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 | |