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): | � | � | |
| � | � | 2022 | 1,268 | � |
| � | � | 2023 | 702 | � |
| � | � | 2024 | 419 | � |
| � | � | 2025 | 306 | � |
| � | � | 2026 | 187 | � |
| � | Thereafter | 500 | � | |
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
��������[email protected]
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