American National Bankshares Reports Second Quarter Earnings of $10.8 Million ($.99 Per Share)

DANVILLE, Va., July 22, 2021 (GLOBE NEWSWIRE) -- American National Bankshares Inc. (NASDAQ: AMNB) (“American National” or the “Company”) today reported second quarter 2021 earnings of $10.8 million, or $.99 per diluted common share. Those results compare to net income of $5.5 million, or $.50 per diluted common share, during the same quarter in the prior year, and net income of $11.3 million, or $1.03 per diluted common share, recognized for the first quarter of 2021.

President and Chief Executive Officer Jeffrey V. Haley commented, “American National delivered strong earnings performance for the second quarter, in spite of the continuing challenges associated with the low interest rate environment. Credit quality remains excellent, and coupled with significant improvement in the reopening economy resulted in a $1.4 million negative provision for loan losses for the period. We had another strong quarter for our core noninterest revenue lines, with income from SBIC investments, mortgage and wealth management continuing to provide meaningful contributions. Deposit growth was again exceptional, and with significant PPP forgiveness during the period contributed to some additional excess liquidity on our balance sheet. Loan balances, excluding PPP, have begun to grow, although market pressures remain fierce. Key areas of focus are loan growth, talent management, process improvement initiatives and our digital product offerings.”

Second quarter 2021 highlights include:

  • Earnings produced a return on average tangible common equity (annualized) of 17.30% for the second quarter of 2021, compared to 18.45% in the previous quarter and 9.85% for the same quarter in the prior year (non-GAAP).  

  • Average deposits grew 3.7% during the quarter and 15.1% over the same quarter of 2020; the cost of interest-bearing deposits decreased to 0.21% in the second quarter, compared to 0.30% in the previous quarter and 0.64% in the same quarter of the prior year.

  • Fully taxable equivalent (“FTE”) net interest margin was 3.00% for the quarter, down from 3.20% in the first quarter of 2021 and from 3.22% in the same quarter of the prior year (non-GAAP).

  • Noninterest revenues decreased $780 thousand, or 13.2%, when compared to the previous quarter, and increased $1.3 million, or 34.1%, compared to the same quarter in the prior year.

  • Noninterest expense increased $572 thousand, or 4.1%, when compared to the previous quarter, and increased $2.2 million, or 17.7%, when compared to the same quarter in the prior year.

  • The Company recorded a negative provision for loan losses in the second quarter of 2021 of $1.4 million and no provision in the first quarter, compared to a provision expense of $4.8 million in the second quarter in the prior year. Annualized net charge-offs (recoveries) as a percentage of average loans outstanding were (0.01%) for the second quarter of 2021, 0.00% for the first quarter of 2021 and 0.06% for the corresponding quarter in the prior year.

  • Nonperforming assets as a percentage of total assets were 0.07% at June 30, 2021, down from 0.10% at March 31, 2021 and 0.16% at June 30, 2020.

SMALL BUSINESS ADMINISTRATION’s PPP

The Company continued to participate in the U.S. Small Business Administration’s Paycheck Protection Program (“PPP”) under the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act in the second quarter of 2021. The Company has processed a total of $364.2 million in PPP loans with $80.0 million forgiven in the second quarter of 2021 compared to $105.1 million in the first quarter. Total outstanding net PPP loans were $104.1 million at June 30, 2021, down from $183.8 million at March 31, 2021. Total PPP fees recognized in net interest income during the quarter were $1.8 million compared to the prior quarter’s $2.9 million as a result of the forgiveness. The interest income from the PPP portfolio outstanding generated $360,000 in revenues for the second quarter compared to $526,000 in the previous quarter.

NET INTEREST INCOME

Net interest income for the second quarter of 2021 was $21.8 million, a decrease of $652 thousand, or 2.9%, from the prior quarter and an increase of $1.5 million, or 7.5%, from the second quarter of 2020. The FTE net interest margin for the quarter was 3.00%, down from 3.20% in the prior quarter and down from 3.22% in the same period a year ago (non-GAAP). The second quarter of 2021 reflected $1.1 million less in net fees on PPP loans than the first quarter as $80.0 million of first round loans were forgiven in the second quarter compared to $105.1 million in the first quarter. The increase in net interest income from the same quarter in the prior year was primarily 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 second quarter of 2021, net accretion related to acquisition accounting amounted to $875 thousand compared to $948 thousand in the prior quarter and $801 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 six months of 2021 (estimated)$840 
 For the years ending (estimated):  
  20221,268 
  2023702 
  2024419 
  2025306 
  2026187 
 Thereafter500 

ASSET QUALITY

Nonperforming assets (“NPAs”) totaled $2.4 million as of June 30, 2021 down from $2.9 million at March 31, 2021, and down from $4.6 million at June 30, 2020. NPAs as a percentage of total assets were 0.07% at June 30, 2021, compared to 0.10% at March 31, 2021 and 0.16% at June 30, 2020.

The Company recorded a negative provision for the second quarter of 2021 of $1.4 million, as compared to no provision in the first quarter and a $4.8 million provision for the same period in the previous year. The second quarter negative provision as compared to the prior period and the same period of 2020 was driven by significant improvement in both national and local economic conditions, ongoing low charge-off and delinquency rates, and overall strong asset quality metrics. The allowance for loan losses was $20.1 million at June 30, 2021, $21.4 million at March 31, 2021 and $18.5 million at June 30, 2020. Annualized net charge-offs (recoveries) as a percentage of average loans outstanding was a negative (0.01%) for the second quarter of 2021, compared to 0.00% in the previous quarter and 0.06% for the same period in the prior year. The allowance as a percentage of loans held for investment was 1.05% at June 30, 2021 compared to 1.08% at March 31, 2021 and 0.88% at June 30, 2020. Excluding PPP loans, the allowance as a percentage of loans was 1.11% at June 30, 2021, 1.19% at March 31, 2021 and 1.00% at June 30, 2020.

NONINTEREST INCOME

Noninterest income decreased $780 thousand, or 13.2%, to $5.1 million for the quarter ended June 30, 2021 from $5.9 million in the prior quarter and increased $1.3 million, or 34.1%, from the same period in the prior year. The largest fluctuations for the second quarter over the previous quarter were the decrease in income from insurance investments which was down $647 thousand, or 82.1%, and increased losses on premises and equipment, net, up $383 thousand or over 100%. The Company recorded a loss during the second quarter of 2021 from the sale of a building acquired in the HomeTown Bankshares acquisition. These declines were partially offset by growth in wealth management revenues, service charges on deposits and income from SBIC investments. Comparing the second quarter of 2021 to the second quarter of 2020, increases were noted in all categories except for securities gains, net, that recorded no activity in either period and had decreased income from insurance investments of $82 thousand, or 36.8%.

NONINTEREST EXPENSE

Noninterest expense for the second quarter of 2021 amounted to $14.6 million, up $572 thousand, or 4.1%, when compared to the $14.1 million for the previous quarter and up $2.2 million, or 17.7%, from $12.4 million during the same period in the previous year. Salary and benefit expense was up $660 thousand or 8.8% over the previous quarter, and up $2.0 million or 32.0% over the second quarter of 2020. These increases can largely be attributed to salary and benefit deferrals associated with loan originations under the PPP program. The second quarter of 2021 reflected $100 thousand in PPP related salaries and benefits deferrals, compared to $604 thousand in the first quarter and $1.6 million in the second quarter of 2020. Other operating expense components were in line with the previous quarter and represented normal growth levels over the same period in 2020.

INCOME TAXES

The effective tax rate for the three months ended June 30, 2021 was 21.0% and 20.9% for the three months ended March 31, 2021. This compares to 20.6% for the same period in the prior year.

BALANCE SHEET

Total assets at June 30, 2021 were $3.2 billion, an increase of $128.1 million or 4.2% growth from the previous quarter and increased $337.0 million or 11.8% from the second quarter of 2020. The asset mix of the balance sheet at June 30, 2021 remained primarily consistent with the first quarter with a decrease in loans as a result of the forgiveness of PPP loans, the proceeds from which were reinvested in the securities portfolio. The growth over the same period a year ago is primarily due to deposit growth in core deposits during the period.

At June 30, 2021, loans held for investment (net of deferred fees and costs) were $1.9 billion, a decrease of $64.3 million, or 3.2%, from March 31, 2021. The decline was primarily a result of the changes discussed previously from the PPP. Excluding PPP loans, loans held for investment increased $15.4 million, or 0.86%, from the first quarter, and decreased $27.5 million or 1.5% compared to June 30, 2020.

Investment securities amounted to $555.4 million at June 30, 2021, with growth of $73.4 million, or 15.2%, compared to March 31, 2021, and growth of $233.0 million, or 72.2%, compared to June 30, 2020.

Deposits amounted to $2.8 billion at June 30, 2021 and $2.6 billion at March 31, 2021, an increase of $137.2 million, or 5.2%, over the previous quarter and growth of $338.0 million, or 13.9%, compared to the second quarter of 2020. The growth over the previous quarter and the prior period of 2020 is primarily a result of continued federal stimulus efforts, and continued higher than average cash balances being maintained by customers as elevated savings rates and liquidity patterns continue.

The Company continues to be well-capitalized as defined by regulators, with tangible common equity to tangible assets of 8.27% at June 30, 2021 compared to 8.42% at March 31, 2021 and compared to 8.49% at June 30, 2020. The Company’s common equity Tier 1, Tier 1, total, and Tier 1 leverage capital ratios were 12.79%, 14.19%, 15.21% and 9.42%, respectively at June 30, 2021.

ABOUT AMERICAN NATIONAL

American National is a multi-state bank holding company with total assets of approximately $3.2 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 $1.1 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 and the associated efforts to limit the spread of the virus; (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 adequacy of the level of the allowance for loan losses, the amount of loan loss provisions required in future periods, and the failure of assumptions underlying the allowance for loan losses; (6) cybersecurity threats or attacks, the implementation of new technologies, and the ability to develop and maintain secure and reliable electronic systems; (7) accounting principles, policies, and guidelines; and (8) 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
     
  June 30
   2021   2020 
Assets    
Cash and due from banks $38,237  $44,607 
Interest-bearing deposits in other banks  502,300   206,998 
Securities available for sale, at fair value  555,444   322,523 
Restricted stock, at cost  8,035   8,694 
Loans held for sale  13,807   2,845 
Loans, net of deferred fees and costs  1,914,371   2,101,711 
Less allowance for loan losses  (20,097)  (18,507)
Net Loans  1,894,274   2,083,204 
Premises and equipment, net  37,478   39,571 
Other real estate owned, net  213   984 
Goodwill  85,048   85,048 
Core deposit intangibles, net  5,339   6,884 
Bank owned life insurance  28,791   28,122 
Other assets  32,618   35,059 
     
Total assets $3,201,584  $2,864,539 
     
     
Liabilities    
Demand deposits -- noninterest-bearing $959,574  $824,679 
Demand deposits -- interest-bearing  482,586   406,322 
Money market deposits  700,670   562,061 
Savings deposits  241,746   200,518 
Time deposits  385,174   438,196 
Total deposits  2,769,750   2,431,776 
Customer repurchase agreements  35,440   46,296 
Long-term borrowings  28,181   35,588 
Other liabilities  20,580   23,446 
Total liabilities  2,853,951   2,537,106 
     
Shareholders' equity    
Preferred stock, $5 par value, 2,000,000 shares authorized,   
none outstanding  -   - 
Common stock, $1 par value, 20,000,000 shares authorized,   
10,875,756 shares outstanding at June 30, 2021 and    
10,964,320 shares outstanding at June 30, 2020  10,811   10,911 
Capital in excess of par value  150,947   154,222 
Retained earnings  185,843   159,586 
Accumulated other comprehensive income, net  32   2,714 
Total shareholders' equity  347,633   327,433 
     
Total liabilities and shareholders' equity $3,201,584  $2,864,539 
     


American National Bankshares Inc.
Consolidated Statements of Income
(Dollars in thousands, except per share data)
Unaudited
           
  For the Three Months Ended For the Six Months Ended
  6/30/21 3/31/21 6/30/20 6/30/21 6/30/20
 Interest and Dividend Income:          
 Interest and fees on loans $21,087  $22,273  $21,379  $43,360  $42,700 
 Interest and dividends on securities:          
 Taxable  1,769   1,632   1,646   3,401   3,683 
 Tax-exempt  96   103   111   199   223 
 Dividends  117   119   128   236   260 
 Other interest income  98   77   33   175   297 
 Total interest and dividend income  23,167   24,204   23,297   47,371   47,163 
           
 Interest Expense:          
 Interest on deposits  922   1,287   2,478   2,209   5,790 
 Interest on short-term borrowings  5   11   66   16   195 
 Interest on long-term borrowings  469   483   493   952   999 
 Total interest expense  1,396   1,781   3,037   3,177   6,984 
           
 Net Interest Income  21,771   22,423   20,260   44,194   40,179 
 (Recovery of) Provision for loan losses  (1,352)  -   4,759   (1,352)  5,712 
           
Net Interest Income After (Recovery of) Provision for          
 Loan Losses  23,123   22,423   15,501   45,546   34,467 
           
 Noninterest Income:          
 Trust fees  1,240   1,206   953   2,446   1,965 
 Service charges on deposit accounts  630   622   541   1,252   1,262 
 Other fees and commissions  1,358   1,139   951   2,497   1,892 
 Mortgage banking income  1,142   1,318   893   2,460   1,442 
 Securities gains, net  -   -   -   -   814 
 Brokerage fees  250   218   172   468   383 
 Income (loss) from Small Business Investment Companies 591   428   (119)  1,019   (64)
 Income from insurance investments  141   788   223   929   271 
 Losses on premises and equipment, net  (432)  (49)  -   (481)  (82)
 Other  222   252   221   474   447 
 Total noninterest income  5,142   5,922   3,835   11,064   8,330 
           
 Noninterest Expense:          
 Salaries and employee benefits  8,178   7,518   6,191   15,696   13,551 
 Occupancy and equipment  1,502   1,533   1,327   3,035   2,693 
 FDIC assessment  226   224   176   450   271 
 Bank franchise tax  443   438   425   881   851 
 Core deposit intangible amortization  371   381   417   752   844 
 Data processing  698   778   785   1,476   1,548 
 Software  338   329   403   667   759 
 Other real estate owned, net  10   117   15   127   6 
 Other  2,871   2,747   2,693   5,618   5,243 
 Total noninterest expense  14,637   14,065   12,432   28,702   25,766 
           
 Income Before Income Taxes  13,628   14,280   6,904   27,908   17,031 
 Income Taxes  2,862   2,991   1,422   5,853   3,007 
 Net Income $10,766  $11,289  $5,482  $22,055  $14,024 
           
Net Income Per Common Share:           
 Basic $0.99  $1.03  $0.50  $2.02  $1.28 
 Diluted $0.99  $1.03  $0.50  $2.01  $1.28 
 Weighted Average Common Shares Outstanding:          
 Basic  10,919,333   10,971,466   10,959,545   10,945,256   10,992,365 
 Diluted  10,923,156   10,976,177   10,963,248   10,949,523   10,997,279 
           


American National Bankshares Inc.
Financial Highlights
Unaudited
             
(Dollars in thousands, except per share data)          At or for the Six Months 
   2nd Qtr 1st Qtr 2nd Qtr Ended June 30,  
    2021   2021   2020   2021   2020  
EARNINGS           
Interest income$ 23,167  $24,204  $23,297  $ 47,371  $47,163  
Interest expense 1,396   1,781   3,037   3,177   6,984  
Net interest income 21,771   22,423   20,260   44,194   40,179  
(Recovery of) Provision for loan losses (1,352)  -   4,759   (1,352)  5,712  
Noninterest income 5,142   5,922   3,835   11,064   8,330  
Noninterest expense 14,637   14,065   12,432   28,702   25,766  
Income taxes  2,862   2,991   1,422   5,853   3,007  
Net income  10,766   11,289   5,482   22,055   14,024  
             
PER COMMON SHARE           
Net income per share - basic$ 0.99  $1.03  $0.50  $ 2.02  $1.28  
Net income per share - diluted 0.99   1.03   0.50   2.01   1.28  
Cash dividends paid 0.27   0.27   0.27   0.54   0.54  
Book value per share 31.96   31.19   29.86   31.96   29.86  
Book value per share - tangible (a) 23.65   22.91   21.48   23.65   21.48  
Closing market price 31.09   33.07   25.04   31.09   25.04  
             
FINANCIAL RATIOS          
Return on average assets 1.38 % 1.49 % 0.80 % 1.44 % 1.07 %
Return on average common equity 12.44   13.19   6.68   12.81   8.61  
Return on average tangible common equity (a)   17.30   18.45   9.85   17.87   12.56  
Average common equity to average assets   11.10   11.31   11.91   11.20   12.42  
Tangible common equity to tangible assets (a)   8.27   8.42   8.49   8.27   8.49  
Net interest margin, taxable equivalent 3.00   3.20   3.22   3.10   3.36  
Efficiency ratio (a) 52.06   47.70   49.74   49.84   52.08  
Effective tax rate 21.00   20.95   20.60   20.97   17.66  
             
PERIOD-END BALANCES          
Securities $ 563,479  $490,167  $331,217  $ 563,479  $331,217  
Loans held for sale 13,807   17,929   2,845   13,807   2,845  
Loans, net  1,914,371   1,978,640   2,101,711   1,914,371   2,101,711  
Goodwill and other intangibles 90,387   90,758   91,932   90,387   91,932  
Assets   3,201,584   3,073,432   2,864,539   3,201,584   2,864,539  
Assets - tangible (a) 3,111,197   2,982,674   2,772,607   3,111,197   2,772,607  
Deposits  2,769,750   2,632,534   2,431,776   2,769,750   2,431,776  
Customer repurchase agreements 35,440   39,205   46,296   35,440   46,296  
Long-term borrowings 28,181   35,656   35,588   28,181   35,588  
Shareholders' equity 347,633   341,793   327,433   347,633   327,433  
Shareholders' equity - tangible (a) 257,246   251,035   235,501   257,246   235,501  
             
AVERAGE BALANCES          
Securities (b) $ 512,981  $458,760  $315,659  $ 486,020  $342,695  
Loans held for sale 15,883   11,237   4,554   13,573   3,855  
Loans, net  1,947,797   2,009,166   2,048,277   1,978,312   1,938,700  
Interest-earning assets 2,909,216   2,814,291   2,525,998   2,862,016   2,400,459  
Goodwill and other intangibles 90,577   90,976   92,161   90,775   91,950  
Assets   3,118,687   3,026,952   2,755,470   3,073,073   2,623,531  
Assets - tangible (a) 3,028,110   2,935,976   2,663,309   2,982,298   2,531,581  
Interest-bearing deposits 1,761,203   1,740,418   1,564,430   1,750,867   1,529,997  
Deposits  2,677,101   2,582,539   2,325,331   2,630,081   2,197,629  
Customer repurchase agreements 37,591   43,746   43,716   40,651   42,617  
Other short-term borrowings -   -   -   -   2  
Long-term borrowings 35,584   35,640   35,575   35,612   35,565  
Shareholders' equity 346,210   342,231   328,051   344,232   325,812  
Shareholders' equity - tangible (a) 255,633   251,255   235,890   253,457   233,862  
             
American National Bankshares Inc.          
Financial Highlights          
Unaudited            
             
(Dollars in thousands, except per share data)          At or for the Six Months 
   2nd Qtr 1st Qtr 2nd Qtr Ended June 30,  
    2021   2021   2020   2021   2020  
CAPITAL             
Weighted average shares outstanding - basic   10,919,333   10,971,466   10,959,545   10,945,256   10,992,365  
Weighted average shares outstanding - diluted   10,923,156   10,976,177   10,963,248   10,949,523   10,997,279  
             
COMMON STOCK REPURCHASE PROGRAM         
Total shares of common stock repurchased   93,212   54,023   -   147,235   140,526  
Average price paid per share of common stock  $ 34.73  $29.51  $-  $ 32.81  $35.44  
             
ALLOWANCE FOR LOAN LOSSES          
Beginning balance$ 21,416  $21,403  $14,065  $ 21,403  $13,152  
(Recovery of) Provision for loan losses (1,352)  -   4,759   (1,352)  5,712  
Charge-offs  (29)  (22)  (444)  (51)  (549) 
Recoveries  62   35   127   97   192  
Ending balance$ 20,097  $21,416  $18,507  $ 20,097  $18,507  
             
LOANS            
Construction and land development$ 133,592  $159,801  $141,392  $ 133,592  $141,392  
Commercial real estate - owner occupied 384,095   364,549   388,947   384,095   388,947  
Commercial real estate - non-owner occupied   650,862   628,742   589,821   650,862   589,821  
Residential real estate 264,680   266,595   291,242   264,680   291,242  
Home equity  100,835   100,643   114,397   100,835   114,397  
Commercial and industrial 372,759   447,109   566,859   372,759   566,859  
Consumer  7,548   11,201   9,053   7,548   9,053  
Total  $ 1,914,371  $1,978,640  $2,101,711  $ 1,914,371  $2,101,711  
             
NONPERFORMING ASSETS AT PERIOD-END         
Nonperforming loans:          
    90 days past due and accruing$ 125  $162  $375  $ 125  $375  
    Nonaccrual  2,057   2,323   2,855   2,057   2,855  
Other real estate owned and repossessions   213   443   1,346   213   1,346  
Nonperforming assets$ 2,395  $2,928  $4,576  $ 2,395  $4,576  
             
ASSET QUALITY RATIOS          
Allowance for loan losses to total loans 1.05 % 1.08 % 0.88 % 1.05 % 0.88 %
Allowance for loan losses to          
    nonperforming loans 921.04   861.81   572.97   921.04   572.97  
Nonperforming assets to total assets 0.07   0.10   0.16   0.07   0.16  
Nonperforming loans to total loans 0.11   0.13   0.15   0.11   0.15  
Annualized net charge-offs (recoveries)          
    to average loans (0.01)  0.00   0.06   0.00   0.04  
             
OTHER DATA           
Fiduciary assets at period-end (c) (d)$ 697,528  $666,653  $536,014  $ 697,528  $536,014  
Retail brokerage assets at period-end (c) (d)  $ 392,881  $382,419  $301,096  $ 392,881  $301,096  
Number full-time equivalent employees (e) 340   340   345   340   345  
Number of full service offices 26   26   26   26   26  
Number of loan production offices 1   1   1   1   1  
Number of ATMs 36   36   38   36   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 June 30, 2021 and 2020
(Dollars in thousands)
Unaudited
              
      Interest     
  Average Balance Income/Expense (a) Yield/Rate 
              
   2021  2020  2021  2020 2021 2020 
Loans:             
Commercial$391,871 $513,765 $4,458 $4,377 4.56%3.42%
Real estate 1,564,747  1,529,723  16,551  16,901 4.23 4.42 
Consumer 7,062  9,343  112  149 6.36 6.40 
Total loans (b) 1,963,680  2,052,831  21,121  21,427 4.30 4.18 
              
Securities:            
U.S. Treasury 41,840  2,250  114  9 1.09 1.60 
Federal agencies & GSEs 102,730  47,197  298  284 1.16 2.41 
Mortgage-backed & CMOs 281,820  203,268  961  1,059 1.36 2.08 
State and municipal 62,204  42,742  323  288 2.08 2.70 
Other 24,387  20,202  311  272 5.10 5.39 
Total securities 512,981  315,659  2,007  1,912 1.56 2.42 
              
Deposits in other banks 432,555  157,508  98  33 0.09 0.08 
              
Total interest-earning assets 2,909,216  2,525,998  23,226  23,372 3.20 3.70 
              
Non-earning assets 209,471  229,472         
              
Total assets$3,118,687 $2,755,470         
              
Deposits:            
Demand$468,684 $371,451  37  115 0.03 0.12 
Money market 701,957  554,318  215  591 0.12 0.43 
Savings 239,887  192,354  6  24 0.01 0.05 
Time 350,675  446,307  664  1,748 0.76 1.57 
Total deposits 1,761,203  1,564,430  922  2,478 0.21 0.64 
              
Customer repurchase agreements  37,591  43,716  5  66 0.05 0.61 
Long-term borrowings 35,584  35,575  469  493 5.27 5.54 
Total interest-bearing            
liabilities 1,834,378  1,643,721  1,396  3,037 0.30 0.74 
              
Noninterest bearing demand deposits  915,898  760,901         
Other liabilities 22,201  22,797         
Shareholders' equity 346,210  328,051         
Total liabilities and            
shareholders' equity$3,118,687 $2,755,470         
              
Interest rate spread        2.90%2.96%
Net interest margin        3.00%3.22%
              
Net interest income (taxable equivalent basis)    21,830  20,335     
Less: Taxable equivalent adjustment (c)    59  75     
Net interest income    $21,771 $20,260     
              
              
Notes:             
              
(a) - Interest income includes net accretion/amortization of acquired loan fair value adjustments and the net accretion/ 
amortization of deferred loan fees and costs. 
(b) - Nonaccrual loans are included in the average balances. 
(c) - A tax rate of 21% was used in adjusting interest on tax-exempt assets to a fully taxable equivalent basis. 


Net Interest Income Analysis
For the Six Months Ended June 30, 2021 and 2020
(Dollars in thousands)
Unaudited
              
      Interest     
  Average Balance Income/Expense (a) Yield/Rate 
              
   2021  2020  2021  2020 2021 2020 
Loans:             
Commercial$428,073 $423,343 $10,249 $7,919 4.83%3.77%
Real estate 1,556,465  1,509,520  32,941  34,564 4.23 4.58 
Consumer 7,347  9,692  238  307 6.53 6.39 
Total loans (b) 1,991,885  1,942,555  43,428  42,790 4.37 4.41 
              
Securities:            
U.S. Treasury 28,645  5,650  126  44 0.88 1.56 
Federal agencies & GSEs 104,026  75,254  602  861 1.16 2.29 
Mortgage-backed & CMOs 269,977  200,521  1,934  2,202 1.43 2.20 
State and municipal 60,359  41,784  637  576 2.11 2.76 
Other 23,013  19,486  588  537 5.11 5.51 
Total securities 486,020  342,695  3,887  4,220 1.60 2.46 
              
Deposits in other banks 384,111  115,209  175  297 0.09 0.52 
              
Total interest-earning assets 2,862,016  2,400,459  47,490  47,307 3.32 3.95 
              
Non-earning assets 211,057  223,072         
              
Total assets$3,073,073 $2,623,531         
              
Deposits:            
Demand$459,867 $351,404  77  238 0.03 0.14 
Money market 693,002  534,828  491  1,779 0.14 0.67 
Savings 233,680  185,625  13  77 0.01 0.08 
Time 364,318  458,140  1,628  3,696 0.90 1.63 
Total deposits 1,750,867  1,529,997  2,209  5,790 0.25 0.76 
              
Customer repurchase agreements  40,651  42,617  16  195 0.08 0.92 
Other short-term borrowings -  2  -  - - 0.50 
Long-term borrowings 35,612  35,565  952  999 5.35 5.62 
Total interest-bearing            
liabilities 1,827,130  1,608,181  3,177  6,984 0.35 0.87 
              
Noninterest bearing demand deposits  879,214  667,632         
Other liabilities 22,497  21,906         
Shareholders' equity 344,232  325,812         
Total liabilities and            
shareholders' equity$3,073,073 $2,623,531         
              
Interest rate spread        2.97%3.08%
Net interest margin        3.10%3.36%
              
Net interest income (taxable equivalent basis)    44,313  40,323     
Less: Taxable equivalent adjustment (c)    119  144     
Net interest income    $44,194 $40,179     
              
              
Notes:             
              
(a) - Interest income includes net accretion/amortization of acquired loan fair value adjustments and the net accretion/ 
amortization of deferred loan fees and costs. 
(b) - Nonaccrual loans are included in the average balances. 
(c) - A tax rate of 21% was used in adjusting interest on tax-exempt assets to a fully taxable equivalent basis. 


American National Bankshares Inc.          
Reconciliation of Non-GAAP Financial Measures         
Unaudited           
            
(Dollars in thousands, except per share data)     At or for the Six Months 
  2nd Qtr 1st Qtr 2nd Qtr Ended June 30,  
   2021   2021   2020   2021   2020  
EFFICIENCY RATIO          
Noninterest expense$ 14,637  $14,065  $12,432  $ 28,702  $25,766  
Add/subtract: gain/loss on sale of OREO -   (111)  8   (111)  35  
Subtract: core deposit intangible amortization  (371)  (381)  (417)  (752)  (844) 
  $ 14,266  $13,573  $12,023  $ 27,839  $24,957  
            
Net interest income$ 21,771  $22,423  $20,260  $ 44,194  $40,179  
Tax equivalent adjustment 59   60   75   119   144  
Noninterest income 5,142   5,922   3,835   11,064   8,330  
Subtract: gain on securities -   -   -   -   (814) 
Add: loss on fixed assets 432   49   -   481   82  
  $ 27,404  $28,454  $24,170  $ 55,858  $47,921  
            
Efficiency ratio  52.06 % 47.70 % 49.74 % 49.84 % 52.08 %
            
TAX EQUIVALENT NET INTEREST INCOME         
Non-GAAP measures:          
Interest income - loans$ 21,121  $22,307  $21,427  $ 43,428  $42,790  
Interest income - investments and other 2,105   1,957   1,945   4,062   4,517  
Interest expense - deposits (922)  (1,287)  (2,478)  (2,209)  (5,790) 
Interest expense - customer repurchase          
agreements  (5)  (11)  (66)  (16)  (195) 
Interest expense - long-term borrowings (469)  (483)  (493)  (952)  (999) 
Total net interest income$ 21,830  $22,483  $20,335  $ 44,313  $40,323  
Less non-GAAP measures:          
Tax benefit on nontaxable interest - loans (34)  (34)  (48)  (68)  (90) 
Tax benefit on nontaxable interest - securities  (25)  (26)  (27)  (51)  (54) 
GAAP measures$ 21,771  $22,423  $20,260  $ 44,194  $40,179  
            
            
RETURN ON AVERAGE TANGIBLE EQUITY         
Return on average equity (GAAP basis) 12.44 % 13.19 % 6.68 % 12.81 % 8.61 %
Impact of excluding average goodwill          
and other intangibles 4.86   5.26   3.17   5.06   3.95  
Return on average tangible equity          
(non-GAAP)  17.30 % 18.45 % 9.85 % 17.87 % 12.56 %
            
TANGIBLE EQUITY TO TANGIBLE ASSETS          
Equity to assets ratio (GAAP basis) 10.86 % 11.12 % 11.43 % 10.86 % 11.43 %
Impact of excluding goodwill and          
other intangibles (2.59)  (2.70)  (2.94)  (2.59)  (2.94) 
Tangible equity to tangible assets ratio          
(non-GAAP)  8.27 % 8.42 % 8.49 % 8.27 % 8.49 %
            
TANGIBLE BOOK VALUE          
Book value per share (GAAP basis)$ 31.96  $31.19  $29.86  $ 31.96  $29.86  
Impact of excluding goodwill and          
other intangibles (8.31)  (8.28)  (8.38)  (8.31)  (8.38) 
Tangible book value per share          
(non-GAAP) $ 23.65  $22.91  $21.48  $ 23.65  $21.48  
            
ADJUSTED LOAN LOSS ALLOWANCE          
Allowance for loan losses$ 20,097  $21,416  $18,507  $ 20,097  $18,507  
Credit discount on purchased loans 6,055   6,528   9,868   6,055   9,868  
Adjusted loan loss allowance$ 26,152  $27,944  $28,375  $ 26,152  $28,375  
            
Total loans, net$ 1,914,371  $1,978,640  $2,101,711  $ 1,914,371  $2,101,711  
Subtract: PPP loans, net (104,143)  (183,783)  (264,022)  (104,143)  (264,022) 
Total loans less PPP loans, net$ 1,810,228  $1,794,857  $1,837,689  $ 1,810,228  $1,837,689  
            
Adjusted loan loss allowance to          
total loans less PPP loans, net 1.44 % 1.56 % 1.54 % 1.44 % 1.54 %
            

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

 

 


Data & News supplied by www.cloudquote.io
Stock quotes supplied by Barchart
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.