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Press Release

American National Bankshares Reports Fourth Quarter Earnings

Company Release - 1/23/2020 7:30 AM ET

DANVILLE, Va., Jan. 23, 2020 (GLOBE NEWSWIRE) -- American National Bankshares Inc. (NASDAQ: AMNB) (“American National” or “the Company”) today reported fourth quarter 2019 earnings of $7.4 million or $0.67 per diluted common share. Those results compare to net income of $5.0 million, or $0.57 per diluted common share during the same quarter in the prior year, and net income of $8.7 million or $0.78 per diluted common share recognized for the third quarter of 2019. Earnings for the twelve months ended December 31, 2019 amounted to $20.9 million or $1.98 per diluted share, compared to $22.6 million or $2.59 per diluted share in 2018. Results for 2019 include the impact of merger related costs of $11.8 million associated with the HomeTown Bank (HomeTown) acquisition.

“2019 was a transformative year for American National, as we successfully completed the acquisition of HomeTown, added some key management talent and just announced the opening of a loan production office in the strong Raleigh, North Carolina market” said Jeffrey V. Haley, President and Chief Executive Officer of the Company. “Loan growth picked up in the quarter, and our credit quality continues to be strong. Margin compression continues to be a challenge in this low rate environment, both from market pricing pressure as well as the impact from recent reductions in short term rates. We incurred some additional merger related expenses associated with completing the HomeTown acquisition during the quarter, as well as some expenses associated with the Raleigh loan production office. I am proud of our accomplishments in 2019 to grow the Company and maintain our solid financial performance, and look to 2020 with optimism and enthusiasm.”

Fourth quarter 2019 highlights include:

  • Earnings produced a return on average assets of 1.20% for the fourth quarter of 2019, compared to 1.43% in the previous quarter and 1.08% for the same quarter in prior year.
     
  • Net loans receivable increased $26.4 million for the quarter or 5.8% annualized.
     
  • Net interest margin was 3.62% for the quarter, down from 3.75% in the third quarter of 2019 and up from 3.48% in the same quarter of the prior year.   
     
  • Noninterest revenues decreased $305.0 thousand or 7.3% when compared to the previous quarter, but increased $868.0 thousand or 29.0% to $3.9 million from $3.0 million in the same quarter in the prior year.

  • The fourth quarter provision for loan losses totaled $462 thousand, which compares to a net recovery of $12 thousand for the previous quarter, and a net recovery of $6 thousand in the same quarter in the prior year.

  • Nonperforming assets as a percentage of total assets remained level at 0.15% at December 31, 2019, compared with 0.15% at September 30, 2019, and up from 0.11% at December 31, 2018.

  • Annualized net charge-offs were 0.02% for the fourth quarter of 2019, compared to 0.23% for the corresponding quarter in the prior year and up from none for the third quarter of 2019.

NET INTEREST INCOME

Net interest income for the fourth quarter of 2019 was $20.4 million, a decrease of $174 thousand or 0.8% from the prior quarter and an increase of $5.4 million or 36.2% from the fourth quarter of 2018. The year-over-year growth was positively impacted by higher earning asset balances and higher loan yields in large part associated with the HomeTown acquisition. The quarter-over-quarter decrease in net interest income was principally the result of lower yields on assets associated with the recent decreases in short term rates  and market pricing pressure in the commercial portfolio offset in part by a decrease in funding costs. The fully taxable equivalent (“FTE”) net interest margin for the quarter was 3.62%, down from 3.75% in the prior quarter and up from 3.48% in the same period a year ago.

The Company’s FTE net interest margin includes the impact of acquisition accounting fair value adjustments. During the fourth quarter of 2019, net accretion related to acquisition accounting increased $118 thousand from the prior quarter to $1.1 million and increased $780 thousand from the fourth quarter of 2018. Net accretion for the twelve months ended December 31, 2019 amounted to $3.4 million, compared to $1.3 million for the same period in 2018. Estimated remaining net accretion from acquisitions for the periods indicated is as follows (dollars in thousands):

2020 $1,968
2021   1,479
2022   980
2023   657
2024   371
Thereafter   1,631

ASSET QUALITY/LOAN LOSS PROVISION

Non-performing assets (“NPAs”) totaled $3.6 million as of December 31, 2019, down from $3.7 million at September 30, 2019 and up from $2.0 million at December 31, 2018. NPAs as a percentage of total assets were 0.15% at December 31, 2019, which compares to 0.15% at September 30, 2019 and 0.11% at December 31, 2018.

The provision for loan losses was $462 thousand for the fourth quarter of 2019, as compared to a net recovery $12 thousand for the previous quarter and a net recovery of $6 thousand for the same period in the previous year. The allowance for loan losses was $13.2 million at December 31, 2019, compared to $12.8 million at September 30, 2019 and $12.8 million at December 31, 2018. Annualized net charge-offs as a percentage of average loans outstanding was 0.02% for the fourth quarter of 2019, compared to none in the previous quarter and 0.23% for the same period in the prior year. The allowance as a percentage of loans held for investment was 0.72% at December 31, 2019, compared to 0.71% at September 30, 2019 and 0.94% at December 31, 2018.

NONINTEREST INCOME

Noninterest income decreased $305.0 thousand to $3.9 million for the quarter ended December 31, 2019 from $4.2 million in the prior quarter and increased from $3.0 million for the same period in the prior year. Losses of $309 thousand related to the write-down of premises and equipment in connection with an ATM replacement initiative accounted for most of the decrease from the previous quarter, while increases in other fees and commissions, mortgage banking fees and securities gains partially offset by losses on premises and equipment accounted for much of the increase over the same period in the prior year.

NONINTEREST EXPENSE

Noninterest expense for the fourth quarter amounted to $15.0 million, up $1.2 million or 9.0% when compared to the $13.8 million for the previous quarter and up $3.4 million or 29.2% when compared to the same period in the previous year. The increase as compared to the previous quarter was driven by additional merger costs of $460 thousand incurred during the quarter, compensation costs associated with establishing the Raleigh loan production office, corporate incentive compensation adjustments, other professional fees and data processing costs. The increase from the same period in the prior year is primarily related to regulatory, data processing and compensation costs associated with the acquisition of HomeTown.

INCOME TAXES

The effective tax rate for the three months ended December 31, 2019 was 15.6% compared to 21.1% for the three months ended September 30, 2019 and 21.6% for the same period in the prior year. The decrease in the effective tax rate as compared to the previous periods was primarily due to a change in future effective rate assumption related to state apportionments which was prompted by the HomeTown acquisition.

ABOUT AMERICAN NATIONAL

American National is a multi-state bank holding company with total assets of approximately $2.5 billion. Headquartered in Danville, Virginia, American National is the parent company of American National Bank and Trust Company. American National Bank is a community bank serving Virginia and North Carolina with 26 banking offices. American National Bank also manages an additional $878 million of trust, investment and brokerage assets in its Trust and Investment Services Division. Additional information about American National and American National Bank is available on American National's website at www.amnb.com.

NON-GAAP FINANCIAL MEASURES

This release contains financial information determined by methods other than in accordance with generally accepted accounting principles (“GAAP”). American National’s management uses these non-GAAP financial measures in its analysis of American National’s performance. These measures typically adjust GAAP performance measures to exclude the effects of the amortization of intangibles and include the tax benefit associated with revenue items that are tax-exempt, as well as adjust income available to common shareholders for certain significant activities or transactions that are infrequent in nature. Management believes presentations of these non-GAAP financial measures provide useful supplemental information that is essential to a proper understanding of the operating results of American National’s core businesses. These non-GAAP disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. For a reconciliation of non-GAAP financial measures, see “Reconciliation of Non-GAAP Financial Measures” at the end of this release.

Forward-Looking Statements

Statements made in this release, other than those concerning historical financial information, may be considered forward-looking statements, which speak only as of the date of this release and are based on current expectations and involve a number of assumptions. American National intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and is including this statement for purposes of these safe harbor provisions. American National’s ability to predict results, or the actual effect of future plans or strategies, is inherently uncertain. Factors that could have a material effect on the operations and future prospects of American National include but are not limited to: (1) expected revenue synergies and cost savings from the recently completed merger with HomeTown may not be fully realized or realized within the expected timeframe; (2) changes in interest rates, general economic conditions, legislation and regulation, and monetary and fiscal policies of the U.S. government, including policies of the U.S.Treasury, Office of the Comptroller of the Currency and the Board of Governors of the Federal Reserve System; (3) the quality and composition of the loan and securities portfolios, demand for loan products, deposit flows, competition, and demand for financial services in American National’s market areas; (4) the implementation of new technologies, and the ability to develop and maintain secure and reliable electronic systems; (5) accounting principles, policies, and guidelines; and (6) other risk factors detailed from time to time in filings made by American National with the Securities and Exchange Commission. American National undertakes no obligation to update or clarify these forward-looking statements, whether as a result of new information, future events or otherwise.

Contact:
Jeffrey W. Farrar
Executive Vice President, COO & CFO
(434)773-2274
[email protected] 

American National Bankshares Inc.
 Consolidated Balance Sheets
(Dollars in thousands, except per share data)
Unaudited
     
  December 31
   2019   2018 
Assets    
Cash and due from banks $32,505  $29,587 
Interest-bearing deposits in other banks  47,077   34,668 
     
Equity securities, at fair value  -   1,830 
Securities available for sale, at fair value  379,195   332,653 
Restricted stock, at cost  8,630   5,247 
Loans held for sale  2,027   640 
     
Loans  1,830,815   1,357,476 
Less allowance for loan losses  (13,152)  (12,805)
Net Loans  1,817,663   1,344,671 
     
Premises and equipment, net  39,848   26,675 
Other real estate owned, net  1,308   869 
Goodwill  84,002   43,872 
Core deposit intangibles, net  7,728   926 
Bank owned life insurance  27,817   18,941 
Accrued interest receivable and other assets  30,750   22,287 
     
Total assets $2,478,550  $1,862,866 
     
     
Liabilities    
Demand deposits -- noninterest-bearing $578,606  $435,828 
Demand deposits -- interest-bearing  328,015   234,621 
Money market deposits  504,651   401,461 
Savings deposits  177,505   132,360 
Time deposits  471,770   361,957 
Total deposits  2,060,547   1,566,227 
     
Customer repurchase agreements  40,475   35,243 
Subordinated debt  7,517   - 
Junior subordinated debt  28,029   27,927 
Accrued interest payable and other liabilities  21,724   10,927 
Total liabilities  2,158,292   1,640,324 
     
Shareholders' equity    
Preferred stock, $5 par, 2,000,000 shares authorized,    
none outstanding  -   - 
Common stock, $1 par, 20,000,000 shares authorized,    
11,071,540 shares outstanding at December 31, 2019 and    
8,720,337 shares outstanding at December 31, 2018  11,019   8,668 
Capital in excess of par value  158,244   78,172 
Retained earnings  151,478   141,537 
Accumulated other comprehensive loss, net  (483)  (5,835)
Total shareholders' equity  320,258   222,542 
     
Total liabilities and shareholders' equity $2,478,550  $1,862,866 
     


American National Bankshares Inc.
Consolidated Statements of Income
(Dollars in thousands, except per share data)
Unaudited
         
  Three Months Ended Twelve Months Ended
  December 31 December 31
   2019   2018   2019   2018 
Interest and Dividend Income:         
Interest and fees on loans $21,947  $15,481  $82,684  $59,966 
Interest and dividends on securities:        
Taxable  1,991   1,674   7,682   6,106 
Tax-exempt  117   298   777   1,502 
Dividends  127   81   451   321 
Other interest income  408   357   1,261   873 
Total interest and dividend income  24,590   17,891   92,855   68,768 
         
Interest Expense:        
Interest on deposits  3,496   2,340   13,143   8,086 
Interest on short-term borrowings  134   145   650   186 
Interest on long-term borrowings  -   -   14   - 
Interest on subordinated debt  122   -   367   - 
Interest on junior subordinated debt  390   394   1,554   1,402 
Total interest expense  4,142   2,879   15,728   9,674 
         
Net Interest Income   20,448   15,012   77,127   59,094 
Provision for (recovery of) loan losses  462   (6)  456   (103)
         
Net Interest Income After Provision        
for Loan Losses   19,986   15,018   76,671   59,197 
         
Noninterest Income:         
Trust fees  1,021   908   3,847   3,783 
Service charges on deposit accounts  765   646   2,866   2,455 
Other fees and commissions  967   660   3,693   2,637 
Mortgage banking income  737   370   2,439   1,862 
Securities gains (losses), net  32   (270)  607   123 
Brokerage fees  205   192   721   795 
Income from Small Business Investment Companies  37   161   211   637 
Gains (losses) on premises and equipment, net  (338)  (6)  (427)  60 
Other  440   337   1,213   922 
Total noninterest income  3,866   2,998   15,170   13,274 
         
Noninterest Expense:         
Salaries  6,665   5,132   24,672   20,509 
Employee benefits  1,321   1,048   5,343   4,370 
Occupancy and equipment  1,454   1,081   5,417   4,378 
FDIC assessment  -   125   119   537 
Bank franchise tax  531   191   1,644   1,054 
Core deposit intangible amortization  437   55   1,398   265 
Data processing  729   382   2,567   1,691 
Software  363   313   1,295   1,279 
Other real estate owned, net  15   21   31   122 
Merger related expenses  460   872   11,782   872 
Other  3,062   2,418   11,806   9,169 
Total noninterest expense  15,037   11,638   66,074   44,246 
         
Income Before Income Taxes  8,815   6,378   25,767   28,225 
Income Taxes  1,374   1,376   4,861   5,646 
Net Income  $7,441  $5,002  $20,906  $22,579 
         
Net Income Per Common Share:          
Basic $0.67  $0.57  $1.99  $2.60 
Diluted $0.67  $0.57  $1.98  $2.59 
Weighted Average Common Shares Outstanding:         
Basic  11,094,346   8,717,572   10,531,572   8,698,014 
Diluted  11,103,905   8,722,645   10,541,337   8,708,462 


American National Bankshares Inc.          
Financial Highlights           
Unaudited            
              
(Dollars in thousands, except per share data)      At or for the Year Ended   
    4th Qtr 3rd Qtr 4th Qtr December 31,  
     2019    2019   2018   2019    2018  
EARNINGS            
Interest income $  24,590   $24,958  $17,891  $  92,855   $68,768  
Interest expense  4,142    4,336   2,879   15,728    9,674  
Net interest income 20,448    20,622   15,012   77,127    59,094  
Provision for (recovery of) loan losses   462    (12)  (6)    456    (103) 
Noninterest income 3,866    4,171   2,998   15,170    13,274  
Noninterest expense 15,037    13,792   11,638   66,074    44,246  
Income taxes    1,374    2,321   1,376   4,861    5,646  
Net income    7,441    8,692   5,002   20,906    22,579  
              
PER COMMON SHARE           
Net income per share - basic$  0.67   $0.78  $0.57  $  1.99   $2.60  
Net income per share - diluted   0.67    0.78   0.57     1.98    2.59  
Cash dividends paid   0.27    0.27   0.25     1.04    1.00  
Book value per share   28.93    28.54   25.52     28.93    25.52  
Book value per share - tangible (a)   20.64    20.19   20.38     20.64    20.38  
Closing market price   39.57    35.47   29.31     39.57    29.31  
              
FINANCIAL RATIOS           
Return on average assets   1.20  % 1.43 % 1.08 % 0.91  % 1.24 %
Return on average equity   9.31    11.04   9.16   7.16    10.56  
Return on average tangible equity (a)   13.71    16.31   11.63   10.43    13.49  
Average equity to average assets 12.88    12.98   11.78   12.68    11.70  
Tangible equity to tangible assets (a) 9.57    9.50   9.78   9.57    9.78  
Net interest margin, taxable equivalent 3.62    3.75   3.48   3.68    3.49  
Efficiency ratio (a) 57.24    53.79   58.15   57.25    59.20  
Effective tax rate    15.59    21.08   21.57   18.87    20.00  
              
PERIOD-END BALANCES          
Securities $  387,825   $317,111  $339,730  $  387,825   $339,730  
Loans held for sale   2,027    5,646   640     2,027    640  
Loans, net    1,830,815    1,804,447   1,357,476     1,830,815    1,357,476  
Goodwill and other intangibles   91,730    92,798   44,798     91,730    44,798  
Assets     2,478,550    2,454,529   1,862,866     2,478,550    1,862,866  
Assets - tangible (a)   2,386,820    2,361,731   1,818,068     2,386,820    1,818,068  
Deposits    2,060,547    2,041,862   1,566,227     2,060,547    1,566,227  
Customer repurchase agreements   40,475    38,924   35,243     40,475    35,243  
Long-term borrowings   35,546    35,524   27,927     35,546    27,927  
Shareholders' equity   320,258    317,246   222,542     320,258    222,542  
Shareholders' equity - tangible (a)   228,528    224,448   177,744     228,528    177,744  
              
AVERAGE BALANCES          
Securities (b) $  347,502   $323,202  $332,230  $  342,219   $330,982  
Loans held for sale   4,991    3,904   1,201     3,419    2,285  
Loans, net    1,810,744    1,817,732   1,335,469     1,700,880    1,330,582  
Interest-earning assets   2,264,687    2,207,935   1,736,453     2,107,169    1,709,283  
Goodwill and other intangibles   92,607    93,077   44,831     81,049    44,926  
Assets     2,482,502    2,426,678   1,854,492     2,303,624    1,827,658  
Assets - tangible (a)   2,389,895    2,333,601   1,809,661     2,222,575    1,782,732  
Interest-bearing deposits   1,466,116    1,443,947   1,116,911     1,377,422    1,134,512  
Deposits    2,066,435    2,012,653   1,558,864     1,915,197    1,556,039  
Customer repurchase agreements   38,742    39,470   37,905     39,134    18,401  
Other short-term borrowings   -    1,986   -     2,694    1,149  
Long-term borrowings   35,537    35,806   27,914     33,644    27,874  
Shareholders' equity   319,851    314,980   218,430     292,022    213,821  
Shareholders' equity - tangible (a)   227,244    221,903   173,599     210,973    168,895  
              
American National Bankshares Inc.          
Financial Highlights           
Unaudited            
              
(Dollars in thousands, except per share data)      At or for the Year Ended   
    4th Qtr 3rd Qtr 4th Qtr December 31,  
     2019    2019   2018   2019    2018  
CAPITAL             
Weighted average shares outstanding - basic 11,094,346    11,127,603   8,717,572   10,531,572    8,698,014  
Weighted average shares outstanding - diluted 11,103,905    11,138,008   8,722,645   10,541,337    8,708,462  
              
ALLOWANCE FOR LOAN LOSSES          
Beginning balance$  12,758   $12,786  $13,588  $  12,805   $13,603  
Provision for (recovery of) loan losses 462    (12)  (6)  456    (103) 
Charge-offs  (144)  (66)  (818)  (333)  (1,020) 
Recoveries  76    50   41   224    325  
Ending balance $  13,152   $12,758  $12,805  $  13,152   $12,805  
              
LOANS            
Construction and land development$  137,920   $143,788  $97,240  $  137,920   $97,240  
Commercial real estate   899,199    883,219   655,800     899,199    655,800  
Residential real estate   324,315    318,833   209,438     324,315    209,438  
Home equity    119,423    122,074   103,933     119,423    103,933  
Commercial and industrial   339,077    324,508   285,972     339,077    285,972  
Consumer    10,881    12,025   5,093     10,881    5,093  
Total  $ 1,830,815   $1,804,447  $1,357,476  $ 1,830,815   $1,357,476  
              
NONPERFORMING ASSETS AT PERIOD-END          
Nonperforming loans:          
90 days past due and accruing$  361   $874  $72  $  361   $72  
Nonaccrual  1,944    1,446   1,090   1,944    1,090  
Other real estate owned 1,308    1,353   869   1,308    869  
Nonperforming assets$  3,613   $3,673  $2,031  $  3,613   $2,031  
              
ASSET QUALITY RATIOS          
Allowance for loan losses to total loans 0.72  % 0.71 % 0.94 % 0.72  % 0.94 %
Allowance for loan losses to          
nonperforming loans 570.59    549.91   1,101.98   570.59    1,101.98  
Nonperforming assets to total assets 0.15    0.15   0.11   0.15    0.11  
Nonperforming loans to total loans 0.13    0.13   0.09   0.13    0.09  
Annualized net charge-offs          
to average loans 0.02    0.00   0.23   0.01    0.05  
              
              
OTHER DATA           
Fiduciary assets at period-end (c) (d)$  560,776   $546,407  $494,034  $  560,776   $494,034  
Retail brokerage assets at period-end (c) (d)$  317,262   $308,820  $274,552  $  317,262   $274,552  
Number full-time equivalent employees (e)   355    365   305      355    305  
Number of full service offices   26    28   24     26    24  
Number of loan production offices   1    1   -     1    -  
Number of ATMs    38    40   33     38    33  
              
              
Notes:            
              
(a) - This financial measure is not calculated in accordance with GAAP.  For a reconciliation of non-GAAP financial measures, see
"Reconciliation of Non-GAAP Financial Measures" at the end of  this release.
(b) - Average does not include unrealized gains and losses.
(c) - Market value.
(d) - Assets are not owned by American National and are not reflected in the consolidated balance sheet.   
(e) - Average for quarter.          
              


   Net Interest Income Analysis
   For the Three Months Ended December 31, 2019 and 2018
   (Dollars in thousands)
   Unaudited
                
        Interest     
    Average Balance Income/Expense (a) Yield/Rate 
                
     2019  2018  2019  2018 2019 2018 
Loans:             
 Commercial$315,902 $262,040 $3,516 $2,768 4.42%4.19%
 Real estate 1,488,577  1,069,515  18,268  12,681 4.91 4.74 
 Consumer 11,256  5,115  209  76 7.37 5.89 
  Total loans (b) 1,815,735  1,336,670  21,993  15,525 4.84 4.64 
                
Securities:            
 Federal agencies & GSEs 123,950  128,826  716  752 2.31 2.33 
 Mortgage-backed & CMOs 164,727  110,753  996  655 2.42 2.37 
 State and municipal 41,109  78,223  303  529 2.95 2.71 
 Other 17,716  14,428  250  187 5.64 5.18 
  Total securities 347,502  332,230  2,265  2,123 2.61 2.56 
                
Deposits in other banks 101,450  67,553  408  357 1.60 2.10 
                
 Total interest-earning assets 2,264,687  1,736,453  24,666  18,005 4.35 4.14 
                
Non-earning assets 217,815  118,039         
                
  Total assets$2,482,502 $1,854,492         
                
Deposits:            
 Demand$329,759 $229,286  126  13 0.15 0.02 
 Money market 482,671  391,289  1,283  1,081 1.05 1.10 
 Savings 176,686  133,350  83  10 0.19 0.03 
 Time  477,000  362,986  2,004  1,236 1.67 1.35 
  Total deposits 1,466,116  1,116,911  3,496  2,340 0.95 0.83 
                
Customer repurchase agreements 38,742  37,905  134  145 1.37 1.52 
Long-term borrowings 35,537  27,914  512  394 5.76 5.65 
 Total interest-bearing            
  liabilities 1,540,395  1,182,730  4,142  2,879 1.07 0.97 
                
Noninterest bearing demand deposits 600,319  441,953         
Other liabilities 21,937  11,379         
Shareholders' equity 319,851  218,430         
  Total liabilities and            
   shareholders' equity$2,482,502 $1,854,492         
                
Interest rate spread        3.28%3.17%
Net interest margin        3.62%3.48%
                
Net interest income (taxable equivalent basis)    20,524  15,126     
Less: Taxable equivalent adjustment (c)    76  114     
Net interest income    $20,448 $15,012     
                
                
Notes:             
                
(a) - Interest income includes net accretion/amortization of acquired loan fair value adjustments and the net accretion/ 
amortization of deferred loan fees and costs. 
(b) - Nonaccrual loans are included in the average balances. 
(c) - A tax rate of 21% was used in adjusting interest on tax-exempt assets to a fully taxable equivalent basis. 
                


   Net Interest Income Analysis
   For the Years Ended December 31, 2019 and 2018
   (Dollars in thousands)
   Unaudited
                
        Interest     
    Average Balance Income/Expense (a) Yield/Rate 
                
     2019  2018  2019  2018 2019 2018 
Loans:             
 Commercial$306,065 $264,241 $14,125 $10,579 4.62%4.00%
 Real estate 1,388,188  1,063,950  68,050  49,275 4.90 4.63 
 Consumer 10,046  4,676  694  305 6.91 6.52 
  Total loans (b) 1,704,299  1,332,867  82,869  60,159 4.86 4.51 
                
Securities:            
 Federal agencies & GSEs 132,916  121,923  3,191  2,708 2.40 2.22 
 Mortgage-backed & CMOs 134,458  109,048  3,350  2,467 2.49 2.26 
 State and municipal 58,293  85,061  1,650  2,399 2.83 2.82 
 Other 16,552  14,950  903  718 5.46 4.80 
  Total securities 342,219  330,982  9,094  8,292 2.66 2.51 
                
Deposits in other banks 60,651  45,434  1,261  873 2.08 1.92 
                
 Total interest-earning assets 2,107,169  1,709,283  93,224  69,324 4.42 4.06 
                
Non-earning assets 196,455  118,375         
                
  Total assets$2,303,624 $1,827,658         
                
Deposits:            
 Demand$307,329 $234,857  370  49 0.12 0.02 
 Money market 445,505  393,321  5,246  3,505 1.18 0.89 
 Savings 166,842  132,182  284  40 0.17 0.03 
 Time  457,746  374,152  7,243  4,492 1.58 1.20 
  Total deposits 1,377,422  1,134,512  13,143  8,086 0.95 0.71 
                
Customer repurchase agreements 39,134  18,401  595  164 1.52 0.89 
Other short-term borrowings 2,694  1,149  55  22 2.04 1.91 
Long-term borrowings 33,644  27,874  1,935  1,402 5.75 5.03 
 Total interest-bearing            
  liabilities 1,452,894  1,181,936  15,728  9,674 1.08 0.82 
                
Noninterest bearing demand deposits 537,775  421,527         
Other liabilities 20,933  10,374         
Shareholders' equity 292,022  213,821         
  Total liabilities and            
   shareholders' equity$2,303,624 $1,827,658         
                
Interest rate spread        3.34%3.24%
Net interest margin        3.68%3.49%
                
Net interest income (taxable equivalent basis)    77,496  59,650     
Less: Taxable equivalent adjustment (c)    369  556     
Net interest income    $77,127 $59,094     
                
                
Notes:             
                
(a) - Interest income includes net accretion/amortization of acquired loan fair value adjustments and the net accretion/ 
amortization of deferred loan fees and costs. 
(b) - Nonaccrual loans are included in the average balances. 
(c) - A tax rate of 21% was used in adjusting interest on tax-exempt assets to a fully taxable equivalent basis. 


American National Bankshares Inc.          
Reconciliation of Non-GAAP Financial Measures         
Unaudited            
              
 (Dollars in thousands, except per share data)      At or for the Year Ended   
    4th Qtr 3rd Qtr 4th Qtr December 31,  
     2019    2019   2018   2019    2018  
EFFICIENCY RATIO           
Noninterest expense$  15,037   $13,792  $11,638  $  66,074   $44,246  
Add/subtract: gain/loss on sale of OREO (3)  (22)  (11)  52    (44) 
Subtract: core deposit intangible amortization (437)  (448)  (55)  (1,398)  (265) 
Subtract: merger related expense   (460)  0   (872)    (11,782)  (872) 
    $  14,137   $13,322  $10,700  $   52,946   $43,065  
              
Net interest income$  20,448   $20,622  $15,012  $  77,127   $59,094  
Tax equivalent adjustment 76    77   114   369    556  
Noninterest income 3,866    4,171   2,998   15,170    13,274  
Add/subtract: loss/gain on securities (32)  (105)  270   (607)  (123) 
Add/subtract: loss/gain on fixed assets 338    2   6   427    (60) 
    $  24,696   $24,767