American National Bankshares Reports First Quarter Earnings

Rhea-AI Summary

American National Bankshares reported Q1 2022 earnings of $9.0 million ($0.84 per diluted share), down from $11.3 million in Q1 2021. Key highlights include a 9.5% increase in average loans held for investment and a 14.14% return on average tangible common equity. However, net interest income decreased by 11.5% quarter-over-quarter to $20.5 million, attributed to lower PPP income. Nonperforming assets fell to 0.06% of total assets. Despite regulatory concerns regarding inflation and loan production pressures, the company remains optimistic about customer support and market performance.

Positive

• Core loan growth of $45.4 million (9.5% annualized) in Q1 2022.
• Return on average tangible common equity at 14.14%.
• Nonperforming assets reduced to 0.06% of total assets.

Negative

• Earnings decreased from $11.3 million in Q1 2021 to $9.0 million.
• Net interest income fell by $2.7 million (11.5%) quarter-over-quarter.
• Average deposits declined by 4.6% annualized.

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

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

First quarter 2022 highlights include:

• Average loans held for investment, excluding U.S. Small Business Administration Paycheck Protection Program (“PPP”) loans, grew $45.4 million, or 9.5% annualized, during the first quarter as compared to the previous quarter.
  
  
• Earnings produced a return on average tangible common equity of 14.14% for the first quarter of 2022, compared to 17.63% in the previous quarter and 18.45% for the same quarter in the prior year (non-GAAP).
  
  
• Average deposits declined 4.6% annualized during the quarter but increased 11.6% over the same quarter of 2021; the cost of interest-bearing deposits decreased to 0.12% in the first quarter, compared to 0.14% in the previous quarter and 0.30% in the same quarter of the prior year.
  
  
• Fully taxable equivalent (“FTE”) net interest margin was 2.63% for the quarter, down from 2.93% in the fourth quarter of 2021 and from 3.20% in the same quarter of the prior year (non-GAAP).
  
  
• Noninterest revenues increased $756 thousand, or 15.6%, when compared to the previous quarter, and decreased $322 thousand, or 5.4%, compared to the same quarter in the prior year.
  
  
• Noninterest expense decreased $114 thousand, or less than 1%, when compared to the previous quarter, and increased $1.3 million, or 9.1%, when compared to the same quarter in the prior year.
  
  
• The Company recognized a negative provision for loan losses in the first quarter of 2022 of $758 thousand compared to a negative provision of $2.0 million in the fourth quarter of 2021 and no provision expense or recovery in the first quarter of 2021. Annualized net charge-offs (recoveries) as a percentage of average loans outstanding were (0.01%) for the first quarter of 2022, compared to none in the previous quarter or in the same quarter in the prior year.
  
  
• Nonperforming assets as a percentage of total assets were 0.06% at March 31, 2022, down from 0.07% at December 31, 2021, and down from 0.10% at March 31, 2021.
  

NET INTEREST INCOME

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

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

	For the years ending (estimated):
	2022	$  725
	2023	732
	2024	434
	2025	292
	2026	177
	Thereafter	246

ASSET QUALITY

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

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

NONINTEREST INCOME

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

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

NONINTEREST EXPENSE

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

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

INCOME TAXES

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

BALANCE SHEET

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

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

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

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

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

ABOUT AMERICAN NATIONAL

American National is a multi-state bank holding company with total assets of approximately $3.3 billion. Headquartered in Danville, Virginia, American National is the parent company of American National Bank and Trust Company. American National Bank is a community bank serving Virginia and North Carolina with 26 banking offices. American National Bank also manages an additional $1.1 billion of trust, investment and brokerage assets in its Wealth Division. Additional information about American National and American National Bank is available on American National's website at www.amnb.com.

NON-GAAP FINANCIAL MEASURES

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

FORWARD-LOOKING STATEMENTS

Statements made in this release, other than those concerning historical financial information, may be considered forward-looking statements, which speak only as of the date of this release and are based on current expectations and involve a number of assumptions. American National intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and is including this statement for purposes of these safe harbor provisions. American National’s ability to predict results, or the actual effect of future plans or strategies, is inherently uncertain. Factors that could have a material effect on the operations and future prospects of American National include but are not limited to: (1) the impacts of the ongoing COVID-19 pandemic and the associated efforts to limit the spread of the virus; (2) expected revenue synergies and cost savings from acquisitions and depositions; (3) changes in interest rates, general economic conditions, legislation and regulation, and monetary and fiscal policies of the U.S. government, including policies of the U.S. Treasury, Office of the Comptroller of the Currency and the Board of Governors of the Federal Reserve System; (4) the quality and composition of the loan and securities portfolios, demand for loan products, deposit flows, competition, and demand for financial services in American National’s market areas; (5) the adequacy of the level of the allowance for loan losses, the amount of loan loss provisions required in future quarters, and the failure of assumptions underlying the allowance for loan losses; (6) cybersecurity threats or attacks, the implementation of new technologies, and the ability to develop and maintain secure and reliable electronic systems; (7) accounting principles, policies, and guidelines; and (8) other risk factors detailed from time to time in filings made by American National with the Securities and Exchange Commission. American National undertakes no obligation to update or clarify these forward-looking statements, whether as a result of new information, future events or otherwise.

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

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

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

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

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

 

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

FAQ

What were the earnings of AMNB in Q1 2022?

AMNB reported earnings of $9.0 million, or $0.84 per diluted share.

How much did average loans increase for AMNB in Q1 2022?

Average loans held for investment grew by $45.4 million, or 9.5% annualized.

What is the net interest income for AMNB in Q1 2022?

Net interest income was $20.5 million, a decrease of 11.5% compared to Q4 2021.

What is the nonperforming asset percentage for AMNB?

Nonperforming assets were 0.06% of total assets as of March 31, 2022.

How did AMNB's deposits perform in Q1 2022?

Average deposits declined by 4.6% annualized during Q1 2022.