   | Percent      Change |   |
| Service      charges on deposits        |   | $                       | 714    |   |                | $      | 804    |   |   |   | (11.19 | ) | % |
| Other      service charges and fees     |   |                    | 47     |   |                |   | 73     |   |   |   | (35.62 | ) | % |
| Credit      card fees                   |   |                    | 666    |   |                |   | 625    |   |   |   | 6.56 |   | % |
| Trust      fees                         |   |                    | 269    |   |                |   | 276    |   |   |   | (2.54 | ) | % |
| BOLI      income                        |   |                    | 185    |   |                |   | 172    |   |   |   | 7.56 |   | % |
| Other      income                       |   |                    | 104    |   |                |   | 77     |   |   |   | 35.06 |   | % |
| Realized      securities gains (losses) |   |                    | (14    | )      |                |   | 80     |   |   |   | (117.50 | ) | % |

----

|                                      |   | Three      Months ended |   |   |                |   |   |
|-------------------------------------------|--------|-------------------------|--------|--------|---------------------|--------|--------|
|                                      |   | March      31, 2010     |   |   | March      31, 2009 |   |   | Percent      Change |   |   |
| Salaries      and employee benefits       |   | $                       | 2,856  |   |                | $      | 2,831  |   |   |   | 0.88 |   | % |
| Occupancy,      furniture and fixtures    |   |                    | 491    |   |                |   | 469    |   |   |   | 4.69 | % |
| Data      processing and ATM              |   |                    | 357    |   |                |   | 322    |   |   |   | 10.87 |   | % |
| FDIC      assessment                      |   |                    | 263    |   |                |   | 121    |   |   |   | 117.36 |   | % |
| Credit      card processing               |   |                    | 508    |   |                |   | 463    |   |   |   | 9.72 | % |
| Intangibles      amortization             |   |                    | 271    |   |                |   | 278    |   |   |   | (2.52 | ) | % |
| Net      costs of other real estate owned |   |                    | 33     |   |                |   | 60     |   |   |   | (45.00 | ) | % |
| Franchise      taxes                      |   |                    | 239    |   |                |   | 227    |   |   |   | 5.29 |   | % |
| Other      operating expenses             |   |                    | 766    |   |                |   | 859    |   |   |   | (10.83 | ) | % |

----

| Assets                                          |   | March      31, 2010 |    |   | December      31, 2009 |   |    | Percent      Change |   |   |
|-------------------------------------------------|--------|---------------------|---------|--------|------------------------|--------|---------|---------------------|--------|--------|
| Interest-bearing      deposits                  |   | $                   | 34,866  |   |                   | $      | 35,841  |                |   |   | (2.72 | ) | % |
| Securities      available for sale              |   |                | 163,438 |   |                   |   | 166,592 |                |   |   | (1.89 | ) | % |
| Securities      held to maturity                |   |                | 125,448 |   |                   |   | 131,645 |                |   |   | (4.71 | ) | % |
| Mortgage      loans held for sale               |   |                | 619     |   |                   |   | 911     |                |   |   | (32.05 | ) | % |
| Real      estate construction loans             |   |                | 45,876  |   |                   |   | 52,579  |                |   |   | (12.75 | ) | % |
| Real      estate mortgage loans                 |   |                | 165,667 |   |                   |   | 165,434 |                |   |   | 0.14 |   | % |
| Commercial      and industrial loans            |   |                | 283,841 |   |                   |   | 261,172 |                |   |   | 8.68 |   | % |
| Loans      to individuals                       |   |                | 93,995  |   |                   |   | 100,581 |                |   |   | (6.55 | ) | % |
| Total      Assets                               |   |                | 971,844 |   |                   |   | 971,538 |                |   |   | 0.03 |   | % |
|                                            |   |                |    |   |                   |   |    |                |   |   |   |   |   |
| Liabilities      and stockholders’ equity |   |                |    |   |                   |   |    |                |   |   |   |   |   |
| Noninterest-bearing      demand deposits        |   | $                   | 115,592 |   |                   | $      | 115,240 |                |   |   | 0.31 |   | % |
| Interest-bearing      demand deposits           |   |                | 305,194 |   |                   |   | 282,532 |                |   |   | 8.02 |   | % |
| Savings      deposits                           |   |                | 52,549  |   |                   |   | 48,992  |                |   |   | 7.26 |   | % |
| Time      deposits                              |   |                | 365,364 |   |                   |   | 399,873 |                |   |   | (8.63 | ) | % |
| Other      borrowings                           |   |                | ---     |   |                   |   | 49      |                |   |   | (100.00 | ) | % |
| Stockholders’      equity                 |   |                | 124,526 |   |                   |   | 117,086 |                |   |   | 6.35 |   | % |

|                                 |   | March      31, 2010 |    |   | December      31, 2009 |   |    | Percent      Change |   |   |
|--------------------------------------|--------|---------------------|---------|--------|------------------------|--------|---------|---------------------|--------|--------|
| Commercial      and industrial loans |   |                | 284,242 |   |                   |   | 283,998 |                |   |   | 0.09 |   | % |
| Real      estate construction loans  |   | $                   | 47,245  |   |                   | $      | 45,625  |                |   |   | 3.55 |   | % |
| Real      estate mortgage loans      |   |                | 165,604 |   |                   |   | 165,542 |                |   |   | 0.04 |   | % |
| Loans      to individuals            |   |                | 92,035  |   |                   |   | 95,844  |                |   |   | (3.97 | ) | % |
| Total      loans                     |   | $                   | 589,126 |   |                   | $      | 591,009 |                |   |   | (0.32 | ) | % |

----

|                                     |   | March      31, 2010 |    |   | December      31, 2009 |   |    | Percent      Change |   |   |
|------------------------------------------|--------|---------------------|---------|--------|------------------------|--------|---------|---------------------|--------|--------|
| Noninterest-bearing      demand deposits |   | $                   | 116,153 |   |                   | $      | 122,549 |                |   |   | (5.22 | ) | % |
| Interest-bearing      demand deposits    |   |                | 325,214 |   |                   |   | 310,629 |                |   |   | 4.70 |   | % |
| Saving      deposits                     |   |                | 53,977  |   |                   |   | 51,622  |                |   |   | 4.56 |   | % |
| Time      deposits                       |   |                | 362,124 |   |                   |   | 367,312 |                |   |   | (1.41 | ) | % |
| Total      deposits                      |   | $                   | 857,468 |   |                   | $      | 852,112 |                |   |   | 0.63 |   | % |
|                                     |   |                |    |   |                   |   |    |                |   |   |   |   |   |

----

Item 1A.  Risk Factors

----

Item 4.   Reserved

Item6.       Exhibits

| DATE:      May 5, 2010 | /s/ JAMES G. RAKES                                                                                        |
|------------------------|-----------------------------------------------------------------------------------------------------------------------------------------|
|                   | James      G. RakesPresident      andChief      Executive Officer(Authorized      Officer)                                              |
|                   |                                                                                                                                    |
| DATE:      May 5, 2010 | /s/ DAVID K. SKEENS                                                                                       |
|                   | David      K. SkeensTreasurer      andChief      Financial Officer(Principal      Financial Officer)(Principal      Accounting Officer) |

----

| Exhibit      No. |  Description                                                                                                                        | Page      No. inSequential      System                                                                                                               |
|------------------|------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3(i)             | Amended      and Restated Articles of Incorporation of National Bankshares,      Inc.                                                    | (incorporated      herein by reference to Exhibit 3.1 of the Form 8K for filed on March 16,      2006)                                               |
| 3(ii)            | Amended      By-laws of National Bankshares, Inc.                                                                                        | (incorporated      herein by reference to Exhibit 3(ii) of the Annual Report on Form 10K for      fiscal year ended December 31, 2007)               |
| 4(i)             | Specimen      copy of certificate for National Bankshares, Inc. common    stock                                                          | (incorporated      herein by reference to Exhibit 4(a) of the Annual Report on Form 10K for      fiscal year ended December 31, 1993)                |
| *10(iii)(A)      | National      Bankshares, Inc. 1999 Stock Option Plan                                                                                    | (incorporated      herein by reference to Exhibit 4.3 of the Form S-8, filed as Registration      No. 333-79979 with the Commission on June 4, 1999) |
| *10(iii)(A)      | Executive      Employment Agreement dated December 17, 2008, between National Bankshares,      Inc. and James G. Rakes                   | (incorporated      herein by reference to Exhibit 10(iii)(A) of the Annual Report on Form 10K      for the fiscal year ended December 31, 2008)      |
| *10(iii)(A)      | Employee      Lease Agreement dated August 14, 2002, between National Bankshares, Inc.      and The National Bank of Blacksburg          | (incorporated      herein by reference to Exhibit 10 (iii) (A) of Form 10Q for the period      ended September 30, 2002)                             |
| *10(iii)(A)      | Executive      Employment Agreement dated December 17, 2008, between National Bankshares,      Inc. and F. Brad Denardo                  | (incorporated      herein by reference to Exhibit 10(iii)(A) of the Annual Report on Form 10K      for the fiscal year ended December 31, 2008)      |
| *10(iii)(A)      | Executive      Employment Agreement dated December 17, 2008, between National Bankshares,      Inc. and Marilyn B. Buhyoff               | (incorporated      herein by reference to Exhibit 10(iii)(A) of the Annual Report on Form 10K      for the fiscal year ended December 31, 2008)      |
| *10(iii)(A)      | Salary      Continuation Agreement dated February 8, 2006, between The National Bank      of Blacksburg and James G. Rakes               | (incorporated      herein by reference to Exhibit 10(iii)(A) of the Form 8K filed on February      8, 2006)                                          |
| *10(iii)(A)      | Salary      Continuation Agreement dated February 8, 2006, between The National Bank      of Blacksburg and F. Brad Denardo              | (incorporated      herein by reference to Exhibit 10(iii)(A) of the Form 8K filed on February      8, 2006)                                          |
| *10(iii)(A)      | Salary      Continuation Agreement dated February 8, 2006, betweenNational      Bankshares, Inc. and Marilyn B. Buhyoff                  | (incorporated      herein by reference to Exhibit 10(iii)(A) of the Form 8K filed on February      8, 2006)                                          |
| *10(iii)(A)      | First      Amendment, dated December 19, 2007, to The National Bank of Blacksburg      Salary Continuation Agreement for James G. Rakes  | (incorporated      herein by reference to Exhibit 10(iii)(A) of the Form 8K filed on December      19, 2007)                                         |
| *10(iii)(A)      | First      Amendment, dated December 19, 2007, to The National Bank of Blacksburg      Salary Continuation Agreement for F. Brad Denardo | (incorporated      herein by reference to Exhibit 10(iii)(A) of the Form 8K filed on December      19, 2007)                                         |
| *10(iii)(A)      | First      Amendment, dated December 19, 2007, to National Bankshares, Inc. Salary      Continuation Agreement for Marilyn B. Buhyoff    | (incorporated      herein by reference to Exhibit 10(iii)(A) of the Form 8K filed on December      19, 2007)                                         |
| *10(viii)(A)     | Second      Amendment, dated June 12, 2008, to The National Bank of Blacksburg Salary      Continuation Agreement for F. Brad Denardo    | (incorporated      herein by reference to Exhibit 10(iii)(A) of the Form 8K filed on June 12,      2008)                                             |

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| *10(viii)(A) | Second      Amendment, dated December 17, 2008, to The National Bank of Blacksburg      Salary Continuation Agreement for James G. Rakes     | (incorporated      herein by reference to Exhibit 10(iii)(A) of the Annual Report on Form 10K      for the fiscal year ended December 31, 2008) |
|--------------|----------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------|
| *10(viii)(A) | Second      Amendment, dated December 17, 2008, to The National Bank of Blacksburg      Salary Continuation Agreement for Marilyn B. Buhyoff | (incorporated      herein by reference to Exhibit 10(iii)(A) of the Annual Report on Form 10K      for the fiscal year ended December 31, 2008) |
| *10(viii)(A) | Third      Amendment, dated December 17, 2008, to The National Bank of Blacksburg      Salary Continuation Agreement for F. Brad Denardo     | (incorporated      herein by reference to Exhibit 10(iii)(A) of the Annual Report on Form 10K      for the fiscal year ended December 31, 2008) |
| 31(i)        | Section      906 Certification of Chief Executive Officer                                                                                    | (included      herewith)                                                                                                                        |
| 31(ii)       | Section      906 Certification of Chief Financial Officer                                                                                    | (included      herewith)                                                                                                                        |
| 32(i)        | 18      U.S.C. Section 1350 Certification of Chief Executive    Officer                                                                      | (included      herewith)                                                                                                                        |
| 32(ii)       | 18      U.S.C. Section 1350 Certification of Chief Financial    Officer                                                                      | (included      herewith)                                                                                                                        |

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| /s/      JAMES G. RAKES                                                 |
|-------------------------------------------------------------------------------------------------------|
| James      G. RakesPresident      and Chief Executive Officer(Principal      Executive Officer)  |

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| 1.   | I      have reviewed this quarterly report on Form 10-Q of National Bankshares,      Inc.; |
|----------------|--------------------------------------------------------------------------------------------|

| /s/ DAVID K. SKEENS                                                    |
|------------------------------------------------------------------------------------------------------|
| David      K. SkeensTreasurer      andChief      Financial Officer(Principal      Financial Officer) |

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| /s/      JAMES G. RAKES                                                           |
|-----------------------------------------------------------------------------------------------------------------|
| James      G. RakesPresident      and Chief Executive Officer(Principal      Executive Officer)May      5, 2010 |

| /s/      DAVID K. SKEENS                                                               |
|----------------------------------------------------------------------------------------------------------------------|
| David      K. SkeensTreasurer      andChief      Financial Officer(Principal      Financial Officer)May      5, 2010 |

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