American National Bankshares Reports Fourth Quarter and Full Year 2023 Earnings

American National Bankshares, Inc.

DANVILLE, Va., Jan. 23, 2024 (GLOBE NEWSWIRE) -- American National Bankshares Inc. (NASDAQ: AMNB) (“American National” or the “Company”) today reported fourth quarter 2023 earnings of $4.0 million, or $0.38 per diluted common share. Those results compare to earnings of $8.0 million, or $0.76 per diluted common share, during the same quarter in the prior year, and earnings of $5.8 million, or $0.54 per diluted common share, for the third quarter of 2023. Earnings for the twelve months ended December 31, 2023, were $26.2 million, or $2.46 per diluted common share, compared to $34.4 million, or $3.23 per diluted common share, for the same period of 2022. Earnings for the fourth quarter and twelve months ended December 31, 2023, reflect the impact of merger related expenses of $875 thousand and $2.6 million in connection with the Company’s pending merger with Atlantic Union Bankshares Corporation (“Atlantic Union”).

President and Chief Executive Officer, Jeffrey V. Haley, commented, “As we await regulatory approval for our combination with Atlantic Union, we can reflect on another solid year of balance sheet growth and operating earnings performance (adjusting for merger related expenses) for American National. I am especially grateful for our customers’, employees’ and shareholders’ support during this transitional period, and am excited for the future of the combined organization.”

NET INTEREST INCOME

Net interest income for the fourth quarter of 2023 decreased by $1.1 million, or 5.4%, to $19.5 million compared to $20.7 million for the third quarter of 2023. The fourth quarter of 2023 compared to the same quarter of 2022 reflected a decrease of $4.7 million, or 19.5%, from $24.3 million. The full-time equivalent net interest margin for the quarter was 2.60%, down from 2.76% in the prior quarter and 3.33% in the same quarter a year ago (non-GAAP). The margin contraction relative to the previous quarter of 2023 resulted from funding costs increasing more than earning asset yields. The yield on average earning assets increased 3 basis points quarter-over-quarter, while the cost of average interest-bearing liabilities rose 27 basis points due to higher rates paid on interest-bearing deposits and various borrowing sources. Similarly, the 51 basis point increase in average earning asset yields was more than offset by the 186 basis point increase in the cost of average interest-bearing liabilities when comparing the fourth quarter of 2023 to the same quarter of 2022.

ASSET QUALITY

Nonperforming assets (“NPAs”) totaled $5.8 million as of December 31, 2023, up $2.1 million compared to $3.7 million as of September 30, 2023, and up $4.4 million compared to $1.4 million at December 31, 2022. NPAs as a percentage of total assets were 0.19% at December 31, 2023, 0.12% at September 30, 2023, and 0.05% at December 31, 2022. The Company recorded a provision for credit losses for the fourth quarter of 2023 of $437 thousand compared to recovery of credit losses of $538 thousand in the previous quarter and a provision of $1.2 million in the fourth quarter of the previous year. The fourth quarter of 2023 reflected net loan charge-offs of $269 thousand compared to $315 thousand of net recoveries in the third quarter, primarily accounting for the change quarter-over-quarter. The decrease in provision in the fourth quarter of 2023 compared to the same quarter of 2022 was the result of continued improvement in economic conditions, ongoing low charge-off and delinquency rates, and overall strong asset quality metrics.

The allowance for credit losses - loans was $25.3 million at December 31, 2023, compared to $25.1 million at September 30, 2023, and $19.6 million at December 31, 2022. Annualized net charge-offs (recoveries) as a percentage of average loans outstanding were 0.05% for the fourth quarter of 2023 compared to (0.06%) in the third quarter of 2023 and 0.15% in the fourth quarter of 2022. The allowance as a percentage of loans held for investment was 1.10% at December 31, 2023, compared to 1.11% at September 30, 2023, and 0.89% at December 31, 2022.

NONINTEREST INCOME

Noninterest income increased $61 thousand, or 1.3%, to $4.8 million for the quarter ended December 31, 2023, from the prior quarter and $1.2 million, or 33.9%, from $3.6 million in the same quarter in the prior year. The increase in the fourth quarter of 2023 compared to the third quarter was increased interchange income on deposit accounts and other operating income partially offset by decreases in income from equity investments in small business investment companies (“SBIC”). The increase as compared to the fourth quarter of the previous year was primarily due to increased income from equity investments in SBIC, wealth management revenues and other operating income.

NONINTEREST EXPENSE

Noninterest expenses for the fourth quarter of 2023 amounted to $17.9 million, down $466 thousand, or 2.5%, when compared to $18.3 million for the previous quarter and up $1.0 million, or 6.2%, from $16.8 million for the same quarter in the previous year. The decrease in the fourth quarter compared to the third quarter of 2023 was primarily the result of increased salaries and employee benefit costs of $426 thousand substantially offset by a decrease in merger related expenses of $828 thousand. The increase from the same quarter of 2022 was primarily due to fourth quarter 2023 merger related expenses of $875 thousand.

INCOME TAXES

The effective tax rate for the three months ended December 31, 2023, was 32.9%, compared to 24.2% for the prior quarter and 18.9% for the same quarter in the prior year. The increase in the fourth quarter of 2023 compared to the third quarter of 2023 and to the same quarter of 2022, is primarily the result of the non-deductibility of merger related expenses for tax purposes. Excluding merger related expenses, the effective tax rate fluctuations are attributable to changes in pre-tax earnings and the levels of permanent tax differences.

BALANCE SHEET

Total assets at December 31, 2023 were $3.1 billion, essentially flat to September 30, 2023, and an increase of $24.8 million, or 0.81%, from December 31, 2022.

At December 31, 2023, loans held for investment (net of deferred fees and costs) were $2.3 billion, an increase of $14.9 million, or 0.65%, from September 30, 2023. Loans held for investment (net of deferred fees and costs) increased $101.9 million, or 4.7%, from December 31, 2022.

Investment securities available for sale amounted to $521.5 million at December 31, 2023, a decrease of $22.4 million, or 4.1%, compared to September 30, 2023, and a decrease of $86.5 million, or 14.2%, compared to December 31, 2022.

Deposits amounted to $2.6 billion at December 31, 2023, an increase of $35.3 million, or 1.37%, from September 30, 2023, and an increase of $10.2 million, or 0.4%, compared to December 31, 2022.

The Company continues to be well-capitalized as defined by regulators, with tangible common equity to tangible assets of 8.52% at December 31, 2023, compared to 7.98% at September 30, 2023 and compared to 7.82% at December 31 2022 (non-GAAP). The Company’s preliminary common equity Tier 1, Tier 1, total, and Tier 1 leverage capital ratios were 11.70%, 12.81%, 13.82%, and 10.61%, respectively, at December 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 following: the businesses of American National and Atlantic Union may not be combined successfully, or such combination may take longer, be more difficult, time-consuming or costly to accomplish than expected; the expected growth opportunities or cost savings from the merger with Atlantic Union may not be fully realized or may take longer to realize than expected; deposit attrition, operating costs, customer losses and business disruption prior to and following the merger with Atlantic Union, including adverse effects on relationships with employees and customers, may be greater than expected; the regulatory and shareholder approvals required for the merger with Atlantic Union may not be obtained; 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 ability to maintain adequate liquidity by retaining deposit customers and secondary funding sources, especially if the Company's or banking industry's reputation becomes damaged; 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; 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.

Contact:

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

American National Bankshares Inc.
Consolidated Balance Sheets
(Dollars in thousands, except per share data)
Unaudited
		December 31,
			2023				2022
Assets
Cash and due from banks		$	31,500			$	32,207
Interest-bearing deposits in other banks			35,219				41,133
Securities available for sale, at fair value			521,519				608,062
Restricted stock, at cost			10,614				12,651
Loans held for sale			1,279				1,061
Loans, net of deferred fees and costs			2,288,320				2,186,449
Less allowance for credit losses - loans			(25,273	)			(19,555	)
Net Loans			2,263,047				2,166,894
Premises and equipment, net			31,809				32,900
Assets held-for-sale			1,131				1,382
Other real estate owned, net			-				27
Goodwill			85,048				85,048
Core deposit intangibles, net			2,298				3,367
Bank owned life insurance			30,409				29,692
Other assets			76,844				51,478
Total assets		$	3,090,717			$	3,065,902
Liabilities
Demand deposits -- noninterest-bearing		$	805,584			$	1,010,602
Demand deposits -- interest-bearing			516,255				484,037
Money market deposits			706,986				574,330
Savings deposits			205,622				269,426
Time deposits			372,066				257,933
Total deposits			2,606,513				2,596,328
Customer repurchase agreements			59,348				370
Other short-term borrowings			35,000				100,531
Long-term borrowings			28,435				28,334
Other liabilities			18,253				19,165
Total liabilities			2,747,549				2,744,728
Shareholders' equity
Preferred stock, $5 par value, 2,000,000 shares authorized,
none outstanding			-				-
Common stock, $1 par value, 20,000,000 shares authorized,
10,633,409 shares outstanding at December 31, 2023 and
10,608,781 shares outstanding at December 31, 2022			10,551				10,538
Capital in excess of par value			142,834				141,948
Retained earnings			232,847				223,664
Accumulated other comprehensive loss, net			(43,064	)			(54,976	)
Total shareholders' equity			343,168				321,174
Total liabilities and shareholders' equity		$	3,090,717			$	3,065,902

American National Bankshares Inc.
Consolidated Statements of Income
(Dollars in thousands, except per share data)
Unaudited
		For the Three Months Ended												For the Twelve Months Ended
		12/31/23				9/30/23				12/31/22				12/31/23				12/31/22
Interest and Dividend Income:
Interest and fees on loans		$	27,995			$	27,512			$	23,544			$	106,471			$	82,568
Interest and dividends on securities:
Taxable			2,503				2,564				2,721				10,358				10,065
Tax-exempt			24				24				110				139				407
Dividends			147				163				126				676				473
Other interest income			767				797				415				2,585				2,491
Total interest and dividend income			31,436				31,060				26,916				120,229				96,004
Interest Expense:
Interest on deposits			9,693				9,057				1,597				28,843				3,553
Interest on short-term borrowings			1,767				938				633				5,192				659
Interest on long-term borrowings			429				402				398				1,612				1,554
Total interest expense			11,889				10,397				2,628				35,647				5,766
Net Interest Income			19,547				20,663				24,288				84,582				90,238
Provision for (recovery of) credit losses			437				(538	)			1,159				495				1,597
Net Interest Income After Provision for
(Recovery of) Credit Losses			19,110				21,201				23,129				84,087				88,641
Noninterest Income:
Wealth management income			1,721				1,736				1,522				6,751				6,521
Service charges on deposit accounts			531				565				597				2,216				2,676
Interchange fees			1,316				1,162				1,117				4,775				4,107
Other fees and commissions			157				169				207				650				906
Mortgage banking income			190				293				176				824				1,666
Securities losses, net			-				-				-				(68	)			-
Income (loss) from Small Business Investment Companies			44				453				(263	)			932				1,409
Income from insurance investments			171				128				103				764				747
Losses on premises and equipment, net			(42	)			-				(146	)			(155	)			(228	)
Other			747				268				297				1,647				1003
Total noninterest income			4,835				4,774				3,610				18,336				18,807
Noninterest Expense:
Salaries and employee benefits			9,655				9,229				9,446				36,356				36,382
Occupancy and equipment			1,543				1,601				1,499				6,219				6,075
FDIC assessment			351				354				209				1,404				903
Bank franchise tax			502				520				501				2,052				1,953
Core deposit intangible amortization			252				262				300				1,069				1,260
Data processing			954				821				864				3,565				3,310
Software			439				470				417				1,829				1,505
Other real estate owned, net			-				(10	)			(1	)			(10	)			3
Merger related expenses			875				1,702				-				2,577				-
Other			3,306				3,394				3,599				12,989				12,695
Total noninterest expense			17,877				18,343				16,834				68,050				64,086
Income Before Income Taxes			6,068				7,632				9,905				34,373				43,362
Income Taxes			1,995				1,844				1,872				8,214				8,934
Net Income		$	4,073			$	5,788			$	8,033			$	26,159			$	34,428
Net Income Per Common Share:
Basic		$	0.38			$	0.54			$	0.76			$	2.46			$	3.23
Diluted		$	0.38			$	0.54			$	0.76			$	2.46			$	3.23
Weighted Average Common Shares Outstanding:
Basic			10,631,001				10,625,709				10,607,678				10,627,709				10,672,314
Diluted			10,631,001				10,625,709				10,609,937				10,628,559				10,674,613

American National Bankshares Inc.
Financial Highlights
Unaudited
(Dollars in thousands, except per share data)													At or for the Twelve Months
	4th Qtr				3rd Qtr				4th Qtr				Ended December 31,
		2023				2023				2022				2023				2022
EARNINGS
Interest income	$	31,436			$	31,060			$	26,916			$	120,229			$	96,004
Interest expense		11,889				10,397				2,628				35,647				5,766
Net interest income		19,547				20,663				24,288				84,582				90,238
Provision for (recovery of) credit losses		437				(538	)			1,159				495				1,597
Noninterest income		4,835				4,774				3,610				18,336				18,807
Noninterest expense		17,877				18,343				16,834				68,050				64,086
Income taxes		1,995				1,844				1,872				8,214				8,934
Net income		4,073				5,788				8,033				26,159				34,428
PER COMMON SHARE
Net income per share - basic	$	0.38			$	0.54			$	0.76			$	2.46			$	3.23
Net income per share - diluted		0.38				0.54				0.76				2.46				3.23
Cash dividends paid		0.30				0.30				0.30				1.20				1.14
Book value per share		32.27				30.79				30.27				32.27				30.27
Book value per share - tangible (a)		24.06				22.55				21.94				24.06				21.94
Closing market price		48.75				37.94				36.93				48.75				36.93
FINANCIAL RATIOS
Return on average assets		0.53		%		0.75		%		1.05		%		0.85		%		1.07		%
Return on average common equity		4.91				7.02				10.15				7.94				10.36
Return on average tangible common equity (a)		6.99				9.91				14.50				11.18				14.56
Average common equity to average assets		10.72				10.68				10.33				10.70				10.35
Tangible common equity to tangible assets (a)		8.52				7.98				7.82				8.52				7.82
Net interest margin, taxable equivalent		2.60				2.76				3.33				2.86				2.97
Efficiency ratio (a)		68.39				64.31				58.82				62.31				57.37
Effective tax rate		32.88				24.16				18.90				23.90				20.60
PERIOD-END BALANCES
Securities	$	532,133			$	556,851			$	620,713			$	532,133			$	620,713
Loans held for sale		1,279				1,981				1,061				1,279				1,061
Loans, net		2,288,320				2,273,455				2,186,449				2,288,320				2,186,449
Goodwill and other intangibles		87,346				87,598				88,415				87,346				88,415
Assets		3,090,717				3,091,258				3,065,902				3,090,717				3,065,902
Assets - tangible (a)		3,003,371				3,003,660				2,977,487				3,003,371				2,977,487
Interest-bearing deposits		1,800,929				1,723,227				1,585,726				1,800,929				1,585,726
Noninterest bearing demand deposits		805,584				848,017				1,010,602				805,584				1,010,602
Customer repurchase agreements		59,348				60,035				370				59,348				370
Other short-term borrowings		35,000				85,000				100,531				35,000				100,531
Long-term borrowings		28,435				28,410				28,334				28,435				28,334
Shareholders' equity		343,168				327,278				321,174				343,168				321,174
Shareholders' equity - tangible (a)		255,822				239,680				232,759				255,822				232,759
AVERAGE BALANCES
Securities (b)	$	622,686			$	634,313			$	713,996			$	646,658			$	720,001
Loans held for sale		2,047				2,488				972				1,788				3,235
Loans, net		2,276,999				2,248,675				2,168,636				2,232,795				2,052,158
Interest-earning assets		2,953,377				2,939,234				2,920,992				2,928,996				3,042,775
Goodwill and other intangibles		87,506				87,758				88,593				87,900				89,048
Assets		3,098,235				3,088,231				3,066,362				3,077,352				3,211,668
Assets - tangible (a)		3,010,729				3,000,473				2,977,769				2,989,452				3,122,620
Interest-bearing deposits		1,744,549				1,758,994				1,609,503				1,697,250				1,765,134
Noninterest bearing demand deposits		838,105				872,488				1,031,630				897,199				1,028,871
Customer repurchase agreements		58,312				65,550				704				48,409				24,005
Other short-term borrowings		75,669				12,935				62,004				58,072				15,629
Subordinated debt		28,419				28,393				28,318				28,381				28,280
Shareholders' equity		332,127				329,812				316,697				329,339				332,356
Shareholders' equity - tangible (a)		244,621				242,054				228,104				241,439				243,308
American National Bankshares Inc.
Financial Highlights
Unaudited
(Dollars in thousands, except per share data)													At or for the Twelve Months
	4th Qtr				3rd Qtr				4th Qtr				Ended December 31,
		2023				2023				2022				2023				2022
CAPITAL
Weighted average shares outstanding - basic		10,631,001				10,625,709				10,607,678				10,627,709				10,672,314
Weighted average shares outstanding - diluted		10,631,001				10,625,709				10,609,937				10,628,559				10,674,613
COMMON STOCK REPURCHASE PROGRAM
Total shares of common stock repurchased		-				-				3,269				34,131				206,978
Average price paid per share of common stock	$	-			$	-			$	36.44			$	30.58			$	36.26
ALLOWANCE FOR CREDIT LOSSES - LOANS
Beginning balance	$	25,124			$	25,342			$	19,189			$	19,555			$	18,678
Day 1 Impact of CECL adoption		-				-				-				5,192				-
Provision for (recovery of) credit losses		418				(533	)			1,159				433				1,597
Charge-offs		(573	)			(19	)			(834	)			(1,002	)			(1,019	)
Recoveries		304				334				41				1095				299
Ending balance	$	25,273			$	25,124			$	19,555			$	25,273			$	19,555
LOANS
Construction and land development	$	274,035			$	269,840			$	197,525			$	274,035			$	197,525
Commercial real estate - owner occupied		414,321				413,151				418,462				414,321				418,462
Commercial real estate - non-owner occupied		830,655				803,440				827,728				830,655				827,728
Residential real estate		369,892				366,557				338,132				369,892				338,132
Home equity		90,298				91,393				93,740				90,298				93,740
Commercial and industrial		302,305				322,209				304,247				302,305				304,247
Consumer		6,814				6,865				6,615				6,814				6,615
Total	$	2,288,320			$	2,273,455			$	2,186,449			$	2,288,320			$	2,186,449
NONPERFORMING ASSETS AT PERIOD-END
Nonperforming loans:
90 days past due and accruing	$	-			$	-			$	16			$	-			$	16
Nonaccrual		5,814				3,740				1,307				5,814				1,307
Other real estate owned and repossessions		-				-				80				-				80
Nonperforming assets	$	5,814			$	3,740			$	1,403			$	5,814			$	1,403
ASSET QUALITY RATIOS
Allowance for credit losses - loans to total loans		1.10		%		1.11		%		0.89		%		1.10		%		0.89		%
Allowance for credit losses - loans to
nonperforming loans		434.69				671.76				1,478.08				434.69				1,478.08
Nonperforming assets to total assets		0.19				0.12				0.05				0.19				0.05
Nonperforming loans to total loans		0.25				0.16				0.06				0.25				0.06
Annualized net charge-offs (recoveries) to average loans		0.05				(0.06	)			0.15				0.00				0.04
OTHER DATA
Fiduciary assets at period-end (c) (d)	$	834,150			$	774,126			$	736,121			$	834,150			$	736,121
Retail brokerage assets at period-end (c) (d)	$	395,585			$	413,956			$	413,235			$	395,585			$	413,235
Number full-time equivalent employees (e)		352				358				359				352				359
Number of full service offices		26				26				26				26				26
Number of loan production offices		1				1				1				1				1
Number of ATMs		34				34				34				34				34
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 December 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)				$	2,279,046		$	2,169,608		$	28,058		$	23,585		4.83	%	4.34	%
Securities:
	Taxable				618,466			693,573			2,650			2,847		1.71		1.64
	Tax exempt				4,220			20,423			30			137		2.85		2.73
		Total securities			622,686			713,996			2,680			2,984		1.72		1.67
Deposits in other banks					51,645			37,388			767			415		5.90		4.40
	Total interest-earning assets				2,953,377			2,920,992			31,505			26,984		4.20		3.69
Non-earning assets					144,858			145,370
		Total assets		$	3,098,235		$	3,066,362
Liabilities and Stockholders' Equity:
Deposits:
	Demand			$	492,925		$	494,572			1,077			95		0.87		0.08
	Savings and money market				880,402			864,089			5,443			1,041		2.45		0.48
	Time				371,222			250,842			3,173			461		3.39		0.73
		Total deposits			1,744,549			1,609,503			9,693			1,597		2.20		0.39
Customer repurchase agreements					58,312			704			695			-		4.72		0.00
Other short-term borrowings					75,669			62,004			1,072			633		5.54		4.08
Long-term borrowings					28,419			28,318			429			398		5.90		5.62
	Total interest-bearing
		liabilities			1,906,949			1,700,529			11,889			2,628		2.48		0.62
Noninterest bearing demand deposits					838,105			1,031,630
Other liabilities					21,054			17,506
Shareholders' equity					332,127			316,697
		Total liabilities and
			shareholders' equity	$	3,098,235		$	3,066,362
Interest rate spread																1.72	%	3.07	%
Net interest margin																2.60	%	3.33	%
Net interest income (taxable equivalent basis)											19,616			24,356
Less: Taxable equivalent adjustment (c)											69			68
Net interest income										$	19,547		$	24,288
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.
			Net Interest Income Analysis
			For the Twelve Months Ended December 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)				$	2,234,583		$	2,055,393		$	106,670		$	82,708		4.72	%	4.02	%
Securities:
	Taxable				640,322			700,660			11,034			10,538		1.72		1.50
	Tax exempt				6,336			19,341			176			511		2.78		2.66
		Total securities			646,658			720,001			11,210			11,049		1.73		1.53
Deposits in other banks					47,755			267,381			2,585			2,491		5.41		0.93
	Total interest-earning assets				2,928,996			3,042,775			120,465			96,248		4.07		3.16
Non-earning assets					148,356			168,893
		Total assets		$	3,077,352		$	3,211,668
Liabilities and Stockholders' Equity:
Deposits:
	Demand			$	483,573		$	522,043			2,892			202		0.60		0.04
	Savings and money market				888,355			962,419			17,285			1,750		1.95		0.18
	Time				325,322			280,672			8,666			1,601		2.67		0.57
		Total deposits			1,697,250			1,765,134			28,843			3,553		1.70		0.20
Customer repurchase agreements					48,409			24,005			2,980			26		4.57		0.11
Other short-term borrowings					58,072			15,629			2,212			633		5.06		4.05
Long-term borrowings					28,381			28,280			1,612			1,554		5.60		5.50
	Total interest-bearing
		liabilities			1,832,112			1,833,048			35,647			5,766		1.94		0.31
Noninterest bearing demand deposits					897,199			1,028,871
Other liabilities					18,702			17,393
Shareholders' equity					329,339			332,356
		Total liabilities and
			shareholders' equity	$	3,077,352		$	3,211,668
Interest rate spread																2.13	%	2.85	%
Net interest margin																2.86	%	2.97	%
Net interest income (taxable equivalent basis)											84,818			90,482
Less: Taxable equivalent adjustment (c)											236			244
Net interest income										$	84,582		$	90,238
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)													At or for the Nine Months
		4th Qtr				3rd Qtr				4th Qtr				Ended December 31,
			2023				2023				2022				2023				2022
EFFICIENCY RATIO
	Noninterest expense	$	17,877			$	18,343			$	16,834			$	68,050			$	64,086
	Add: loss on sale of OREO		-				13				2				13				2
	Subtract: core deposit intangible amortization		(252	)			(262	)			(300	)			(1,069	)			(1,260	)
	Subtract: merger related expenses		(875	)			(1,702	)			-				(2,577	)			-
		$	16,750			$	16,392			$	16,536			$	64,417			$	62,828
	Net interest income	$	19,547			$	20,663			$	24,288			$	84,582			$	90,238
	Tax equivalent adjustment		69				53				68				236				244
	Noninterest income		4,835				4,774				3,610				18,336				18,807
	Add: loss on securities		-				-				-				68				-
	Add: loss on premises and equipment		42				-				146				155				228
		$	24,493			$	25,490			$	28,112			$	103,377			$	109,517
	Efficiency ratio		68.39		%		64.31		%		58.82		%		62.31		%		57.37		%
TAX EQUIVALENT NET INTEREST INCOME
	GAAP measures:
	Interest income - loans	$	28,058			$	27,559			$	23,585			$	106,670			$	82,708
	Interest income - investments and other		3,447				3,554				3,399				13,795				13,540
	Interest expense - deposits		(9,693	)			(9,057	)			(1,597	)			(28,843	)			(3,553	)
	Interest expense - customer repurchase
	agreements		(695	)			(759	)			-				(2,980	)			(26	)
	Interest expense - other short-term borrowings		(1,072	)			(179	)			(633	)			(2,212	)			(633	)
	Interest expense - long-term borrowings		(429	)			(402	)			(398	)			(1,612	)			(1,554	)
	Total net interest income	$	19,616			$	20,716			$	24,356			$	84,818			$	90,482
	Less non-GAAP measures:
	Tax benefit on nontaxable interest - loans		(63	)			(47	)			(41	)			(199	)			(139	)
	Tax benefit on nontaxable interest - securities		(6	)			(6	)			(27	)			(37	)			(105	)
	Non- GAAP measures	$	19,547			$	20,663			$	24,288			$	84,582			$	90,238
NET INTEREST MARGIN
	Net interest margin (FTE) (non-GAAP)		2.60		%		2.76		%		3.33		%		2.86		%		2.97		%
	Net interest margin (GAAP)		2.59		%		2.75		%		3.32		%		2.85		%		2.97		%
RETURN ON AVERAGE TANGIBLE EQUITY
	Return on average equity (GAAP basis)		4.91		%		7.02		%		10.15		%		7.94		%		10.36		%
	Impact of excluding average goodwill
	and other intangibles		2.08				2.89				4.35				3.24				4.20
	Return on average tangible equity
	(non-GAAP)		6.99		%		9.91		%		14.50		%		11.18		%		14.56		%
TANGIBLE EQUITY TO TANGIBLE ASSETS
	Equity to assets ratio (GAAP basis)		11.10		%		10.59		%		10.48		%		11.10		%		10.48		%
	Impact of excluding goodwill and
	other intangibles		(2.58	)			(2.61	)			(2.66	)			(2.58	)			(2.66	)
	Tangible equity to tangible assets ratio
	(non-GAAP)		8.52		%		7.98		%		7.82		%		8.52		%		7.82		%
TANGIBLE BOOK VALUE
	Book value per share (GAAP basis)	$	32.27			$	30.79			$	30.27			$	32.27			$	30.27
	Impact of excluding goodwill and
	other intangibles		(8.21	)			(8.24	)			(8.33	)			(8.21	)			(8.33	)
	Tangible book value per share
	(non-GAAP)	$	24.06			$	22.55			$	21.94			$	24.06			$	21.94