American National Bankshares Reports Fourth Quarter and Full Year 2021 Earnings

Rhea-AI Summary

American National Bankshares (NASDAQ: AMNB) reported fourth quarter 2021 earnings of $11.3 million ($1.05 per diluted share), an increase from $8.8 million ($0.80 per share) a year earlier. Full-year earnings reached $43.5 million ($4.00 per share), up from $30 million ($2.73 per share) in 2020. Core loans grew 6.6% annualized despite paydowns, while deposits rose 5.3% quarter-over-quarter. Notably, the Company recognized a negative provision for loan losses of $2 million. Total assets increased to $3.3 billion, reflecting ongoing core deposit growth and loan activity.

Positive

• Fourth quarter earnings increased by 28.4% year-over-year.
• Core loan growth of 6.6% annualized in Q4.
• Total assets rose to $3.3 billion, up $284.6 million year-over-year.
• Negative provision for loan losses of $2 million indicates improved asset quality.

Negative

• Net interest margin decreased to 2.93%, down from 3.09% in Q3.
• Noninterest income fell 5.4% compared to the previous quarter.

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

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

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

Fourth quarter 2021 highlights include:

• Average loans held for investment, excluding U.S. Small Business Administration Paycheck Protection Program (“PPP”) loans, grew $69.0 million, or 14.9% annualized, during the fourth quarter compared to growth of $39.5 million, or 8.7% annualized, in the third quarter of this year and compared to a decrease of $13.6 million, or 3.0% annualized, in the fourth quarter of the prior year.
  
  
• Earnings produced a return on average tangible common equity of 17.63% for the fourth quarter of 2021, compared to 16.01% in the previous quarter and 14.90% for the same quarter in the prior year (non-GAAP).
  
  
• Average deposits grew 5.3% during the quarter and 14.9% over the same quarter of 2020; the cost of interest-bearing deposits decreased to 0.14% in the fourth quarter, compared to 0.17% in the previous quarter and 0.43% in the same quarter of the prior year.
  
  
• Fully taxable equivalent (“FTE”) net interest margin was 2.93% for the quarter, down from 3.09% in the third quarter of 2021 and from 3.22% in the same quarter of the prior year (non-GAAP).
  
  
• Noninterest revenues decreased $279 thousand, or 5.4%, when compared to the previous quarter, and increased $623 thousand, or 14.8%, compared to the same quarter in the prior year.
  
  
• Noninterest expense increased $620 thousand, or 4.2%, when compared to the previous quarter, and increased $804 thousand, or 5.5%, when compared to the same quarter in the prior year.
  
  
• The Company recognized a negative provision for loan losses in the fourth quarter of 2021 of $2.0 million compared to a provision expense of $482 thousand in the third quarter of 2021 and $585 thousand in the fourth quarter of 2020. Annualized net charge-offs (recoveries) as a percentage of average loans outstanding were (0.00%) for the fourth quarter 2021, (0.01%) for the third quarter of 2021 and 0.05% for the fourth quarter of 2020.
  
  
• Nonperforming assets as a percentage of total assets were 0.07% at December 31, 2021, up from 0.06% at September 30, 2021 but down from 0.12% at December 31, 2020.
  

SMALL BUSINESS ADMINISTRATION’S PPP

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

NET INTEREST INCOME

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

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

For the years ending (estimated):
2022	$1,100
2023	690
2024	429
2025	292
2026	171
Thereafter	234

ASSET QUALITY

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

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

NONINTEREST INCOME

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

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

NONINTEREST EXPENSE

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

INCOME TAXES

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

BALANCE SHEET

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

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

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

Deposits amounted to $2.9 billion at December 31, 2021, with growth of $28.3 million, or 4.0%, annualized from September 30, 2021 and $279.0 million, or 10.7%, compared to December 31, 2020. The growth over the same quarter and prior quarter of 2020 is a result of continued higher than average cash balances being maintained by customers.

The Company continues to be well-capitalized as defined by regulators, with tangible common equity to tangible assets of 8.17% at December 31, 2021 compared to 8.14% at September 30, 2021 and compared to 8.34% at December 31, 2020. The Company’s common equity Tier 1, Tier 1, total, and Tier 1 leverage capital ratios were 12.43%, 13.73%, 14.61% and 9.13%, respectively, at December 31, 2021.

ABOUT AMERICAN NATIONAL

American National is a multi-state bank holding company with total assets of approximately $3.3 billion. Headquartered in Danville, Virginia, American National is the parent company of American National Bank and Trust Company. American National Bank is a community bank serving Virginia and North Carolina with 26 banking offices. American National Bank also manages an additional $1.2 billion of trust, investment and brokerage assets in its Wealth Division. Additional information about American National and American National Bank is available on American National's website at www.amnb.com.

NON-GAAP FINANCIAL MEASURES

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

FORWARD-LOOKING STATEMENTS

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

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

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

American National Bankshares Inc.
Financial Highlights
(Dollars in thousands, except per share data)
														At or for the Twelve Months
		4rd Qtr				3rd Qtr				4th Qtr				Ended December 31,
			2021				2021				2020				2021				2020
		(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)				(Audited)
EARNINGS
Interest income		$	24,148			$	24,277			$	24,498			$	95,796			$	95,840
Interest expense			1,044				1,184				2,352				5,405				12,020
Net interest income			23,104				23,093				22,146				90,391				83,820
(Recovery of) Provision for loan losses			(1,955	)			482				585				(2,825	)			8,916
Noninterest income			4,844				5,123				4,221				21,031				16,843
Noninterest expense			15,463				14,843				14,659				59,008				54,565
Income taxes			3,147				2,713				2,329				11,713				7,137
Net income			11,293				10,178				8,794				43,526				30,045
PER COMMON SHARE
Net income per share - basic		$	1.05			$	0.94			$	0.80			$	4.00			$	2.74
Net income per share - diluted			1.05				0.94				0.80				4.00				2.73
Cash dividends paid			0.28				0.27				0.27				1.09				1.08
Book value per share			32.95				32.51				30.77				32.95				30.77
Book value per share - tangible (a)			24.62				24.16				22.47				24.62				22.47
Closing market price			37.68				33.04				26.21				37.68				26.21
FINANCIAL RATIOS
Return on average assets			1.35		%		1.27		%		1.18		%		1.37		%		1.08		%
Return on average common equity			12.82				11.58				10.48				12.50				9.12
Return on average tangible common equity (a)			17.63				16.01				14.90				17.34				13.19
Average common equity to average assets			10.50				10.99				11.30				10.96				11.88
Tangible common equity to tangible assets (a)			8.17				8.14				8.34				8.17				8.34
Net interest margin, taxable equivalent			2.93				3.09				3.22				3.05				3.30
Efficiency ratio (a)			53.46				51.03				53.92				51.05				52.80
Effective tax rate			21.79				21.05				20.94				21.20				19.19
PERIOD-END BALANCES
Securities		$	700,523			$	651,995			$	474,806			$	700,523			$	474,806
Loans held for sale			8,481				9,518				15,591				8,481				15,591
Loans, net			1,946,580				1,940,332				2,015,056				1,946,580				2,015,056
Goodwill and other intangibles			89,675				90,026				91,139				89,675				91,139
Assets			3,334,597				3,289,063				3,050,010				3,334,597				3,050,010
Assets - tangible (a)			3,244,922				3,199,037				2,958,871				3,244,922				2,958,871
Deposits			2,890,353				2,862,081				2,611,330				2,890,353				2,611,330
Customer repurchase agreements			41,128				26,595				42,551				41,128				42,551
Long-term borrowings			28,232				28,207				35,630				28,232				35,630
Shareholders' equity			354,792				350,387				337,894				354,792				337,894
Shareholders' equity - tangible (a)			265,117				260,361				246,755				265,117				246,755
AVERAGE BALANCES
Securities (b)		$	654,595			$	569,508			$	372,529			$	549,554			$	347,952
Loans held for sale			8,121				9,835				8,601				11,257				6,578
Loans, net			1,943,238				1,913,446				2,063,397				1,953,121				2,008,683
Interest-earning assets			3,154,730				2,989,661				2,754,455				2,967,799				2,551,913
Goodwill and other intangibles			89,855				90,257				91,358				90,413				91,751
Assets			3,357,223				3,199,514				2,971,505				3,176,564				2,773,007
Assets - tangible (a)			3,267,368				3,109,257				2,880,147				3,086,151				2,681,256
Interest-bearing deposits			1,868,695				1,817,595				1,701,395				1,797,385				1,595,694
Deposits			2,914,381				2,768,268				2,536,363				2,736,571				2,342,353
Customer repurchase agreements			39,645				29,681				40,819				37,632				42,937
Other short-term borrowings			-				-				-				-				1
Long-term borrowings			28,218				28,192				35,617				31,878				35,586
Shareholders' equity			352,395				351,646				335,671				348,158				329,353
Shareholders' equity - tangible (a)			262,540				261,389				244,313				257,745				237,602
American National Bankshares Inc.
Financial Highlights
(Dollars in thousands, except per share data)														At or for the Twelve Months
		4rd Qtr				3rd Qtr				4th Qtr				Ended December 31,
			2021				2021				2020				2021				2020
		(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)				(Audited)
CAPITAL
Weighted average shares outstanding - basic			10,774,268				10,833,875				10,975,349				10,873,817				10,981,623
Weighted average shares outstanding - diluted			10,776,970				10,836,293				10,978,931				10,877,231				10,985,790
COMMON STOCK REPURCHASE PROGRAM
Total shares of common stock repurchased			16,580				100,764				-				264,579				62,669
Average price paid per share of common stock		$	37.12			$	32.87			$	-			$	33.10			$	34.90
ALLOWANCE FOR LOAN LOSSES
Beginning balance		$	20,630			$	20,097			$	21,088			$	21,403			$	13,152
(Recovery of) Provision for loan losses			(1,955	)			482				585				(2,825	)			8,916
Charge-offs			(76	)			(19	)			(331	)			(146	)			(1,006	)
Recoveries			79				70				61				246				341
Ending balance		$	18,678			$	20,630			$	21,403			$	18,678			$	21,403
LOANS
Construction and land development		$	134,221			$	120,193			$	140,071			$	134,221			$	140,071
Commercial real estate - owner occupied			391,517				404,029				373,680				391,517				373,680
Commercial real estate - non-owner occupied			731,034				713,339				627,569				731,034				627,569
Residential real estate			289,757				280,351				269,137				289,757				269,137
Home equity			93,203				95,317				104,881				93,203				104,881
Commercial and industrial			299,773				320,278				491,256				299,773				491,256
Consumer			7,075				6,825				8,462				7,075				8,462
Total		$	1,946,580			$	1,940,332			$	2,015,056			$	1,946,580			$	2,015,056
NONPERFORMING ASSETS AT PERIOD-END
Nonperforming loans:
90 days past due and accruing		$	216			$	-			$	262			$	216			$	262
Nonaccrual			2,006				1,903				2,434				2,006				2,434
Other real estate owned and repossessions			143				213				958				143				958
Nonperforming assets		$	2,365			$	2,116			$	3,654			$	2,365			$	3,654
ASSET QUALITY RATIOS
Allowance for loan losses to total loans			0.96		%		1.06		%		1.06		%		0.96		%		1.06		%
Allowance for loan losses to nonperforming loans			840.59				1,084.08				793.88				840.59				793.88
Nonperforming assets to total assets			0.07				0.06				0.12				0.07				0.12
Nonperforming loans to total loans			0.11				0.10				0.13				0.11				0.13
Annualized net charge-offs (recoveries) to average loans			(0.00	)			(0.01	)			0.05				(0.01	)			0.03
OTHER DATA
Fiduciary assets at period-end (c) (d)		$	752,410			$	697,528			$	614,016			$	752,410			$	614,016
Retail brokerage assets at period-end (c) (d)		$	418,850			$	406,408			$	362,022			$	418,850			$	362,022
Number full-time equivalent employees (e)			346				345				342				346				342
Number of full service offices			26				26				26				26				26
Number of loan production offices			1				1				1				1				1
Number of ATMs			36				36				37				36				37
Notes:
(a) - This financial measure is not calculated in accordance with GAAP. For a reconciliation of non-GAAP financial measures, see "Reconciliation of Non-GAAP Financial Measures" at the end of this release.
(b) - Average does not include unrealized gains and losses.
(c) - Market value.
(d) - Assets are not owned by American National and are not reflected in the consolidated balance sheet.
(e) - Average for quarter.

Net Interest Income Analysis
For the Three Months Ended December 31, 2021 and 2020
(Dollars in thousands)
								Interest
		Average Balance						Income/Expense (a)						Yield/Rate
		2021			2020			2021			2020			2021			2020
		(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Loans:
Commercial		$	310,175		$	507,750		$	3,386		$	5,354		4.33	%		4.19	%
Real estate			1,634,660			1,556,192			18,244			17,206		4.46			4.42
Consumer			6,524			8,056			112			137		6.81			6.77
Total loans (b)			1,951,359			2,071,998			21,742			22,697		4.45			4.38
Securities:
U.S. Treasury			116,629			14,126			242			4		0.83			0.11
Federal agencies & GSEs			93,042			76,606			265			276		1.14			1.44
Mortgage-backed & CMOs			355,492			206,817			1,117			916		1.26			1.77
State and municipal			63,148			53,257			314			304		1.99			2.28
Other			26,284			21,723			305			286		4.64			5.27
Total securities			654,595			372,529			2,243			1,786		1.37			1.92
Deposits in other banks			548,776			309,928			223			84		0.16			0.11
Total interest-earning assets			3,154,730			2,754,455			24,208			24,567		3.07			3.56
Non-earning assets			202,493			217,050
Total assets		$	3,357,223		$	2,971,505
Deposits:
Demand		$	505,528		$	433,356			37			50		0.03			0.05
Money market			743,354			647,320			101			380		0.05			0.23
Savings			257,289			215,233			6			16		0.01			0.03
Time			362,524			405,486			511			1,375		0.56			1.35
Total deposits			1,868,695			1,701,395			655			1,821		0.14			0.43
Customer repurchase agreements			39,645			40,819			3			22		0.03			0.21
Long-term borrowings			28,218			35,617			386			509		5.47			5.72
Total interest-bearing liabilities			1,936,558			1,777,831			1,044			2,352		0.21			0.53
Noninterest bearing demand deposits			1,045,686			834,968
Other liabilities			22,584			23,035
Shareholders' equity			352,395			335,671
Total liabilities and shareholders'
equity		$	3,357,223		$	2,971,505
Interest rate spread														2.86	%		3.03	%
Net interest margin														2.93	%		3.22	%
Net interest income (taxable equivalent basis)									23,164			22,215
Less: Taxable equivalent adjustment (c)									60			69
Net interest income								$	23,104		$	22,146
Notes:
(a) - Interest income includes net accretion/amortization of acquired loan fair value adjustments and the net accretion/amortization of deferred loan fees and costs.
(b) - Nonaccrual loans are included in the average balances.
(c) - A tax rate of 21% was used in adjusting interest on tax-exempt assets to a fully taxable equivalent basis.

Net Interest Income Analysis
For the Twelve Months Ended December 31, 2021 and 2020
(Dollars in thousands)
								Interest
		Average Balance						Income/Expense (a)						Yield/Rate
		2021			2020			2021			2020			2021			2020
		(Unaudited)			(Audited)			(Unaudited)			(Audited)			(Unaudited)			(Audited)
Loans:
Commercial		$	372,538		$	475,068		$	18,819		$	17,768		5.05	%		3.74	%
Real estate			1,584,856			1,531,195			67,887			69,525		4.28			4.54
Consumer			6,984			8,998			475			588		6.80			6.53
Total loans (b)			1,964,378			2,015,261			87,181			87,881		4.44			4.36
Securities:
U.S. Treasury			57,048			9,010			507			51		0.89			0.57
Federal agencies & GSEs			97,943			72,112			1,132			1,423		1.16			1.97
Mortgage-backed & CMOs			308,158			200,612			4,142			4,060		1.34			2.02
State and municipal			61,698			45,836			1,272			1,175		2.06			2.56
Other			24,707			20,382			1,205			1,098		4.88			5.39
Total securities			549,554			347,952			8,258			7,807		1.50			2.24
Deposits in other banks			453,867			188,700			598			440		0.13			0.23
Total interest-earning assets			2,967,799			2,551,913			96,037			96,128		3.24			3.77
Non-earning assets			208,765			221,094
Total assets		$	3,176,564		$	2,773,007
Deposits:
Demand		$	476,710		$	386,790			152			344		0.03			0.09
Money market			710,948			574,510			758			2,634		0.11			0.46
Savings			243,123			198,313			26			117		0.01			0.06
Time			366,604			436,081			2,709			6,634		0.74			1.52
Total deposits			1,797,385			1,595,694			3,645			9,729		0.20			0.61
Customer repurchase agreements			37,632			42,937			22			259		0.06			0.60
Other short-term borrowings			-			1			-			-		-			0.50
Long-term borrowings			31,878			35,586			1,738			2,032		5.45			5.71
Total interest-bearing liabilities			1,866,895			1,674,218			5,405			12,020		0.29			0.72
Noninterest bearing demand deposits			939,186			746,659
Other liabilities			22,325			22,777
Shareholders' equity			348,158			329,353
Total liabilities and shareholders'
equity		$	3,176,564		$	2,773,007
Interest rate spread														2.95	%		3.05	%
Net interest margin														3.05	%		3.30	%
Net interest income (taxable equivalent basis)									90,632			84,108
Less: Taxable equivalent adjustment (c)									241			288
Net interest income								$	90,391		$	83,820
Notes:
(a) - Interest income includes net accretion/amortization of acquired loan fair value adjustments and the net accretion/amortization of deferred loan fees and costs.
(b) - Nonaccrual loans are included in the average balances.
(c) - A tax rate of 21% was used in adjusting interest on tax-exempt assets to a fully taxable equivalent basis.

American National Bankshares Inc.
Reconciliation of Non-GAAP Financial Measures
(Dollars in thousands, except per share data)
														At or for the Twelve Months
		4rd Qtr				3rd Qtr				4th Qtr				Ended December 31,
			2021				2021				2020				2021				2020
		(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)				(Audited)
EFFICIENCY RATIO
Noninterest expense		$	15,463			$	14,843			$	14,659			$	59,008			$	54,565
Add/subtract: gain/loss on sale of OREO			-				-				(8	)			(111	)			4
Subtract: core deposit intangible amortization			(351	)			(361	)			(391	)			(1,464	)			(1,637	)
		$	15,112			$	14,482			$	14,260			$	57,433			$	52,932
Net interest income		$	23,104			$	23,093			$	22,146			$	90,391			$	83,820
Tax equivalent adjustment			60				59				69				241				288
Noninterest income			4,844				5,123				4,221				21,031				16,843
Subtract: gain on securities			(35	)			-				-				(35	)			(814	)
Add: loss on fixed assets			297				107				13				885				110
		$	28,270			$	28,382			$	26,449			$	112,513			$	100,247
Efficiency ratio			53.46		%		51.03		%		53.92		%		51.05		%		52.80		%
TAX EQUIVALENT NET INTEREST INCOME
Non-GAAP measures:
Interest income - loans		$	21,742			$	22,012			$	22,697			$	87,181			$	87,881
Interest income - investments and other			2,466				2,327				1,870				8,856				8,247
Interest expense - deposits			(655	)			(781	)			(1,821	)			(3,645	)			(9,729	)
Interest expense - customer repurchase agreements			(3	)			(3	)			(22	)			(22	)			(259	)
Interest expense - long-term borrowings			(386	)			(400	)			(509	)			(1,738	)			(2,032	)
Total net interest income		$	23,164			$	23,155			$	22,215			$	90,632			$	84,108
Less non-GAAP measures:
Tax benefit on nontaxable interest - loans			(36	)			(38	)			(43	)			(141	)			(181	)
Tax benefit on nontaxable interest - securities			(24	)			(24	)			(26	)			(100	)			(107	)
GAAP measures		$	23,104			$	23,093			$	22,146			$	90,391			$	83,820
RETURN ON AVERAGE TANGIBLE EQUITY
Return on average equity (GAAP basis)			12.82		%		11.58		%		10.48		%		12.50		%		9.12		%
Impact of excluding average goodwill and other intangibles			4.81				4.43				4.42				4.84				4.07
Return on average tangible equity (non-GAAP)			17.63		%		16.01		%		14.90		%		17.34		%		13.19		%
TANGIBLE EQUITY TO TANGIBLE ASSETS
Equity to assets ratio (GAAP basis)			10.64		%		10.65		%		11.08		%		10.64		%		11.08		%
Impact of excluding goodwill and other intangibles			(2.47	)			(2.51	)			(2.74	)			(2.47	)			(2.74	)
Tangible equity to tangible assets ratio (non-GAAP)			8.17		%		8.14		%		8.34		%		8.17		%		8.34		%
TANGIBLE BOOK VALUE
Book value per share (GAAP basis)		$	32.95			$	32.51			$	30.77			$	32.95			$	30.77
Impact of excluding goodwill and other intangibles			(8.33	)			(8.35	)			(8.30	)			(8.33	)			(8.30	)
Tangible book value per share (non-GAAP)		$	24.62			$	24.16			$	22.47			$	24.62			$	22.47
ADJUSTED LOAN LOSS ALLOWANCE
Allowance for loan losses		$	18,678			$	20,630			$	21,403			$	18,678			$	21,403
Credit discount on purchased loans			4,474				5,258				7,255				4,474				7,255
Adjusted loan loss allowance		$	23,152			$	25,888			$	28,658			$	23,152			$	28,658
Total loans, net of deferred fees and costs		$	1,946,580			$	1,940,332			$	2,015,056			$	1,946,580			$	2,015,056
Subtract: PPP loans, net			(12,239	)			(37,199	)			(211,275	)			(12,239	)			(211,275	)
Total loans less PPP loans, net		$	1,934,341			$	1,903,133			$	1,803,781			$	1,934,341			$	1,803,781
Adjusted loan loss allowance to total loans less PPP loans, net			1.20		%		1.36		%		1.59		%		1.20		%		1.59		%
Allowance for loan losses to total loans less PPP loans, net			0.97		%		1.08		%		1.19		%		0.97		%		1.19		%

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

FAQ

What were American National's earnings for Q4 2021?

American National reported earnings of $11.3 million or $1.05 per diluted share for Q4 2021.

How did American National perform in 2021 compared to 2020?

In 2021, American National earned $43.5 million compared to $30 million in 2020.

What is the loan growth percentage for American National in Q4 2021?

Core loan growth was 6.6% annualized in the fourth quarter of 2021.

How did the total assets of American National change in Q4 2021?

Total assets increased to $3.3 billion, up $284.6 million from December 31, 2020.

What was the net interest margin for American National in Q4 2021?

The net interest margin decreased to 2.93% in the fourth quarter of 2021.