American National Bankshares Reports Fourth Quarter and Full Year 2023 Earnings


DANVILLE, Va., Jan. 23, 2024 (GLOBE NEWSWIRE) -- American National Bankshares Inc. (NASDAQ: AMNB) (“American National” or the “Company”) today reported fourth quarter 2023 earnings of $4.0 million, or $0.38 per diluted common share. Those results compare to earnings of $8.0 million, or $0.76 per diluted common share, during the same quarter in the prior year, and earnings of $5.8 million, or $0.54 per diluted common share, for the third quarter of 2023. Earnings for the twelve months ended December 31, 2023, were $26.2 million, or $2.46 per diluted common share, compared to $34.4 million, or $3.23 per diluted common share, for the same period of 2022. Earnings for the fourth quarter and twelve months ended December 31, 2023, reflect the impact of merger related expenses of $875 thousand and $2.6 million in connection with the Company’s pending merger with Atlantic Union Bankshares Corporation (“Atlantic Union”).

President and Chief Executive Officer, Jeffrey V. Haley, commented, “As we await regulatory approval for our combination with Atlantic Union, we can reflect on another solid year of balance sheet growth and operating earnings performance (adjusting for merger related expenses) for American National. I am especially grateful for our customers’, employees’ and shareholders’ support during this transitional period, and am excited for the future of the combined organization.”

NET INTEREST INCOME

Net interest income for the fourth quarter of 2023 decreased by $1.1 million, or 5.4%, to $19.5 million compared to $20.7 million for the third quarter of 2023. The fourth quarter of 2023 compared to the same quarter of 2022 reflected a decrease of $4.7 million, or 19.5%, from $24.3 million. The full-time equivalent net interest margin for the quarter was 2.60%, down from 2.76% in the prior quarter and 3.33% in the same quarter a year ago (non-GAAP). The margin contraction relative to the previous quarter of 2023 resulted from funding costs increasing more than earning asset yields. The yield on average earning assets increased 3 basis points quarter-over-quarter, while the cost of average interest-bearing liabilities rose 27 basis points due to higher rates paid on interest-bearing deposits and various borrowing sources. Similarly, the 51 basis point increase in average earning asset yields was more than offset by the 186 basis point increase in the cost of average interest-bearing liabilities when comparing the fourth quarter of 2023 to the same quarter of 2022.

ASSET QUALITY

Nonperforming assets (“NPAs”) totaled $5.8 million as of December 31, 2023, up $2.1 million compared to $3.7 million as of September 30, 2023, and up $4.4 million compared to $1.4 million at December 31, 2022. NPAs as a percentage of total assets were 0.19% at December 31, 2023, 0.12% at September 30, 2023, and 0.05% at December 31, 2022. The Company recorded a provision for credit losses for the fourth quarter of 2023 of $437 thousand compared to recovery of credit losses of $538 thousand in the previous quarter and a provision of $1.2 million in the fourth quarter of the previous year. The fourth quarter of 2023 reflected net loan charge-offs of $269 thousand compared to $315 thousand of net recoveries in the third quarter, primarily accounting for the change quarter-over-quarter. The decrease in provision in the fourth quarter of 2023 compared to the same quarter of 2022 was the result of continued improvement in economic conditions, ongoing low charge-off and delinquency rates, and overall strong asset quality metrics.

The allowance for credit losses - loans was $25.3 million at December 31, 2023, compared to $25.1 million at September 30, 2023, and $19.6 million at December 31, 2022. Annualized net charge-offs (recoveries) as a percentage of average loans outstanding were 0.05% for the fourth quarter of 2023 compared to (0.06%) in the third quarter of 2023 and 0.15% in the fourth quarter of 2022. The allowance as a percentage of loans held for investment was 1.10% at December 31, 2023, compared to 1.11% at September 30, 2023, and 0.89% at December 31, 2022.

NONINTEREST INCOME

Noninterest income increased $61 thousand, or 1.3%, to $4.8 million for the quarter ended December 31, 2023, from the prior quarter and $1.2 million, or 33.9%, from $3.6 million in the same quarter in the prior year. The increase in the fourth quarter of 2023 compared to the third quarter was increased interchange income on deposit accounts and other operating income partially offset by decreases in income from equity investments in small business investment companies (“SBIC”). The increase as compared to the fourth quarter of the previous year was primarily due to increased income from equity investments in SBIC, wealth management revenues and other operating income.

NONINTEREST EXPENSE

Noninterest expenses for the fourth quarter of 2023 amounted to $17.9 million, down $466 thousand, or 2.5%, when compared to $18.3 million for the previous quarter and up $1.0 million, or 6.2%, from $16.8 million for the same quarter in the previous year. The decrease in the fourth quarter compared to the third quarter of 2023 was primarily the result of increased salaries and employee benefit costs of $426 thousand substantially offset by a decrease in merger related expenses of $828 thousand. The increase from the same quarter of 2022 was primarily due to fourth quarter 2023 merger related expenses of $875 thousand.

INCOME TAXES

The effective tax rate for the three months ended December 31, 2023, was 32.9%, compared to 24.2% for the prior quarter and 18.9% for the same quarter in the prior year. The increase in the fourth quarter of 2023 compared to the third quarter of 2023 and to the same quarter of 2022, is primarily the result of the non-deductibility of merger related expenses for tax purposes. Excluding merger related expenses, the effective tax rate fluctuations are attributable to changes in pre-tax earnings and the levels of permanent tax differences.

BALANCE SHEET

Total assets at December 31, 2023 were $3.1 billion, essentially flat to September 30, 2023, and an increase of $24.8 million, or 0.81%, from December 31, 2022.

At December 31, 2023, loans held for investment (net of deferred fees and costs) were $2.3 billion, an increase of $14.9 million, or 0.65%, from September 30, 2023. Loans held for investment (net of deferred fees and costs) increased $101.9 million, or 4.7%, from December 31, 2022.

Investment securities available for sale amounted to $521.5 million at December 31, 2023, a decrease of $22.4 million, or 4.1%, compared to September 30, 2023, and a decrease of $86.5 million, or 14.2%, compared to December 31, 2022.

Deposits amounted to $2.6 billion at December 31, 2023, an increase of $35.3 million, or 1.37%, from September 30, 2023, and an increase of $10.2 million, or 0.4%, compared to December 31, 2022.

The Company continues to be well-capitalized as defined by regulators, with tangible common equity to tangible assets of 8.52% at December 31, 2023, compared to 7.98% at September 30, 2023 and compared to 7.82% at December 31 2022 (non-GAAP). The Company’s preliminary common equity Tier 1, Tier 1, total, and Tier 1 leverage capital ratios were 11.70%, 12.81%, 13.82%, and 10.61%, respectively, at December 31, 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 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 
      
  December 31, 
   2023   2022  
Assets     
Cash and due from banks $31,500  $32,207  
Interest-bearing deposits in other banks  35,219   41,133  
Securities available for sale, at fair value  521,519   608,062  
Restricted stock, at cost  10,614   12,651  
Loans held for sale  1,279   1,061  
Loans, net of deferred fees and costs  2,288,320   2,186,449  
Less allowance for credit losses - loans  (25,273)  (19,555) 
Net Loans  2,263,047   2,166,894  
Premises and equipment, net  31,809   32,900  
Assets held-for-sale  1,131   1,382  
Other real estate owned, net  -   27  
Goodwill  85,048   85,048  
Core deposit intangibles, net  2,298   3,367  
Bank owned life insurance  30,409   29,692  
Other assets  76,844   51,478  
      
Total assets $3,090,717  $3,065,902  
      
      
Liabilities     
Demand deposits -- noninterest-bearing $805,584  $1,010,602  
Demand deposits -- interest-bearing  516,255   484,037  
Money market deposits  706,986   574,330  
Savings deposits  205,622   269,426  
Time deposits  372,066   257,933  
Total deposits  2,606,513   2,596,328  
Customer repurchase agreements  59,348   370  
Other short-term borrowings  35,000   100,531  
Long-term borrowings  28,435   28,334  
Other liabilities  18,253   19,165  
Total liabilities  2,747,549   2,744,728  
      
Shareholders' equity     
Preferred stock, $5 par value, 2,000,000 shares authorized,    
none outstanding  -   -  
Common stock, $1 par value, 20,000,000 shares authorized,    
10,633,409 shares outstanding at December 31, 2023 and    
10,608,781 shares outstanding at December 31, 2022  10,551   10,538  
Capital in excess of par value  142,834   141,948  
Retained earnings  232,847   223,664  
Accumulated other comprehensive loss, net  (43,064)  (54,976) 
Total shareholders' equity  343,168   321,174  
      
Total liabilities and shareholders' equity $3,090,717  $3,065,902  
      
      


American National Bankshares Inc.  
Consolidated Statements of Income 
(Dollars in thousands, except per share data) 
Unaudited 
            
  For the Three Months Ended For the Twelve Months Ended 
  12/31/23 9/30/23 12/31/22 12/31/23 12/31/22 
Interest and Dividend Income:           
Interest and fees on loans $27,995  $27,512  $23,544  $106,471  $82,568  
Interest and dividends on securities:           
Taxable  2,503   2,564   2,721   10,358   10,065  
Tax-exempt  24   24   110   139   407  
Dividends  147   163   126   676   473  
Other interest income  767   797   415   2,585   2,491  
Total interest and dividend income  31,436   31,060   26,916   120,229   96,004  
            
Interest Expense:           
Interest on deposits  9,693   9,057   1,597   28,843   3,553  
Interest on short-term borrowings  1,767   938   633   5,192   659  
Interest on long-term borrowings  429   402   398   1,612   1,554  
Total interest expense  11,889   10,397   2,628   35,647   5,766  
            
Net Interest Income  19,547   20,663   24,288   84,582   90,238  
Provision for (recovery of) credit losses  437   (538)  1,159   495   1,597  
            
Net Interest Income After Provision for           
(Recovery of) Credit Losses  19,110   21,201   23,129   84,087   88,641  
            
Noninterest Income:           
Wealth management income  1,721   1,736   1,522   6,751   6,521  
Service charges on deposit accounts  531   565   597   2,216   2,676  
Interchange fees  1,316   1,162   1,117   4,775   4,107  
Other fees and commissions  157   169   207   650   906  
Mortgage banking income  190   293   176   824   1,666  
Securities losses, net  -   -   -   (68)  -  
Income (loss) from Small Business Investment Companies 44   453   (263)  932   1,409  
Income from insurance investments  171   128   103   764   747  
Losses on premises and equipment, net  (42)  -   (146)  (155)  (228) 
Other  747   268   297   1,647   1003  
Total noninterest income  4,835   4,774   3,610   18,336   18,807  
            
Noninterest Expense:           
Salaries and employee benefits  9,655   9,229   9,446   36,356   36,382  
Occupancy and equipment  1,543   1,601   1,499   6,219   6,075  
FDIC assessment  351   354   209   1,404   903  
Bank franchise tax  502   520   501   2,052   1,953  
Core deposit intangible amortization  252   262   300   1,069   1,260  
Data processing  954   821   864   3,565   3,310  
Software  439   470   417   1,829   1,505  
Other real estate owned, net  -   (10)  (1)  (10)  3  
Merger related expenses  875   1,702   -   2,577   -  
Other  3,306   3,394   3,599   12,989   12,695  
Total noninterest expense  17,877   18,343   16,834   68,050   64,086  
            
Income Before Income Taxes  6,068   7,632   9,905   34,373   43,362  
Income Taxes  1,995   1,844   1,872   8,214   8,934  
Net Income $4,073  $5,788  $8,033  $26,159  $34,428  
            
Net Income Per Common Share:           
Basic $0.38  $0.54  $0.76  $2.46  $3.23  
Diluted $0.38  $0.54  $0.76  $2.46  $3.23  
Weighted Average Common Shares Outstanding:           
Basic  10,631,001   10,625,709   10,607,678   10,627,709   10,672,314  
Diluted  10,631,001   10,625,709   10,609,937   10,628,559   10,674,613  


American National Bankshares Inc.          
Financial Highlights          
Unaudited          
           
(Dollars in thousands, except per share data)      At or for the Twelve Months 
 4th Qtr 3rd Qtr 4th Qtr Ended December 31,  
  2023   2023   2022   2023   2022  
           
EARNINGS          
Interest income$ 31,436  $31,060  $26,916  $ 120,229  $96,004  
Interest expense 11,889   10,397   2,628   35,647   5,766  
Net interest income 19,547   20,663   24,288   84,582   90,238  
Provision for (recovery of) credit losses 437   (538)  1,159   495   1,597  
Noninterest income 4,835   4,774   3,610   18,336   18,807  
Noninterest expense 17,877   18,343   16,834   68,050   64,086  
Income taxes 1,995   1,844   1,872   8,214   8,934  
Net income 4,073   5,788   8,033   26,159   34,428  
           
PER COMMON SHARE           
Net income per share - basic$ 0.38  $0.54  $0.76  $ 2.46  $3.23  
Net income per share - diluted 0.38   0.54   0.76   2.46   3.23  
Cash dividends paid 0.30   0.30   0.30   1.20   1.14  
Book value per share 32.27   30.79   30.27   32.27   30.27  
Book value per share - tangible (a) 24.06   22.55   21.94   24.06   21.94  
Closing market price 48.75   37.94   36.93   48.75   36.93  
           
FINANCIAL RATIOS          
Return on average assets 0.53 % 0.75 % 1.05 % 0.85 % 1.07 %
Return on average common equity 4.91   7.02   10.15   7.94   10.36  
Return on average tangible common equity (a) 6.99   9.91   14.50   11.18   14.56  
Average common equity to average assets 10.72   10.68   10.33   10.70   10.35  
Tangible common equity to tangible assets (a) 8.52   7.98   7.82   8.52   7.82  
Net interest margin, taxable equivalent 2.60   2.76   3.33   2.86   2.97  
Efficiency ratio (a) 68.39   64.31   58.82   62.31   57.37  
Effective tax rate 32.88   24.16   18.90   23.90   20.60  
           
PERIOD-END BALANCES          
Securities$ 532,133  $556,851  $620,713  $ 532,133  $620,713  
Loans held for sale 1,279   1,981   1,061   1,279   1,061  
Loans, net 2,288,320   2,273,455   2,186,449   2,288,320   2,186,449  
Goodwill and other intangibles 87,346   87,598   88,415   87,346   88,415  
Assets 3,090,717   3,091,258   3,065,902   3,090,717   3,065,902  
Assets - tangible (a) 3,003,371   3,003,660   2,977,487   3,003,371   2,977,487  
Interest-bearing deposits 1,800,929   1,723,227   1,585,726   1,800,929   1,585,726  
Noninterest bearing demand deposits 805,584   848,017   1,010,602   805,584   1,010,602  
Customer repurchase agreements 59,348   60,035   370   59,348   370  
Other short-term borrowings 35,000   85,000   100,531   35,000   100,531  
Long-term borrowings 28,435   28,410   28,334   28,435   28,334  
Shareholders' equity 343,168   327,278   321,174   343,168   321,174  
Shareholders' equity - tangible (a) 255,822   239,680   232,759   255,822   232,759  
           
AVERAGE BALANCES          
Securities (b)$ 622,686  $634,313  $713,996  $ 646,658  $720,001  
Loans held for sale 2,047   2,488   972   1,788   3,235  
Loans, net 2,276,999   2,248,675   2,168,636   2,232,795   2,052,158  
Interest-earning assets 2,953,377   2,939,234   2,920,992   2,928,996   3,042,775  
Goodwill and other intangibles 87,506   87,758   88,593   87,900   89,048  
Assets 3,098,235   3,088,231   3,066,362   3,077,352   3,211,668  
Assets - tangible (a) 3,010,729   3,000,473   2,977,769   2,989,452   3,122,620  
Interest-bearing deposits 1,744,549   1,758,994   1,609,503   1,697,250   1,765,134  
Noninterest bearing demand deposits 838,105   872,488   1,031,630   897,199   1,028,871  
Customer repurchase agreements 58,312   65,550   704   48,409   24,005  
Other short-term borrowings 75,669   12,935   62,004   58,072   15,629  
Subordinated debt 28,419   28,393   28,318   28,381   28,280  
Shareholders' equity 332,127   329,812   316,697   329,339   332,356  
Shareholders' equity - tangible (a) 244,621   242,054   228,104   241,439   243,308  
           
American National Bankshares Inc.          
Financial Highlights          
Unaudited          
           
(Dollars in thousands, except per share data)      At or for the Twelve Months 
 4th Qtr 3rd Qtr 4th Qtr Ended December 31,  
  2023   2023   2022   2023   2022  
CAPITAL           
Weighted average shares outstanding - basic 10,631,001   10,625,709   10,607,678   10,627,709   10,672,314  
Weighted average shares outstanding - diluted 10,631,001   10,625,709   10,609,937   10,628,559   10,674,613  
           
COMMON STOCK REPURCHASE PROGRAM          
Total shares of common stock repurchased -   -   3,269   34,131   206,978  
Average price paid per share of common stock$ -  $-  $36.44  $ 30.58  $36.26  
           
ALLOWANCE FOR CREDIT LOSSES - LOANS          
Beginning balance$ 25,124  $25,342  $19,189  $ 19,555  $18,678  
Day 1 Impact of CECL adoption -   -   -   5,192   -  
Provision for (recovery of) credit losses 418   (533)  1,159   433   1,597  
Charge-offs (573)  (19)  (834)  (1,002)  (1,019) 
Recoveries 304   334   41   1095   299  
Ending balance$ 25,273  $25,124  $19,555  $ 25,273  $19,555  
           
LOANS          
Construction and land development$ 274,035  $269,840  $197,525  $ 274,035  $197,525  
Commercial real estate - owner occupied 414,321   413,151   418,462   414,321   418,462  
Commercial real estate - non-owner occupied 830,655   803,440   827,728   830,655   827,728  
Residential real estate 369,892   366,557   338,132   369,892   338,132  
Home equity 90,298   91,393   93,740   90,298   93,740  
Commercial and industrial 302,305   322,209   304,247   302,305   304,247  
Consumer 6,814   6,865   6,615   6,814   6,615  
Total$ 2,288,320  $2,273,455  $2,186,449  $ 2,288,320  $2,186,449  
           
NONPERFORMING ASSETS AT PERIOD-END          
Nonperforming loans:          
90 days past due and accruing$ -  $-  $16  $ -  $16  
Nonaccrual 5,814   3,740   1,307   5,814   1,307  
Other real estate owned and repossessions -   -   80   -   80  
Nonperforming assets$ 5,814  $3,740  $1,403  $ 5,814  $1,403  
           
ASSET QUALITY RATIOS          
Allowance for credit losses - loans to total loans 1.10 % 1.11 % 0.89 % 1.10 % 0.89 %
Allowance for credit losses - loans to          
nonperforming loans 434.69   671.76   1,478.08   434.69   1,478.08  
Nonperforming assets to total assets 0.19   0.12   0.05   0.19   0.05  
Nonperforming loans to total loans 0.25   0.16   0.06   0.25   0.06  
Annualized net charge-offs (recoveries) to average loans 0.05   (0.06)  0.15   0.00   0.04  
           
           
           
OTHER DATA          
Fiduciary assets at period-end (c) (d)$ 834,150  $774,126  $736,121  $ 834,150  $736,121  
Retail brokerage assets at period-end (c) (d)$ 395,585  $413,956  $413,235  $ 395,585  $413,235  
Number full-time equivalent employees (e) 352   358   359   352   359  
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 December 31, 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)$2,279,046 $2,169,608 $28,058 $23,585 4.83%4.34%
                    
Securities:                
 Taxable 618,466  693,573  2,650  2,847 1.71 1.64 
 Tax exempt 4,220  20,423  30  137 2.85 2.73 
  Total securities 622,686  713,996  2,680  2,984 1.72 1.67 
                    
Deposits in other banks 51,645  37,388  767  415 5.90 4.40 
                    
 Total interest-earning assets 2,953,377  2,920,992  31,505  26,984 4.20 3.69 
                    
Non-earning assets 144,858  145,370           
  Total assets$3,098,235 $3,066,362           
                    
Liabilities and Stockholders' Equity:                
                    
Deposits:                
 Demand$492,925 $494,572  1,077  95 0.87 0.08 
 Savings and money market 880,402  864,089  5,443  1,041 2.45 0.48 
 Time  371,222  250,842  3,173  461 3.39 0.73 
  Total deposits 1,744,549  1,609,503  9,693  1,597 2.20 0.39 
                    
Customer repurchase agreements 58,312  704  695  - 4.72 0.00 
Other short-term borrowings 75,669  62,004  1,072  633 5.54 4.08 
Long-term borrowings 28,419  28,318  429  398 5.90 5.62 
 Total interest-bearing                
  liabilities 1,906,949  1,700,529  11,889  2,628 2.48 0.62 
                    
Noninterest bearing demand deposits 838,105  1,031,630           
Other liabilities 21,054  17,506           
Shareholders' equity 332,127  316,697           
  Total liabilities and                
   shareholders' equity$3,098,235 $3,066,362           
                    
Interest rate spread            1.72%3.07%
Net interest margin            2.60%3.33%
                    
Net interest income (taxable equivalent basis)     19,616  24,356     
Less: Taxable equivalent adjustment (c)       69  68     
Net interest income      $19,547 $24,288     
                    
                    
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 Twelve Months Ended December 31, 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)$2,234,583 $2,055,393 $106,670 $82,708 4.72%4.02%
                    
Securities:                
 Taxable 640,322  700,660  11,034  10,538 1.72 1.50 
 Tax exempt 6,336  19,341  176  511 2.78 2.66 
  Total securities 646,658  720,001  11,210  11,049 1.73 1.53 
                    
Deposits in other banks 47,755  267,381  2,585  2,491 5.41 0.93 
                    
 Total interest-earning assets 2,928,996  3,042,775  120,465  96,248 4.07 3.16 
                    
Non-earning assets 148,356  168,893           
  Total assets$3,077,352 $3,211,668           
                    
Liabilities and Stockholders' Equity:                
                    
Deposits:                
 Demand$483,573 $522,043  2,892  202 0.60 0.04 
 Savings and money market 888,355  962,419  17,285  1,750 1.95 0.18 
 Time  325,322  280,672  8,666  1,601 2.67 0.57 
  Total deposits 1,697,250  1,765,134  28,843  3,553 1.70 0.20 
                    
Customer repurchase agreements 48,409  24,005  2,980  26 4.57 0.11 
Other short-term borrowings 58,072  15,629  2,212  633 5.06 4.05 
Long-term borrowings 28,381  28,280  1,612  1,554 5.60 5.50 
 Total interest-bearing                
  liabilities 1,832,112  1,833,048  35,647  5,766 1.94 0.31 
                    
Noninterest bearing demand deposits 897,199  1,028,871           
Other liabilities 18,702  17,393           
Shareholders' equity 329,339  332,356           
  Total liabilities and                
   shareholders' equity$3,077,352 $3,211,668           
                    
Interest rate spread            2.13%2.85%
Net interest margin            2.86%2.97%
                    
Net interest income (taxable equivalent basis)     84,818  90,482     
Less: Taxable equivalent adjustment (c)       236  244     
Net interest income      $84,582 $90,238     
                    
                    
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 
  4th Qtr 3rd Qtr 4th Qtr Ended December 31,  
   2023   2023   2022   2023   2022  
EFFICIENCY RATIO          
 Noninterest expense$ 17,877  $18,343  $16,834  $ 68,050  $64,086  
 Add: loss on sale of OREO -   13   2   13   2  
 Subtract: core deposit intangible amortization (252)  (262)  (300)  (1,069)  (1,260) 
 Subtract: merger related expenses (875)  (1,702)  -   (2,577)  -  
  $ 16,750  $16,392  $16,536  $ 64,417  $62,828  
            
 Net interest income$ 19,547  $20,663  $24,288  $ 84,582  $90,238  
 Tax equivalent adjustment 69   53   68   236   244  
 Noninterest income 4,835   4,774   3,610   18,336   18,807  
 Add: loss on securities -   -   -   68   -  
 Add: loss on premises and equipment 42   -   146   155   228  
  $ 24,493  $25,490  $28,112  $ 103,377  $109,517  
            
 Efficiency ratio 68.39 % 64.31 % 58.82 % 62.31 % 57.37 %
            
TAX EQUIVALENT NET INTEREST INCOME         
 GAAP measures:          
 Interest income - loans$ 28,058  $27,559  $23,585  $ 106,670  $82,708  
 Interest income - investments and other 3,447   3,554   3,399   13,795   13,540  
 Interest expense - deposits (9,693)  (9,057)  (1,597)  (28,843)  (3,553) 
 Interest expense - customer repurchase          
  agreements (695)  (759)  -   (2,980)  (26) 
  Interest expense - other short-term borrowings (1,072)  (179)  (633)  (2,212)  (633) 
 Interest expense - long-term borrowings (429)  (402)  (398)  (1,612)  (1,554) 
 Total net interest income$ 19,616  $20,716  $24,356  $ 84,818  $90,482  
 Less non-GAAP measures:          
 Tax benefit on nontaxable interest - loans (63)  (47)  (41)  (199)  (139) 
 Tax benefit on nontaxable interest - securities (6)  (6)  (27)  (37)  (105) 
 Non- GAAP measures$ 19,547  $20,663  $24,288  $ 84,582  $90,238  
            
NET INTEREST MARGIN          
 Net interest margin (FTE) (non-GAAP) 2.60 % 2.76 % 3.33 % 2.86 % 2.97 %
 Net interest margin (GAAP) 2.59 % 2.75 % 3.32 % 2.85 % 2.97 %
            
RETURN ON AVERAGE TANGIBLE EQUITY         
 Return on average equity (GAAP basis) 4.91 % 7.02 % 10.15 % 7.94 % 10.36 %
 Impact of excluding average goodwill          
 and other intangibles 2.08   2.89   4.35   3.24   4.20  
 Return on average tangible equity          
  (non-GAAP) 6.99 % 9.91 % 14.50 % 11.18 % 14.56 %
            
TANGIBLE EQUITY TO TANGIBLE ASSETS         
 Equity to assets ratio (GAAP basis) 11.10 % 10.59 % 10.48 % 11.10 % 10.48 %
 Impact of excluding goodwill and          
 other intangibles (2.58)  (2.61)  (2.66)  (2.58)  (2.66) 
 Tangible equity to tangible assets ratio          
  (non-GAAP) 8.52 % 7.98 % 7.82 % 8.52 % 7.82 %
            
TANGIBLE BOOK VALUE          
 Book value per share (GAAP basis)$ 32.27  $30.79  $30.27  $ 32.27  $30.27  
 Impact of excluding goodwill and          
 other intangibles (8.21)  (8.24)  (8.33)  (8.21)  (8.33) 
 Tangible book value per share          
  (non-GAAP)$ 24.06  $22.55  $21.94  $ 24.06  $21.94