DANVILLE, Va., Jan. 20, 2022 (GLOBE NEWSWIRE) -- American National Bankshares Inc. (NASDAQ: AMNB) (“American National” or the “Company”) today reported fourth quarter 2021 earnings of $11.3 million, or $1.05 per diluted common share. Those results compare to $8.8 million, or $0.80 per diluted common share, during the same quarter in the prior year, and net income of $10.2 million, or $0.94 per diluted common share, recognized for the third quarter of 2021. Earnings for the twelve months ended December 31, 2021 were $43.5 million, or $4.00 per diluted common share, compared to $30.0 million, or $2.73 per diluted common share, for the same period of 2020.

President and Chief Executive Officer, Jeffrey V. Haley, commented, “American National finished 2021 on a positive note with strong earnings for the fourth quarter and the full year. Core loan growth for the quarter was 6.6% annualized in spite of some significant paydown activity, and deposit growth continued to exceed expectations. Business activity and our local economies remain fairly robust in spite of factors associated with elevated inflation, supply chain issues and the ongoing pandemic.”

“I am so proud and appreciative of the efforts of our employees, the support of our customers and our shareholders over the past year. We had a very successful year financially, but also achieved many other milestones as we continue to build the Company for future success.”

Fourth quarter 2021 highlights include:

  • Average loans held for investment, excluding U.S. Small Business Administration Paycheck Protection Program (“PPP”) loans, grew $69.0 million, or 14.9% annualized, during the fourth quarter compared to growth of $39.5 million, or 8.7% annualized, in the third quarter of this year and compared to a decrease of $13.6 million, or 3.0% annualized, in the fourth quarter of the prior year.

  • Earnings produced a return on average tangible common equity of 17.63% for the fourth quarter of 2021, compared to 16.01% in the previous quarter and 14.90% for the same quarter in the prior year (non-GAAP).

  • Average deposits grew 5.3% during the quarter and 14.9% over the same quarter of 2020; the cost of interest-bearing deposits decreased to 0.14% in the fourth quarter, compared to 0.17% in the previous quarter and 0.43% in the same quarter of the prior year.

  • Fully taxable equivalent (“FTE”) net interest margin was 2.93% for the quarter, down from 3.09% in the third quarter of 2021 and from 3.22% in the same quarter of the prior year (non-GAAP).

  • Noninterest revenues decreased $279 thousand, or 5.4%, when compared to the previous quarter, and increased $623 thousand, or 14.8%, compared to the same quarter in the prior year.

  • Noninterest expense increased $620 thousand, or 4.2%, when compared to the previous quarter, and increased $804 thousand, or 5.5%, when compared to the same quarter in the prior year.

  • The Company recognized a negative provision for loan losses in the fourth quarter of 2021 of $2.0 million compared to a provision expense of $482 thousand in the third quarter of 2021 and $585 thousand in the fourth quarter of 2020. Annualized net charge-offs (recoveries) as a percentage of average loans outstanding were (0.00%) for the fourth quarter 2021, (0.01%) for the third quarter of 2021 and 0.05% for the fourth quarter of 2020.

  • Nonperforming assets as a percentage of total assets were 0.07% at December 31, 2021, up from 0.06% at September 30, 2021 but down from 0.12% at December 31, 2020.

SMALL BUSINESS ADMINISTRATION’S PPP

The Company has processed a total of $364.2 million in PPP loans, with total remaining outstanding net PPP loans of $12.2 million at December 31, 2021, down from $37.2 million at September 30, 2021. These quarter-end balances are net of $24.9 million of loans forgiven in the fourth quarter of 2021 compared to $66.9 million forgiven in the third quarter. Total PPP fees recognized in net interest income during the fourth quarter of 2021 were $919,000 compared to the prior quarter’s $2.4 million. The interest income from the outstanding PPP portfolio generated $68,000 and $169,000, respectively, in the fourth and third quarters of 2021.

NET INTEREST INCOME

Net interest income for the fourth quarter of 2021 was stable compared to the third quarter at $23.1 million. The fourth quarter of 2021 compared to the same quarter of 2020 reflected an increase of $958 thousand, or 4.3%. The FTE net interest margin for the quarter was 2.93%, down from 3.09% in the prior quarter and 3.22% in the same quarter a year ago (non-GAAP). The reduction in PPP income was offset by additional accretion income on purchased loans, higher interest income associated with higher average balances on loans and growth in investment income in the fourth quarter compared to the third quarter of 2021. The increase in net interest income from the same quarter in the prior year was attributable to the same factors as well as the significantly lower rate environment in 2021, which reduced interest expense on deposits $1.2 million, or 64.0%.

The Company’s FTE net interest margin includes the impact of acquisition accounting fair value adjustments. During the fourth quarter of 2021, net accretion related to acquisition accounting amounted to $2.1 million compared to $1.3 million in the prior quarter of 2021 and $1.2 million for the same quarter in 2020. Net accretion for the twelve months ended December 31, 2021 amounted to $5.2 million, compared to $3.8 million for the same period in 2020. Estimated remaining net accretion from acquisitions for the periods indicated is as follows (dollars in thousands):
                                

For the years ending (estimated): 
2022$1,100
2023690
2024429
2025292
2026171
Thereafter234
  

ASSET QUALITY

Nonperforming assets (“NPAs”) totaled $2.4 million as of December 31, 2021, up slightly from $2.1 million at September 30, 2021, and down significantly from $3.7 million at December 31, 2020. NPAs as a percentage of total assets were 0.07% at December 31, 2021, compared to 0.06% at September 30, 2021 and 0.12% at December 31, 2020.

The Company recorded a negative provision for the fourth quarter of 2021 of $2.0 million compared to the recognition of a provision of $482 thousand in the third quarter and $585 thousand in the fourth quarter in the previous year. The fourth quarter 2021 negative provision compared to the third quarter of 2021 and the fourth quarter of 2020 was the result of continued improvement in economic conditions, ongoing low charge-off and delinquency rates, and overall strong asset quality metrics. In addition, the third quarter provision was higher due to significant loan growth during the period. The allowance for loan losses was $18.7 million at December 31, 2021, compared to $20.6 million at September 30, 2021 and $21.4 million at December 31, 2020. Annualized net charge-offs (recoveries) as a percentage of average loans outstanding were (0.00%) for the fourth quarter of 2021, compared to (0.01%) in the previous quarter and 0.05% for the same quarter in the prior year. The allowance as a percentage of loans held for investment was 0.96% at December 31, 2021, compared to 1.06% at September 30, 2021, and 1.06% at December 31, 2020. Excluding PPP loans, the allowance as a percentage of loans decreased to 0.97% at December 31, 2021, compared to 1.08% at September 30, 2021 and 1.19% at December 31, 2020.

NONINTEREST INCOME

Noninterest income decreased $279 thousand, or 5.4%, to $4.8 million for the quarter ended December 31, 2021 from $5.1 million in the prior quarter and increased $623 thousand, or 14.8%, from the same quarter in the prior year. The fourth quarter of 2021 decrease from the prior quarter was the result of increased write-downs on premises and equipment, net of $190 thousand or 178% and a decrease in mortgage banking income of $243 thousand or 24.6%. The increased expense was partially offset by an increase in other fees and commissions of $162 thousand, or 14.1%, in the fourth quarter compared to the third quarter of 2021.

The fourth quarter of 2021 compared to the fourth quarter of 2020 reflected significant growth in trust fees of $240 thousand, or 23.4%, other fees and commissions of $272 thousand, or 26.2%, income from small business investment companies of $226 thousand, or 95.8%, offset by a $296 thousand, or 28.4%, decrease in mortgage banking income.

NONINTEREST EXPENSE

Noninterest expense for the fourth quarter of 2021 amounted to $15.5 million, up $620 thousand, or 4.2%, when compared to the $14.8 million for the previous quarter and up $804 thousand, or 5.5%, from $14.7 million during the same quarter in the previous year. The increase in the fourth quarter compared to the third quarter of 2021 was due to higher compensation costs associated primarily with incentive accrual adjustments, and in other expenses which included $150,000 in additional charitable contributions. Fourth quarter 2021 increases compared to the same quarter of 2020 were primarily due to increased compensation costs and expense seasonality.

INCOME TAXES

The effective tax rate for the three months ended December 31, 2021 was 21.80%, compared to 21.05% for the prior quarter and 20.94% for the same quarter in the prior year. The effective tax rate was relatively consistent among the periods, with slight increases in the 2021 periods attributable to changes in pre-tax earnings and the levels of permanent tax differences.

BALANCE SHEET

Total assets at December 31, 2021 were $3.3 billion, an increase of $45.5 million from September 30, 2021 and $284.6 million from December 31, 2020. The growth over the previous quarter and over the same quarter of 2020 is the result of continued core deposit growth, deployment of excess liquidity into investments, and loan growth.

At December 31, 2021, loans held for investment (net of deferred fees and costs) were $1.9 billion, an increase of $6.2 million, or 1.3%, annualized from September 30, 2021. This increase is net of $25.9 million of PPP loans forgiven during the fourth quarter of 2021. Loans held for investment increased $130.6 million, or 7.2%, from December 31, 2020 excluding PPP loans.

Investment securities available for sale amounted to $692.5 million at December 31, 2021, with growth of $48.6 million, or 7.5%, compared to September 30, 2021, and growth of $226.4 million, or 48.6%, compared to December 31, 2020.

Deposits amounted to $2.9 billion at December 31, 2021, with growth of $28.3 million, or 4.0%, annualized from September 30, 2021 and $279.0 million, or 10.7%, compared to December 31, 2020. The growth over the same quarter and prior quarter of 2020 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 8.17% at December 31, 2021 compared to 8.14% at September 30, 2021 and compared to 8.34% at December 31, 2020. The Company’s common equity Tier 1, Tier 1, total, and Tier 1 leverage capital ratios were 12.43%, 13.73%, 14.61% and 9.13%, respectively, at December 31, 2021.

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 $1.2 billion of trust, investment and brokerage assets in its Wealth Division. Additional information about American National and American National Bank is available on American National's website at www.amnb.com.

NON-GAAP FINANCIAL MEASURES

This release contains financial information determined by methods other than in accordance with generally accepted accounting principles in the United States (“GAAP”). American National’s management uses these non-GAAP financial measures in its analysis of American National’s performance. These measures typically adjust GAAP performance measures to exclude the effects of the amortization of intangibles and include the tax benefit associated with revenue items that are tax-exempt, as well as adjust income available to common shareholders for certain significant activities or transactions that are infrequent in nature. Management believes presentations of these non-GAAP financial measures provide useful supplemental information that is essential to a proper understanding of the operating results of American National’s core businesses. These non-GAAP disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. For a reconciliation of non-GAAP financial measures, see “Reconciliation of Non-GAAP Financial Measures” at the end of this release.

FORWARD-LOOKING STATEMENTS

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.


 
Consolidated Balance Sheets
(Dollars in thousands, except per share data)
     
  December 31
   2021   2020 
  (Unaudited) (Audited)
Assets    
Cash and due from banks $23,095  $30,767 
Interest-bearing deposits in other banks  487,773   343,603 
Securities available for sale, at fair value  692,467   466,091 
Restricted stock, at cost  8,056   8,715 
Loans held for sale  8,481   15,591 
Loans, net of deferred fees and costs  1,946,580   2,015,056 
Less allowance for loan losses  (18,678)  (21,403)
Net Loans  1,927,902   1,993,653 
Premises and equipment, net  35,564   39,723 
Other real estate owned, net  143   958 
Goodwill  85,048   85,048 
Core deposit intangibles, net  4,627   6,091 
Bank owned life insurance  29,107   28,482 
Other assets  32,334   31,288 
     
Total assets $3,334,597  $3,050,010 
     
     
Liabilities    
Demand deposits -- noninterest-bearing $1,009,081  $830,094 
Demand deposits -- interest-bearing  547,878   501,283 
Money market deposits  719,498   666,122 
Savings deposits  259,193   217,405 
Time deposits  354,703   396,426 
Total deposits  2,890,353   2,611,330 
Customer repurchase agreements  41,128   42,551 
Long-term borrowings  28,232   35,630 
Other liabilities  20,092   22,605 
Total liabilities  2,979,805   2,712,116 
     
Shareholders' equity    
Preferred stock, $5 par value, 2,000,000 shares authorized, none outstanding  -   - 
Common stock, $1 par value, 20,000,000 shares authorized, 10,766,967 shares outstanding at December 31, 2021 and 10,982,367 shares outstanding at December 31, 2020  10,710   10,926 
Capital in excess of par value  147,777   154,850 
Retained earnings  201,380   169,681 
Accumulated other comprehensive income (loss), net  (5,075)  2,437 
Total shareholders' equity  354,792   337,894 
     
Total liabilities and shareholders' equity $3,334,597  $3,050,010 


           
American National Bankshares Inc.
Consolidated Statements of Income
(Dollars in thousands, except per share data)
           
  For the Three Months Ended For the Twelve Months Ended
  12/31/21 9/30/21 12/31/20 12/31/21 12/31/20
  (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited)
Interest and Dividend Income:          
Interest and fees on loans $21,706  $21,974  $22,654  $87,040  $87,700 
Interest and dividends on securities:          
Taxable  2,012   1,896   1,536   7,309   6,764 
Tax-exempt  92   94   103   385   433 
Dividends  115   112   121   464   503 
Other interest income  223   201   84   598   440 
Total interest and dividend income  24,148   24,277   24,498   95,796   95,840 
           
Interest Expense:          
Interest on deposits  655   781   1,821   3,645   9,729 
Interest on short-term borrowings  3   3   22   22   259 
Interest on long-term borrowings  386   400   509   1,738   2,032 
Total interest expense  1,044   1,184   2,352   5,405   12,020 
           
Net Interest Income  23,104   23,093   22,146   90,391   83,820 
(Recovery of) Provision for loan losses  (1,955)  482   585   (2,825)  8,916 
           
Net Interest Income After (Recovery of) Provision for Loan Losses  25,059   22,611   21,561   93,216   74,904 
           
Noninterest Income:          
Trust fees  1,265   1,311   1,025   5,022   4,044 
Service charges on deposit accounts  695   664   677   2,611   2,557 
Other fees and commissions  1,309   1,147   1,037   4,953   3,925 
Mortgage banking income  746   989   1,042   4,195   3,514 
Securities gains, net  35   -   -   35   814 
Brokerage fees  264   265   192   997   745 
Income from Small Business Investment Companies  462   491   236   1,972   270 
Income (loss) from insurance investments  137   132   (58)  1,199   321 
Losses on premises and equipment, net  (297)  (107)  (13)  (885)  (110)
Other  228   231   83   932   763 
Total noninterest income  4,844   5,123   4,221   21,031   16,843 
           
Noninterest Expense:          
Salaries and employee benefits  8,461   8,185   8,225   32,342   29,765 
Occupancy and equipment  1,484   1,513   1,470   6,032   5,586 
FDIC assessment  220   194   206   864   639 
Bank franchise tax  446   440   425   1,767   1,702 
Core deposit intangible amortization  351   361   391   1,464   1,637 
Data processing  734   748   764   2,958   3,017 
Software  357   344   342   1,368   1,454 
Other real estate owned, net  (17)  21   26   131   60 
Other  3,427   3,037   2,810   12,082   10,705 
Total noninterest expense  15,463   14,843   14,659   59,008   54,565 
           
Income Before Income Taxes  14,440   12,891   11,123   55,239   37,182 
Income Taxes  3,147   2,713   2,329   11,713   7,137 
Net Income $11,293  $10,178  $8,794  $43,526  $30,045 
           
Net Income Per Common Share:           
Basic $1.05  $0.94  $0.80  $4.00  $2.74 
Diluted $1.05  $0.94  $0.80  $4.00  $2.73 
Weighted Average Common Shares Outstanding:          
Basic  10,774,268   10,833,875   10,975,349   10,873,817   10,981,623 
Diluted  10,776,970   10,836,293   10,978,931   10,877,231   10,985,790 
           


American National Bankshares Inc. 
Financial Highlights 
            
(Dollars in thousands, except per share data)          
        At or for the Twelve Months 
  4rd Qtr 3rd Qtr 4th Qtr Ended December 31,  
   2021   2021   2020   2021   2020  
  (Unaudited) (Unaudited) (Unaudited) (Unaudited)(Audited) 
EARNINGS           
Interest income$ 24,148  $24,277  $24,498  $ 95,796  $95,840  
Interest expense 1,044   1,184   2,352   5,405   12,020  
Net interest income 23,104   23,093   22,146   90,391   83,820  
(Recovery of) Provision for loan losses (1,955)  482   585   (2,825)  8,916  
Noninterest income 4,844   5,123   4,221   21,031   16,843  
Noninterest expense 15,463   14,843   14,659   59,008   54,565  
Income taxes  3,147   2,713   2,329   11,713   7,137  
Net income  11,293   10,178   8,794   43,526   30,045  
            
PER COMMON SHARE           
Net income per share - basic$ 1.05  $0.94  $0.80  $ 4.00  $2.74  
Net income per share - diluted 1.05   0.94   0.80    4.00   2.73  
Cash dividends paid 0.28   0.27   0.27   1.09   1.08  
Book value per share 32.95   32.51   30.77   32.95   30.77  
Book value per share - tangible (a) 24.62   24.16   22.47   24.62   22.47  
Closing market price 37.68   33.04   26.21   37.68   26.21  
            
FINANCIAL RATIOS          
Return on average assets 1.35 % 1.27 % 1.18 % 1.37 % 1.08 %
Return on average common equity 12.82   11.58   10.48   12.50   9.12  
Return on average tangible common equity (a)  17.63   16.01   14.90   17.34   13.19  
Average common equity to average assets  10.50   10.99   11.30   10.96   11.88  
Tangible common equity to tangible assets (a)  8.17   8.14   8.34   8.17   8.34  
Net interest margin, taxable equivalent 2.93   3.09   3.22   3.05   3.30  
Efficiency ratio (a) 53.46   51.03   53.92   51.05   52.80  
Effective tax rate 21.79   21.05   20.94   21.20   19.19  
            
PERIOD-END BALANCES          
Securities $ 700,523  $651,995  $474,806  $ 700,523  $474,806  
Loans held for sale 8,481   9,518   15,591   8,481   15,591  
Loans, net  1,946,580   1,940,332   2,015,056   1,946,580   2,015,056  
Goodwill and other intangibles 89,675   90,026   91,139   89,675   91,139  
Assets  3,334,597   3,289,063   3,050,010   3,334,597   3,050,010  
Assets - tangible (a) 3,244,922   3,199,037   2,958,871   3,244,922   2,958,871  
Deposits  2,890,353   2,862,081   2,611,330   2,890,353   2,611,330  
Customer repurchase agreements 41,128   26,595   42,551   41,128   42,551  
Long-term borrowings 28,232   28,207   35,630   28,232   35,630  
Shareholders' equity 354,792   350,387   337,894   354,792   337,894  
Shareholders' equity - tangible (a) 265,117   260,361   246,755   265,117   246,755  
            
AVERAGE BALANCES          
Securities (b) $ 654,595  $569,508  $372,529  $ 549,554  $347,952  
Loans held for sale 8,121   9,835   8,601   11,257   6,578  
Loans, net  1,943,238   1,913,446   2,063,397   1,953,121   2,008,683  
Interest-earning assets 3,154,730   2,989,661   2,754,455   2,967,799   2,551,913  
Goodwill and other intangibles 89,855   90,257   91,358   90,413   91,751  
Assets  3,357,223   3,199,514   2,971,505   3,176,564   2,773,007  
Assets - tangible (a) 3,267,368   3,109,257   2,880,147   3,086,151   2,681,256  
Interest-bearing deposits 1,868,695   1,817,595   1,701,395   1,797,385   1,595,694  
Deposits  2,914,381   2,768,268   2,536,363   2,736,571   2,342,353  
Customer repurchase agreements 39,645   29,681   40,819   37,632   42,937  
Other short-term borrowings -   -   -   -   1  
Long-term borrowings 28,218   28,192   35,617   31,878   35,586  
Shareholders' equity 352,395   351,646   335,671   348,158   329,353  
Shareholders' equity - tangible (a) 262,540   261,389   244,313   257,745   237,602  
            
American National Bankshares Inc.          
Financial Highlights          
            
(Dollars in thousands, except per share data)      At or for the Twelve Months 
  4rd Qtr 3rd Qtr 4th Qtr Ended December 31,  
   2021   2021   2020   2021   2020  
  (Unaudited) (Unaudited) (Unaudited) (Unaudited)(Audited) 
CAPITAL            
Weighted average shares outstanding - basic  10,774,268   10,833,875   10,975,349   10,873,817   10,981,623  
Weighted average shares outstanding - diluted  10,776,970   10,836,293   10,978,931   10,877,231   10,985,790  
            
COMMON STOCK REPURCHASE PROGRAM         
Total shares of common stock repurchased  16,580   100,764   -   264,579   62,669  
Average price paid per share of common stock $ 37.12  $32.87  $-  $ 33.10  $34.90  
            
ALLOWANCE FOR LOAN LOSSES          
Beginning balance$ 20,630  $20,097  $21,088  $ 21,403  $13,152  
(Recovery of) Provision for loan losses (1,955)  482   585   (2,825)  8,916  
Charge-offs  (76)  (19)  (331)  (146)  (1,006) 
Recoveries  79   70   61   246   341  
Ending balance$ 18,678  $20,630  $21,403  $ 18,678  $21,403  
            
LOANS           
Construction and land development$ 134,221  $120,193  $140,071  $ 134,221  $140,071  
Commercial real estate - owner occupied 391,517   404,029   373,680   391,517   373,680  
Commercial real estate - non-owner occupied  731,034   713,339   627,569   731,034   627,569  
Residential real estate 289,757   280,351   269,137   289,757   269,137  
Home equity  93,203   95,317   104,881   93,203   104,881  
Commercial and industrial 299,773   320,278   491,256   299,773   491,256  
Consumer  7,075   6,825   8,462   7,075   8,462  
Total $ 1,946,580  $1,940,332  $2,015,056  $ 1,946,580  $2,015,056  
            
NONPERFORMING ASSETS AT PERIOD-END         
Nonperforming loans:          
90 days past due and accruing$ 216  $-  $262  $ 216  $262  
Nonaccrual  2,006   1,903   2,434   2,006   2,434  
Other real estate owned and repossessions  143   213   958   143   958  
Nonperforming assets$ 2,365  $2,116  $3,654  $ 2,365  $3,654  
            
ASSET QUALITY RATIOS          
Allowance for loan losses to total loans 0.96 % 1.06 % 1.06 % 0.96 % 1.06 %
Allowance for loan losses to nonperforming loans 840.59   1,084.08   793.88   840.59   793.88  
Nonperforming assets to total assets 0.07   0.06   0.12   0.07   0.12  
Nonperforming loans to total loans 0.11   0.10   0.13   0.11   0.13  
Annualized net charge-offs (recoveries) to average loans (0.00)  (0.01)  0.05   (0.01)  0.03  
            
OTHER DATA           
Fiduciary assets at period-end (c) (d)$ 752,410  $697,528  $614,016  $ 752,410  $614,016  
Retail brokerage assets at period-end (c) (d) $ 418,850  $406,408  $362,022  $ 418,850  $362,022  
Number full-time equivalent employees (e) 346   345   342   346   342  
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   37   36   37  
            
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 December 31, 2021 and 2020
(Dollars in thousands)
     
      Interest      
  Average Balance Income/Expense (a) Yield/Rate
  2021 2020 2021 2020 2021 2020
  (Unaudited) (Unaudited) (Unaudited)(Unaudited) (Unaudited) (Unaudited)
Loans:              
Commercial $310,175 $507,750 $3,386 $5,354 4.33% 4.19%
Real estate  1,634,660  1,556,192  18,244  17,206 4.46  4.42 
Consumer  6,524  8,056  112  137 6.81  6.77 
Total loans (b)  1,951,359  2,071,998  21,742  22,697 4.45  4.38 
               
Securities:              
U.S. Treasury  116,629  14,126  242  4 0.83  0.11 
Federal agencies & GSEs  93,042  76,606  265  276 1.14  1.44 
Mortgage-backed & CMOs  355,492  206,817  1,117  916 1.26  1.77 
State and municipal  63,148  53,257  314  304 1.99  2.28 
Other  26,284  21,723  305  286 4.64  5.27 
Total securities  654,595  372,529  2,243  1,786 1.37  1.92 
               
Deposits in other banks  548,776  309,928  223  84 0.16  0.11 
               
Total interest-earning assets  3,154,730  2,754,455  24,208  24,567 3.07  3.56 
               
Non-earning assets  202,493  217,050          
               
Total assets $3,357,223 $2,971,505          
               
Deposits:              
Demand $505,528 $433,356  37  50 0.03  0.05 
Money market  743,354  647,320  101  380 0.05  0.23 
Savings  257,289  215,233  6  16 0.01  0.03 
Time  362,524  405,486  511  1,375 0.56  1.35 
Total deposits  1,868,695  1,701,395  655  1,821 0.14  0.43 
               
Customer repurchase agreements  39,645  40,819  3  22 0.03  0.21 
Long-term borrowings  28,218  35,617  386  509 5.47  5.72 
Total interest-bearing liabilities  1,936,558  1,777,831  1,044  2,352 0.21  0.53 
               
Noninterest bearing demand deposits  1,045,686  834,968          
Other liabilities  22,584  23,035          
Shareholders' equity  352,395  335,671          
   Total liabilities and shareholders'                 
   equity $3,357,223 $2,971,505          
               
Interest rate spread         2.86% 3.03%
Net interest margin         2.93% 3.22%
               
Net interest income (taxable equivalent basis)       23,164  22,215      
Less: Taxable equivalent adjustment (c)       60  69      
Net interest income     $23,104 $22,146      
               
               
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 Twelve Months Ended December 31, 2021 and 2020
(Dollars in thousands)
   
      Interest      
  Average Balance Income/Expense (a) Yield/Rate
  2021 2020 2021 2020 2021 2020
  (Unaudited) (Audited) (Unaudited) (Audited) (Unaudited) (Audited)
Loans:              
Commercial $372,538 $475,068 $18,819 $17,768 5.05% 3.74%
Real estate  1,584,856  1,531,195  67,887  69,525 4.28  4.54 
Consumer  6,984  8,998  475  588 6.80  6.53 
Total loans (b)  1,964,378  2,015,261  87,181  87,881 4.44  4.36 
               
Securities:              
U.S. Treasury  57,048  9,010  507  51 0.89  0.57 
Federal agencies & GSEs  97,943  72,112  1,132  1,423 1.16  1.97 
Mortgage-backed & CMOs  308,158  200,612  4,142  4,060 1.34  2.02 
State and municipal  61,698  45,836  1,272  1,175 2.06  2.56 
Other  24,707  20,382  1,205  1,098 4.88  5.39 
Total securities  549,554  347,952  8,258  7,807 1.50  2.24 
               
Deposits in other banks  453,867  188,700  598  440 0.13  0.23 
               
Total interest-earning assets  2,967,799  2,551,913  96,037  96,128 3.24  3.77 
               
Non-earning assets  208,765  221,094          
               
Total assets $3,176,564 $2,773,007          
               
Deposits:              
Demand $476,710 $386,790  152  344 0.03  0.09 
Money market  710,948  574,510  758  2,634 0.11  0.46 
Savings  243,123  198,313  26  117 0.01  0.06 
Time  366,604  436,081  2,709  6,634 0.74  1.52 
Total deposits  1,797,385  1,595,694  3,645  9,729 0.20  0.61 
               
Customer repurchase agreements  37,632  42,937  22  259 0.06  0.60 
Other short-term borrowings  -  1  -  - -  0.50 
Long-term borrowings  31,878  35,586  1,738  2,032 5.45  5.71 
Total interest-bearing liabilities  1,866,895  1,674,218  5,405  12,020 0.29  0.72 
               
Noninterest bearing demand deposits  939,186  746,659          
Other liabilities  22,325  22,777          
Shareholders' equity  348,158  329,353          
   Total liabilities and shareholders'               
   equity $3,176,564 $2,773,007          
               
Interest rate spread         2.95% 3.05%
Net interest margin         3.05% 3.30%
               
Net interest income (taxable equivalent basis)       90,632  84,108      
Less: Taxable equivalent adjustment (c)       241  288      
Net interest income     $90,391 $83,820      
               
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 
            
(Dollars in thousands, except per share data)           
        At or for the Twelve Months 
  4rd Qtr 3rd Qtr 4th Qtr Ended December 31,  
   2021   2021   2020   2021   2020  
  (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited) 
EFFICIENCY RATIO           
Noninterest expense $ 15,463  $14,843  $14,659  $ 59,008  $54,565  
Add/subtract: gain/loss on sale of OREO  -   -   (8)  (111)  4  
Subtract: core deposit intangible amortization  (351)  (361)  (391)  (1,464)  (1,637) 
  $ 15,112  $14,482  $14,260  $ 57,433  $52,932  
            
Net interest income $ 23,104  $23,093  $22,146  $ 90,391  $83,820  
Tax equivalent adjustment  60   59   69   241   288  
Noninterest income  4,844   5,123   4,221   21,031   16,843  
Subtract: gain on securities  (35)  -   -   (35)  (814) 
Add: loss on fixed assets  297   107   13   885   110  
  $ 28,270  $28,382  $26,449  $ 112,513  $100,247  
            
Efficiency ratio  53.46 % 51.03 % 53.92 % 51.05 % 52.80 %
            
TAX EQUIVALENT NET INTEREST INCOME             
Non-GAAP measures:           
Interest income - loans $ 21,742  $22,012  $22,697  $ 87,181  $87,881  
Interest income - investments and other  2,466   2,327   1,870   8,856   8,247  
Interest expense - deposits  (655)  (781)  (1,821)  (3,645)  (9,729) 
Interest expense - customer repurchase agreements  (3)  (3)  (22)  (22)  (259) 
Interest expense - long-term borrowings  (386)  (400)  (509)  (1,738)  (2,032) 
Total net interest income $ 23,164  $23,155  $22,215  $ 90,632  $84,108  
Less non-GAAP measures:           
Tax benefit on nontaxable interest - loans  (36)  (38)  (43)  (141)  (181) 
Tax benefit on nontaxable interest - securities  (24)  (24)  (26)  (100)  (107) 
GAAP measures $ 23,104  $23,093  $22,146  $ 90,391  $83,820  
            
RETURN ON AVERAGE TANGIBLE EQUITY             
Return on average equity (GAAP basis)  12.82 % 11.58 % 10.48 % 12.50 % 9.12 %
Impact of excluding average goodwill and other intangibles  4.81   4.43   4.42   4.84   4.07  
Return on average tangible equity (non-GAAP)  17.63 % 16.01 % 14.90 % 17.34 % 13.19 %
            
TANGIBLE EQUITY TO TANGIBLE ASSETS           
Equity to assets ratio (GAAP basis)  10.64 % 10.65 % 11.08 % 10.64 % 11.08 %
Impact of excluding goodwill and other intangibles  (2.47)  (2.51)  (2.74)  (2.47)  (2.74) 
Tangible equity to tangible assets ratio (non-GAAP)  8.17 % 8.14 % 8.34 % 8.17 % 8.34 %
            
TANGIBLE BOOK VALUE           
Book value per share (GAAP basis) $ 32.95  $32.51  $30.77  $ 32.95  $30.77  
Impact of excluding goodwill and other intangibles  (8.33)  (8.35)  (8.30)  (8.33)  (8.30) 
Tangible book value per share (non-GAAP) $ 24.62  $24.16  $22.47  $ 24.62  $22.47  
            
ADJUSTED LOAN LOSS ALLOWANCE           
Allowance for loan losses $ 18,678  $20,630  $21,403  $ 18,678  $21,403  
Credit discount on purchased loans  4,474   5,258   7,255   4,474   7,255  
Adjusted loan loss allowance $ 23,152  $25,888  $28,658  $ 23,152  $28,658  
            
Total loans, net of deferred fees and costs $ 1,946,580  $1,940,332  $2,015,056  $ 1,946,580  $2,015,056  
Subtract: PPP loans, net  (12,239)  (37,199)  (211,275)  (12,239)  (211,275) 
Total loans less PPP loans, net $ 1,934,341  $1,903,133  $1,803,781  $ 1,934,341  $1,803,781  
            
Adjusted loan loss allowance to total loans less PPP loans, net  1.20 % 1.36 % 1.59 % 1.20 % 1.59 %
            
Allowance for loan losses to total loans less PPP loans, net  0.97 % 1.08 % 1.19 % 0.97 % 1.19 %
            

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