American National Bankshares Reports First Quarter Earnings

DANVILLE, Va., April 22, 2021 (GLOBE NEWSWIRE) -- American National Bankshares Inc. (NASDAQ: AMNB) (“American National” or the “Company”) today reported first quarter 2021 earnings of $11.3 million, or $1.03 per diluted common share. Those results compare to net income of $8.5 million, or $0.77 per diluted common share, during the same quarter in the prior year, and net income of $8.8 million, or $0.80 per diluted common share, recognized for the fourth quarter of 2020.

President and Chief Executive Officer Jeffrey V. Haley commented, “We are certainly pleased with our first quarter results, with growth noted in revenues and in particular our noninterest lines of business. We are encouraged by the optimism surrounding the potential end of the pandemic and prospects for the economy with continued stimulus support.

“We were very active in the Paycheck Protection Program (“PPP”) during the quarter, with this program continuing to support our customers, while providing a meaningful contribution to both revenues and earnings. We continued to see excellent credit quality during the quarter, resulting in no additional allowance requirement or provision expense for the period. Noninterest revenues were strong for the quarter, with solid growth in our wealth, mortgage and insurance revenues. Operating expenses adjusted for the impacts of PPP were in line with expectations. Low interest rates, excess liquidity and light loan demand were headwinds during the quarter, but we saw some notable improvement in loan activity toward the end of the quarter and as we enter the second quarter.

“We have begun to return to the Bank and fully opened our lobbies to our customers with prudent safety protocols. We remain focused on supporting and protecting our employees, customers and communities while creating shareholder value.”

First quarter 2021 highlights include:

  • Earnings produced a return on average tangible common equity (annualized) of 18.45% for the first quarter of 2021, compared to 14.90% in the previous quarter and 15.32% for the same quarter in the prior year (non-GAAP).
  • Average deposits grew 1.8% during the quarter and 24.8% over the same quarter of 2020; the cost of interest-bearing deposits decreased to 0.30% in the first quarter, compared to 0.43% in the previous quarter and 0.89% in the same quarter of the prior year.
  • Fully taxable equivalent (“FTE”) net interest margin was 3.20% for the quarter, down from 3.22% in the fourth quarter of 2020 and from 3.52% in the same quarter of the prior year (non-GAAP).
  • Noninterest revenues increased $1.7 million, or 40.3%, when compared to the previous quarter, and increased $1.4 million, or 31.7%, compared to the same quarter in the prior year.
  • Noninterest expense decreased $594 thousand, or 4.1%, when compared to the previous quarter, and increased $731 thousand, or 5.5%, when compared to the same quarter in the prior year.
  • The Company had no provision for loan losses in the first quarter of 2021, compared to a provision of $585 thousand for the previous quarter, and a provision of $953 thousand in the same quarter in the prior year. Annualized net charge-offs were 0.00% for the first quarter of 2021, down from 0.01% for the corresponding quarter in the prior year and 0.05% for the fourth quarter of 2020.
  • Nonperforming assets as a percentage of total assets were 0.10% at March 31, 2021, down from 0.12% at December 31, 2020 and 0.16% at March 31, 2020.

SMALL BUSINESS ADMINISTRATION’s (“SBA’s”) PPP

The Company continued to participate in the SBA’s PPP under the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act in the first quarter of 2021. There were 805 loans processed for approximately $80.7 million from the second round of the program. In addition to the new loans, $105.1 million of first round loans from 2020 were forgiven in first quarter 2021 compared to $56.4 million in the fourth quarter of 2020. Total outstanding net PPP loans were $183.8 million at March 31, 2021 down from $211.3 at December 31, 2020. Total PPP fees recognized in net interest income during the quarter were $2.9 million compared to the prior quarter’s $2.4 million as a result of the forgiveness. The interest income from the total PPP portfolio generated $526,000 in revenues for the first quarter compared to $639,000 in the previous quarter.

NET INTEREST INCOME

Net interest income for the first quarter of 2021 was $22.4 million, an increase of $277 thousand, or 1.3%, from the prior quarter and an increase of $2.5 million, or 12.6%, from the first quarter of 2020. The FTE net interest margin for the quarter was 3.20%, down from 3.22% in the prior quarter and down from 3.52% in the same period a year ago (non-GAAP). The first quarter of 2021 benefited from the recognition of a higher level of remaining net fees on PPP loans that were forgiven during the quarter. The increase in net interest income from the same quarter in the prior year was attributable to the PPP program and reduced deposit costs from a significantly lower rate environment.

The Company’s FTE net interest margin includes the impact of acquisition accounting fair value adjustments. During the first quarter of 2021, net accretion related to acquisition accounting amounted to $948 thousand compared to $1.2 million in the prior quarter and $957 thousand for the same period in 2020. Estimated remaining net accretion from acquisitions for the periods indicated is as follows (dollars in thousands):

 For the remaining nine months of 2021$1,299 
 For the years ending (estimated):  
 20221,203 
 2023689 
 2024416 
 2025302 
 2026185 
 Thereafter536 

ASSET QUALITY

Nonperforming assets (“NPAs”) totaled $2.9 million as of March 31, 2021 down from $3.7 million at December 31, 2020, and down from $4.0 million at March 31, 2020. NPAs as a percentage of total assets were 0.10% at March 31, 2021, compared to 0.12% at December 31, 2020 and 0.16% at March 31, 2020.

There was no provision expense for the first quarter of 2021, as compared to $585 thousand for the previous quarter and $953 thousand for the same period in the previous year. The first quarter of 2021 warranted a significantly lower provision than the fourth quarter of 2020 based on loan activity, an improving economy, ongoing low charge-off and delinquency rates, and overall strong asset quality metrics. However, risk levels in general remain elevated particularly in certain industry segments. The allowance for loan losses was $21.4 million at March 31, 2021 and December 31, 2020 and $14.1 million at March 31, 2020. Annualized net charge-offs as a percentage of average loans outstanding were 0.00% for the first quarter of 2021, compared to 0.05% in the previous quarter and 0.01% for the same period in the prior year. The allowance as a percentage of loans held for investment was 1.08% at March 31, 2021 compared to 1.06% at December 31, 2020 and 0.76% at March 31, 2020. Excluding PPP loans, the allowance as a percentage of loans was 1.19% at both March 31, 2021 and December 31, 2020.

American National continues to utilize a Disaster Assistance Program for borrowers in accordance with Section 4013 of the CARES Act. At March 31, 2021, American National had interest only deferrals to customers with outstanding balances amounting to $19.3 million, representing less than 1.0% of total loans held for investment, which compares to $30.0 million, or 1.5%, of total loans held for investment, at December 31, 2020. At March 31, 2021 $16.4 million of the $19.3 million was the result of second and third interest deferrals.

NONINTEREST INCOME

Noninterest income increased $1.7 million, or 40.3%, to $5.9 million for the quarter ended March 31, 2021 from $4.2 million in the prior quarter and increased $1.4 million, or 31.7%, from the same period in the prior year. The largest increases for the first quarter over the previous quarter were in income from mortgage banking, up $276 thousand or 26.5%; income from small business investment companies, up $192 thousand or 81.4%; and income from insurance investments, up $846 thousand or over 100%, respectively. Comparing the first quarter of 2021 to the first quarter of 2020, increases were noted in all categories except for service charges on deposit accounts, securities gains, net, and losses on premises and equipment, net.

NONINTEREST EXPENSE

Noninterest expense for the first quarter of 2021 amounted to $14.1 million, down $594 thousand, or 4.1%, when compared to the $14.7 million for the previous quarter and up $731 thousand, or 5.5%, from $13.3 million during the same period in the previous year. The first quarter of 2021 reflects a reduction in salaries and benefits expense associated with the deferral of $604 thousand in costs associated with the origination of PPP loans during the quarter. The fourth quarter of 2020 included $650 thousand in pension and salary expenses resulting from a voluntary early retirement package recognized as one-time costs. The increase from the first quarter of 2020 was attributable primarily to increases in salaries and benefits and occupancy expense reflecting normal growth, and the benefit of small bank credits in the FDIC assessment line item for 2020 that reduced expenses.

INCOME TAXES

The effective tax rate for the three months ended March 31, 2021 and December 31, 2020 was 20.9%. This compares to 15.7% for the same period in the prior year. In the quarter ended March 31, 2020, the Company benefited from a provision of the CARES Act which allowed it to recognize a tax benefit for the net operating loss (NOL) five-year carryback of the NOL acquired in the acquisition of HomeTown Bankshares Corporation in 2019. An income tax benefit was realized on the NOL for the difference between the 21% corporate tax rate and the higher rate of 35% in effect prior to 2018.

BALANCE SHEET

Total assets at March 31, 2021 and December 31, 2020 were $3.1 billion and increased $578.4 million from the first quarter of 2020. The balance sheet at March 31, 2021 reflected a slight shift in the mix of assets from the previous quarter but primarily remained constant. The growth over the same period a year ago is primarily due to loan and deposit growth associated with the PPP program and growth in core deposits during the period.

At March 31, 2021, loans held for investment (net of deferred fees and costs) were $2.0 billion, a decrease of $36.4 million, or 7.2% annualized, from December 31, 2020. The change was primarily a result of the changes discussed previously from the PPP. Excluding PPP loans, loans held for investment were slightly lower, contracting $8.9 million or 0.5% from year-end 2020.

Investment securities amounted to $482.1 million at March 31, 2021, with growth of $16.1 million, or 3.4%, compared to December 31, 2020, and growth of $139.4 million, or 40.7%, compared to March 31, 2020.

Deposits amounted to $2.6 billion at March 31, 2021 and December 31, 2020, with growth of $561.9 million, or 27.1%, compared to the first quarter of 2020. The growth over the previous quarter and the prior period of 2020 is a result of continued higher than average cash balances being maintained by customers as elevated savings rates and liquidity patterns continue. This pattern has been prevalent since the second quarter of 2020 and is consistent with trends with other commercial banks.

The Company continues to be well-capitalized as defined by regulators, with tangible common equity to tangible assets of 8.42% at March 31, 2021 as compared to 8.34% at December 31, 2020 and 9.61% at March 31, 2020. The Company’s common equity Tier 1, Tier 1, total, and Tier 1 leverage capital ratios were 12.74%, 14.16%, 15.56% and 9.56%, respectively at March 31, 2021.

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 $1.0 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

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) the impacts of the ongoing COVID-19 pandemic; (2) expected revenue synergies and cost savings from acquisitions and depositions; (3) 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; (4) 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; (5) the implementation of new technologies, and the ability to develop and maintain secure and reliable electronic systems; (6) accounting principles, policies, and guidelines; and (7) 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.



 
Consolidated Balance Sheets
(Dollars in thousands, except per share data)
Unaudited
    
 March 31
  2021   2020 
Assets   
Cash and due from banks$33,266  $39,602 
Interest-bearing deposits in other banks 383,984   69,968 
Securities available for sale, at fair value 482,143   342,769 
Restricted stock, at cost 8,024   8,682 
Loans held for sale 17,929   2,666 
Loans, net of deferred fees and costs 1,978,640   1,854,928 
Less allowance for loan losses (21,416)  (14,065)
Net Loans 1,957,224   1,840,863 
Premises and equipment, net 39,336   39,632 
Other real estate owned, net 443   984 
Goodwill 85,048   85,048 
Core deposit intangibles, net 5,710   7,301 
Bank owned life insurance 28,635   27,970 
Other assets 31,690   29,580 
    
Total assets$3,073,432  $2,495,065 
    
    
Liabilities   
Demand deposits -- noninterest-bearing$907,721  $567,772 
Demand deposits -- interest-bearing 455,457   343,291 
Money market deposits 688,051   524,234 
Savings deposits 236,518   181,564 
Time deposits 344,787   453,806 
Total deposits 2,632,534   2,070,667 
Customer repurchase agreements 39,205   42,114 
Long-term borrowings 35,656   35,567 
Other liabilities 24,244   23,424 
Total liabilities 2,731,639   2,171,772 
    
Shareholders' equity   
Preferred stock, $5 par value, 2,000,000 shares authorized,   
none outstanding -   - 
Common stock, $1 par value, 20,000,000 shares authorized,   
10,958,171 shares outstanding at March 31, 2021 and   
10,957,502 shares outstanding at March 31, 2020 10,894   10,898 
Capital in excess of par value 153,651   153,817 
Retained earnings 178,015   157,064 
Accumulated other comprehensive income (loss), net (767)  1,514 
Total shareholders' equity 341,793   323,293 
    
Total liabilities and shareholders' equity$3,073,432  $2,495,065 




American National Bankshares Inc.
Consolidated Statements of Income
(Dollars in thousands, except per share data)
Unaudited
      
 For the Three Months Ended
 3/31/21 12/31/20 3/31/20
Interest and Dividend Income:     
Interest and fees on loans$22,273  $22,654  $21,321 
Interest and dividends on securities:     
Taxable 1,632   1,536   2,037 
Tax-exempt 103   103   112 
Dividends 119   121   132 
Other interest income 77   84   264 
Total interest and dividend income 24,204   24,498   23,866 
      
Interest Expense:     
Interest on deposits 1,287   1,821   3,312 
Interest on short-term borrowings 11   22   129 
Interest on long-term borrowings 483   509   506 
Total interest expense 1,781   2,352   3,947 
      
Net Interest Income 22,423   22,146   19,919 
Provision for loan losses -   585   953 
      
Net Interest Income After Provision     
for Loan Losses 22,423   21,561   18,966 
      
Noninterest Income:     
Trust fees 1,206   1,025   1,012 
Service charges on deposit accounts 622   677   721 
Other fees and commissions 1,139   1,037   941 
Mortgage banking income 1,318   1,042   549 
Securities gains, net -   -   814 
Brokerage fees 218   192   211 
Income from Small Business Investment Companies 428   236   55 
Income (loss) from insurance investments 788   (58)  48 
Losses on premises and equipment, net (49)  (13)  (82)
Other 252   83   226 
Total noninterest income 5,922   4,221   4,495 
      
Noninterest Expense:     
Salaries and employee benefits 7,518   8,225   7,360 
Occupancy and equipment 1,533   1,470   1,366 
FDIC assessment 224   206   95 
Bank franchise tax 438   425   426 
Core deposit intangible amortization 381   391   427 
Data processing 778   764   763 
Software 329   342   356 
Other real estate owned, net 117   26   (9)
Other 2,747   2,810   2,550 
Total noninterest expense 14,065   14,659   13,334 
      
Income Before Income Taxes 14,280   11,123   10,127 
Income Taxes 2,991   2,329   1,585 
Net Income$11,289  $8,794  $8,542 
      
Net Income Per Common Share:     
Basic$1.03  $0.80  $0.77 
Diluted$1.03  $0.80  $0.77 
Weighted Average Common Shares Outstanding:     
Basic 10,971,466   10,975,349   11,025,185 
Diluted 10,976,177   10,978,931   11,031,310 



American National Bankshares Inc.     
Financial Highlights     
Unaudited     
      
(Dollars in thousands, except per share data)       
 1st Qtr 4th Qtr 1st Qtr
  2021   2020   2020  
EARNINGS     
Interest income$ 24,204  $24,498  $23,866  
Interest expense 1,781   2,352   3,947  
Net interest income 22,423   22,146   19,919  
Provision for loan losses -   585   953  
Noninterest income 5,922   4,221   4,495  
Noninterest expense 14,065   14,659   13,334  
Income taxes 2,991   2,329   1,585  
Net income 11,289   8,794   8,542  
      
PER COMMON SHARE      
Net income per share - basic$ 1.03  $0.80  $0.77  
Net income per share - diluted 1.03   0.80   0.77  
Cash dividends paid 0.27   0.27   0.27  
Book value per share 31.19   30.77   29.50  
Book value per share - tangible (a) 22.91   22.47   21.08  
Closing market price 33.07   26.21   23.90  
      
FINANCIAL RATIOS     
Return on average assets 1.49 % 1.18 % 1.37 %
Return on average common equity 13.19   10.48   10.56  
Return on average tangible common equity (a) 18.45   14.90   15.32  
Average common equity to average assets 11.31   11.30   12.99  
Tangible common equity to tangible assets (a) 8.42   8.34   9.61  
Net interest margin, taxable equivalent 3.20   3.22   3.52  
Efficiency ratio (a) 47.70   53.92   54.46  
Effective tax rate 20.95   20.94   15.65  
      
PERIOD-END BALANCES     
Securities$ 490,167  $474,806  $351,451  
Loans held for sale 17,929   15,591   2,666  
Loans, net 1,978,640   2,015,056   1,854,928  
Goodwill and other intangibles 90,758   91,139   92,349  
Assets 3,073,432   3,050,010   2,495,065  
Assets - tangible (a) 2,982,674   2,958,871   2,402,716  
Deposits 2,632,534   2,611,330   2,070,667  
Customer repurchase agreements 39,205   42,551   42,114  
Long-term borrowings 35,656   35,630   35,567  
Shareholders' equity 341,793   337,894   323,293  
Shareholders' equity - tangible (a) 251,035   246,755   230,944  
      
AVERAGE BALANCES     
Securities (b)$ 458,760  $372,529  $369,730  
Loans held for sale 11,237   8,601   3,156  
Loans, net 2,009,166   2,063,397   1,829,125  
Interest-earning assets 2,814,291   2,754,455   2,274,920  
Goodwill and other intangibles 90,976   91,358   91,738  
Assets 3,026,952   2,971,505   2,491,591  
Assets - tangible (a) 2,935,976   2,880,147   2,399,853  
Interest-bearing deposits 1,740,418   1,701,395   1,495,565  
Deposits 2,582,539   2,536,363   2,069,927  
Customer repurchase agreements 43,746   40,819   41,519  
Other short-term borrowings -   -   3  
Long-term borrowings 35,640   35,617   35,554  
Shareholders' equity 342,231   335,671   323,573  
Shareholders' equity - tangible (a) 251,255   244,313   231,835  
      
American National Bankshares Inc.     
Financial Highlights     
Unaudited     
      
(Dollars in thousands, except per share data)       
 1st Qtr 4th Qtr 1st Qtr
  2021   2020   2020  
CAPITAL      
Weighted average shares outstanding - basic 10,971,466   10,975,349   11,025,185  
Weighted average shares outstanding - diluted 10,976,177   10,978,931   11,031,310  
      
COMMON STOCK REPURCHASE PROGRAM    
Total shares of common stock repurchased 54,023   -   140,526  
Average price paid per share of common stock$ 29.51  $-  $35.44  
      
ALLOWANCE FOR LOAN LOSSES     
Beginning balance$ 21,403  $21,088  $13,152  
Provision for loan losses -   585   953  
Charge-offs (22)  (331)  (105) 
Recoveries 35   61   65  
Ending balance$ 21,416  $21,403  $14,065  
      
LOANS     
Construction and land development$ 159,801  $140,071  $141,154  
Commercial real estate - owner occupied 364,549   373,680   376,554  
Commercial real estate - non-owner occupied 628,742   627,569   576,809  
Residential real estate 266,595   269,137   301,284  
Home equity 100,643   104,881   118,030  
Commercial and industrial 447,109   491,256   331,507  
Consumer 11,201   8,462   9,590  
Total$ 1,978,640  $2,015,056  $1,854,928  
      
NONPERFORMING ASSETS AT PERIOD-END    
Nonperforming loans:     
90 days past due and accruing$ 162  $262  $459  
Nonaccrual 2,323   2,434   2,579  
Other real estate owned and repossessions 443   958   984  
Nonperforming assets$ 2,928  $3,654  $4,022  
      
ASSET QUALITY RATIOS     
Allowance for loan losses to total loans 1.08 % 1.06 % 0.76 %
Allowance for loan losses to     
nonperforming loans 861.81   793.88   462.97  
Nonperforming assets to total assets 0.10   0.12   0.16  
Nonperforming loans to total loans 0.13   0.13   0.16  
Annualized net charge-offs     
to average loans 0.00   0.05   0.01  
      
      
OTHER DATA     
Fiduciary assets at period-end (c) (d)$ 666,653  $614,016  $492,850  
Retail brokerage assets at period-end (c) (d)$ 382,419  $362,022  $235,359  
Number full-time equivalent employees (e) 340   342   355  
Number of full service offices 26   26   26  
Number of loan production offices 1   1   1  
Number of ATMs 36   37   38  
      
      
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 March 31, 2021 and 2020
(Dollars in thousands)
Unaudited
             
     Interest     
 Average Balance Income/Expense (a) Yield/Rate 
             
  2021  2020  2021  2020 2021 2020 
Loans:            
Commercial$464,677 $332,920 $5,790 $3,543 5.05%4.28%
Real estate 1,548,091  1,489,319  16,390  17,663 4.23 4.74 
Consumer 7,635  10,042  127  157 6.75 6.29 
Total loans (b) 2,020,403  1,832,281  22,307  21,363 4.43 4.67 
             
Securities:            
U.S. Treasury 15,303  9,049  12  36 0.31 1.59 
Federal agencies & GSEs 105,337  103,311  305  576 1.16 2.23 
Mortgage-backed & CMOs 258,003  197,774  973  1,144 1.51 2.31 
State and municipal 58,493  40,825  315  288 2.15 2.82 
Other 21,624  18,771  275  264 5.09 5.63 
Total securities 458,760  369,730  1,880  2,308 1.64 2.50 
             
Deposits in other banks 335,128  72,909  77  264 0.09 1.46 
             
Total interest-earning assets 2,814,291  2,274,920  24,264  23,935 3.46 4.21 
             
Non-earning assets 212,661  216,671         
             
Total assets$3,026,952 $2,491,591         
             
Deposits:            
Demand$450,953 $331,357  40  123 0.04 0.15 
Money market 683,948  515,339  276  1,188 0.16 0.93 
Savings 227,404  178,896  7  53 0.01 0.12 
Time 378,113  469,973  964  1,948 1.03 1.67 
Total deposits 1,740,418  1,495,565  1,287  3,312 0.30 0.89 
             
Customer repurchase agreements 43,746  41,519  11  129 0.10 1.25 
Other short-term borrowings -  3  -  - - 1.01 
Long-term borrowings 35,640  35,554  483  506 5.42 5.69 
Total interest-bearing            
liabilities 1,819,804  1,572,641  1,781  3,947 0.40 1.01 
             
Noninterest bearing demand deposits 842,121  574,362         
Other liabilities 22,796  21,015         
Shareholders' equity 342,231  323,573         
Total liabilities and            
shareholders' equity$3,026,952 $2,491,591         
             
Interest rate spread        3.06%3.20%
Net interest margin        3.20%3.52%
             
Net interest income (taxable equivalent basis)     22,483  19,988     
Less: Taxable equivalent adjustment (c)     60  69     
Net interest income    $22,423 $19,919     
             
             
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)        
 1st Qtr 4th Qtr 1st Qtr 
  2021   2020   2020  
EFFICIENCY RATIO      
Noninterest expense$ 14,065  $14,659  $13,334  
Add/subtract: gain/loss on sale of OREO (111)  (8)  27  
Subtract: core deposit intangible amortization (381)  (391)  (427) 
 $ 13,573  $14,260  $12,934  
       
Net interest income$ 22,423  $22,146  $19,919  
Tax equivalent adjustment 60   69   69  
Noninterest income 5,922   4,221   4,495  
Subtract: gain on securities -   -   (814) 
Add: loss on fixed assets 49   13   82  
 $ 28,454  $26,449  $23,751  
       
Efficiency ratio 47.70 % 53.92 % 54.46 %
       
TAX EQUIVALENT NET INTEREST INCOME     
Non-GAAP measures:      
Interest income - loans$ 22,307  $22,697  $21,363  
Interest income - investments and other 1,957   1,870   2,572  
Interest expense - deposits (1,287)  (1,821)  (3,312) 
Interest expense - customer repurchase      
agreements (11)  (22)  (129) 
Interest expense - other short-term borrowings -   -   -  
Interest expense - long-term borrowings (483)  (509)  (506) 
Total net interest income$ 22,483  $22,215  $19,988  
Less non-GAAP measures:      
Tax benefit on nontaxable interest - loans (34)  (43)  (42) 
Tax benefit on nontaxable interest - securities (26)  (26)  (27) 
GAAP measures$ 22,423  $22,146  $19,919  
       
       
RETURN ON AVERAGE TANGIBLE EQUITY     
Return on average equity (GAAP basis) 13.19 % 10.48 % 10.56 %
Impact of excluding average goodwill      
and other intangibles 5.26   4.42   4.76  
Return on average tangible equity      
(non-GAAP) 18.45 % 14.90 % 15.32 %
       
TANGIBLE EQUITY TO TANGIBLE ASSETS      
Equity to assets ratio (GAAP basis) 11.12 % 11.08 % 12.96 %
Impact of excluding goodwill and      
other intangibles (2.70)  (2.74)  (3.35) 
Tangible equity to tangible assets ratio      
(non-GAAP) 8.42 % 8.34 % 9.61 %
       
TANGIBLE BOOK VALUE      
Book value per share (GAAP basis)$ 31.19  $30.77  $29.50  
Impact of excluding goodwill and      
other intangibles (8.28)  (8.30)  (8.42) 
Tangible book value per share      
(non-GAAP)$ 22.91  $22.47  $21.08  
       
ADJUSTED LOAN LOSS ALLOWANCE      
Allowance for loan losses$ 21,416  $21,403  $14,065  
Credit discount on purchased loans 6,528   7,255   10,547  
Adjusted loan loss allowance$ 27,944  $28,658  $24,612  
       
Total loans, net$ 1,978,640  $2,015,056  $1,854,928  
Subtract: PPP loans, net (183,783)  (211,275)  -  
Total loans less PPP loans, net$ 1,794,857  $1,803,781  $1,854,928  
       
Adjusted loan loss allowance to      
total loans less PPP loans, net 1.56 % 1.59 % 1.33 %
       


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


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