DANVILLE, Va., April 21, 2022 (GLOBE NEWSWIRE) -- American National Bankshares Inc. (NASDAQ: AMNB) (“American National” or the “Company”) today reported first quarter 2022 earnings of $9.0 million, or $0.84 per diluted common share. Those results compare to earnings of $11.3 million, or $1.03 per diluted common share, during the same quarter in the prior year, and earnings of $11.3 million, or $1.05 per diluted common share, for the fourth quarter of 2021.

President and Chief Executive Officer, Jeffrey V. Haley, commented, “American National delivered a solid first quarter for earnings and balance sheet growth. Core loan growth was a highlight and a strengthened economy allowed for some additional release of allowance for credit losses that were built during the early stages of the pandemic. While we are positive on the economic activity in our markets, there are headwinds associated with high inflation, continuing supply chain issues and the tragedy unfolding in Ukraine. It remains to be seen whether the economy will be negatively impacted in the longer term. Although, we tend to perform better financially in a rising rate environment, the rapid rise in treasury interest rates and anticipated monetary policy tightening has created some additional pressure on loan production and competitive pricing as some competitors have been slow to respond to these rate increases. Mortgage rates are significantly higher than one year ago, having some impact on the refinance market and affordability in general. Our customers seem to be thriving well in this environment, and we are most appreciative of their business and support.”

First quarter 2022 highlights include:

  • Average loans held for investment, excluding U.S. Small Business Administration Paycheck Protection Program (“PPP”) loans, grew $45.4 million, or 9.5% annualized, during the first quarter as compared to the previous quarter.

  • Earnings produced a return on average tangible common equity of 14.14% for the first quarter of 2022, compared to 17.63% in the previous quarter and 18.45% for the same quarter in the prior year (non-GAAP).

  • Average deposits declined 4.6% annualized during the quarter but increased 11.6% over the same quarter of 2021; the cost of interest-bearing deposits decreased to 0.12% in the first quarter, compared to 0.14% in the previous quarter and 0.30% in the same quarter of the prior year.

  • Fully taxable equivalent (“FTE”) net interest margin was 2.63% for the quarter, down from 2.93% in the fourth quarter of 2021 and from 3.20% in the same quarter of the prior year (non-GAAP).

  • Noninterest revenues increased $756 thousand, or 15.6%, when compared to the previous quarter, and decreased $322 thousand, or 5.4%, compared to the same quarter in the prior year.

  • Noninterest expense decreased $114 thousand, or less than 1%, when compared to the previous quarter, and increased $1.3 million, or 9.1%, when compared to the same quarter in the prior year.

  • The Company recognized a negative provision for loan losses in the first quarter of 2022 of $758 thousand compared to a negative provision of $2.0 million in the fourth quarter of 2021 and no provision expense or recovery in the first quarter of 2021. Annualized net charge-offs (recoveries) as a percentage of average loans outstanding were (0.01%) for the first quarter of 2022, compared to none in the previous quarter or in the same quarter in the prior year.

  • Nonperforming assets as a percentage of total assets were 0.06% at March 31, 2022, down from 0.07% at December 31, 2021, and down from 0.10% at March 31, 2021.

NET INTEREST INCOME

Net interest income for the first quarter of 2022 decreased by $2.7 million, or 11.5%, to $20.5 million compared to $23.1 million for the fourth quarter of 2021. The first quarter of 2022 compared to the same quarter of 2021 reflected a decrease of $2.0 million, or 8.8%. The FTE net interest margin for the quarter was 2.63%, down from 2.93% in the prior quarter and 3.20% in the same quarter a year ago (non-GAAP). The first quarter of 2022 recognized $714 thousand less PPP income and $1.5 million less accretion income compared to the fourth quarter of 2021. The decrease in PPP income of $3.1 million offset by the reduced deposit interest expense of $718 thousand drove the decrease in net interest income from the same quarter of the prior year.

The Company’s FTE net interest margin includes the impact of acquisition accounting fair value adjustments. During the first quarter of 2022, net accretion related to acquisition accounting amounted to $566 thousand compared to $2.1 million in the prior quarter and $948 thousand for the same quarter in 2021. There were multiple acquired loan cash basis collections in the fourth quarter of 2021 accounting for the significant difference between quarters. Estimated remaining net accretion from acquisitions for the periods indicated is as follows (dollars in thousands):
                                

 For the years ending (estimated):  
 2022$  725 
 2023732 
 2024434 
 2025292 
 2026177 
 Thereafter246 

ASSET QUALITY

Nonperforming assets (“NPAs”) totaled $2.0 million as of March 31, 2022, down from $2.4 million at December 31, 2021, and down substantially from $2.9 million at March 31, 2021. NPAs as a percentage of total assets were 0.06% at March 31, 2022, compared to 0.07% at December 31, 2021 and 0.10% at March 31, 2021. The Company recorded a negative provision for the first quarter of 2022 of $758 thousand compared to a negative provision of $2.0 million in the previous quarter and no provision or recovery in the first quarter of the previous year. The first quarter of 2022 and fourth quarter of 2021 negative provisions were the result of continued improvement in economic conditions, ongoing low charge-off and delinquency rates, and overall strong asset quality metrics. The provision expense that would have been required in the first quarter of 2021 based on loan activity was offset by the adjustments to qualitative factors for improved economic conditions.

The allowance for loan losses was $18.0 million at March 31, 2022, compared to $18.7 million at December 31, 2021 and $21.4 million at March 31, 2021. Annualized net charge-offs (recoveries) as a percentage of average loans outstanding were (0.01%) for the first quarter of 2022, compared to none in the previous quarter or in the same quarter in the prior year. The allowance as a percentage of loans held for investment was 0.90% at March 31, 2022, compared to 0.96% at December 31, 2021, and 1.08% at March 31, 2021. Excluding PPP loans, the allowance as a percentage of loans decreased to 0.91% at March 31, 2022, compared to 0.97% at December 31, 2021 and 1.19% at March 31, 2021.

NONINTEREST INCOME

Noninterest income increased $756 thousand, or 15.6%, to $5.6 million for the quarter ended March 31, 2022 from $4.8 million in the prior quarter and decreased $322 thousand, or 5.4%, from the same quarter in the prior year. The increase in the first quarter of 2022 from the fourth quarter of 2021 was primarily the result of increased income of $310 thousand, or over 200%, in income from insurance investments, non-recurring estate settlement revenues of $200 thousand included in trust and brokerage fees and a gain on premises and equipment, net compared to a loss in the 2021 period.

The first quarter of 2022 compared to the first quarter of 2021 reflected a significant decrease in mortgage banking income of $645 thousand, or 48.9%, and income from insurance investments of $341 thousand, or 43.3%, partially offset by increased trust and brokerage income growth of $385 thousand, or 27.0%,

NONINTEREST EXPENSE

Noninterest expense for the first quarter of 2022 amounted to $15.3 million, down $114 thousand, or less than a 1% decrease, when compared to the $15.5 million for the previous quarter and up $1.3 million, or 9.1%, from $14.1 million during the same quarter in the previous year. The decrease in the first quarter compared to the fourth quarter of 2021 was the net of increased benefit and data processing expenses and decreased charitable contributions.  

The first quarter 2022 increase compared to the same quarter of 2021, was primarily due to increased salary and employee benefits expenses including annual salary adjustments and incentive accruals, and reduced loan origination deferral costs. The first quarter of 2021 reflected a reduction in salaries and benefits expense associated with the deferral of $604 thousand in costs associated with the origination of PPP loans during the quarter.

INCOME TAXES

The effective tax rate for the three months ended March 31, 2022 was 21.49%, compared to 21.79% for the prior quarter and 20.95% for the same quarter in the prior year. The effective tax rate was relatively consistent in the last two quarters, with a slight increase from the March 31, 2021 quarter attributable to changes in pre-tax earnings and the levels of permanent tax differences.

BALANCE SHEET

Total assets at March 31, 2022 were $3.3 billion, an increase of $11.6 million from December 31, 2021 and $272.8 million from March 31, 2021. The growth over the previous quarter and over the same quarter of 2021 is the result of continued core deposit growth and loan growth.

At March 31, 2022, loans held for investment (net of deferred fees and costs) were $2.0 billion, an increase of $41.4 million, or 8.5%, annualized from December 31, 2021. This increase is net of $11.6 million of PPP loans forgiven during the first quarter of 2022. Loans held for investment, excluding PPP loans, increased $192.5 million, or 10.7%, from March 31, 2021. The Company had PPP loan net balances remaining of $689 thousand at March 31, 2022 compared to $12.2 million at December 31, 2021 and $183.8 million at March 31, 2021.

Investment securities available for sale amounted to $686.2 million at March 31, 2022, with a less than 1% decrease of $6.3 million, compared to December 31, 2021, and growth of $204.0 million, or 42.3%, compared to March 31, 2021.

Deposits amounted to $2.9 billion at March 31, 2022, with growth of $35.9 million, or 5.0%; annualized from December 31, 2021 and $293.7 million, or 11.2%, compared to March 31, 2021. The growth over the prior quarter and same quarter of 2021 is a result of continued higher than average cash balances being maintained by customers.

The Company continues to be well-capitalized as defined by regulators, with tangible common equity to tangible assets of 7.54% at March 31, 2022 compared to 8.17% at December 31, 2021 and compared to 8.42% at March 31, 2021 (non-GAAP). The Company’s common equity Tier 1, Tier 1, total, and Tier 1 leverage capital ratios were 12.04%, 13.28%, 14.09% and 9.31%, respectively, at March 31, 2022.

ABOUT AMERICAN NATIONAL

American National is a multi-state bank holding company with total assets of approximately $3.3 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 quarters, 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.



American National Bankshares Inc.
Consolidated Balance Sheets
(Dollars in thousands, except per share data)
Unaudited
    
 March 31
 2022 2021
Assets   
Cash and due from banks$34,506  $33,266 
Interest-bearing deposits in other banks 452,562   383,984 
Securities available for sale, at fair value 686,176   482,143 
Restricted stock, at cost 8,484   8,024 
Loans held for sale 2,524   17,929 
Loans, net of deferred fees and costs 1,988,008   1,978,640 
Less allowance for loan losses (17,988)  (21,416)
Net Loans 1,970,020   1,957,224 
Premises and equipment, net 35,383   39,336 
Other real estate owned, net 143   443 
Goodwill 85,048   85,048 
Core deposit intangibles, net 4,297   5,710 
Bank owned life insurance 29,159   28,635 
Other assets 37,936   31,690 
    
Total assets$3,346,238  $3,073,432 
    
    
Liabilities   
Demand deposits -- noninterest-bearing$1,024,778  $907,721 
Demand deposits -- interest-bearing 539,252   455,457 
Money market deposits 759,782   688,051 
Savings deposits 271,384   236,518 
Time deposits 331,011   344,787 
Total deposits 2,926,207   2,632,534 
Customer repurchase agreements 38,527   39,205 
Long-term borrowings 28,257   35,656 
Other liabilities 18,173   24,244 
Total liabilities 3,011,164   2,731,639 
    
Shareholders' equity   
Preferred stock, $5 par value, 2,000,000 shares authorized,   
none outstanding -   - 
Common stock, $1 par value, 20,000,000 shares authorized,   
10,713,958 shares outstanding at March 31, 2022 and   
10,958,171 shares outstanding at March 31, 2021 10,638   10,894 
Capital in excess of par value 144,848   153,651 
Retained earnings 207,373   178,015 
Accumulated other comprehensive loss, net (27,785)  (767)
Total shareholders' equity 335,074   341,793 
    
Total liabilities and shareholders' equity$3,346,238  $3,073,432 
    



American National Bankshares Inc.
Consolidated Statements of Income
(Dollars in thousands, except per share data)
Unaudited
      
 For the Three Months Ended
 3/31/22 12/31/21 3/31/21
Interest and Dividend Income:     
Interest and fees on loans$18,788  $21,706  $22,273 
Interest and dividends on securities:     
Taxable 2,239   2,012   1,632 
Tax-exempt 90   92   103 
Dividends 113   115   119 
Other interest income 177   223   77 
Total interest and dividend income 21,407   24,148   24,204 
      
Interest Expense:     
Interest on deposits 569   655   1,287 
Interest on short-term borrowings 6   3   11 
Interest on long-term borrowings 379   386   483 
Total interest expense 954   1,044   1,781 
      
Net Interest Income 20,453   23,104   22,423 
(Recovery of) provision for loan losses (758)  (1,955)  - 
      
Net Interest Income After (Recovery of) Provision     
for Loan Losses 21,211   25,059   22,423 
      
Noninterest Income:     
Trust and brokerage fees 1,809   1,529   1,424 
Service charges on deposit accounts 689   695   622 
Interchange fees 981   1,127   889 
Other fees and commissions 266   182   250 
Mortgage banking income 673   746   1,318 
Securities gains, net -   35   - 
Income from Small Business Investment Companies 493   462   428 
Income from insurance investments 447   137   788 
Gains (losses) on premises and equipment, net 4   (297)  (49)
Other 238   228   252 
Total noninterest income 5,600   4,844   5,922 
      
Noninterest Expense:     
Salaries and employee benefits 8,598   8,461   7,518 
Occupancy and equipment 1,542   1,484   1,533 
FDIC assessment 239   220   224 
Bank franchise tax 476   446   438 
Core deposit intangible amortization 330   351   381 
Data processing 847   734   778 
Software 363   357   329 
Other real estate owned, net (1)  (17)  117 
Other 2,955   3,427   2,747 
Total noninterest expense 15,349   15,463   14,065 
      
Income Before Income Taxes 11,462   14,440   14,280 
Income Taxes 2,463   3,147   2,991 
Net Income$8,999  $11,293  $11,289 
      
Net Income Per Common Share:     
Basic$0.84  $1.05  $1.03 
Diluted$0.84  $1.05  $1.03 
Weighted Average Common Shares Outstanding:     
Basic 10,754,287   10,774,268   10,971,466 
Diluted 10,756,902   10,776,970   10,976,177 
      



American National Bankshares Inc.      
Financial Highlights      
Unaudited      
       
(Dollars in thousands, except per share data)        
 1st Qtr 4th Qtr 1st Qtr 
  2022   2021   2021  
       
EARNINGS      
Interest income$ 21,407  $24,148  $24,204  
Interest expense 954   1,044   1,781  
Net interest income 20,453   23,104   22,423  
(Recovery of) provision for loan losses (758)  (1,955)  -  
Noninterest income 5,600   4,844   5,922  
Noninterest expense 15,349   15,463   14,065  
Income taxes 2,463   3,147   2,991  
Net income 8,999   11,293   11,289  
       
PER COMMON SHARE       
Net income per share - basic$ 0.84  $1.05  $1.03  
Net income per share - diluted 0.84   1.05   1.03  
Cash dividends paid 0.28   0.28   0.27  
Book value per share 31.27   32.95   31.19  
Book value per share - tangible (a) 22.94   24.62   22.91  
Closing market price 37.68   37.68   33.07  
       
FINANCIAL RATIOS      
Return on average assets 1.08 % 1.35 % 1.49 %
Return on average common equity 10.24   12.82   13.19  
Return on average tangible common equity (a) 14.14   17.63   18.45  
Average common equity to average assets 10.59   10.50   11.31  
Tangible common equity to tangible assets (a) 7.54   8.17   8.42  
Net interest margin, taxable equivalent 2.63   2.93   3.20  
Efficiency ratio (a) 57.53   53.46   47.70  
Effective tax rate 21.49   21.79   20.95  
       
PERIOD-END BALANCES      
Securities$ 694,660  $700,523  $490,167  
Loans held for sale 2,524   8,481   17,929  
Loans, net 1,988,008   1,946,580   1,978,640  
Goodwill and other intangibles 89,345   89,675   90,758  
Assets 3,346,238   3,334,597   3,073,432  
Assets - tangible (a) 3,256,893   3,244,922   2,982,674  
Deposits 2,926,207   2,890,353   2,632,534  
Customer repurchase agreements 38,527   41,128   39,205  
Long-term borrowings 28,257   28,232   35,656  
Shareholders' equity 335,074   354,792   341,793  
Shareholders' equity - tangible (a) 245,729   265,117   251,035  
       
AVERAGE BALANCES      
Securities (b)$ 710,873  $654,595  $458,760  
Loans held for sale 4,324   8,121   11,237  
Loans, net 1,966,586   1,943,238   2,009,166  
Interest-earning assets 3,126,561   3,154,730   2,814,291  
Goodwill and other intangibles 89,525   89,855   90,976  
Assets 3,320,314   3,357,223   3,026,952  
Assets - tangible (a) 3,230,789   3,267,368   2,935,976  
Interest-bearing deposits 1,880,873   1,868,695   1,740,418  
Deposits 2,880,893   2,914,381   2,582,539  
Customer repurchase agreements 41,337   39,645   43,746  
Long-term borrowings 28,241   28,218   35,640  
Shareholders' equity 351,539   352,395   342,231  
Shareholders' equity - tangible (a) 262,014   262,540   251,255  
       
American National Bankshares Inc.      
Financial Highlights      
Unaudited      
       
(Dollars in thousands, except per share data)      
 1st Qtr 4th Qtr 1st Qtr 
  2022   2021   2021  
CAPITAL       
Weighted average shares outstanding - basic 10,754,287   10,774,268   10,971,466  
Weighted average shares outstanding - diluted 10,756,902   10,776,970   10,976,177  
       
COMMON STOCK REPURCHASE PROGRAM     
Total shares of common stock repurchased 88,929   16,580   54,023  
Average price paid per share of common stock$ 38.18  $37.12  $29.51  
       
ALLOWANCE FOR LOAN LOSSES      
Beginning balance$ 18,678  $20,630  $21,403  
(Recovery of) provision for loan losses (758)  (1,955)  -  
Charge-offs (37)  (76)  (22) 
Recoveries 105   79   35  
Ending balance$ 17,988  $18,678  $21,416  
       
LOANS      
Construction and land development$ 148,276  $134,221  $159,801  
Commercial real estate - owner occupied 402,306   391,517   364,549  
Commercial real estate - non-owner occupied 752,817   731,034   628,742  
Residential real estate 295,949   289,757   266,595  
Home equity 89,593   93,203   100,643  
Commercial and industrial 291,697   299,773   447,109  
Consumer 7,370   7,075   11,201  
Total$ 1,988,008  $1,946,580  $1,978,640  
       
NONPERFORMING ASSETS AT PERIOD-END     
Nonperforming loans:      
90 days past due and accruing$ 71  $216  $162  
Nonaccrual 1,762   2,006   2,323  
Other real estate owned and repossessions 143   143   443  
Nonperforming assets$ 1,976  $2,365  $2,928  
       
ASSET QUALITY RATIOS      
Allowance for loan losses to total loans 0.90 % 0.96 % 1.08 %
Allowance for loan losses to      
nonperforming loans 981.34   840.59   861.81  
Nonperforming assets to total assets 0.06   0.07   0.10  
Nonperforming loans to total loans 0.09   0.11   0.13  
Annualized net recoveries to average loans (0.01)  (0.00)  (0.00) 
       
OTHER DATA      
Fiduciary assets at period-end (c) (d)$ 727,022  $752,410  $666,653  
Retail brokerage assets at period-end (c) (d)$ 405,742  $418,850  $382,419  
Number full-time equivalent employees (e) 338   346   340  
Number of full service offices 26   26   26  
Number of loan production offices 1   1   1  
Number of ATMs 36   36   36  
       
Notes:      
       
(a) - This financial measure is not calculated in accordance with GAAP. For a reconciliation of non-GAAP financial measures, see "Reconciliation of Non-GAAP Financial Measures" at the end of this release.
(b) - Average does not include unrealized gains and losses.
(c) - Market value.
(d) - Assets are not owned by American National and are not reflected in the consolidated balance sheet.
(e) - Average for quarter.
       



American National Bankshares Inc.
Net Interest Income Analysis
For the Three Months Ended March 31, 2022 and 2021
(Dollars in thousands)
Unaudited
             
     Interest     
 Average Balance Income/Expense (a) Yield/Rate 
             
  2022  2021  2022  2021 2022 2021 
Loans:            
Commercial$290,051 $464,677 $2,632 $5,790 3.68%5.05%
Real estate 1,674,350  1,548,091  16,078  16,390 3.84 4.23 
Consumer 6,509  7,635  112  127 6.98 6.75 
Total loans (b) 1,970,910  2,020,403  18,822  22,307 3.83 4.43 
             
Securities:            
U.S. Treasury 147,001  15,303  323  12 0.88 0.31 
Federal agencies & GSEs 104,905  105,337  293  305 1.12 1.16 
Mortgage-backed & CMOs 361,583  258,003  1,207  973 1.34 1.51 
State and municipal 67,524  58,493  331  315 1.96 2.15 
Other 29,860  21,624  312  275 4.18 5.09 
Total securities 710,873  458,760  2,466  1,880 1.39 1.64 
             
Deposits in other banks 444,778  335,128  177  77 0.16 0.09 
             
Total interest-earning assets 3,126,561  2,814,291  21,465  24,264 2.75 3.46 
             
Non-earning assets 193,753  212,661         
             
Total assets$3,320,314 $3,026,952         
             
Deposits:            
Demand$525,508 $450,953  37  40 0.03 0.04 
Money market 752,386  683,948  101  276 0.05 0.16 
Savings 264,057  227,404  7  7 0.01 0.01 
Time 338,922  378,113  424  964 0.51 1.03 
Total deposits 1,880,873  1,740,418  569  1,287 0.12 0.30 
             
Customer repurchase agreements 41,337  43,746  6  11 0.06 0.10 
Long-term borrowings 28,241  35,640  379  483 5.37 5.42 
Total interest-bearing            
liabilities 1,950,451  1,819,804  954  1,781 0.20 0.40 
             
Noninterest bearing demand deposits 1,000,020  842,121         
Other liabilities 18,304  22,796         
Shareholders' equity 351,539  342,231         
Total liabilities and            
shareholders' equity$3,320,314 $3,026,952         
             
Interest rate spread        2.55%3.06%
Net interest margin        2.63%3.20%
             
Net interest income (taxable equivalent basis)      20,511  22,483     
Less: Taxable equivalent adjustment (c)      58  60     
Net interest income    $20,453 $22,423     
             
             
Notes:            
             
(a) - Interest income includes net accretion/amortization of acquired loan fair value adjustments and the net accretion/amortization of deferred loan fees and costs.
(b) - Nonaccrual loans are included in the average balances.
(c) - A tax rate of 21% was used in adjusting interest on tax-exempt assets to a fully taxable equivalent basis.
 



American National Bankshares Inc.      
Reconciliation of Non-GAAP Financial Measures     
Unaudited      
       
(Dollars in thousands, except per share data)      
 1st Qtr 4th Qtr 1st Qtr 
  2022   2021   2021  
EFFICIENCY RATIO      
Noninterest expense$ 15,349  $15,463  $14,065  
Subtract: loss on sale of OREO -   -   (111) 
Subtract: core deposit intangible amortization (330)  (351)  (381) 
 $ 15,019  $15,112  $13,573  
       
Net interest income$ 20,453  $23,104  $22,423  
Tax equivalent adjustment 58   60   60  
Noninterest income 5,600   4,844   5,922  
Subtract: gain on securities -   (35)  -  
Add/subtract: (gain)/loss on fixed assets (4)  297   49  
 $ 26,107  $28,270  $28,454  
       
Efficiency ratio 57.53 % 53.46 % 47.70 %
       
TAX EQUIVALENT NET INTEREST INCOME     
Non-GAAP measures:      
Interest income - loans$ 18,822  $21,742  $22,307  
Interest income - investments and other 2,643   2,466   1,957  
Interest expense - deposits (569)  (655)  (1,287) 
Interest expense - customer repurchase      
agreements (6)  (3)  (11) 
Interest expense - long-term borrowings (379)  (386)  (483) 
Total net interest income$ 20,511  $23,164  $22,483  
Less non-GAAP measures:      
Tax benefit on nontaxable interest - loans (34)  (36)  (34) 
Tax benefit on nontaxable interest - securities (24)  (24)  (26) 
GAAP measures$ 20,453  $23,104  $22,423  
       
       
RETURN ON AVERAGE TANGIBLE EQUITY     
Return on average equity (GAAP basis) 10.24 % 12.82 % 13.19 %
Impact of excluding average goodwill      
and other intangibles 3.90   4.81   5.26  
Return on average tangible equity      
(non-GAAP) 14.14 % 17.63 % 18.45 %
       
TANGIBLE EQUITY TO TANGIBLE ASSETS      
Equity to assets ratio (GAAP basis) 10.01 % 10.64 % 11.12 %
Impact of excluding goodwill and      
other intangibles (2.47)  (2.47)  (2.70) 
Tangible equity to tangible assets ratio      
(non-GAAP) 7.54 % 8.17 % 8.42 %
       
TANGIBLE BOOK VALUE      
Book value per share (GAAP basis)$ 31.27  $32.95  $31.19  
Impact of excluding goodwill and      
other intangibles (8.33)  (8.33)  (8.28) 
Tangible book value per share      
(non-GAAP)$ 22.94  $24.62  $22.91  
       
ADJUSTED LOAN LOSS ALLOWANCE      
Allowance for loan losses$ 17,988  $18,678  $21,416  
Credit discount on purchased loans 4,001   4,474   6,528  
Adjusted loan loss allowance$ 21,989  $23,152  $27,944  
       
Total loans, net$ 1,988,008  $1,946,580  $1,978,640  
Subtract: PPP loans, net (689)  (12,239)  (183,783) 
Total loans less PPP loans, net$ 1,987,319  $1,934,341  $1,794,857  
       
Adjusted loan loss allowance to      
total loans less PPP loans, net 1.11 % 1.20 % 1.56 %
       
Allowance for loan losses to      
total loans less PPP loans, net 0.91 % 0.97 % 1.19 %
       

 

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

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Source: American National Bankshares, Inc.

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