Updating two different nodes using XSLT

Input –

<root>
    <Bank>
        <BankDetail>
            <Name1>
            </Name1>
            <Name2>TestBank</Name2>
        </BankDetail>
    </Bank>
    <Item>
        <Item1>1235</Item1>
    </Item>
</root>

Existing XSLT

The XSLT is doing one task of copying the value from Name2 Tag to Name1.

<xsl:stylesheet xmlns:xsl="http://www.w3.org/1999/XSL/Transform" xmlns:msxsl="urn:schemas-microsoft-com:xslt" exclude-result-prefixes="msxsl" version="1.0">
    <xsl:output omit-xml-declaration="yes" method="xml" indent="yes" version="1.0"/>
    <xsl:template match="@*|node()">
        <xsl:copy>
            <xsl:apply-templates select="@*|node()"/>
        </xsl:copy>
    </xsl:template>
    <xsl:variable name="varName">
        <xsl:if test="/root/Bank/BankDetail/Name1 = ''">
            <xsl:value-of select="/root/Bank/BankDetail/Name2"/2
        </xsl:if>
    </xsl:variable>
    <xsl:template match="/root/Bank/BankDetail/Name1">
            <xsl:copy>
            <xsl:value-of select="$varName"/>
            <xsl:apply-templates/>
            </xsl:copy>
    </xsl:template>
</xsl:stylesheet>

Now, another update needs to be made using the same XSLT. Replacing the <Item1> value 1235 with “Item No 1” string.

Need this in XSLT 1.0

Desired Output –

<root>
    <Bank>
        <BankDetail>
            <Name1>TestBank</Name1>
            <Name2>TestBank</Name2>
        </BankDetail>
    </Bank>
    <Item>
        <Item1>Item No 1</Item1>
    </Item>
</root>

I am new to the XSLT. Please let me know if we have any way to do the updates in same XSLT.