DANVILLE, VA--(Marketwire - October 21, 2009) - American National Bankshares Inc. (
NASDAQ:
AMNB)
-- Q3 net income of $2.2 million and diluted EPS of $0.35 per share
-- Q3 net interest margin 3.91%
-- Average shareholders' equity of $103 million represents 12.77% of assets
American National Bankshares Inc. (
NASDAQ:
AMNB), parent company of
American National Bank and Trust Company, today announced third quarter
2009 net income of $2,167,000 compared to $2,224,000 for the same quarter
in 2008, a 2.6% decline. Basic earnings per share were $0.36 for the 2009
quarter, unchanged from the 2008 quarter. Diluted earnings per share were
$0.35 for the 2009 quarter compared to $0.36 for the 2008 quarter. This net
income produced returns on average assets and average equity of 1.07% and
8.38%, respectively. For the quarter, return on tangible equity was
11.30%.
Net income for the nine month period of 2009 was $4,641,000 compared to
$6,338,000 for the comparable period of 2008, a 26.8% decline. Earnings per
share, basic and diluted, were $0.76 for the 2009 period compared to $1.04,
basic and diluted, for the 2008 period. Earnings for the 2009 period were
adversely impacted by a first quarter $1.2 million pre-tax charge writing
down other real estate owned and increased FDIC premiums and a special
assessment.
Financial Performance and Overview
"Our third quarter net income was almost $2.2 million, down less than 3%
from the same quarter a year ago," stated Charles H. Majors, President and
Chief Executive Officer. "While we are not satisfied with these earnings,
we are encouraged that American National continues to be solidly profitable
and maintains its position as a well capitalized community bank.
"We believe that our primary corporate mission is to build shareholder
value and that, over time, the primary driver of that process is the
quality and consistency of our earnings. We think our shareholders are
seeing the fruits of that strategy more than most of our peers. Our market
price at the end of the quarter was 127% of book value. Our total
shareholder return for the twelve months ended June 30, 2009 was sixth
highest among publicly traded bank holding companies.
"During the third quarter, compared to the prior year quarter, we
experienced decreases in service charge income and trust income and
increased costs of deposit insurance. However, we were pleased, and
somewhat surprised, that we did not have another special FDIC assessment
comparable to the second quarter charge of $360,000. Further, our secondary
market mortgage operation showed significant gains and net interest income
improved over 2%.
"Businesses and consumers are continuing to deleverage their balance
sheets. This macroeconomic trend is reflected in a 5.6% decline in our loan
portfolio since year-end. These are difficult times, but we are optimistic
that the business cycle will improve and, when that occurs, we will be
prepared to resume quality growth in earning assets and profitability."
Capital
American National's capital ratios are among the highest in its peer group.
At September 30, 2009, average shareholders' equity was 12.77% of average
assets.
Credit Quality Measurements
Nonperforming assets ($3.1 million of non-accrual loans and $4.6 million of
foreclosed real estate) were significantly below industry averages and
represented 0.95% of total assets at September 30, 2009, compared to 0.91%
at December 31, 2008. The allowance for loan losses was $8.3 million or
1.53% of loans at September 30, 2009 compared to 1.37% at December 31,
2008.
Net Interest Income
Net interest income increased to $7,000,000 in the third quarter of 2009
from $6,856,000 in the third quarter of 2008, an increase of 2.1%. Net
interest income has been adversely impacted by historically low market
interest rates. The Bank has mitigated the environment by reducing the cost
of its interest bearing liabilities. The Company's net interest margin has
improved one basis point (0.01%) in the third quarter 2009 compared to the
same quarter in 2008, though for the nine month period the margin declined
eight basis points (0.08%).
Noninterest Income
Noninterest income totaled $2,119,000 in the third quarter of 2009,
compared with $2,062,000 in the third quarter of 2008, a 2.8% increase.
Noninterest income continued to be negatively impacted by the
market-related declines in trust and brokerage income. However, increases
in secondary market mortgage income and smaller increases in other
categories offset that negative impact.
Noninterest Expense
Noninterest expense totaled $5,598,000 in the third quarter of 2009,
compared to $5,485,000 in the third quarter of 2008, a 2.1% increase. The
major factor impacting noninterest expense was deposit insurance costs.
During the third quarter the Bank incurred costs of $203,000 compared to
$47,000 for the prior year quarter, over a 300% increase. For the nine
month period FDIC costs increased $896,000, over a 1000% increase over the
prior year. These increases were due primarily to industry-wide conditions
which resulted in increased FDIC costs for all member banks.
About American National
American National Bankshares Inc. is a bank holding company with assets of
$810 million. Headquartered in Danville, Virginia, it is the holding
company of American National Bank and Trust Company, a community bank
serving Southern and Central Virginia and the northern portion of Central
North Carolina with nineteen banking offices. The Bank also manages an
additional $423 million of assets in its Trust and Investment Services
Division. Additional information is available on the Bank's website at
www.amnb.com. The shares of American National Bankshares Inc. are traded
on the NASDAQ Global Select Market under the symbol "AMNB."
Forward-Looking Statements
This press release may contain "forward-looking statements," within the
meaning of federal securities laws that involve significant risks and
uncertainties. Statements herein are based on certain assumptions and
analyses by the Company and are factors it believes are appropriate in the
circumstances. Actual results could differ materially from those contained
in or implied by such statements for a variety of reasons including, but
not limited to: changes in interest rates; changes in accounting
principles, policies, or guidelines; significant changes in the economic
scenario; significant changes in regulatory requirements; and significant
changes in securities markets. Consequently, all forward-looking
statements made herein are qualified by these cautionary statements and the
cautionary language in the Company's most recent Form 10-K report and other
documents filed with the Securities and Exchange Commission. American
National Bankshares Inc. does not undertake to update forward-looking
statements to reflect circumstances or events that occur after the date the
forward-looking statements are made.
American National Bankshares Inc. and Subsidiaries
Consolidated Balance Sheets
(Dollars in thousands, except share and per share data)
Unaudited
September 30
----------------------------
ASSETS 2009 2008
------------- -------------
Cash and due from banks $ 17,451 $ 25,136
Interest-bearing deposits in other banks 8,892 8,050
Securities available for sale, at fair value 181,953 134,114
Securities held to maturity 6,540 7,133
------------- -------------
Total securities 188,493 141,247
------------- -------------
Loans held for sale 3,840 2,269
Loans 539,188 576,598
Less allowance for loan losses (8,260) (8,083)
------------- -------------
Net Loans 530,928 568,515
------------- -------------
Premises and equipment, net 19,390 16,459
Other real estate owned 4,558 707
Goodwill 22,468 22,468
Core deposit intangibles, net 1,792 2,169
Accrued interest receivable and other assets 12,534 13,625
------------- -------------
Total assets $ 810,346 $ 800,645
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Demand deposits -- noninterest-bearing $ 105,100 $ 102,065
Demand deposits -- interest-bearing 92,012 107,228
Money market deposits 71,424 56,574
Savings deposits 62,420 59,563
Time deposits 265,339 263,627
------------- -------------
Total deposits 596,295 589,057
Short-term borrowings:
Customer repurchase agreements 71,339 44,951
Other short-term borrowings 4,000 25,920
Long-term borrowings 8,675 13,825
Trust preferred capital notes 20,619 20,619
Accrued interest payable and other
liabilities 4,513 3,559
------------- -------------
Total liabilities 705,441 697,931
------------- -------------
Shareholders' equity:
Common stock, $1 par, 10,000,000 shares
authorized, 6,107,327 shares outstanding
at September 30, 2009 and 6,090,804
shares outstanding at September 30, 2008 6,107 6,091
Capital in excess of par value 26,900 26,439
Retained earnings 71,445 70,962
Accumulated other comprehensive income
(loss), net 453 (778)
------------- -------------
Total shareholders' equity 104,905 102,714
------------- -------------
Total liabilities and shareholders'
equity $ 810,346 $ 800,645
============= =============
American National Bankshares Inc. and Subsidiaries
Consolidated Statements of Income
(Dollars in thousands, except share and per share data)
Unaudited
Three Months Ended Nine Months Ended
September 30 September 30
-------------------- --------------------
2009 2008 2009 2008
---------- --------- --------- ---------
Interest and Dividend Income:
Interest and fees on loans $ 7,666 $ 8,916 $ 23,617 $ 27,347
Interest and dividends on
securities:
Taxable 1,241 1,179 3,594 3,644
Tax-exempt 434 388 1,236 1,240
Dividends 27 41 70 191
Other interest income 96 75 287 225
---------- --------- --------- ---------
Total interest and
dividend income 9,464 10,599 28,804 32,647
---------- --------- --------- ---------
Interest Expense:
Interest on deposits 1,921 2,845 6,628 9,543
Interest on short-term
borrowings 135 429 548 1,340
Interest on long-term
borrowings 65 126 276 423
Interest on trust preferred
capital notes 343 343 1,030 1,030
---------- --------- --------- ---------
Total interest expense 2,464 3,743 8,482 12,336
---------- --------- --------- ---------
Net Interest Income 7,000 6,856 20,322 20,311
Provision for loan losses 492 280 1,334 1,020
---------- --------- --------- ---------
Net Interest Income After
Provision for Loan Losses 6,508 6,576 18,988 19,291
---------- --------- --------- ---------
Noninterest Income:
Trust fees 813 901 2,338 2,697
Service charges on deposit
accounts 536 603 1,549 1,769
Other fees and commissions 257 193 750 622
Mortgage banking income 361 238 1,215 633
Brokerage fees 23 126 153 370
Securities gains (losses),
net 1 (87) 2 (195)
Impairment of securities - - - (255)
Net loss on foreclosed real
estate - - (1,222) (7)
Other 128 88 321 404
---------- --------- --------- ---------
Total noninterest income 2,119 2,062 5,106 6,038
---------- --------- --------- ---------
Noninterest Expense:
Salaries 2,471 2,466 7,734 7,416
Employee benefits 806 688 2,451 2,212
Occupancy and equipment 704 684 2,174 2,120
FDIC assessment 203 47 984 88
Bank franchise tax 160 172 483 522
Core deposit intangible
amortization 94 94 283 283
Other 1,160 1,334 3,685 3,936
---------- --------- --------- ---------
Total noninterest expense 5,598 5,485 17,794 16,577
---------- --------- --------- ---------
Income Before Income Taxes 3,029 3,153 6,300 8,752
Income Taxes 862 929 1,659 2,414
---------- --------- --------- ---------
Net Income $ 2,167 $ 2,224 $ 4,641 $ 6,338
========== ========= ========= =========
Net Income Per Common Share:
Basic $ 0.36 $ 0.36 $ 0.76 $ 1.04
Diluted $ 0.35 $ 0.36 $ 0.76 $ 1.04
Average Common Shares
Outstanding:
Basic 6,104,505 6,093,851 6,094,261 6,099,933
Diluted 6,111,913 6,100,089 6,098,221 6,109,947
American National Bankshares Inc. and Subsidiaries
Financial Highlights
(In thousands,
except share, ratio
and nonfinancial
data, unaudited) 3rd Qtr 2nd Qtr 3rd Qtr YTD YTD
2009 2009 2008 2009 2008
--------- --------- --------- --------- ---------
EARNINGS
Interest income $ 9,464 $ 9,690 $ 10,599 $ 28,804 $ 32,647
Interest expense 2,464 2,781 3,743 8,482 12,336
Net interest income 7,000 6,909 6,856 20,322 20,311
Provision for loan
losses 492 492 280 1,334 1,020
Noninterest income 2,119 2,253 2,062 5,106 6,038
Noninterest expense 5,598 6,321 5,485 17,794 16,577
Income taxes 862 643 929 1,659 2,414
Net income 2,167 1,706 2,224 4,641 6,338
PER COMMON SHARE
Earnings per share -
basic $ 0.36 $ 0.28 $ 0.36 $ 0.76 $ 1.04
Earnings per share -
diluted 0.35 0.28 0.36 0.76 1.04
Cash dividends
declared 0.23 0.23 0.23 0.69 0.69
Book value per share 17.18 16.82 16.86 17.18 16.86
Book value per share
- tangible (a) 13.20 12.83 12.82 13.20 12.82
Closing market price 21.82 19.25 18.00 21.82 18.00
FINANCIAL RATIOS
Return on average
assets 1.07% 0.84% 1.13% 0.77% 1.08%
Return on average
equity 8.38 6.63 8.72 6.00 8.26
Return on average
tangible equity (b) 11.30 9.05 11.84 8.22 11.25
Average equity to
average assets 12.77 12.66 12.97 12.74 13.02
Net interest margin,
taxable equivalent 3.91 3.84 3.90 3.79 3.87
Efficiency ratio 59.77 66.98 59.51 65.07 60.33
Effective tax rate 28.46 27.37 29.46 26.33 27.58
PERIOD-END BALANCES
Securities $ 188,493 $ 151,418 $ 141,247 $ 188,493 $ 141,247
Loans held for sale 3,840 10,408 2,269 3,840 2,269
Loans 539,188 557,042 576,598 539,188 576,598
Goodwill and other
intangibles 24,260 24,354 24,637 24,260 24,637
Assets 810,346 811,483 800,645 810,346 800,645
Assets - tangible
(a) 786,086 787,129 776,008 786,086 776,008
Deposits 596,295 615,231 589,057 596,295 589,057
Customer repurchase
agreements 71,339 59,437 44,951 71,339 44,951
Other short-term
borrowings 4,000 - 25,920 4,000 25,920
Long-term borrowings 29,294 29,331 34,444 29,294 34,444
Shareholders' equity 104,905 102,618 102,714 104,905 102,714
Shareholders' equity
- tangible (a) 80,645 78,264 78,077 80,645 78,077
AVERAGE BALANCES
Securities $ 159,314 $ 147,576 $ 141,697 $ 148,415 $ 147,863
Loans held for sale 6,540 7,787 1,986 5,788 1,936
Loans 547,075 562,654 572,196 559,938 563,667
Interest-earning
assets 741,194 744,899 724,368 740,399 722,619
Goodwill and other
intangibles 24,314 24,406 24,695 24,408 24,781
Assets 810,064 812,404 786,804 808,761 785,372
Assets - tangible
(a) 785,750 787,998 762,109 784,353 760,591
Interest-bearing
deposits 503,793 513,876 480,133 509,470 480,806
Deposits 606,134 612,134 577,263 607,440 578,922
Customer repurchase
agreements 65,341 60,876 51,038 60,790 53,069
Other short-term
borrowings 460 1,553 17,589 1,355 11,808
Long-term borrowings 29,325 30,460 34,474 31,376 34,195
Shareholders' equity 103,411 102,862 102,052 103,060 102,290
Shareholders' equity
- tangible (a) 79,097 78,456 77,357 78,652 77,509
CAPITAL
Average shares
outstanding - basic 6,104,505 6,096,034 6,093,851 6,094,261 6,099,933
Average shares
outstanding -
diluted 6,111,913 6,097,047 6,100,089 6,098,221 6,109,947
Shares repurchased - - 7,850 7,600 39,050
Average price of
shares repurchased $ - $ - $ 17.42 $ 15.92 $ 20.16
ALLOWANCE FOR LOAN
LOSSES
Beginning balance $ 7,934 $ 7,836 $ 7,932 $ 7,824 $ 7,395
Provision for loan
losses 492 492 280 1,334 1,020
Charge-offs (318) (422) (179) (1,116) (552)
Recoveries 152 28 50 218 220
--------- --------- --------- --------- ---------
Ending balance $ 8,260 $ 7,934 $ 8,083 $ 8,260 $ 8,083
LOANS
Construction and
land development $ 46,175 $ 50,930 $ 65,826 $ 46,175 $ 65,826
Commercial real
estate 209,470 210,832 208,046 209,470 208,046
Residential real
estate 126,392 128,835 139,683 126,392 139,683
Home equity 62,519 61,818 55,665 62,519 55,665
Commercial and
industrial 87,226 96,978 99,139 87,226 99,139
Consumer 7,406 7,649 8,239 7,406 8,239
--------- --------- --------- --------- ---------
Total $ 539,188 $ 557,042 $ 576,598 $ 539,188 $ 576,598
NONPERFORMING ASSETS
AT PERIOD-END
Nonperforming loans:
90 days past due $ - $ - $ - $ - $ -
Nonaccrual 3,106 2,745 6,674 3,106 6,674
Foreclosed real
estate 4,558 4,033 707 4,558 707
--------- --------- --------- --------- ---------
Nonperforming assets $ 7,664 $ 6,778 $ 7,381 $ 7,664 $ 7,381
ASSET QUALITY RATIOS
Annualized net
chargeoffs to
average loans 0.12% 0.28% 0.09% 0.21% 0.08%
Nonperforming assets
to total assets 0.95 0.84 0.92 0.95 0.92
Nonperforming loans
to total loans 0.58 0.49 1.16 0.58 1.16
Allowance for loan
losses to total
loans 1.53 1.42 1.40 1.53 1.40
Allowance for loan
losses to
nonperforming
loans 265.94 289.03 121.11 265.94 121.11
OTHER DATA
Fiduciary assets at
period-end (c) $ 354,860 $ 333,754 $ 368,341 $ 354,860 $ 368,341
Retail brokerage
assets at
period-end (c) $ 63,893 $ 89,016 $ 91,026 $ 63,893 $ 91,026
Number full
time-time
equivalent
employees (d) 246 255 258 246 258
Number of full
service offices 19 19 20 19 20
Number of loan
production offices 2 2 1 2 1
Number of ATM's 24 24 23 24 23
Notes:
(a) - Excludes goodwill and other intangible assets
(b) - Excludes amortization expense, net of tax, of intangible assets
(c) - Market value
(d) - Average for quarter
N/A - Percentage change is not applicable or not meaningful
Net Interest Income Analysis
For the Three Months Ended September 30, 2009 and 2008
(in thousands, except rates)
Interest
Average Balance Income/Expense Yield/Rate
------------------- ------------------- ------------------
2009 2008 2009 2008 2009 2008
--------- --------- --------- --------- -------- --------
Loans:
Commercial $ 85,894 $ 94,575 $ 1,027 $ 1,423 4.78% 6.02%
Real estate 460,253 471,162 6,508 7,323 5.66 6.22
Consumer 7,468 8,445 158 192 8.46 9.09
--------- --------- --------- --------- -------- --------
Total loans 553,615 574,182 7,693 8,938 5.56 6.23
--------- --------- --------- --------- -------- --------
Securities:
Federal
agencies and
GSE 56,706 43,543 538 534 3.80 4.91
Mortgage-backed
& CMO's 37,609 48,000 506 607 5.38 5.06
State and
municipal 56,665 44,104 798 602 5.63 5.46
Other 8,334 6,050 80 54 3.84 3.57
--------- --------- --------- --------- -------- --------
Total
securities 159,314 141,697 1,922 1,797 4.83 5.07
--------- --------- --------- --------- -------- --------
Deposits in
other banks 28,265 8,489 96 75 1.36 3.53
--------- --------- --------- --------- -------- --------
Total
interest-
earning
assets 741,194 724,368 9,711 10,810 5.24 5.97
--------- --------- -------- --------
Non-earning
assets 68,870 62,436
--------- ---------
Total
assets $ 810,064 $ 786,804
========= =========
Deposits:
Demand $ 94,869 $ 110,230 31 215 0.13 0.78
Money market 76,416 54,642 107 246 0.56 1.80
Savings 62,985 60,499 38 76 0.24 0.50
Time 269,523 254,762 1,745 2,308 2.59 3.62
--------- --------- --------- --------- -------- --------
Total
deposits 503,793 480,133 1,921 2,845 1.53 2.37
Customer
repurchase
agreements 65,341 51,038 134 313 0.82 2.45
Other
short-term
borrowings 460 17,589 1 116 0.87 2.64
Long-term
borrowings 29,325 34,474 408 469 5.57 5.44
--------- --------- --------- --------- -------- --------
Total
interest-
bearing
liabilities 598,919 583,234 2,464 3,743 1.65 2.57
--------- --------- -------- --------
Noninterest
bearing demand
deposits 102,341 97,130
Other
liabilities 5,393 4,388
Shareholders'
equity 103,411 102,052
--------- ---------
Total
liabilities
and
shareholders'
equity $ 810,064 $ 786,804
========= =========
Interest rate
spread 3.59% 3.40%
======== ========
Net interest
margin 3.91% 3.90%
======== ========
Net interest
income
(taxable
equivalent
basis) 7,247 7,067
Less: Taxable
equivalent
adjustment 247 211
--------- ---------
Net interest
income $ 7,000 $ 6,856
========= =========
Net Interest Income Analysis
For the Nine Months Ended September 30, 2009 and 2008
(in thousands, except rates)
Interest
Average Balance Income/Expense Yield/Rate
------------------- ------------------- ------------------
2009 2008 2009 2008 2009 2008
--------- --------- --------- --------- -------- --------
Loans:
Commercial $ 91,193 $ 90,301 $ 3,227 $ 4,219 4.72% 6.23%
Real estate 466,787 466,346 19,956 22,580 5.70 6.46
Consumer 7,746 8,956 511 606 8.80 9.02
--------- --------- --------- --------- -------- --------
Total loans 565,726 565,603 23,694 27,405 5.58 6.46
--------- --------- --------- --------- -------- --------
Securities:
Federal
agencies and
GSE 49,606 46,428 1,584 1,682 4.26 4.83
Mortgage-backed
& CMO's 41,158 48,588 1,618 1,852 5.24 5.08
State and
municipal 50,439 46,376 2,133 1,910 5.64 5.49
Other 7,212 6,471 185 243 3.42 5.01
--------- --------- --------- --------- -------- --------
Total
securities 148,415 147,863 5,520 5,687 4.96 5.13
--------- --------- --------- --------- -------- --------
Deposits in
other banks 26,258 9,153 287 225 1.46 3.28
--------- --------- --------- --------- -------- --------
Total
interest-
earning
assets 740,399 722,619 29,501 33,317 5.31 6.15
--------- --------- -------- --------
Non-earning
assets 68,362 62,753
--------- ---------
Total
assets $ 808,761 $ 785,372
========= =========
Deposits:
Demand $ 99,860 $ 108,463 263 600 0.35 0.74
Money market 73,112 52,365 453 779 0.83 1.98
Savings 62,284 62,107 115 276 0.25 0.59
Time 274,214 257,871 5,797 7,888 2.82 4.08
--------- --------- --------- --------- -------- --------
Total
deposits 509,470 480,806 6,628 9,543 1.73 2.65
Customer
repurchase
agreements 60,790 53,069 543 1,103 1.19 2.77
Other
short-term
borrowings 1,355 11,808 5 237 0.49 2.68
Long-term
borrowings 31,376 34,195 1,306 1,453 5.55 5.67
--------- --------- --------- --------- -------- --------
Total
interest-
bearing
liabilites 602,991 579,878 8,482 12,336 1.88 2.84
--------- --------- -------- --------
Noninterest
bearing demand
deposits 97,970 98,116
Other
liabilities 4,740 5,088
Shareholders'
equity 103,060 102,290
--------- ---------
Total
liabilities
and
share-
holders'
equity $ 808,761 $ 785,372
========= =========
Interest rate
spread 3.43% 3.31%
Net interest
margin 3.79% 3.87%
======== ========
Net interest
income
(taxable
equivalent
basis) 21,019 20,981
Less: Taxable
equivalent
adjustment 697 670
--------- ---------
Net interest
income $ 20,322 $ 20,311
========= =========