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American National Bankshares Reports First Quarter Earnings

American National Bankshares, Inc.
American National Bankshares, Inc.

DANVILLE, Va., April 25, 2023 (GLOBE NEWSWIRE) -- American National Bankshares Inc. (Nasdaq: AMNB) (“American National” or the “Company”) today reported first quarter 2023 earnings of $9.2 million, or $0.86 per diluted common share. Those results compare to earnings of $9.0 million, or $0.84 per diluted common share, during the same quarter in the prior year, and earnings of $8.0 million, or $0.76 per diluted common share, for the fourth quarter of 2022. Earnings produced a return on average tangible common equity of 15.95% for the first quarter of 2023, compared to 14.50% in the previous quarter and 14.14% for the same quarter in the prior year (non-GAAP).

President and Chief Executive Officer, Jeffrey V. Haley, commented, “I could not be prouder of our Company’s resiliency in the face of unfortunate turmoil in the banking industry over the course of the past few weeks. The failure of two large regional banks certainly created challenges for the regional and community banking industry, but our industry remains strong and American National remains strong. Our customers have continued to place trust in us, and we continue to serve their needs. Our balance sheet maintains strong liquidity and capital, and we were able to deliver a solid quarter of earnings performance for our shareholders. While economic activity in our markets is still fairly strong, we are seeing indications of slowing and have consciously narrowed our lending focus in the face of an uncertain economic future. We have placed additional emphasis on deposit gathering but continue to see a shift in funding mix and rising funding costs associated with higher market rates and fiscal policy. While certainly this represents a headwind, we are confident in our ability to pivot and continue to build franchise value.”

First quarter 2023 highlights include:

  • Average loans held for investment grew $17.8 million, or 3.3% annualized, during the first quarter as compared to the previous quarter.

  • Average deposits declined by 8.8% annualized during the quarter, while period-end deposits increased $15.9 million, or 2.5% annualized.

  • Fully taxable equivalent (“FTE”) net interest margin was 3.20% for the quarter, down 13 basis points from 3.33% in the fourth quarter of 2022 and up 57 basis points from 2.63% in the same quarter of the prior year (non-GAAP).

  • Noninterest revenues increased $762 thousand, or 21.1%, when compared to the previous quarter, and decreased $1.2 million, or 21.9%, compared to the same quarter in the prior year.

  • Noninterest expense decreased $1.2 million, or 7.0% when compared to the previous quarter, and increased $299 thousand, or 1.9%, when compared to the same quarter in the prior year.

  • On January 1, 2023, the Company adopted the current expected credit losses (“CECL”) standard for estimating credit losses, which resulted in increases of $5.2 million in the allowance for credit losses (“ACL”), $305 thousand in the reserve liability for unfunded commitments, $1.2 million in deferred tax assets and decreased retained earnings by $4.2 million.

  • The Company recognized a provision for credit losses on loans in the first quarter of 2023 of $329 thousand compared to $1.2 million in the fourth quarter of 2022 and a negative provision in the first quarter of 2022 of $758 thousand.

  • Annualized net charge-offs (recoveries) as a percentage of average loans outstanding were 0.04% for the first quarter of 2023, compared to 0.15% in the previous quarter and (0.01%) in the same quarter in the prior year.

  • Nonperforming assets as a percentage of total assets were 0.06% at March 31, 2023 and March 31, 2022 and 0.05% at December 31, 2022.

NET INTEREST INCOME

Net interest income for the first quarter of 2023 decreased by $1.1 million, or 4.4%, to $23.2 million compared to $24.3 million for the fourth quarter of 2022. The first quarter of 2023 compared to the same quarter of 2022 reflected an increase of $2.8 million, or 13.5%. The FTE net interest margin for the quarter was 3.20%, down from 3.33% in the prior quarter and up from 2.63% in the same quarter a year ago (non-GAAP). The margin contraction relative to the previous quarter resulted from funding costs increasing more than earning asset yields. The yield on average earning assets increased 22 basis points quarter-over-quarter, while the cost of average interest-bearing liabilities rose 55 basis points due to an acceleration in deposit repricing, shift of the deposit mix into interest-bearing accounts and increased reliance on short-term borrowings. The cost of interest-bearing deposits increased to 0.88% in the first quarter, compared to 0.39% in the previous quarter and 0.12% in the same quarter of the prior year. The improvement in net interest margin relative to the first quarter of 2022 is a reflection of an increase in the yield on average earning assets of 116 basis points partially offset by a 97 basis point rise in the cost of average interest-bearing liabilities.

ASSET QUALITY

Nonperforming assets (“NPAs”) totaled $2.0 million as of March 31, 2023 and 2022, respectively, up $564 thousand from December 31, 2022. NPAs as a percentage of total assets were 0.06% at March 31, 2023 and 2022, respectively, compared to 0.05% at December 31, 2022. The Company recorded a provision for credit losses for the first quarter of 2023 of $329 thousand compared to $1.2 million in the previous quarter and a negative provision of $758 thousand in the first quarter of the previous year. The first quarter of 2023 and fourth quarter of 2022 provisions were the result of loan growth and replenishment of the allowance for net charge-off activity. The negative provision expense for the first quarter of 2022 was the result of improvement in economic conditions, ongoing low charge-off and delinquency rates, and overall strong asset quality metrics from the prior quarter.

The allowance for credit losses on loans increased $5.2 million from the fourth quarter of 2022 resulting from the Day 1 adjustment for the adoption of CECL to $24.9 million at March 31, 2023 as compared to $19.6 million at December 31, 2022. The reserve for unfunded commitments increased $305 thousand to $682 thousand as a result of the Day 1 adoption of CECL. Annualized net charge-offs (recoveries) as a percentage of average loans outstanding were 0.04% for the first quarter of 2023, compared to 0.15% in the previous quarter and (0.01%) in the same quarter in the prior year. The ACL as a percentage of loans held for investment was 1.13% at March 31, 2023, compared to 0.89% at December 31, 2022, and 0.90% at March 31, 2022.

NONINTEREST INCOME

Noninterest income increased $762 thousand, or 21.1%, to $4.4 million for the quarter ended March 31, 2023 from $3.6 million in the prior quarter and decreased $1.2 million, or 21.9%, from the same quarter in the prior year. The increase in the first quarter of 2023 from the fourth quarter of 2022 was primarily the result of increased income from small business investment companies of $590 thousand and income from insurance commissions of $265 thousand included in other fees and commissions.

The first quarter of 2023 compared to the first quarter of 2022 reflected a decrease in the majority of line items, with the most significant decrease in mortgage banking income of $529 thousand, or 78.6%, and a decrease in income from insurance investments of $418 thousand, or 93.5%, partially offset by increased interchange fees of $129 thousand, or 13.1%, and $216 thousand, or 81.2%, in other fees and commissions.

NONINTEREST EXPENSE

Noninterest expense for the first quarter of 2023 amounted to $15.6 million, down $1.2 million, or 7.0%, when compared to the $16.8 million for the previous quarter and up $299 thousand, or 1.9%, from $15.3 million during the same quarter in the previous year. The decrease in the first quarter compared to the fourth quarter of 2022 was the result of reduced incentive accruals in salaries and employee benefits of $638 thousand partially offset by a $262 thousand increase in payroll taxes and retirement contributions; reduced costs in the first quarter associated with deferred compensation programs of $203 thousand; and one-time seasonal expenses and fraud losses included in the fourth quarter of 2022 of $300 thousand and $184 thousand, respectively.

The first quarter 2023 increase compared to the same quarter of 2022 was primarily due to a higher salary base partially offset by reduced incentive and commission expense.

INCOME TAXES

The effective tax rate for the three months ended March 31, 2023 was 21.19%, compared to 18.90% for the prior quarter and 21.49% for the same quarter in the prior year. The Company recognized a tax benefit in the fourth quarter in the prior year resulting from investment partnership income tax returns reducing the effective tax rate for that period. The decrease in effective tax rate from the March 31, 2022 quarter was attributable to changes in pre-tax earnings and the levels of permanent tax differences.

BALANCE SHEET

Total assets at March 31, 2023 were $3.1 billion, an increase of $9.8 million or 1.3% annualized from December 31, 2022 and a decrease of $270.6 million, or 8.1%, from March 31, 2022.

At March 31, 2023, loans held for investment (net of deferred fees and costs) were $2.2 billion, an increase of $13.1 million, or 2.4% annualized, from December 31, 2022. Loans held for investment (net of deferred fees and costs) increased $211.5 million, or 10.6%, from March 31, 2022.

Investment securities available for sale amounted to $586.4 million at March 31, 2023, a decrease of $21.7 million, or 3.6%, from December 31, 2022, and a decrease of $99.8 million, or 14.5%, compared to March 31, 2022. The unrealized loss on available for sale securities was $62.4 million at March 31, 2023 compared to $71.0 million at December 31, 2022 and $33.0 million at March 31, 2022. The improvement relative to the prior quarter was primarily the result of declines in market yields for longer term securities. 65% of the market value of the securities portfolio is unencumbered and could be used to provide additional liquidity if needed.

Deposits amounted to $2.6 billion at March 31, 2023, with growth of $15.9 million, or 2.5% annualized, from December 31, 2022 and decreased $314.0 million, or 10.7%, compared to March 31, 2022. Deposit accounts that were uninsured amounted to 39.9% of total deposits (29.3% excluding collateralized municipal deposits) at March 31, 2023.

Borrowings from the Federal Home Loan Bank of Atlanta (“FHLB”) totaled $25.0 million at March 31, 2023, down from $100.5 million at December 31, 2022. The Company had no FHLB borrowings at March 31, 2022. The Company’s remaining credit availability from the FHLB was $723.3 million as of March 31, 2023, $485.8 million of which could be accessed without pledging additional collateral.

The Company continues to be well-capitalized as defined by regulators, with tangible common equity to tangible assets of 8.06% at March 31, 2023 compared to 7.82% at December 31, 2022 and compared to 7.54% at March 31, 2022 (non-GAAP). The Company’s preliminary common equity Tier 1, Tier 1, total, and Tier 1 leverage capital ratios were 11.75%, 12.90%, 13.93% and 10.46%, respectively, at March 31, 2023.

ABOUT AMERICAN NATIONAL

American National is a multi-state bank holding company with total assets of approximately $3.1 billion. Headquartered in Danville, Virginia, American National is the parent company of American National Bank and Trust Company. American National Bank is a community bank serving Virginia and North Carolina with 26 banking offices. American National Bank also manages an additional $1.2 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
Certain statements in this release may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, statements regarding anticipated changes in the interest rate environment, future economic conditions and the impacts of current economic uncertainties, and projections, predictions, expectations, or beliefs about future events or results, or otherwise are not statements of historical fact. Such forward-looking statements are based on certain assumptions as of the time they are made, and are inherently subject to known and unknown risks and uncertainties, some of which cannot be predicted or quantified, that may cause actual results, performance or achievements to be materially different from those expressed or implied by such forward-looking statements. Such statements are often characterized by the use of qualified words (and their derivatives) such as “expect,” “believe,” “estimate,” “plan,” “project,” “anticipate,” “intend,” “will,” “may,” “view,” “seek to,” “opportunity,” “potential,” “continue,” “confidence” or words of similar meaning, or other statements concerning opinions or judgment of our management about future events. Although we believe that our expectations with respect to forward-looking statements are based upon reasonable assumptions within the bounds of our existing knowledge of our business and operations, there can be no assurance that actual future results, performance, or achievements of, or trends affecting, us will not differ materially from any projected future results, performance, achievements or trends expressed or implied by such forward-looking statements. Actual future results, performance, achievements or trends may differ materially from historical results or those anticipated depending on a variety of factors, including, but not limited to, the effects of or changes in: the level of inflation; financial market volatility including the level of interest rates, could affect the values of financial instruments and the amount of net interest income earned; the adequacy of the level of the Company’s allowance for credit losses, the amount of credit loss provisions required in future periods, and the failure of assumptions underlying the allowance for credit losses; general economic or business conditions, either nationally or in the market areas in which the Company does business, may be less favorable than expected, resulting in deteriorating credit quality, reduced demand for credit, or a weakened ability to generate deposits; competition among financial institutions may increase, and competitors may have greater financial resources and develop products and technology that enable those competitors to compete more successfully than the Company; businesses that the Company is engaged in may be adversely affected by legislative or regulatory changes, including changes in accounting standards and tax laws; the ability to recruit and retain key personnel; cybersecurity threats or attacks, the implementation of new technologies, and the ability to develop and maintain reliable and secure electronic systems; the effects of climate change, natural disasters, and extreme weather events; geopolitical conditions, including acts or threats of terrorism and/or military conflicts, or actions taken by the U.S. or other governments in response to acts of threats or terrorism and/or military conflicts, negatively impacting business and economic conditions in the U.S. and abroad; the impact of health emergencies, epidemics or pandemics, including the COVID-19 pandemic; risks related to environmental, social and governance practices; risks associated with mergers, acquisitions, and other expansion activities; and other factors described from time to time in the Company’s reports (such as our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K) filed with the Securities and Exchange Commission. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. The Company does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions which may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

 

American National Bankshares Inc.

Consolidated Balance Sheets

(Dollars in thousands, except per share data)

Unaudited

 

 

 

 

 

March 31

 

2023

 

2022

Assets

 

 

 

Cash and due from banks

$

45,090

 

 

$

34,506

 

Interest-bearing deposits in other banks

 

58,340

 

 

 

452,562

 

Securities available for sale, at fair value

 

586,407

 

 

 

686,176

 

Restricted stock, at cost

 

9,319

 

 

 

8,484

 

Loans held for sale

 

650

 

 

 

2,524

 

Loans, net of deferred fees and costs

 

2,199,517

 

 

 

1,988,008

 

Less allowance for credit losses - loans

 

(24,861

)

 

 

(17,988

)

Net Loans

 

2,174,656

 

 

 

1,970,020

 

Premises and equipment, net

 

32,440

 

 

 

34,001

 

Assets held-for-sale

 

1,382

 

 

 

1,382

 

Other real estate owned, net

 

27

 

 

 

143

 

Goodwill

 

85,048

 

 

 

85,048

 

Core deposit intangibles, net

 

3,085

 

 

 

4,297

 

Bank owned life insurance

 

29,853

 

 

 

29,159

 

Other assets

 

49,358

 

 

 

37,936

 

 

 

 

 

Total assets

$

3,075,655

 

 

$

3,346,238

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

Demand deposits -- noninterest-bearing

$

962,247

 

 

$

1,024,778

 

Demand deposits -- interest-bearing

 

481,499

 

 

 

539,252

 

Money market deposits

 

619,621

 

 

 

759,782

 

Savings deposits

 

252,121

 

 

 

271,384

 

Time deposits

 

296,762

 

 

 

331,011

 

Total deposits

 

2,612,250

 

 

 

2,926,207

 

Customer repurchase agreements

 

63,220

 

 

 

38,527

 

Other short-term borrowings

 

25,000

 

 

 

-

 

Long-term borrowings

 

28,359

 

 

 

28,257

 

Other liabilities

 

17,785

 

 

 

18,173

 

Total liabilities

 

2,746,614

 

 

 

3,011,164

 

 

 

 

 

Shareholders' equity

 

 

 

Preferred stock, $5 par value, 2,000,000 shares authorized, none outstanding

 

-

 

 

 

-

 

Common stock, $1 par value, 20,000,000 shares authorized, 10,626,066 shares outstanding at March 31, 2023 and 10,713,958 shares outstanding at March 31, 2022

 

10,536

 

 

 

10,638

 

Capital in excess of par value

 

141,713

 

 

 

144,848

 

Retained earnings

 

225,409

 

 

 

207,373

 

Accumulated other comprehensive loss, net

 

(48,617

)

 

 

(27,785

)

Total shareholders' equity

 

329,041

 

 

 

335,074

 

 

 

 

 

Total liabilities and shareholders' equity

$

3,075,655

 

 

$

3,346,238

 

 

 

 

 


American National Bankshares Inc.

Consolidated Statements of Income

(Dollars in thousands, except per share data)

Unaudited

 

 

 

 

 

 

 

For the Three Months Ended

 

3/31/23

 

12/31/22

 

3/31/22

Interest and Dividend Income:

 

 

 

 

 

Interest and fees on loans

$

24,912

 

 

$

23,544

 

 

$

18,788

 

Interest and dividends on securities:

 

 

 

 

 

Taxable

 

2,684

 

 

 

2,721

 

 

 

2,239

 

Tax-exempt

 

65

 

 

 

110

 

 

 

90

 

Dividends

 

170

 

 

 

126

 

 

 

113

 

Other interest income

 

471

 

 

 

415

 

 

 

177

 

Total interest and dividend income

 

28,302

 

 

 

26,916

 

 

 

21,407

 

 

 

 

 

 

 

Interest Expense:

 

 

 

 

 

Interest on deposits

 

3,486

 

 

 

1,597

 

 

 

569

 

Interest on short-term borrowings

 

1,205

 

 

 

633

 

 

 

6

 

Interest on long-term borrowings

 

387

 

 

 

398

 

 

 

379

 

Total interest expense

 

5,078

 

 

 

2,628

 

 

 

954

 

 

 

 

 

 

 

Net Interest Income

 

23,224

 

 

 

24,288

 

 

 

20,453

 

Provision for (recovery of) credit losses

 

329

 

 

 

1,159

 

 

 

(758

)

 

 

 

 

 

 

Net Interest Income After Provision for

 

 

 

 

 

(Recovery of) Credit Losses

 

22,895

 

 

 

23,129

 

 

 

21,211

 

 

 

 

 

 

 

Noninterest Income:

 

 

 

 

 

Wealth management income

 

1,568

 

 

 

1,522

 

 

 

1,809

 

Service charges on deposit accounts

 

556

 

 

 

597

 

 

 

689

 

Interchange fees

 

1,110

 

 

 

1,117

 

 

 

981

 

Other fees and commissions

 

482

 

 

 

207

 

 

 

266

 

Mortgage banking income

 

144

 

 

 

176

 

 

 

673

 

Securities losses, net

 

(68

)

 

 

-

 

 

 

-

 

Income (loss) from Small Business Investment Companies

 

327

 

 

 

(263

)

 

 

493

 

Income from insurance investments

 

29

 

 

 

103

 

 

 

447

 

(Losses) gains on premises and equipment, net

 

(105

)

 

 

(146

)

 

 

4

 

Other

 

329

 

 

 

297

 

 

 

238

 

Total noninterest income

 

4,372

 

 

 

3,610

 

 

 

5,600

 

 

 

 

 

 

 

Noninterest Expense:

 

 

 

 

 

Salaries and employee benefits

 

9,172

 

 

 

9,446

 

 

 

8,598

 

Occupancy and equipment

 

1,444

 

 

 

1,499

 

 

 

1,542

 

FDIC assessment

 

207

 

 

 

209

 

 

 

239

 

Bank franchise tax

 

510

 

 

 

501

 

 

 

476

 

Core deposit intangible amortization

 

283

 

 

 

300

 

 

 

330

 

Data processing

 

851

 

 

 

864

 

 

 

847

 

Software

 

444

 

 

 

417

 

 

 

363

 

Other real estate owned, net

 

-

 

 

 

(1

)

 

 

(1

)

Other

 

2,737

 

 

 

3,599

 

 

 

2,955

 

Total noninterest expense

 

15,648

 

 

 

16,834

 

 

 

15,349

 

 

 

 

 

 

 

Income Before Income Taxes

 

11,619

 

 

 

9,905

 

 

 

11,462

 

Income Taxes

 

2,462

 

 

 

1,872

 

 

 

2,463

 

Net Income

$

9,157

 

 

$

8,033

 

 

$

8,999

 

 

 

 

 

 

 

Net Income Per Common Share:

 

 

 

 

 

Basic

$

0.86

 

 

$

0.76

 

 

$

0.84

 

Diluted

$

0.86

 

 

$

0.76

 

 

$

0.84

 

Weighted Average Common Shares Outstanding:

 

 

 

 

 

Basic

 

10,630,571

 

 

 

10,607,678

 

 

 

10,754,287

 

Diluted

 

10,632,681

 

 

 

10,609,937

 

 

 

10,756,902

 

 

 

 

 

 

 



American National Bankshares Inc.

 

 

 

 

 

 

 

 

Financial Highlights

 

 

 

 

 

 

 

 

Unaudited

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Dollars in thousands, except per share data)

 

 

 

 

 

 

 

 

 

1st Qtr

 

4th Qtr

 

1st Qtr

 

2023

 

2022

 

2022

 

 

 

 

 

 

 

 

 

EARNINGS

 

 

 

 

 

 

 

 

Interest income

$

28,302

 

 

$

26,916

 

 

$

21,407

 

Interest expense

5,078

 

 

2,628

 

 

954

 

Net interest income

23,224

 

 

24,288

 

 

20,453

 

Provision for (recovery of) credit losses

329

 

 

1,159

 

 

(758

)

Noninterest income

4,372

 

 

3,610

 

 

5,600

 

Noninterest expense

15,648

 

 

16,834

 

 

15,349

 

Income taxes

2,462

 

 

1,872

 

 

2,463

 

Net income

9,157

 

 

8,033

 

 

8,999

 

 

 

 

 

 

 

 

 

 

PER COMMON SHARE

 

 

 

 

 

 

 

 

Net income per share - basic

$

0.86

 

 

$

0.76

 

 

$

0.84

 

Net income per share - diluted

0.86

 

 

0.76

 

 

0.84

 

Cash dividends paid

0.30

 

 

0.30

 

 

0.28

 

Book value per share

30.97

 

 

30.27

 

 

31.27

 

Book value per share - tangible (a)

22.67

 

 

21.94

 

 

22.94

 

Closing market price

31.70

 

 

36.93

 

 

37.68

 

 

 

 

 

 

 

 

 

 

FINANCIAL RATIOS

 

 

 

 

 

 

 

 

Return on average assets

1.20

%

 

1.05

%

 

1.08

%

Return on average common equity

11.32

 

 

10.15

 

 

10.24

 

Return on average tangible common equity (a)

15.95

 

 

14.50

 

 

14.14

 

Average common equity to average assets

10.58

 

 

10.33

 

 

10.59

 

Tangible common equity to tangible assets (a)

8.06

 

 

7.82

 

 

7.54

 

Net interest margin, taxable equivalent

3.20

 

 

3.33

 

 

2.63

 

Efficiency ratio (a)

55.21

 

 

58.82

 

 

57.53

 

Effective tax rate

21.19

 

 

18.90

 

 

21.49

 

 

 

 

 

 

 

 

 

 

PERIOD-END BALANCES

 

 

 

 

 

 

 

 

Securities

$

595,726

 

 

$

620,713

 

 

$

694,660

 

Loans held for sale

650

 

 

1,061

 

 

2,524

 

Loans, net

2,199,517

 

 

2,186,449

 

 

1,988,008

 

Goodwill and other intangibles

88,133

 

 

88,415

 

 

89,345

 

Assets

3,075,655

 

 

3,065,902

 

 

3,346,238

 

Assets - tangible (a)

2,987,522

 

 

2,977,487

 

 

3,256,893

 

Interest-bearing deposits

1,650,003

 

 

1,585,726

 

 

1,901,429

 

Noninterest bearing demand deposits

962,247

 

 

1,010,602

 

 

1,024,778

 

Customer repurchase agreements

63,220

 

 

370

 

 

38,527

 

Other short-term borrowings

25,000

 

 

100,531

 

 

-

 

Long-term borrowings

28,359

 

 

28,334

 

 

28,257

 

Shareholders' equity

329,041

 

 

321,174

 

 

335,074

 

Shareholders' equity - tangible (a)

240,908

 

 

232,759

 

 

245,729

 

 

 

 

 

 

 

 

 

 

AVERAGE BALANCES

 

 

 

 

 

 

 

 

Securities (b)

$

677,938

 

 

$

713,996

 

 

$

710,873

 

Loans held for sale

611

 

 

972

 

 

4,324

 

Loans, net

2,186,475

 

 

2,168,636

 

 

1,966,586

 

Interest-earning assets

2,910,165

 

 

2,920,992

 

 

3,126,561

 

Goodwill and other intangibles

88,311

 

 

88,593

 

 

89,525

 

Assets

3,056,918

 

 

3,066,362

 

 

3,320,314

 

Assets - tangible (a)

2,968,607

 

 

2,977,769

 

 

3,230,789

 

Interest-bearing deposits

1,614,273

 

 

1,609,503

 

 

1,880,873

 

Noninterest bearing demand deposits

969,001

 

 

1,031,630

 

 

1,000,020

 

Customer repurchase agreements

6,597

 

 

704

 

 

41,337

 

Other short-term borrowings

98,497

 

 

62,004

 

 

-

 

Long-term borrowings

28,342

 

 

28,318

 

 

28,241

 

Shareholders' equity

323,497

 

 

316,697

 

 

351,539

 

Shareholders' equity - tangible (a)

235,186

 

 

228,104

 

 

262,014

 

 

 

 

 

 

 

 

 

 

American National Bankshares Inc.

 

 

 

 

 

 

 

 

Financial Highlights

 

 

 

 

 

 

 

 

Unaudited

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1st Qtr

 

4th Qtr

 

1st Qtr

 

2023

 

2022

 

2022

CAPITAL

 

 

 

 

 

 

 

 

Weighted average shares outstanding - basic

10,630,571

 

 

10,607,678

 

 

10,754,287

 

Weighted average shares outstanding - diluted

10,632,681

 

 

10,609,937

 

 

10,756,902

 

 

 

 

 

 

 

 

 

 

COMMON STOCK REPURCHASE PROGRAM

 

 

 

 

 

 

 

 

Weighted average shares outstanding - basic

20,443

 

 

3,269

 

 

88,929

 

Weighted average shares outstanding - diluted

$

32.98

 

 

$

36.44

 

 

$

38.18

 

 

 

 

 

 

 

 

 

 

ALLOWANCE FOR CREDIT LOSSES - LOANS

 

 

 

 

 

 

 

 

Beginning balance

$

19,555

 

 

$

19,189

 

 

$

18,678

 

Day 1 Impact of CECL adoption

5,192

 

 

-

 

 

-

 

Provision for (recovery of) credit losses

329

 

 

1,159

 

 

(758

)

Charge-offs

(395

)

 

(834

)

 

(37

)

Recoveries

180

 

 

41

 

 

105

 

Ending balance

$

24,861

 

 

$

19,555

 

 

$

17,988

 

 

 

 

 

 

 

 

 

 

LOANS

 

 

 

 

 

 

 

 

Construction and land development

$

215,975

 

 

$

197,525

 

 

$

148,276

 

Commercial real estate - owner occupied

415,106

 

 

418,462

 

 

402,306

 

Commercial real estate - non-owner occupied

822,347

 

 

827,728

 

 

752,817

 

Residential real estate

343,548

 

 

338,132

 

 

295,949

 

Home equity

91,408

 

 

93,740

 

 

89,593

 

Commercial and industrial

304,486

 

 

304,247

 

 

291,697

 

Consumer

6,647

 

 

6,615

 

 

7,370

 

Total

$

2,199,517

 

 

$

2,186,449

 

 

$

1,988,008

 

 

 

 

 

 

 

 

 

 

NONPERFORMING ASSETS AT PERIOD-END

 

 

 

 

 

 

 

 

Nonperforming loans:

 

 

 

 

 

 

 

 

90 days past due and accruing

$ 

-

 

 

$

16

 

 

$

71

 

Nonaccrual

1,887

 

 

1,307

 

 

1,762

 

Other real estate owned and repossessions

80

 

 

80

 

 

143

 

Nonperforming assets

$

1,967

 

 

$

1,403

 

 

$

1,976

 

 

 

 

 

 

 

 

 

 

ASSET QUALITY RATIOS

 

 

 

 

 

 

 

 

Allowance for credit losses - loans to total loans

1.13

%

 

0.89

%

 

0.90

%

Allowance for credit losses - loans to nonperforming loans

1,317.49

 

 

1,478.08

 

 

981.34

 

Nonperforming assets to total assets

0.06

 

 

0.05

 

 

0.06

 

Nonperforming loans to total loans

0.09

 

 

0.06

 

 

0.09

 

Annualized net charge-offs (recoveries) to average loans to average loans

0.04

 

 

0.15

 

 

(0.01

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER DATA

 

 

 

 

 

 

 

 

Fiduciary assets at period-end (c) (d)

$

775,379

 

 

$

736,121

 

 

$

727,022

 

Retail brokerage assets at period-end (c) (d)

$

420,540

 

 

$

413,235

 

 

$

405,742

 

Number full-time equivalent employees (e)

357

 

 

359

 

 

338

 

Number of full service offices

26

 

 

26

 

 

26

 

Number of loan production offices

1

 

 

1

 

 

1

 

Number of ATMs

34

 

 

34

 

 

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, 2023 and 2022

 

(Dollars in thousands)

 

Unaudited

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest

 

 

 

 

 

 

 

Average Balance

 

 

Income/Expense (a)

 

Yield/Rate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

2023

 

2022

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total loans (b)

$

2,187,086

 

$

1,970,910

 

$

24,957

 

$

18,822

 

4.57

%

3.83

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

665,635

 

 

692,998

 

 

2,854

 

 

2,351

 

1.72

 

1.36

 

Tax exempt

 

12,303

 

 

17,875

 

 

82

 

 

115

 

2.67

 

2.56

 

Total securities

 

677,938

 

 

710,873

 

 

2,936

 

 

2,466

 

1.74

 

1.39

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits in other banks

 

45,141

 

 

444,778

 

 

471

 

 

177

 

4.23

 

0.16

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total interest-earning assets

 

2,910,165

 

 

3,126,561

 

 

28,364

 

 

21,465

 

3.91

 

2.75

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-earning assets

 

146,753

 

 

193,753

 

 

 

 

 

 

 

 

 

 

 

Total assets

$

3,056,918

 

$

3,320,314

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Demand

$

474,334

 

$

525,508

 

 

174

 

 

37

 

0.15

 

0.03

 

Savings and money market

 

864,008

 

 

1,016,443

 

 

2,288

 

 

108

 

1.07

 

0.04

 

Time

 

275,931

 

 

338,922

 

 

1,024

 

 

424

 

1.51

 

0.51

 

Total deposits

 

1,614,273

 

 

1,880,873

 

 

3,486

 

 

569

 

0.88

 

0.12

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Customer repurchase agreements

 

6,597

 

 

41,337

 

 

65

 

 

6

 

4.02

 

0.06

 

Other short-term borrowings

 

98,497

 

 

-

 

 

1,140

 

 

-

 

4.63

 

-

 

Long-term borrowings

 

28,342

 

 

28,241

 

 

387

 

 

379

 

5.46

 

5.37

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total interest-bearing liabilities

 

1,747,709

 

 

1,950,451

 

 

5,078

 

 

954

 

1.17

 

0.20

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest bearing demand deposits

 

969,001

 

 

1,000,020

 

 

 

 

 

 

 

 

 

 

 

Other liabilities

 

16,711

 

 

18,304

 

 

 

 

 

 

 

 

 

 

 

Shareholders' equity

 

323,497

 

 

351,539

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities and shareholders' equity

$

3,056,918

 

$

3,320,314

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate spread

 

 

 

 

 

 

 

 

 

 

 

 

2.74

%

2.55

%

Net interest margin

 

 

 

 

 

 

 

 

 

 

 

 

3.20

%

2.63

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income (taxable equivalent basis)

 

 

 

 

 

23,286

 

 

20,511

 

 

 

 

 

Less: Taxable equivalent adjustment (c)

 

 

 

 

 

 

 

62

 

 

58

 

 

 

 

 

Net interest income

 

 

 

 

 

 

$

23,224

 

$

20,453

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 and loans held for sale 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

 

 

2023

 

 

 

2022

 

 

 

2022

 

EFFICIENCY RATIO

 

 

 

 

 

Noninterest expense

$

15,648

 

 

$

16,834

 

 

$

15,349

 

Subtract: loss on sale of OREO

 

-

 

 

 

2

 

 

 

-

 

Subtract: core deposit intangible amortization

 

(283

)

 

 

(300

)

 

 

(330

)

 

$

15,365

 

 

$

16,536

 

 

$

15,019

 

 

 

 

 

 

 

Net interest income

$

23,224

 

 

$

24,288

 

 

$

20,453

 

Tax equivalent adjustment

 

62

 

 

 

68

 

 

 

58

 

Noninterest income

 

4,372

 

 

 

3,610

 

 

 

5,600

 

Add: loss on securities

 

68

 

 

 

-

 

 

 

-

 

Add/subtract: (gain)/loss on fixed assets

 

105

 

 

 

146

 

 

 

(4

)

 

$

27,831

 

 

$

28,112

 

 

$

26,107

 

 

 

 

 

 

 

Efficiency ratio

 

55.21

%

 

 

58.82

%

 

 

57.53

%

 

 

 

 

 

 

TAX EQUIVALENT NET INTEREST INCOME

 

 

 

 

Non-GAAP measures:

 

 

 

 

 

Interest income - loans

$

24,957

 

 

$

23,585

 

 

$

18,822

 

Interest income - investments and other

 

3,407

 

 

 

3,399

 

 

 

2,643

 

Interest expense - deposits

 

(3,486

)

 

 

(1,597

)

 

 

(569

)

Interest expense - customer repurchase agreements

 

(65

)

 

 

-

 

 

 

(6

)

Interest expense - other short-term borrowings

 

(1,140

)

 

 

(633

)

 

 

-

 

Interest expense - long-term borrowings

 

(387

)

 

 

(398

)

 

 

(379

)

Total net interest income

$

23,286

 

 

$

24,356

 

 

$

20,511

 

Less non-GAAP measures:

 

 

 

 

 

Tax benefit on nontaxable interest - loans

 

(45

)

 

 

(41

)

 

 

(34

)

Tax benefit on nontaxable interest - securities

 

(17

)

 

 

(27

)

 

 

(24

)

GAAP measures

$

23,224

 

 

$

24,288

 

 

$

20,453

 

 

 

 

 

 

 

NET INTEREST MARGIN

 

 

 

 

 

Net interest margin (FTE) (non-GAAP)

 

3.20

%

 

 

3.33

%

 

 

2.63

%

Net interest margin (GAAP)

 

3.19

 

 

 

3.32

 

 

 

2.63

 

 

 

 

 

 

 

RETURN ON AVERAGE TANGIBLE EQUITY

 

 

 

 

Return on average equity (GAAP basis)

 

11.32

%

 

 

10.15

%

 

 

10.24

%

Impact of excluding average goodwill and other intangibles

 

4.63

 

 

 

4.35

 

 

 

3.90

 

Return on average tangible equity (non-GAAP)

 

15.95

%

 

 

14.50

%

 

 

14.14

%

 

 

 

 

 

 

TANGIBLE EQUITY TO TANGIBLE ASSETS

 

 

 

 

 

Equity to assets ratio (GAAP basis)

 

10.70

%

 

 

10.48

%

 

 

10.01

%

Impact of excluding goodwill and other intangibles

 

(2.64

)

 

 

(2.66

)

 

 

(2.47

)

Tangible equity to tangible assets ratio (non-GAAP)

 

8.06

%

 

 

7.82

%

 

 

7.54

%

 

 

 

 

 

 

TANGIBLE BOOK VALUE

 

 

 

 

 

Book value per share (GAAP basis)

$

30.97

 

 

$

30.27

 

 

$

31.27

 

Impact of excluding goodwill and other intangibles

 

(8.30

)

 

 

(8.33

)

 

 

(8.33

)

Tangible book value per share (non-GAAP)

$

22.67

 

 

$

21.94

 

 

$

22.94

 

 

 

 

 

 

 

ADJUSTED CREDIT LOSS ALLOWANCE - LOANS

 

 

 

 

Allowance for credit losses - loans

$

24,861

 

 

$

19,555

 

 

$

17,988

 

Credit discount on purchased loans

 

-

 

 

 

3,068

 

 

 

4,001

 

Adjusted credit loss allowance - loans

$

24,861

 

 

$

22,623

 

 

$

21,989

 

 

 

 

 

 

 

Total loans, net

$

2,199,517

 

 

$

2,186,449

 

 

$

1,988,008

 

Subtract: PPP loans, net

 

(65

)

 

 

(74

)

 

 

(689

)

Total loans less PPP loans, net

$

2,199,452

 

 

$

2,186,375

 

 

$

1,987,319

 

 

 

 

 

 

 

Adjusted credit loss allowance - loans to total loans less PPP loans, net

 

1.13

%

 

 

1.03

%

 

 

1.11

%

 

 

 

 

 

 

Allowance for credit losses - loans to total loans less PPP loans, net

 

1.13

%

 

 

0.89

%

 

 

0.91

%

 

 

 

 

 

 

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


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