DANVILLE, Va., Oct. 20, 2022 (GLOBE NEWSWIRE) -- American National Bankshares Inc. (NASDAQ: AMNB) (“American National” or the “Company”) today reported third quarter 2022 earnings of $9.3 million, or $0.87 per diluted common share. Those results compare to earnings of $10.2 million, or $0.94 per diluted common share, during the same quarter in the prior year, and earnings of $8.1 million, or $0.76 per diluted common share, for the second quarter of 2022. Earnings for the nine months ended September 30, 2022 were $26.4 million, or $2.47 per diluted common share, compared to $32.2 million, or $2.95 diluted common share, for the same period of 2021.
President and Chief Executive Officer, Jeffrey V. Haley, commented, “American National delivered another solid quarter of earnings performance with meaningful growth in top-line revenue and margins. Our continued growth in our loan portfolio and improved asset mix coupled with the continued rising rate environment drove double-digit growth in net interest income. Asset quality remains strong, and our local business markets continue to be healthy in spite of the geopolitical headwinds and some signs of a slowing economy nationally.”
Third quarter 2022 highlights include:
- Earnings produced a return on average tangible common equity of 15.74% for the third quarter of 2022, compared to 13.87% in the previous quarter and 16.01% for the same quarter in the prior year (non-GAAP).
- Net interest income increased $2.5 million, or 11.7%, when compared to the previous quarter, and increased $914 thousand, or 4.0%, when compared to the same quarter in 2021.
- Fully taxable equivalent (“FTE”) net interest margin was 3.20% for the quarter, up from 2.76% in the second quarter of 2022 and up from 3.09% in the same quarter of the prior year (non-GAAP).
- Noninterest revenues decreased $77 thousand, or 1.6%, when compared to the previous quarter, and decreased $363 thousand, or 7.1%, compared to the same quarter in the prior year.
- Noninterest expense increased $993 thousand, or 6.4%, when compared to the previous quarter, and increased $1.6 million, or 10.8%, when compared to the same quarter in the prior year.
- Average loans held for investment, excluding U.S. Small Business Administration Paycheck Protection Program (“PPP”) loans, grew $57.2 million, or 11.4% annualized, during the third quarter as compared to the previous quarter of $44.5 million, or 9.1% annualized.
- The Company recognized a provision for loan losses in the third quarter of 2022 of $615 thousand compared to $581 thousand in the second quarter of 2022 and $482 thousand in the third quarter of 2021. Annualized net charge-offs (recoveries) as a percentage of average loans outstanding were (0.01%) for the third quarter of 2022 compared to 0.01% in the previous quarter and (0.01%) in the same quarter of 2021.
- Nonperforming assets as a percentage of total assets were 0.05% at September 30, 2022 and June 30, 2022, down from 0.06% at September 30, 2021.
NET INTEREST INCOME
Net interest income for the third quarter of 2022 increased by $2.5 million, or 11.7%, to $24.0 million compared to $21.5 million for the second quarter of 2022. The third quarter of 2022 compared to the same quarter of 2021 reflected an increase of $914 thousand, or 4.0%. The FTE net interest margin for the quarter was 3.20%, up from 2.76% in the prior quarter and 3.09% in the same quarter a year ago (non-GAAP). The margin expansion relative to the previous quarter was primarily due to a 45-basis point increase in yield on average earning assets. The higher yield resulted from a shift in the earning assets mix caused by excess deposits in other banks being deployed into the loan portfolio as well as increased yields on loans, securities, and deposits in other banks due to the rise in interest rates. The increase in margin from third quarter 2021 was also attributable to the higher rate environment and asset mix changes partially offset by substantially more PPP related income in 2021.
The Company’s FTE net interest margin includes the impact of acquisition accounting fair value adjustments. During the third quarter of 2022, net accretion related to acquisition accounting amounted to $454 thousand compared to $336 thousand in the prior quarter and $1.3 million for the same quarter in 2021. The third quarter of 2021 reflected additional accretion income from the early payoff of acquired loans. Estimated remaining net accretion from acquisitions for the periods indicated is as follows (dollars in thousands):
| For the years ending December 31, (estimated): | |||
| 2022 | $ | 208 | |
| 2023 | 745 | ||
| 2024 | 454 | ||
| 2025 | 320 | ||
| 2026 | 215 | ||
| Thereafter | 274 | ||
ASSET QUALITY
Nonperforming assets (“NPAs”) totaled $1.4 million as of September 30, 2022, down from $1.6 million at June 30, 2022, and down substantially from $2.1 million at September 30, 2021. NPAs as a percentage of total assets were 0.05% at September 30, 2022 and June 30, 2022, and 0.06% at September 30, 2021. The Company recorded a provision for loan losses for the third quarter of 2022 of $615 thousand compared to $581 thousand in the previous quarter and $482 thousand in the third quarter of the previous year. The provision expense for the third and second quarters of 2022 was a function of continued loan growth during the periods. The provision expense in the third quarter of 2021 was the net of the provision for loan growth offset by positive adjustments in qualitative factors for improved economic conditions.
The allowance for loan losses was $19.2 million at September 30, 2022, compared to $18.5 million at June 30, 2022 and $20.6 million at September 30, 2021. Annualized net charge-offs (recoveries) as a percentage of average loans outstanding were (0.01%) for the third quarter of 2022 and the third quarter of 2021, compared to 0.01% in the second quarter of 2022. The allowance as a percentage of loans held for investment was 0.91% at September 30, 2022 and June 30, 2022, compared to 1.06% at September 30, 2021. Excluding PPP loans, the allowance as a percentage of loans was 0.91% at September 30, 2022 and June 30, 2022, compared to 1.08% at September 30, 2021.
NONINTEREST INCOME
Noninterest income decreased $77 thousand, or 1.6%, to $4.8 million for the quarter ended September 30, 2022 from the prior quarter and $363 thousand, or 7.1%, from $5.1 million in the same quarter in the prior year. The largest decrease in the third quarter of 2022 compared to the second quarter was income from small business investment companies. This income is generated by distributions based on ownership percentages and is highly unpredictable. The decrease for the third quarter of 2022 as compared to same quarter in the prior year is primarily attributable to mortgage revenue contraction associated with higher mortgage rates, with mortgage banking income decreasing by $601 thousand, or 60.8%, compared to the same quarter of 2021.
NONINTEREST EXPENSE
Noninterest expense for the third quarter of 2022 amounted to $16.4 million, up $993 thousand, or 6.4%, when compared to $15.5 million for the previous quarter and up $1.6 million, or 10.8%, from $14.8 million during the same quarter in the previous year. The increase in the third quarter compared to the second quarter of 2022 and the same quarter of 2021 was primarily the result of compensation associated with a lower staffing vacancy rate, and increased incentive accruals.
INCOME TAXES
The effective tax rate for the three months ended September 30, 2022 was 20.92%, compared to 20.90% for the prior quarter and 21.05% for the same quarter in the prior year. The effective tax rate fluctuations are attributable to changes in pre-tax earnings and the levels of permanent tax differences.
BALANCE SHEET
Total assets at September 30, 2022 were $3.0 billion, a decrease of $184.4 million from June 30, 2022 and a decrease of $239.7 million from September 30, 2021. The decrease from the previous quarter is due to lower interest-bearing deposits in other banks resulting from a decrease in deposits, partially offset by an increase in loans, net during the period.
At September 30, 2022, loans held for investment (net of deferred fees and costs) were $2.1 billion, an increase of $88.6 million, or 17.5% annualized, from June 30, 2022. Loans held for investment, excluding PPP loans, increased $216.2 million, or 11.4%, from September 30, 2021.
Investment securities available for sale amounted to $641.9 million at September 30, 2022, a decrease of $26.9 million, or 4.0%, compared to June 30, 2022, and a decrease of $2.1 million, or less than 1% compared to September 30, 2021.
Deposits amounted to $2.7 billion at September 30, 2022, a decrease of $139.5 million, or 19.7% annualized, from June 30, 2022 and a decrease of $171.2 million, or 6.0%, compared to September 30, 2021. Noninterest- bearing deposits increased $63.9 million, or 6.5%, compared to September 30, 2021.
The Company continues to be well-capitalized as defined by regulators, with tangible common equity to tangible assets of 7.59% at September 30, 2022 compared to 7.58% at June 30, 2022 and compared to 8.14% at September 30, 2021 (non-GAAP). The Company’s common equity Tier 1, Tier 1, total, and Tier 1 leverage capital ratios were 11.80%, 12.98%, 13.80% and 9.92%, respectively, at September 30, 2022.
ABOUT AMERICAN NATIONAL
American National is a multi-state bank holding company with total assets of approximately $3.0 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.
| Contact: |
| Jeffrey W. Farrar Executive Vice President, COO & CFO (434)773-2274 farrarj@amnb.com |
| American National Bankshares Inc. | ||||||||
| Consolidated Balance Sheets | ||||||||
| (Dollars in thousands, except per share data) | ||||||||
| Unaudited | ||||||||
| September 30 | ||||||||
| 2022 | 2021 | |||||||
| Assets | ||||||||
| Cash and due from banks | $ | 35,437 | $ | 38,349 | ||||
| Interest-bearing deposits in other banks | 59,541 | 480,052 | ||||||
| Securities available for sale, at fair value | 641,884 | 643,949 | ||||||
| Restricted stock, at cost | 8,383 | 8,046 | ||||||
| Loans held for sale | 2,852 | 9,518 | ||||||
| Loans, net of deferred fees and costs | 2,119,415 | 1,940,332 | ||||||
| Less allowance for loan losses | (19,189 | ) | (20,630 | ) | ||||
| Net Loans | 2,100,226 | 1,919,702 | ||||||
| Premises and equipment, net | 34,686 | 37,021 | ||||||
| Other real estate owned, net | 143 | 213 | ||||||
| Goodwill | 85,048 | 85,048 | ||||||
| Core deposit intangibles, net | 3,667 | 4,978 | ||||||
| Bank owned life insurance | 29,480 | 28,950 | ||||||
| Other assets | 47,973 | 33,237 | ||||||
| Total assets | $ | 3,049,320 | $ | 3,289,063 | ||||
| Liabilities | ||||||||
| Demand deposits -- noninterest-bearing | $ | 1,044,803 | $ | 980,985 | ||||
| Demand deposits -- interest-bearing | 509,017 | 524,328 | ||||||
| Money market deposits | 612,600 | 733,515 | ||||||
| Savings deposits | 282,093 | 254,456 | ||||||
| Time deposits | 242,357 | 368,797 | ||||||
| Total deposits | 2,690,870 | 2,862,081 | ||||||
| Customer repurchase agreements | 625 | 26,595 | ||||||
| Long-term borrowings | 28,308 | 28,207 | ||||||
| Other liabilities | 16,127 | 21,793 | ||||||
| Total liabilities | 2,735,930 | 2,938,676 | ||||||
| Shareholders' equity | ||||||||
| Preferred stock, $5 par value, 2,000,000 shares authorized, none outstanding | - | - | ||||||
| Common stock, $1 par value, 20,000,000 shares authorized, 10,608,750 shares outstanding at September 30, 2022 and 10,778,562 shares outstanding at September 30, 2021 | 10,533 | 10,715 | ||||||
| Capital in excess of par value | 141,694 | 148,069 | ||||||
| Retained earnings | 218,814 | 193,107 | ||||||
| Accumulated other comprehensive loss, net | (57,651 | ) | (1,504 | ) | ||||
| Total shareholders' equity | 313,390 | 350,387 | ||||||
| Total liabilities and shareholders' equity | $ | 3,049,320 | $ | 3,289,063 | ||||
| American National Bankshares Inc. | ||||||||||||||||||||
| Consolidated Statements of Income | ||||||||||||||||||||
| (Dollars in thousands, except per share data) | ||||||||||||||||||||
| Unaudited | ||||||||||||||||||||
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||||
| 9/30/22 | 6/30/22 | 9/30/21 | 9/30/22 | 9/30/21 | ||||||||||||||||
| Interest and Dividend Income: | ||||||||||||||||||||
| Interest and fees on loans | $ | 21,160 | $ | 19,076 | $ | 21,974 | $ | 59,024 | $ | 65,334 | ||||||||||
| Interest and dividends on securities: | ||||||||||||||||||||
| Taxable | 2,664 | 2,441 | 1,896 | 7,344 | 5,297 | |||||||||||||||
| Tax-exempt | 110 | 97 | 94 | 297 | 293 | |||||||||||||||
| Dividends | 118 | 116 | 112 | 347 | 349 | |||||||||||||||
| Other interest income | 1,099 | 800 | 201 | 2,076 | 375 | |||||||||||||||
| Total interest and dividend income | 25,151 | 22,530 | 24,277 | 69,088 | 71,648 | |||||||||||||||
| Interest Expense: | ||||||||||||||||||||
| Interest on deposits | 741 | 646 | 781 | 1,956 | 2,990 | |||||||||||||||
| Interest on short-term borrowings | 11 | 9 | 3 | 26 | 19 | |||||||||||||||
| Interest on long-term borrowings | 392 | 385 | 400 | 1,156 | 1,352 | |||||||||||||||
| Total interest expense | 1,144 | 1,040 | 1,184 | 3,138 | 4,361 | |||||||||||||||
| Net Interest Income | 24,007 | 21,490 | 23,093 | 65,950 | 67,287 | |||||||||||||||
| Provision for (recovery of) loan losses | 615 | 581 | 482 | 438 | (870 | ) | ||||||||||||||
| Net Interest Income After Provision for (recovery of) Loan Losses | 23,392 | 20,909 | 22,611 | 65,512 | 68,157 | |||||||||||||||
| Noninterest Income: | ||||||||||||||||||||
| Trust and brokerage fees | 1,603 | 1,587 | 1,576 | 4,999 | 3,757 | |||||||||||||||
| Service charges on deposit accounts | 681 | 709 | 664 | 2,079 | 1,916 | |||||||||||||||
| Interchange fees | 1,013 | 996 | 958 | 2,990 | 3,025 | |||||||||||||||
| Other fees and commissions | 233 | 200 | 189 | 699 | 619 | |||||||||||||||
| Mortgage banking income | 388 | 429 | 989 | 1,490 | 3,449 | |||||||||||||||
| Securities gains, net | - | - | - | - | 733 | |||||||||||||||
| Income from Small Business Investment Companies | 501 | 678 | 491 | 1,672 | 1,510 | |||||||||||||||
| Income from insurance investments | 100 | 97 | 132 | 644 | 1,062 | |||||||||||||||
| Losses on premises and equipment, net | (2 | ) | (84 | ) | (107 | ) | (82 | ) | (588 | ) | ||||||||||
| Other | 243 | 225 | 231 | 706 | 704 | |||||||||||||||
| Total noninterest income | 4,760 | 4,837 | 5,123 | 15,197 | 16,187 | |||||||||||||||
| Noninterest Expense: | ||||||||||||||||||||
| Salaries and employee benefits | 9,618 | 8,720 | 8,185 | 26,936 | 23,881 | |||||||||||||||
| Occupancy and equipment | 1,514 | 1,520 | 1,513 | 4,576 | 4,548 | |||||||||||||||
| FDIC assessment | 227 | 228 | 194 | 694 | 644 | |||||||||||||||
| Bank franchise tax | 488 | 488 | 440 | 1,452 | 1,321 | |||||||||||||||
| Core deposit intangible amortization | 310 | 320 | 361 | 960 | 1,113 | |||||||||||||||
| Data processing | 818 | 781 | 748 | 2,446 | 2,224 | |||||||||||||||
| Software | 362 | 363 | 344 | 1,088 | 1,011 | |||||||||||||||
| Other real estate owned, net | 3 | 2 | 21 | 4 | 148 | |||||||||||||||
| Other | 3,108 | 3,033 | 3,037 | 9,096 | 8,655 | |||||||||||||||
| Total noninterest expense | 16,448 | 15,455 | 14,843 | 47,252 | 43,545 | |||||||||||||||
| Income Before Income Taxes | 11,704 | 10,291 | 12,891 | 33,457 | 40,799 | |||||||||||||||
| Income Taxes | 2,448 | 2,151 | 2,713 | 7,062 | 8,566 | |||||||||||||||
| Net Income | $ | 9,256 | $ | 8,140 | $ | 10,178 | $ | 26,395 | $ | 32,233 | ||||||||||
| Net Income Per Common Share: | ||||||||||||||||||||
| Basic | $ | 0.87 | $ | 0.76 | $ | 0.94 | $ | 2.47 | $ | 2.96 | ||||||||||
| Diluted | $ | 0.87 | $ | 0.76 | $ | 0.94 | $ | 2.47 | $ | 2.95 | ||||||||||
| Weighted Average Common Shares Outstanding: | ||||||||||||||||||||
| Basic | 10,640,952 | 10,688,294 | 10,833,875 | 10,694,096 | 10,907,721 | |||||||||||||||
| Diluted | 10,643,073 | 10,690,496 | 10,836,293 | 10,696,409 | 10,911,372 | |||||||||||||||
| American National Bankshares Inc. | |||||||||||||||||||
| Financial Highlights | |||||||||||||||||||
| Unaudited | |||||||||||||||||||
| (Dollars in thousands, except per share data) | At or for the Nine Months | ||||||||||||||||||
| 3rd Qtr | 2nd Qtr | 3rd Qtr | Ended September 30, | ||||||||||||||||
| 2022 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||
| EARNINGS | |||||||||||||||||||
| Interest income | $ | 25,151 | $ | 22,530 | $ | 24,277 | $ | 69,088 | $ | 71,648 | |||||||||
| Interest expense | 1,144 | 1,040 | 1,184 | 3,138 | 4,361 | ||||||||||||||
| Net interest income | 24,007 | 21,490 | 23,093 | 65,950 | 67,287 | ||||||||||||||
| Provision for (recovery of) loan losses | 615 | 581 | 482 | 438 | (870 | ) | |||||||||||||
| Noninterest income | 4,760 | 4,837 | 5,123 | 15,197 | 16,187 | ||||||||||||||
| Noninterest expense | 16,448 | 15,455 | 14,843 | 47,252 | 43,545 | ||||||||||||||
| Income taxes | 2,448 | 2,151 | 2,713 | 7,062 | 8,566 | ||||||||||||||
| Net income | 9,256 | 8,140 | 10,178 | 26,395 | 32,233 | ||||||||||||||
| PER COMMON SHARE | |||||||||||||||||||
| Net income per share - basic | $ | 0.87 | $ | 0.76 | $ | 0.94 | $ | 2.47 | $ | 2.96 | |||||||||
| Net income per share - diluted | 0.87 | 0.76 | 0.94 | 2.47 | 2.95 | ||||||||||||||
| Cash dividends paid | 0.28 | 0.28 | 0.27 | 0.84 | 0.81 | ||||||||||||||
| Book value per share | 29.54 | 30.71 | 32.51 | 29.54 | 32.51 | ||||||||||||||
| Book value per share - tangible (a) | 21.18 | 22.36 | 24.16 | 21.18 | 24.16 | ||||||||||||||
| Closing market price | 31.95 | 34.61 | 33.04 | 31.95 | 33.04 | ||||||||||||||
| FINANCIAL RATIOS | |||||||||||||||||||
| Return on average assets | 1.17 | % | 0.99 | % | 1.27 | % | 1.08 | % | 1.38 | % | |||||||||
| Return on average common equity | 11.21 | 9.83 | 11.58 | 10.42 | 12.40 | ||||||||||||||
| Return on average tangible common equity (a) | 15.74 | 13.87 | 16.01 | 14.57 | 17.24 | ||||||||||||||
| Average common equity to average assets | 10.42 | 10.06 | 10.99 | 10.35 | 11.13 | ||||||||||||||
| Tangible common equity to tangible assets (a) | 7.59 | 7.58 | 8.14 | 7.59 | 8.14 | ||||||||||||||
| Net interest margin, taxable equivalent | 3.20 | 2.76 | 3.09 | 2.86 | 3.10 | ||||||||||||||
| Efficiency ratio (a) | 55.98 | 57.18 | 51.02 | 56.87 | 50.24 | ||||||||||||||
| Effective tax rate | 20.92 | 20.90 | 21.05 | 21.11 | 21.00 | ||||||||||||||
| PERIOD-END BALANCES | |||||||||||||||||||
| Securities | $ | 650,267 | $ | 677,260 | $ | 651,995 | $ | 650,267 | $ | 651,995 | |||||||||
| Loans held for sale | 2,852 | 5,227 | 9,518 | 2,852 | 9,518 | ||||||||||||||
| Loans, net | 2,119,415 | 2,030,818 | 1,940,332 | 2,119,415 | 1,940,332 | ||||||||||||||
| Goodwill and other intangibles | 88,715 | 89,025 | 90,026 | 88,715 | 90,026 | ||||||||||||||
| Assets | 3,049,320 | 3,233,728 | 3,289,063 | 3,049,320 | 3,289,063 | ||||||||||||||
| Assets - tangible (a) | 2,960,605 | 3,144,703 | 3,199,037 | 2,960,605 | 3,199,037 | ||||||||||||||
| Deposits | 2,690,870 | 2,830,347 | 2,862,081 | 2,690,870 | 2,862,081 | ||||||||||||||
| Customer repurchase agreements | 625 | 32,038 | 26,595 | 625 | 26,595 | ||||||||||||||
| Long-term borrowings | 28,308 | 28,283 | 28,207 | 28,308 | 28,207 | ||||||||||||||
| Shareholders' equity | 313,390 | 327,431 | 350,387 | 313,390 | 350,387 | ||||||||||||||
| Shareholders' equity - tangible (a) | 224,675 | 238,406 | 260,361 | 224,675 | 260,361 | ||||||||||||||
| AVERAGE BALANCES | |||||||||||||||||||
| Securities (b) | $ | 728,535 | $ | 726,472 | $ | 569,508 | $ | 722,025 | $ | 514,156 | |||||||||
| Loans held for sale | 3,915 | 3,759 | 15,883 | 3,998 | 12,313 | ||||||||||||||
| Loans, net | 2,064,088 | 2,006,970 | 1,907,398 | 2,012,905 | 1,956,452 | ||||||||||||||
| Interest-earning assets | 3,005,292 | 3,120,925 | 2,989,661 | 3,083,815 | 2,905,032 | ||||||||||||||
| Goodwill and other intangibles | 88,886 | 89,200 | 90,257 | 89,202 | 90,600 | ||||||||||||||
| Assets | 3,170,328 | 3,292,913 | 3,199,514 | 3,260,636 | 3,115,683 | ||||||||||||||
| Assets - tangible (a) | 3,081,442 | 3,203,713 | 3,109,257 | 3,171,434 | 3,025,083 | ||||||||||||||
| Interest-bearing deposits | 1,723,931 | 1,849,664 | 1,817,595 | 1,817,581 | 1,773,354 | ||||||||||||||
| Deposits | 2,775,516 | 2,881,318 | 2,768,268 | 2,845,523 | 2,676,650 | ||||||||||||||
| Customer repurchase agreements | 18,719 | 35,766 | 29,681 | 31,858 | 36,954 | ||||||||||||||
| Long-term borrowings | 28,293 | 28,268 | 28,192 | 28,268 | 33,111 | ||||||||||||||
| Shareholders' equity | 330,318 | 331,276 | 351,646 | 337,633 | 346,730 | ||||||||||||||
| Shareholders' equity - tangible (a) | 241,432 | 242,076 | 261,389 | 248,431 | 256,130 | ||||||||||||||
| American National Bankshares Inc. | |||||||||||||||||||
| Financial Highlights | |||||||||||||||||||
| Unaudited | |||||||||||||||||||
| (Dollars in thousands, except per share data) | At or for the Nine Months | ||||||||||||||||||
| 3rd Qtr | 2nd Qtr | 3rd Qtr | Ended September 30, | ||||||||||||||||
| 2022 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||
| CAPITAL | |||||||||||||||||||
| Weighted average shares outstanding - basic | 10,640,952 | 10,688,294 | 10,833,875 | 10,694,096 | 10,907,721 | ||||||||||||||
| Weighted average shares outstanding - diluted | 10,643,073 | 10,690,496 | 10,836,293 | 10,696,409 | 10,911,372 | ||||||||||||||
| COMMON STOCK REPURCHASE PROGRAM | |||||||||||||||||||
| Weighted average shares outstanding - basic | 60,104 | 54,676 | 100,764 | 203,709 | 247,999 | ||||||||||||||
| Weighted average shares outstanding - diluted | $ | 34.26 | $ | 35.32 | $ | 32.87 | $ | 36.26 | $ | 32.84 | |||||||||
| ALLOWANCE FOR LOAN LOSSES | |||||||||||||||||||
| Beginning balance | $ | 18,505 | $ | 17,988 | $ | 20,097 | $ | 18,678 | $ | 21,403 | |||||||||
| Provision for (recovery for) loan losses | 615 | 581 | 482 | 438 | (870 | ) | |||||||||||||
| Charge-offs | (31 | ) | (117 | ) | (19 | ) | (185 | ) | (70 | ) | |||||||||
| Recoveries | 100 | 53 | 70 | 258 | 167 | ||||||||||||||
| Ending balance | $ | 19,189 | $ | 18,505 | $ | 20,630 | $ | 19,189 | $ | 20,630 | |||||||||
| LOANS | |||||||||||||||||||
| Construction and land development | $ | 210,500 | $ | 174,361 | $ | 120,193 | $ | 210,500 | $ | 120,193 | |||||||||
| Commercial real estate - owner occupied | 423,678 | 403,478 | 404,029 | 423,678 | 404,029 | ||||||||||||||
| Commercial real estate - non-owner occupied | 764,963 | 749,174 | 713,339 | 764,963 | 713,339 | ||||||||||||||
| Residential real estate | 324,468 | 310,110 | 280,351 | 324,468 | 280,351 | ||||||||||||||
| Home equity | 93,659 | 95,352 | 95,317 | 93,659 | 95,317 | ||||||||||||||
| Commercial and industrial | 295,541 | 291,445 | 320,278 | 295,541 | 320,278 | ||||||||||||||
| Consumer | 6,606 | 6,898 | 6,825 | 6,606 | 6,825 | ||||||||||||||
| Total | $ | 2,119,415 | $ | 2,030,818 | $ | 1,940,332 | $ | 2,119,415 | $ | 1,940,332 | |||||||||
| NONPERFORMING ASSETS AT PERIOD-END | |||||||||||||||||||
| Nonperforming loans: | |||||||||||||||||||
| 90 days past due and accruing | $ | 18 | $ | 90 | $ | - | $ | 18 | $ | - | |||||||||
| Nonaccrual | 1,171 | 1,385 | 1,903 | 1,171 | 1,903 | ||||||||||||||
| Other real estate owned and repossessions | 196 | 143 | 213 | 196 | 213 | ||||||||||||||
| Nonperforming assets | $ | 1,385 | $ | 1,618 | $ | 2,116 | $ | 1,385 | $ | 2,116 | |||||||||
| ASSET QUALITY RATIOS | |||||||||||||||||||
| Allowance for loan losses to total loans | 0.91 | % | 0.91 | % | 1.06 | % | 0.91 | % | 1.06 | % | |||||||||
| Allowance for loan losses to nonperforming loans | 1,613.88 | 1,254.58 | 1,084.08 | 1,613.88 | 1,084.08 | ||||||||||||||
| Nonperforming assets to total assets | 0.05 | 0.05 | 0.06 | 0.05 | 0.06 | ||||||||||||||
| Nonperforming loans to total loans | 0.06 | 0.07 | 0.10 | 0.06 | 0.10 | ||||||||||||||
| Annualized net (recoveries) charge-offs to average loans to average loans | (0.01 | ) | 0.01 | (0.01 | ) | 0.00 | (0.01 | ) | |||||||||||
| OTHER DATA | |||||||||||||||||||
| Fiduciary assets at period-end (c) (d) | $ | 693,153 | $ | 709,264 | $ | 697,546 | $ | 693,153 | $ | 697,546 | |||||||||
| Retail brokerage assets at period-end (c) (d) | $ | 376,891 | $ | 370,493 | $ | 406,408 | $ | 376,891 | $ | 406,408 | |||||||||
| Number full-time equivalent employees (e) | 363 | 345 | 345 | 363 | 345 | ||||||||||||||
| Number of full service offices | 26 | 26 | 26 | 26 | 26 | ||||||||||||||
| Number of loan production offices | 1 | 1 | 1 | 1 | 1 | ||||||||||||||
| Number of ATMs | 34 | 36 | 36 | 34 | 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 September 30, 2022 and 2021 | |||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||
| Unaudited | |||||||||||||||||||||
| Interest | |||||||||||||||||||||
| Average Balance | Income/Expense (a) | Yield/Rate | |||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||
| Loans: | |||||||||||||||||||||
| Commercial | $ | 287,785 | $ | 325,692 | $ | 2,877 | $ | 5,185 | 3.97 | % | 6.32 | % | |||||||||
| Real estate | 1,773,694 | 1,590,858 | 18,207 | 16,702 | 4.11 | 4.20 | |||||||||||||||
| Consumer | 6,524 | 6,731 | 107 | 125 | 6.51 | 7.37 | |||||||||||||||
| Total loans (b) | 2,068,003 | 1,923,281 | 21,191 | 22,012 | 4.09 | 4.57 | |||||||||||||||
| Securities: | |||||||||||||||||||||
| U.S. Treasury | 152,158 | 53,347 | 350 | 139 | 0.92 | 1.04 | |||||||||||||||
| Federal agencies & GSEs | 111,804 | 90,876 | 369 | 265 | 1.32 | 1.17 | |||||||||||||||
| Mortgage-backed & CMOs | 354,296 | 335,940 | 1,435 | 1,091 | 1.62 | 1.30 | |||||||||||||||
| State and municipal | 70,528 | 62,883 | 365 | 320 | 2.07 | 2.04 | |||||||||||||||
| Other | 39,749 | 26,462 | 401 | 311 | 4.04 | 4.70 | |||||||||||||||
| Total securities | 728,535 | 569,508 | 2,920 | 2,126 | 1.60 | 1.49 | |||||||||||||||
| Deposits in other banks | 208,754 | 496,872 | 1,099 | 201 | 2.09 | 0.16 | |||||||||||||||
| Total interest-earning assets | 3,005,292 | 2,989,661 | 25,210 | 24,339 | 3.35 | 3.25 | |||||||||||||||
| Non-earning assets | 165,036 | 209,853 | |||||||||||||||||||
| Total assets | $ | 3,170,328 | $ | 3,199,514 | |||||||||||||||||
| Deposits: | |||||||||||||||||||||
| Demand | $ | 522,021 | $ | 481,032 | 34 | 38 | 0.03 | 0.03 | |||||||||||||
| Money market | 668,970 | 713,846 | 348 | 166 | 0.21 | 0.09 | |||||||||||||||
| Savings | 281,369 | 247,536 | 20 | 6 | 0.03 | 0.01 | |||||||||||||||
| Time | 251,571 | 375,181 | 339 | 571 | 0.53 | 0.60 | |||||||||||||||
| Total deposits | 1,723,931 | 1,817,595 | 741 | 781 | 0.17 | 0.17 | |||||||||||||||
| Customer repurchase agreements | 18,719 | 29,681 | 11 | 3 | 0.23 | 0.04 | |||||||||||||||
| Long-term borrowings | 28,293 | 28,192 | 392 | 400 | 5.54 | 5.68 | |||||||||||||||
| Total interest-bearing liabilities | 1,770,943 | 1,875,468 | 1,144 | 1,184 | 0.26 | 0.25 | |||||||||||||||
| Noninterest bearing demand deposits | 1,051,585 | 950,673 | |||||||||||||||||||
| Other liabilities | 17,482 | 21,727 | |||||||||||||||||||
| Shareholders' equity | 330,318 | 351,646 | |||||||||||||||||||
| Total liabilities and shareholders' equity | $ | 3,170,328 | $ | 3,199,514 | |||||||||||||||||
| Interest rate spread | 3.09 | % | 3.00 | % | |||||||||||||||||
| Net interest margin | 3.20 | % | 3.09 | % | |||||||||||||||||
| Net interest income (taxable equivalent basis) | 24,066 | 23,155 | |||||||||||||||||||
| Less: Taxable equivalent adjustment (c) | 59 | 62 | |||||||||||||||||||
| Net interest income | $ | 24,007 | $ | 23,093 | |||||||||||||||||
| 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 Nine Months Ended September 30, 2022 and 2021 | |||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||
| Unaudited | |||||||||||||||||||||
| Interest | |||||||||||||||||||||
| Average Balance | Income/Expense (a) | Yield/Rate | |||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||
| Loans: | |||||||||||||||||||||
| Commercial | $ | 288,968 | $ | 393,571 | $ | 7,982 | $ | 15,433 | 3.69 | % | 5.24 | % | |||||||||
| Real estate | 1,721,403 | 1,568,055 | 50,823 | 49,642 | 3.94 | 4.22 | |||||||||||||||
| Consumer | 6,532 | 7,139 | 317 | 364 | 6.49 | 6.82 | |||||||||||||||
| Total loans (b) | 2,016,903 | 1,968,765 | 59,122 | 65,439 | 3.91 | 4.43 | |||||||||||||||
| Securities: | |||||||||||||||||||||
| U.S. Treasury | 150,483 | 36,969 | 1,021 | 265 | 0.90 | 0.96 | |||||||||||||||
| Federal agencies & GSEs | 108,050 | 99,595 | 985 | 867 | 1.22 | 1.16 | |||||||||||||||
| Mortgage-backed & CMOs | 358,739 | 292,207 | 3,922 | 3,025 | 1.46 | 1.38 | |||||||||||||||
| State and municipal | 68,752 | 61,210 | 1,038 | 958 | 2.01 | 2.09 | |||||||||||||||
| Other | 36,001 | 24,175 | 1,100 | 900 | 4.07 | 4.96 | |||||||||||||||
| Total securities | 722,025 | 514,156 | 8,066 | 6,015 | 1.49 | 1.56 | |||||||||||||||
| Deposits in other banks | 344,887 | 422,111 | 2,076 | 375 | 0.80 | 0.12 | |||||||||||||||
| Total interest-earning assets | 3,083,815 | 2,905,032 | 69,264 | 71,829 | 3.00 | 3.30 | |||||||||||||||
| Non-earning assets | 176,821 | 210,651 | |||||||||||||||||||
| Total assets | $ | 3,260,636 | $ | 3,115,683 | |||||||||||||||||
| Deposits: | |||||||||||||||||||||
| Demand | $ | 531,301 | $ | 466,999 | 107 | 116 | 0.03 | 0.03 | |||||||||||||
| Money market | 721,697 | 700,027 | 673 | 657 | 0.12 | 0.13 | |||||||||||||||
| Savings | 273,858 | 238,349 | 35 | 19 | 0.02 | 0.01 | |||||||||||||||
| Time | 290,725 | 367,979 | 1,141 | 2,198 | 0.52 | 0.80 | |||||||||||||||
| Total deposits | 1,817,581 | 1,773,354 | 1,956 | 2,990 | 0.14 | 0.23 | |||||||||||||||
| Customer repurchase agreements | 31,858 | 36,954 | 26 | 19 | 0.11 | 0.07 | |||||||||||||||
| Long-term borrowings | 28,268 | 33,111 | 1,156 | 1,352 | 5.45 | 5.44 | |||||||||||||||
| Total interest-bearing liabilities | 1,877,707 | 1,843,419 | 3,138 | 4,361 | 0.22 | 0.32 | |||||||||||||||
| Noninterest bearing demand deposits | 1,027,942 | 903,296 | |||||||||||||||||||
| Other liabilities | 17,354 | 22,238 | |||||||||||||||||||
| Shareholders' equity | 337,633 | 346,730 | |||||||||||||||||||
| Total liabilities and shareholders' equity | $ | 3,260,636 | $ | 3,115,683 | |||||||||||||||||
| Interest rate spread | 2.78 | % | 2.98 | % | |||||||||||||||||
| Net interest margin | 2.86 | % | 3.10 | % | |||||||||||||||||
| Net interest income (taxable equivalent basis) | 66,126 | 67,468 | |||||||||||||||||||
| Less: Taxable equivalent adjustment (c) | 176 | 181 | |||||||||||||||||||
| Net interest income | $ | 65,950 | $ | 67,287 | |||||||||||||||||
| 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) | At or for the Nine Months | ||||||||||||||||||
| 3rd Qtr | 2nd Qtr | 3rd Qtr | Ended September 30, | ||||||||||||||||
| 2022 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||
| EFFICIENCY RATIO | |||||||||||||||||||
| Noninterest expense | $ | 16,448 | $ | 15,455 | $ | 14,843 | $ | 47,252 | $ | 43,545 | |||||||||
| Subtract: loss on sale of OREO | - | - | - | - | (111 | ) | |||||||||||||
| Subtract: core deposit intangible amortization | (310 | ) | (320 | ) | (361 | ) | (960 | ) | (1,113 | ) | |||||||||
| $ | 16,138 | $ | 15,135 | $ | 14,482 | $ | 46,292 | $ | 42,321 | ||||||||||
| Net interest income | $ | 24,007 | $ | 21,490 | $ | 23,093 | $ | 65,950 | $ | 67,287 | |||||||||
| Tax equivalent adjustment | 59 | 58 | 62 | 176 | 181 | ||||||||||||||
| Noninterest income | 4,760 | 4,837 | 5,123 | 15,197 | 16,187 | ||||||||||||||
| Add: loss on fixed assets | 2 | 84 | 107 | 82 | 588 | ||||||||||||||
| $ | 28,828 | $ | 26,469 | $ | 28,385 | $ | 81,405 | $ | 84,243 | ||||||||||
| Efficiency ratio | 55.98 | % | 57.18 | % | 51.02 | % | 56.87 | % | 50.24 | % | |||||||||
| TAX EQUIVALENT NET INTEREST INCOME | |||||||||||||||||||
| Non-GAAP measures: | |||||||||||||||||||
| Interest income - loans | $ | 21,191 | $ | 19,109 | $ | 22,012 | $ | 59,122 | $ | 65,439 | |||||||||
| Interest income - investments and other | 4,019 | 3,479 | 2,327 | 10,142 | 6,390 | ||||||||||||||
| Interest expense - deposits | (741 | ) | (646 | ) | (781 | ) | (1,956 | ) | (2,990 | ) | |||||||||
| Interest expense - customer repurchase agreements | (11 | ) | (9 | ) | (3 | ) | (26 | ) | (19 | ) | |||||||||
| Interest expense - long-term borrowings | (392 | ) | (385 | ) | (400 | ) | (1,156 | ) | (1,352 | ) | |||||||||
| Total net interest income | $ | 24,066 | $ | 21,548 | $ | 23,155 | $ | 66,126 | $ | 67,468 | |||||||||
| Less non-GAAP measures: | |||||||||||||||||||
| Tax benefit on nontaxable interest - loans | (31 | ) | (34 | ) | (38 | ) | (98 | ) | (105 | ) | |||||||||
| Tax benefit on nontaxable interest - securities | (28 | ) | (24 | ) | (24 | ) | (78 | ) | (76 | ) | |||||||||
| GAAP measures | $ | 24,007 | $ | 21,490 | $ | 23,093 | $ | 65,950 | $ | 67,287 | |||||||||
| RETURN ON AVERAGE TANGIBLE EQUITY | |||||||||||||||||||
| Return on average equity (GAAP basis) | 11.21 | % | 9.83 | % | 11.58 | % | 10.42 | % | 12.40 | % | |||||||||
| Impact of excluding average goodwill and other intangibles | 4.53 | 4.04 | % | 4.43 | 4.15 | 4.84 | |||||||||||||
| Return on average tangible equity (non-GAAP) | 15.74 | % | 13.87 | % | 16.01 | % | 14.57 | % | 17.24 | % | |||||||||
| TANGIBLE EQUITY TO TANGIBLE ASSETS | |||||||||||||||||||
| Equity to assets ratio (GAAP basis) | 10.28 | % | 10.13 | % | 10.65 | % | 10.28 | % | 10.65 | % | |||||||||
| Impact of excluding goodwill and other intangibles | (2.69 | ) | (2.55 | ) | (2.51 | ) | (2.69 | ) | (2.51 | ) | |||||||||
| Tangible equity to tangible assets ratio (non-GAAP) | 7.59 | % | 7.58 | % | 8.14 | % | 7.59 | % | 8.14 | % | |||||||||
| TANGIBLE BOOK VALUE | |||||||||||||||||||
| Book value per share (GAAP basis) | $ | 29.54 | $ | 30.71 | $ | 32.51 | $ | 29.54 | $ | 32.51 | |||||||||
| Impact of excluding goodwill and other intangibles | (8.36 | ) | (8.35 | ) | (8.35 | ) | (8.36 | ) | (8.35 | ) | |||||||||
| Tangible book value per share (non-GAAP) | $ | 21.18 | $ | 22.36 | $ | 24.16 | $ | 21.18 | $ | 24.16 | |||||||||
| ADJUSTED LOAN LOSS ALLOWANCE | |||||||||||||||||||
| Allowance for loan losses | $ | 19,189 | $ | 18,505 | $ | 20,630 | $ | 19,189 | $ | 20,630 | |||||||||
| Credit discount on purchased loans | 3,477 | 3,741 | 5,258 | 3,477 | 5,258 | ||||||||||||||
| Adjusted loan loss allowance | $ | 22,666 | $ | 22,246 | $ | 25,888 | $ | 22,666 | $ | 25,888 | |||||||||
| Total loans, net | $ | 2,119,415 | $ | 2,030,818 | $ | 1,940,332 | $ | 2,119,415 | $ | 1,940,332 | |||||||||
| Subtract: PPP loans, net | (95 | ) | (116 | ) | (37,199 | ) | (95 | ) | (37,199 | ) | |||||||||
| Total loans less PPP loans, net | $ | 2,119,320 | $ | 2,030,702 | $ | 1,903,133 | $ | 2,119,320 | $ | 1,903,133 | |||||||||
| Adjusted loan loss allowance to total loans less PPP loans, net | 1.07 | % | 1.10 | % | 1.36 | % | 1.07 | % | 1.36 | % | |||||||||
| Allowance for loan losses to total loans less PPP loans, net | 0.91 | % | 0.91 | % | 1.08 | % | 0.91 | % | 1.08 | % | |||||||||
