American National Bankshares Reports Third Quarter Earnings


DANVILLE, Va., Oct. 19, 2023 (GLOBE NEWSWIRE) -- American National Bankshares Inc. (Nasdaq: AMNB) (“American National” or the “Company”) today reported third quarter 2023 earnings of $5.8 million, or $0.54 per diluted common share. These results compare to earnings of $9.3 million, or $0.87 per diluted common share, during the same quarter in the prior year, and earnings of $7.1 million, or $0.67 per diluted common share, for the second quarter of 2023. Earnings for the nine months ended September 30, 2023 were $22.1 million, or $2.08 per diluted common share, compared to $26.4 million, or $2.47 per diluted common share, for the same period of 2022.

President and Chief Executive Officer, Jeffrey V. Haley, commented, “The third quarter was a historic one for American National as we announced our agreement to merge with Atlantic Union Bankshares Corporation subject to shareholder and regulatory approvals. We continue to believe this partnership will provide the combined company with a stronger platform for growth and create enhanced value for our shareholders, customers and employees. I have been so pleased with the level of collaboration from both companies since announcement as we work through our various regulatory approvals and early integration planning.”

“We had a solid third quarter from an operating perspective, with revenues and earnings (adjusting for merger expenses) in line with our expectations for the quarter. Strengths included loan growth, continued favorable credit trends, expense management, reduced margin compression from higher rates and growth in fee income over the previous quarter.”

Third quarter 2023 highlights include:

  • Average loans held for investment grew $30.8 million, or 5.6% annualized, during the third quarter as compared to the previous quarter.
  • Average deposits increased by $51.5 million, or 8.0% annualized, during the quarter, while period-end deposits declined $80.7 million, or 12.2% annualized.
  • Fully taxable equivalent (“FTE”) net interest margin was 2.76% for the quarter, down 12 basis points from 2.88% in the second quarter of 2023 and down 44 basis points from 3.20% in the third quarter of the prior year (non-GAAP).
  • Noninterest revenues increased $419 thousand, or 9.6%, when compared to the previous quarter, and increased $14 thousand, or 0.3%, compared to the same quarter in the prior year.
  • Noninterest expense increased $2.2 million, or 13.4%, when compared to the previous quarter, and increased $1.9 million, or 11.5%, when compared to the same quarter in the prior year. Excluding non-recurring merger related expenses of $1.7 million recorded during the quarter, increases relative to the prior quarter and same quarter of 2022 were 2.8% and 1.2%, respectively.
  • The Company recognized a recovery of credit losses on loans in the third quarter of 2023 of $538 thousand compared to provisions of $268 thousand in the second quarter of 2023 and $615 thousand in the third quarter of the previous year.
  • Annualized net recoveries as a percentage of average loans outstanding were (0.06%) for the third quarter of 2023, compared to (0.05%) in the previous quarter and (0.01%) in the same quarter in the prior year.
  • Nonperforming assets as a percentage of total assets were 0.12% at September 30, 2023, up from 0.04% at June 30, 2023 and 0.05% at September 30, 2022.

NET INTEREST INCOME

Net interest income for the third quarter of 2023 decreased by $485 thousand, or 2.3%, to $20.7 million compared to $21.1 million for the previous quarter. The third quarter of 2023 compared to the same quarter of 2022 reflected a decrease of $3.3 million, or 13.9%. The FTE net interest margin for the third quarter of 2023 was 2.76%, down from 2.88% in the prior quarter and 3.20% in the same quarter a year ago (non-GAAP). The margin contraction relative to the previous quarter resulted from funding costs increasing more than earning asset yields. The yield on average earning assets increased 15 basis points quarter-over-quarter, while the cost of average interest-bearing liabilities rose 37 basis points due to higher rates paid on interest-bearing deposits and the continued migration of the deposit composition from demand deposits to higher cost money market and time deposits. Similarly, the 82-basis point increase in average earning asset yields was more than offset by the 195-basis point increase in the cost of average interest-bearing liabilities when comparing the third quarter of 2023 to the same quarter of 2022. The cost of interest-bearing deposits increased to 2.04% in the third quarter, compared to 1.59% in the previous quarter and 0.17% in the same quarter of the prior year.

ASSET QUALITY

Nonperforming assets (“NPAs”) totaled $3.7 million as of September 30, 2023, up from $1.1 million at June 30, 2023 and $1.4 million at September 30, 2022. NPAs as a percentage of total assets were 0.12% at September 30, 2023, compared to 0.04% at June 30, 2023 and 0.05% at September 30, 2022. The Company recorded a recovery of credit losses for the third quarter of 2023 of $538 thousand compared to provisions of $268 thousand in the previous quarter and $615 thousand in the third quarter of the previous year. The negative provision for the third quarter of 2023 was principally the result of net loan recoveries of $315 thousand and a slight reduction in the quantitative expected loan loss rates partially offset by net loan growth during the quarter.

The allowance for credit losses – loans was $25.1 million at September 30, 2023, compared to $25.3 million at June 30, 2023 and $19.2 million at September 30, 2022. Annualized net recoveries as a percentage of average loans outstanding were 0.06% for the third quarter of 2023 compared to 0.05% in the previous quarter and 0.01% in the same quarter in the prior year. The allowance for credit losses as a percentage of loans held for investment was 1.11% at September 30, 2023, compared to 1.13% at June 30, 2023, and 0.91% at September 30, 2022.

NONINTEREST INCOME

Noninterest income in the third quarter of 2023 increased by $419 thousand, or 9.6%, compared to the prior quarter and increased $14 thousand, or 0.3%, from the same quarter in the prior year. Noninterest income totaled $4.8 million for each of the quarters ended September 30, 2023 and September 30, 2022 compared to $4.4 million for the quarter ended June 30, 2023.

The increase in the third quarter compared to the previous quarter was attributable to higher income from small business investment companies of $345 thousand and growth in mortgage banking income of $96 thousand.

The third quarter of 2023 compared to the same quarter of 2022 reflected increases in interchange fees of $149 thousand and wealth management income of $133 thousand, partially offset by lower income from service charges on deposit accounts of $116 thousand and mortgage banking income of $95 thousand.

NONINTEREST EXPENSE

Noninterest expense for the third quarter of 2023 amounted to $18.3 million, up $2.2 million, or 13.4%, when compared to $16.2 million for the previous quarter and up $1.9 million, or 11.5%, from $16.4 million during the same quarter in the previous year. The increase in the third quarter compared to the previous quarter was driven by merger related expenses totaling $1.7 million and increased incentive accruals of $1.0 million included in salaries and employee benefits.

The third quarter 2023 increase compared to the same quarter of 2022 was principally attributable to merger related expenses of $1.7 million and an increase in FDIC assessments of $127 thousand.

INCOME TAXES

The effective tax rate for the three months ended September 30, 2023 was 24.16%, compared to 21.13% for the prior quarter and 20.92% for the same quarter in the prior year. The increase in the effective tax rate in the third quarter of 2023 was primarily the result of certain non-deductible merger related expenses.

BALANCE SHEET

Total assets at September 30, 2023 were $3.1 billion, a decline of $21.9 million, or 0.7% from June 30, 2023, and an increase of $41.9 million, or 1.4%, from September 30, 2022.

At September 30, 2023, loans held for investment (net of deferred fees and costs) were $2.3 billion, an increase of $29.0 million, or 5.2% annualized, from June 30, 2023. Loans held for investment (net of deferred fees and costs) increased $154.0 million, or 7.3%, from September 30, 2022.

Investment securities available for sale amounted to $543.9 million at September 30, 2023, a decrease of $16.8 million, or 3.0%, from June 30, 2023 and a decrease of $98.0 million, or 15.3%, compared to September 30, 2022. The unrealized loss on available for sale securities was $75.1 million at September 30, 2023 compared to $69.7 million at June 30, 2023 and $73.6 million at September 30, 2022. The increase in unrealized losses relative to the prior quarter was the result of increases in market yields for investment securities. At September 30, 2023, 54% of the market value of the securities portfolio was unencumbered and could be used to provide additional liquidity, if needed.

Deposits amounted to $2.6 billion at September 30, 2023, representing declines of $80.7 million, or 12.2% annualized, from June 30, 2023 and $119.6 million, or 4.4%, compared to September 30, 2022.

Borrowings from the Federal Home Loan Bank of Atlanta (“FHLB”) totaled $85.0 million at September 30, 2023 compared to $25.0 million at June 30, 2023. The Company had no FHLB borrowings at September 30, 2022. The Company’s remaining credit availability from the FHLB was $677.6 million as of September 30, 2023, $446.5 million of which could be accessed without pledging additional collateral.

The Company continues to be well-capitalized as defined by regulators, with tangible common equity to tangible assets of 7.98% at September 30, 2023 compared to 7.94% at June 30, 2023 and compared to 7.59% at September 30, 2022 (non-GAAP). The Company’s preliminary common equity Tier 1, Tier 1, total, and Tier 1 leverage capital ratios were 11.77%, 12.89%, 13.91% and 10.61%, respectively, at September 30, 2023.

ABOUT AMERICAN NATIONAL

American National is a multi-state bank holding company with total assets of approximately $3.1 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 $1.2 billion of trust, investment and brokerage assets in its Wealth 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 in the United States (“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

Certain statements in this release may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, statements regarding anticipated changes in the interest rate environment, future economic conditions and the impacts of current economic uncertainties, and projections, predictions, expectations, or beliefs about future events or results, or otherwise are not statements of historical fact. Such forward-looking statements are based on certain assumptions as of the time they are made, and are inherently subject to known and unknown risks and uncertainties, some of which cannot be predicted or quantified, that may cause actual results, performance or achievements to be materially different from those expressed or implied by such forward-looking statements. Such statements are often characterized by the use of qualified words (and their derivatives) such as “expect,” “believe,” “estimate,” “plan,” “project,” “anticipate,” “intend,” “will,” “may,” “view,” “seek to,” “opportunity,” “potential,” “continue,” “confidence” or words of similar meaning, or other statements concerning opinions or judgment of our management about future events. Although we believe that our expectations with respect to forward-looking statements are based upon reasonable assumptions within the bounds of our existing knowledge of our business and operations, there can be no assurance that actual future results, performance, or achievements of, or trends affecting, us will not differ materially from any projected future results, performance, achievements or trends expressed or implied by such forward-looking statements. Actual future results, performance, achievements or trends may differ materially from historical results or those anticipated depending on a variety of factors, including, but not limited to, the following: the businesses of American National and Atlantic Union Bankshares Corporation (“Atlantic Union”) may not be combined successfully, or such combination may take longer, be more difficult, time-consuming or costly to accomplish than expected; the expected growth opportunities or cost savings from the merger with Atlantic Union may not be fully realized or may take longer to realize than expected; deposit attrition, operating costs, customer losses and business disruption prior to and following the merger with Atlantic Union, including adverse effects on relationships with employees and customers, may be greater than expected; the regulatory and shareholder approvals required for the merger with Atlantic Union may not be obtained; the level of inflation; financial market volatility including the level of interest rates, could affect the values of financial instruments and the amount of net interest income earned; the ability to maintain adequate liquidity by retaining deposit customers and secondary funding sources, especially if the Company's or banking industry's reputation becomes damaged; the adequacy of the level of the Company’s allowance for credit losses, the amount of credit loss provisions required in future periods, and the failure of assumptions underlying the allowance for credit losses; general economic or business conditions, either nationally or in the market areas in which the Company does business, may be less favorable than expected, resulting in deteriorating credit quality, reduced demand for credit, or a weakened ability to generate deposits; competition among financial institutions may increase, and competitors may have greater financial resources and develop products and technology that enable those competitors to compete more successfully than the Company; businesses that the Company is engaged in may be adversely affected by legislative or regulatory changes, including changes in accounting standards and tax laws; the ability to recruit and retain key personnel; cybersecurity threats or attacks, the implementation of new technologies, and the ability to develop and maintain reliable and secure electronic systems; the effects of climate change, natural disasters, and extreme weather events; geopolitical conditions, including acts or threats of terrorism and/or military conflicts, or actions taken by the U.S. or other governments in response to acts of threats or terrorism and/or military conflicts, negatively impacting business and economic conditions in the U.S. and abroad; the impact of health emergencies, epidemics or pandemics; risks related to environmental, social and governance practices; risks associated with mergers, acquisitions, and other expansion activities; and other factors described from time to time in the Company’s reports (such as our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K) filed with the Securities and Exchange Commission. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. The Company does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions which may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

Contact:
 
 Jeffrey W. Farrar
 Senior Executive Vice President, COO & CFO
 (434)773-2274
 farrarj@amnb.com



American National Bankshares Inc.
Consolidated Balance Sheets
(Dollars in thousands, except per share data)
Unaudited
    
 September 30
  2023   2022 
Assets   
Cash and due from banks$34,646  $35,437 
Interest-bearing deposits in other banks 40,622   59,541 
Securities available for sale, at fair value 543,915   641,884 
Restricted stock, at cost 12,936   8,383 
Loans held for sale 1,981   2,852 
Loans, net of deferred fees and costs 2,273,455   2,119,415 
Less allowance for credit losses - loans (25,124)  (19,189)
Net Loans 2,248,331   2,100,226 
Premises and equipment, net 32,167   34,686 
Assets held-for-sale 1,131   - 
Other real estate owned, net -   143 
Goodwill 85,048   85,048 
Core deposit intangibles, net 2,550   3,667 
Bank owned life insurance 30,197   29,480 
Other assets 57,734   47,973 
    
Total assets$3,091,258  $3,049,320 
    
    
Liabilities   
Demand deposits -- noninterest-bearing$848,017  $1,044,803 
Demand deposits -- interest-bearing 484,511   509,017 
Money market deposits 659,899   612,600 
Savings deposits 214,955   282,093 
Time deposits 363,862   242,357 
Total deposits 2,571,244   2,690,870 
Customer repurchase agreements 60,035   625 
Other short-term borrowings 85,000   - 
Long-term borrowings 28,410   28,308 
Other liabilities 19,291   16,127 
Total liabilities 2,763,980   2,735,930 
    
Shareholders' equity   
Preferred stock, $5 par value, 2,000,000 shares authorized,   
none outstanding -   - 
Common stock, $1 par value, 20,000,000 shares authorized,   
10,629,111 shares outstanding at September 30, 2023 and  
10,608,750 shares outstanding at September 30, 2022 10,544   10,533 
Capital in excess of par value 142,392   141,694 
Retained earnings 231,962   218,814 
Accumulated other comprehensive loss, net (57,620)  (57,651)
Total shareholders' equity 327,278   313,390 
    
Total liabilities and shareholders' equity$3,091,258  $3,049,320 
    


American National Bankshares Inc.
Consolidated Statements of Income
(Dollars in thousands, except per share data)
Unaudited
          
 For the Three Months Ended For the Nine Months Ended
 9/30/23 6/30/23 9/30/22 9/30/23 9/30/22
Interest and Dividend Income:         
Interest and fees on loans$27,512  $26,052  $21,160  $78,476  $59,024 
Interest and dividends on securities:         
Taxable 2,564   2,607   2,664   7,855   7,344 
Tax-exempt 24   26   110   115   297 
Dividends 163   196   118   529   347 
Other interest income 797   550   1,099   1,818   2,076 
Total interest and dividend income 31,060   29,431   25,151   88,793   69,088 
          
Interest Expense:         
Interest on deposits 9,057   6,607   741   19,149   1,956 
Interest on short-term borrowings 938   1,282   11   3,427   26 
Interest on long-term borrowings 402   394   392   1,183   1,156 
Total interest expense 10,397   8,283   1,144   23,759   3,138 
          
Net Interest Income 20,663   21,148   24,007   65,034   65,950 
Provision for (recovery of) credit losses (538)  268   615   59   438 
          
Net Interest Income After Provision for         
(Recovery of) Credit Losses 21,201   20,880   23,392   64,975   65,512 
          
Noninterest Income:         
Wealth management income 1,736   1,726   1,603   5,030   4,999 
Service charges on deposit accounts 565   564   681   1,685   2,079 
Interchange fees 1,162   1,187   1,013   3,458   2,990 
Other fees and commissions 169   158   233   493   699 
Mortgage banking income 293   197   388   634   1,490 
Securities losses, net -   -   -   (68)  - 
Income from Small Business Investment Companies 453   108   501   888   1,672 
Income from insurance investments 128   120   100   594   644 
Losses on premises and equipment, net -   (8)  (2)  (113)  (82)
Other 268   303   243   900   706 
Total noninterest income 4,774   4,355   4,760   13,501   15,197 
          
Noninterest Expense:         
Salaries and employee benefits 9,229   8,300   9,618   26,701   26,936 
Occupancy and equipment 1,601   1,631   1,514   4,676   4,576 
FDIC assessment 354   492   227   1,053   694 
Bank franchise tax 520   520   488   1,550   1,452 
Core deposit intangible amortization 262   272   310   817   960 
Data processing 821   939   818   2,611   2,446 
Software 470   476   362   1,391   1,088 
Other real estate owned, net (10)  -   3   (10)  4 
Merger related expenses 1,702   -   -   1,702   - 
Other 3,394   3,552   3,108   9,683   9,096 
Total noninterest expense 18,343   16,182   16,448   50,174   47,252 
          
Income Before Income Taxes 7,632   9,053   11,704   28,303   33,457 
Income Taxes 1,844   1,913   2,448   6,218   7,062 
Net Income$5,788  $7,140  $9,256  $22,085  $26,395 
          
Net Income Per Common Share:         
Basic$0.54  $0.67  $0.87  $2.08  $2.47 
Diluted$0.54  $0.67  $0.87  $2.08  $2.47 
Weighted Average Common Shares Outstanding:         
Basic 10,625,709   10,623,571   10,640,952   10,626,599   10,694,096 
Diluted 10,625,709   10,624,859   10,643,073   10,627,732   10,696,409 
          


American National Bankshares Inc.         
Financial Highlights         
Unaudited           
             
 (Dollars in thousands, except per share data)      At or for the Nine Months
    3rd Qtr 2nd Qtr 3rd Qtr Ended September 30,
     2023   2023   2022   2023   2022 
             
EARNINGS          
Interest income$ 31,060  $29,431  $25,151  $ 88,793  $69,088 
Interest expense 10,397   8,283   1,144   23,759   3,138 
Net interest income 20,663   21,148   24,007   65,034   65,950 
Provision for (recovery of) credit losses (538)  268   615   59   438 
Noninterest income 4,774   4,355   4,760   13,501   15,197 
Noninterest expense 18,343   16,182   16,448   50,174   47,252 
Income taxes  1,844   1,913   2,448   6,218   7,062 
Net income  5,788   7,140   9,256   22,085   26,395 
             
PER COMMON SHARE          
Net income per share - basic$ 0.54  $0.67  $0.87  $ 2.08  $2.47 
Net income per share - diluted 0.54   0.67   0.87   2.08   2.47 
Cash dividends paid 0.30   0.30   0.28   0.90   0.84 
Book value per share 30.79   30.88   29.54   30.79   29.54 
Book value per share - tangible (a) 22.55   22.61   21.18   22.55   21.18 
Closing market price 37.94   28.98   31.95   37.94   31.95 
             
FINANCIAL RATIOS         
Return on average assets 0.75%  0.93%  1.17%  0.96%  1.08%
Return on average common equity 7.02   8.61   11.21   8.97   10.42 
Return on average tangible common equity (a) 9.91   12.07   15.74   12.61   14.57 
Average common equity to average assets 10.68   10.82   10.42   10.70   10.35 
Tangible common equity to tangible assets (a) 7.98   7.94   7.59   7.98   7.59 
Net interest margin, taxable equivalent 2.76   2.88   3.20   2.94   2.86 
Efficiency ratio (a) 64.31   62.24   55.98   60.43   56.87 
Effective tax rate 24.16   21.13   20.92   21.97   21.11 
             
PERIOD-END BALANCES         
Securities $ 556,851  $570,039  $650,267  $ 556,851  $650,267 
Loans held for sale 1,981   4,048   2,852   1,981   2,852 
Loans, net  2,273,455   2,244,464   2,119,415   2,273,455   2,119,415 
Goodwill and other intangibles 87,598   87,860   88,715   87,598   88,715 
Assets   3,091,258   3,113,163   3,049,320   3,091,258   3,049,320 
Assets - tangible (a) 3,003,660   3,025,303   2,960,605   3,003,660   2,960,605 
Interest-bearing deposits 1,723,227   1,767,258   1,646,067   1,723,227   1,646,067 
Noninterest bearing demand deposits 848,017   884,658   1,044,803   848,017   1,044,803 
Customer repurchase agreements 60,035   62,886   625   60,035   625 
Other short-term borrowings 85,000   25,000   -   85,000   - 
Long-term borrowings 28,410   28,384   28,308   28,410   28,308 
Shareholders' equity 327,278   328,090   313,390   327,278   313,390 
Shareholders' equity - tangible (a) 239,680   240,230   224,675   239,680   224,675 
             
AVERAGE BALANCES         
Securities (b) $ 634,313  $652,439  $728,535  $ 654,737  $722,025 
Loans held for sale 2,488   1,984   3,915   1,701   3,998 
Loans, net  2,248,675   2,217,859   2,064,088   2,217,898   2,012,905 
Interest-earning assets 2,939,234   2,912,623   3,005,292   2,920,781   3,083,815 
Goodwill and other intangibles 87,758   88,036   88,886   88,033   89,202 
Assets   3,088,231   3,065,449   3,170,328   3,070,314   3,260,636 
Assets - tangible (a) 3,000,473   2,977,413   3,081,442   2,982,281   3,171,434 
Interest-bearing deposits 1,758,994   1,669,076   1,723,931   1,681,311   1,817,581 
Noninterest bearing demand deposits 872,488   910,911   1,051,585   917,113   1,027,942 
Customer repurchase agreements 65,550   62,419   18,719   45,071   31,858 
Other short-term borrowings 12,935   45,934   -   52,142   - 
Subordinated debt 28,393   28,368   28,293   28,368   28,268 
Shareholders' equity 329,812   331,821   330,318   328,400   337,633 
Shareholders' equity - tangible (a) 242,054   243,785   241,432   240,367   248,431 
             
American National Bankshares Inc.         
Financial Highlights         
Unaudited           
             
 (Dollars in thousands, except per share data)      At or for the Nine Months
    3rd Qtr 2nd Qtr 3rd Qtr Ended September 30,
     2023   2023   2022   2023   2022 
CAPITAL            
Weighted average shares outstanding - basic 10,625,709   10,623,571   10,640,952   10,626,599   10,694,096 
Weighted average shares outstanding - diluted 10,625,709   10,624,859   10,643,073   10,627,732   10,696,409 
             
COMMON STOCK REPURCHASE PROGRAM         
Total shares of common stock repurchased
 -   13,688   60,104   34,131   203,709 
Average price paid per share of common stock
$ -  $26.99  $34.26   30.58   36.26 
             
ALLOWANCE FOR CREDIT LOSSES - LOANS         
Beginning balance$ 25,342  $24,861  $18,505  $ 19,555  $18,678 
Day 1 Impact of CECL adoption -   -   -   5,192   - 
Provision for (recovery of) credit losses (533)  219   615   15   438 
Charge-offs  (19)  (15)  (31)  (429)  (185)
Recoveries  334   277   100   791   258 
Ending balance$ 25,124  $25,342  $19,189  $ 25,124  $19,189 
             
LOANS           
Construction and land development$ 269,840  $240,934  $210,500  $ 269,840  $210,500 
Commercial real estate - owner occupied 413,151   416,397   423,678   413,151   423,678 
Commercial real estate - non-owner occupied 803,440   833,084   764,963   803,440   764,963 
Residential real estate 366,557   351,855   324,468   366,557   324,468 
Home equity  91,393   93,594   93,659   91,393   93,659 
Commercial and industrial 322,209   301,778   295,541   322,209   295,541 
Consumer  6,865   6,822   6,606   6,865   6,606 
Total  $ 2,273,455  $2,244,464  $2,119,415  $ 2,273,455  $2,119,415 
             
NONPERFORMING ASSETS AT PERIOD-END         
Nonperforming loans:         
90 days past due and accruing$ -  $-  $18  $ -  $18 
Nonaccrual  3,740   1,024   1,171   3,740   1,171 
Other real estate owned and repossessions -   80   196   -   196 
Nonperforming assets$ 3,740  $1,104  $1,385  $ 3,740  $1,385 
             
ASSET QUALITY RATIOS         
Allowance for credit losses - loans to total loans 1.11%  1.13%  0.91%  1.11%  0.91%
Allowance for credit losses - loans to         
nonperforming loans 671.76   2,474.80   1,613.88   671.76   1,613.88 
Nonperforming assets to total assets 0.12   0.04   0.05   0.12   0.05 
Nonperforming loans to total loans 0.16   0.05   0.06   0.16   0.06 
Annualized net charge-offs (recoveries) to average loans   (0.06)  (0.05)  (0.01)  (0.02)  0.00 
to average loans         
             
             
OTHER DATA          
Fiduciary assets at period-end (c) (d)$ 774,126  $782,659  $693,153  $ 774,126   693,153 
Retail brokerage assets at period-end (c) (d)$ 413,956  $426,565  $376,891  $ 413,956   376,891 
Number full-time equivalent employees (e) 358   365   363   358   363 
Number of full service offices 26   26   26   26   26 
Number of loan production offices 1   1   1   1   1 
Number of ATMs 34   34   34   34   34 
             
             
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.         



   American National Bankshares Inc.
   Net Interest Income Analysis
   For the Three Months Ended September 30, 2023 and 2022
   (Dollars in thousands)
   Unaudited
                           
             Interest        
     Average Balance  Income/Expense (a) Yield/Rate
                           
     2023   2022   2023   2022   2023   2022 
Assets:                        
                           
Total loans (b)$2,251,163  $2,068,003  $27,559  $21,191   4.81%  4.09%
                           
Securities:                       
 Taxable 630,034   708,076   2,727   2,782   1.73   1.56 
 Tax exempt 4,279   20,459   30   138   2.85   2.70 
  Total securities 634,313   728,535   2,757   2,920   1.74   1.60 
                           
Deposits in other banks 53,758   208,754   797   1,099   5.88   2.09 
                           
 Total interest-earning assets 2,939,234   3,005,292   31,113   25,210   4.17   3.35 
                           
Non-earning assets 148,997   165,036                 
  Total assets$3,088,231  $3,170,328                 
                           
Liabilities and Stockholders' Equity:                       
                           
Deposits:                       
 Demand$489,126  $522,021   983   34   0.80   0.03 
 Savings and money market 923,732   950,339   5,448   368   2.34   0.15 
 Time  346,136   251,571   2,626   339   3.00   0.53 
  Total deposits 1,758,994   1,723,931   9,057   741   2.04   0.17 
                           
Customer repurchase agreements 65,550   18,719   759   11   4.60   0.23 
Other short-term borrowings 12,935   -   179   -   5.42   - 
Long-term borrowings 28,393   28,293   402   392   5.55   5.54 
 Total interest-bearing                       
  liabilities 1,865,872   1,770,943   10,397   1,144   2.21   0.26 
                           
Noninterest bearing demand deposits 872,488   1,051,585                 
Other liabilities 20,059   17,482                 
Shareholders' equity 329,812   330,318                 
  Total liabilities and                       
   shareholders' equity$3,088,231  $3,170,328                 
                           
Interest rate spread                 1.96%  3.09%
Net interest margin                 2.76%  3.20%
                           
Net interest income (taxable equivalent basis)      20,716   24,066         
Less: Taxable equivalent adjustment (c)         53   59         
Net interest income        $20,663  $24,007         
                           
                           
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 and loans held for sale 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.
   Net Interest Income Analysis
   For the Nine Months Ended September 30, 2023 and 2022
   (Dollars in thousands)
   Unaudited
                           
             Interest        
     Average Balance  Income/Expense (a) Yield/Rate
                           
     2023   2022   2023   2022   2023   2022 
Assets:                        
                           
Total loans (b)$2,219,599  $2,016,903  $78,612  $59,122   4.68%  3.91%
                           
Securities:                       
 Taxable 647,688   703,048   8,384   7,691   1.73   1.46 
 Tax exempt 7,049   18,977   146   375   2.76   2.64 
  Total securities 654,737   722,025   8,530   8,066   1.74   1.49 
                           
Deposits in other banks 46,445   344,887   1,818   2,076   5.23   0.80 
                           
 Total interest-earning assets 2,920,781   3,083,815   88,960   69,264   4.03   3.00 
                           
Non-earning assets 149,533   176,821                 
  Total assets$3,070,314  $3,260,636                 
                           
Liabilities and Stockholders' Equity:                       
                           
Deposits:                       
 Demand$480,422  $531,301   1,815   107   0.51   0.03 
 Savings and money market 891,035   995,555   11,841   708   1.78   0.10 
 Time  309,854   290,725   5,493   1,141   2.37   0.52 
  Total deposits 1,681,311   1,817,581   19,149   1,956   1.52   0.14 
                           
Customer repurchase agreements 45,071   31,858   1,519   26   4.50   0.11 
Other short-term borrowings 52,142   -   1,908   -   4.83   - 
Long-term borrowings 28,368   28,268   1,183   1,156   5.50   5.45 
 Total interest-bearing                       
  liabilities 1,806,892   1,877,707   23,759   3,138   1.75   0.22 
                           
Noninterest bearing demand deposits 917,113   1,027,942                 
Other liabilities 17,909   17,354                 
Shareholders' equity 328,400   337,633                 
  Total liabilities and                       
   shareholders' equity$3,070,314  $3,260,636                 
                           
Interest rate spread                 2.28%  2.78%
Net interest margin                 2.94%  2.86%
                           
Net interest income (taxable equivalent basis)      65,201   66,126         
Less: Taxable equivalent adjustment (c)         167   176         
Net interest income        $65,034  $65,950         
                           
                           
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 and loans held for sale 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 Nine Months
    3rd Qtr 2nd Qtr 3rd Qtr Ended September 30,
     2023   2023   2022   2023   2022 
EFFICIENCY RATIO         
Noninterest expense
$ 18,343  $16,182  $16,448  $ 50,174  $47,252 
Add: loss on sale of OREO 13   -   -   13   - 
Subtract: core deposit intangible amortization   (262)  (272)  (310)  (817)  (960)
Subtract: merger related expenses (1,702)  -   -   (1,702)  - 
    $ 16,392  $15,910  $16,138  $ 47,668  $46,292 
             
Net interest income$ 20,663  $21,148  $24,007  $ 65,034  $65,950 
Tax equivalent adjustment 53   51   59   167   176 
Noninterest income 4,774   4,355   4,760   13,501   15,197 
Add: loss on securities -   -   -   68   - 
Add: loss on premises and equipment -   8   2   113   82 
    $ 25,490  $25,562  $28,828  $ 78,883  $81,405 
             
Efficiency ratio  64.31%  62.24%  55.98%  60.43%  56.87%
             
TAX EQUIVALENT NET INTEREST INCOME        
Non-GAAP measures:         
Interest income - loans$ 27,559  $26,096  $21,191  $ 78,612  $59,122 
Interest income - investments and other 3,554   3,386   4,019   10,348   10,142 
Interest expense - deposits (9,057)  (6,607)  (741)  (19,149)  (1,956)
Interest expense - customer repurchase         
agreements  (759)  (694)  (11)  (1,519)  (26)
Interest expense - other short-term borrowings    (179)  (588)  -   (1,908)  - 
Interest expense - long-term borrowings (402)  (394)  (392)  (1,183)  (1,156)
Total net interest income$ 20,716  $21,199  $24,066  $ 65,201  $66,126 
Less non-GAAP measures:         
Tax benefit on nontaxable interest - loans (47)  (44)  (31)  (136)  (98)
Tax benefit on nontaxable interest - securities   (6)  (7)  (28)  (31)  (78)
GAAP measures$ 20,663  $21,148  $24,007  $ 65,034  $65,950 
             
NET INTEREST MARGIN         
Net interest margin (FTE) (non-GAAP) 2.76%  2.88%  3.20%  2.94%  2.86%
Net interest margin (GAAP) 2.75%  2.87%  3.19%  2.92%  2.84%
             
RETURN ON AVERAGE TANGIBLE EQUITY        
Return on average equity (GAAP basis) 7.02%  8.61%  11.21%  8.97%  10.42%
Impact of excluding average goodwill         
and other intangibles 2.89   3.46   4.53   3.64   4.15 
Return on average tangible equity         
(non-GAAP)  9.91%  12.07%  15.74%  12.61%  14.57%
             
TANGIBLE EQUITY TO TANGIBLE ASSETS         
Equity to assets ratio (GAAP basis) 10.59%  10.54%  10.28%  10.59%  10.28%
Impact of excluding goodwill and         
other intangibles (2.61)  (2.60)  (2.69)  (2.61)  (2.69)
Tangible equity to tangible assets ratio         
(non-GAAP) 7.98%
  7.94%  7.59%  7.98%  7.59%
             
TANGIBLE BOOK VALUE         
Book value per share (GAAP basis)$ 30.79  $30.88  $29.54  $ 30.79  $29.54 
Impact of excluding goodwill and         
other intangibles (8.24)  (8.27)  (8.36)  (8.24)  (8.36)
Tangible book value per share         
(non-GAAP) $ 22.55  $22.61  $21.18  $ 22.55  $21.18