American National Bankshares Inc. and Subsidiaries
Consolidated Balance Sheets
(Dollars in thousands, except share and per share data)
Unaudited
	March 31
ASSETS	2011			2010
Cash and due from banks	$	10,248		$	11,059
Interest-bearing deposits in other banks		25,397			25,531
Securities available for sale, at fair value		226,171			190,949
Securities held to maturity		3,146			5,802
Total securities		229,317			196,751
Restricted stock, at cost		4,062			4,362
Loans held for sale		1,309			2,208
Loans		516,629			515,366
Less allowance for loan losses		(8,257	)		(8,112	)
Net Loans		508,372			507,254
Premises and equipment, net		19,308			19,145
Other real estate owned, net		3,532			3,815
Goodwill		22,468			22,468
Core deposit intangibles, net		1,226			1,603
Accrued interest receivable and other assets		15,999			16,458
Total assets	$	841,238		$	810,654
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Demand deposits -- noninterest-bearing	$	113,260		$	101,190
Demand deposits -- interest-bearing		96,686			98,968
Money market deposits		57,530			79,225
Savings deposits		63,236			64,721
Time deposits		328,771			265,517
Total deposits		659,483			609,621
Short-term borrowings:
Customer repurchase agreements		43,871			60,372
Other short-term borrowings		-			-
Long-term borrowings		4,450			8,600
Trust preferred capital notes		20,619			20,619
Accrued interest payable and other liabilities		3,443			4,260
Total liabilities		731,866			703,472
Shareholders' equity:
Common stock, $1 par, 10,000,000 shares authorized,
6,153,433 shares outstanding at March 31, 2011 and
6,123,275 shares outstanding at March 31, 2010		6,153			6,123
Capital in excess of par value		27,541			27,063
Retained earnings		75,214			72,985
Accumulated other comprehensive income (loss), net		464			1,011
Total shareholders' equity		109,372			107,182
Total liabilities and shareholders' equity	$	841,238		$	810,654

American National Bankshares Inc. and Subsidiaries
Consolidated Statements of Income
(Dollars in thousands, except share and per share data)
Unaudited
	Three Months Ended
	March 31
	2011			2010
Interest and Dividend Income:
Interest and fees on loans	$	6,679		$	7,155
Interest and dividends on securities:
Taxable		1,169			1,316
Tax-exempt		716			466
Dividends		27			23
Other interest income		70			91
Total interest and dividend income		8,661			9,051
Interest Expense:
Interest on deposits		1,580			1,635
Interest on short-term borrowings		80			105
Interest on long-term borrowings		53			64
Interest on customer repurchase agreements
Interest on trust preferred capital notes		343			343
Total interest expense		2,056			2,147
Net Interest Income		6,605			6,904
Provision for loan losses		337			285
Net Interest Income After Provision
for Loan Losses		6,268			6,619
Noninterest Income:
Trust fees		928			812
Service charges on deposit accounts		421			479
Other fees and commissions		316			278
Mortgage banking income		147			246
Securities gains (losses), net		1			(29	)
Foreclosed real estate (losses), net		(22	)		(3	)
Other		158			138
Total noninterest income		1,949			1,921
Noninterest Expense:
Salaries		2,485			2,398
Employee benefits		541			640
Occupancy and equipment		699			779
FDIC assessment		205			195
Bank franchise tax		175			167
Core deposit intangible amortization		94			94
Other		1,558			1,224
Total noninterest expense		5,757			5,497
Income Before Income Taxes		2,460			3,043
Income Taxes		682			858
Net Income	$	1,778		$	2,185
Net Income Per Common Share:
Basic	$	0.29		$	0.36
Diluted	$	0.29		$	0.36
Average Common Shares Outstanding:
Basic		6,143,602			6,119,415
Diluted		6,152,738			6,124,306

American National Bankshares Inc. and Subsidiaries
Financial Highlights
(In thousands, except share, ratio and
nonfinancial data, unaudited)	1st Qtr			4th Qtr			1st Qtr			YTD			YTD
	2011			2010			2010			2011			2010
EARNINGS
Interest income	$	8,661		$	8,889		$	9,051		$	8,661		$	9,051
Interest expense		2,056			2,196			2,147			2,056			2,147
Net interest income		6,605			6,693			6,904			6,605			6,904
Provision for loan losses		337			485			285			337			285
Noninterest income		1,949			2,602			1,921			1,949			1,921
Noninterest expense		5,757			6,170			5,497			5,757			5,497
Income taxes		682			789			858			682			858
Net income		1,778			1,851			2,185			1,778			2,185
PER COMMON SHARE
Earnings per share - basic	$	0.29		$	0.30		$	0.36		$	0.29		$	0.36
Earnings per share - diluted		0.29			0.30			0.36			0.29			0.36
Cash dividends declared		0.23			0.23			0.23			0.23			0.23
Book value per share		17.77			17.64			17.50			17.77			17.50
Book value per share - tangible (a)		13.92			13.76			13.57			13.92			13.57
Closing market price		22.51			23.55			20.15			22.51			20.15
FINANCIAL RATIOS
Return on average assets		0.85	%		0.88	%		1.08	%		0.85	%		1.08	%
Return on average equity		6.51			6.69			8.14			6.51			8.14
Return on average tangible equity (b)		8.64			8.83			10.83			8.64			10.83
Average equity to average assets		13.03			13.12			13.24			13.03			13.24
Net interest margin, taxable equivalent		3.66			3.67			3.90			3.66			3.90
Efficiency ratio		64.16			65.70			60.22			64.16			60.22
Effective tax rate		27.72			29.89			28.20			27.72			28.20
PERIOD-END BALANCES
Securities	$	233,379		$	235,691		$	201,113		$	233,379		$	201,113
Loans held for sale		1,309			3,135			2,208			1,309			2,208
Loans, net of unearned income		516,629			520,781			515,366			516,629			515,366
Goodwill and other intangibles		23,694			23,788			24,071			23,694			24,071
Assets		841,238			833,664			810,654			841,238			810,654
Assets - tangible (a)		817,544			809,876			786,583			817,544			786,583
Deposits		659,483			640,098			609,621			659,483			609,621
Customer repurchase agreements		43,871			47,084			60,372			43,871			60,372
Other short-term borrowings		-			6,110			-			-			-
Long-term borrowings		25,069			29,107			29,219			25,069			29,219
Shareholders' equity		109,372			108,087			107,182			109,372			107,182
Shareholders' equity - tangible (a)		85,678			84,299			83,111			85,678			83,111
AVERAGE BALANCES
Securities	$	226,595		$	215,208		$	184,696		$	226,595		$	184,696
Loans held for sale		1,508			5,629			2,444			1,508			2,444
Loans, net of unearned income		516,610			521,832			518,403			516,610			520,847
Interest-earning assets		765,291			770,649			736,183			765,291			736,183
Goodwill and other intangibles		23,750			23,844			24,125			23,750			24,125
Assets		838,151			843,922			810,620			838,151			810,620
Assets - tangible (a)		814,401			820,078			786,495			814,401			786,495
Interest-bearing deposits		542,104			537,662			507,209			542,104			507,209
Deposits		652,922			647,526			606,085			652,922			606,085
Customer repurchase agreements		43,762			52,068			63,947			43,762			63,947
Other short-term borrowings		136			251			-			136			-
Long-term borrowings		27,855			29,136			29,248			27,855			29,248
Shareholders' equity		109,224			110,688			107,336			109,224			107,336
Shareholders' equity - tangible (a)		85,474			86,844			83,211			85,474			83,211
CAPITAL
Average shares outstanding - basic		6,143,602			6,126,817			6,119,415			6,143,602			6,119,415
Average shares outstanding - diluted		6,152,738			6,141,123			6,124,306			6,152,738			6,124,306
Shares repurchased		-			-			-			-			-
Average price of shares repurchased	$	-		$	-		$	-		$	-		$	-

American National Bankshares Inc. and Subsidiaries
Financial Highlights
(In thousands, except share, ratio and
nonfinancial data, unaudited)		1st Qtr			4th Qtr			1st Qtr			YTD			YTD
		2011			2010			2010			2011			2010
ALLOWANCE FOR LOAN LOSSES
Beginning balance	$	8,420		$	8,542		$	8,166		$	8,420		$	8,166
Provision for loan losses		337			485			285			337			285
Charge-offs		(571	)		(662	)		(427	)		(571	)		(427	)
Recoveries		71			55			88			71			88
Ending balance	$	8,257		$	8,420		$	8,112		$	8,257		$	8,112
LOANS
Construction and land development	$	36,720		$	37,168		$	39,421		$	36,720		$	39,421
Commercial real estate		207,290			210,393			205,642			207,290			205,642
Residential real estate		118,610			119,398			119,776			118,610			119,776
Home equity		61,674			61,064			63,302			61,674			63,302
Commercial and industrial		84,702			85,051			80,331			84,702			80,331
Consumer		7,632			7,707			6,894			7,632			6,894
Total	$	516,628		$	520,781		$	515,366		$	516,628		$	515,366
NONPERFORMING ASSETS AT PERIOD-END
Nonperforming loans:
90 days past due	$	-		$	-		$	-		$	-		$	-
Nonaccrual		3,417			2,597			3,436			3,417			3,436
Foreclosed real estate		3,532			3,716			3,815			3,532			3,815
Nonperforming assets	$	6,949		$	6,313		$	7,251		$	6,949		$	7,251
ASSET QUALITY RATIOS
Annualized net chargeoffs to average loans		0.39	%		0.47	%		0.26	%		0.39	%		0.26	%
Nonperforming assets to total assets		0.83			0.76			0.89			0.83			0.89
Nonperforming loans to total loans		0.66			0.50			0.67			0.66			0.67
Allowance for loan losses to total loans		1.60			1.62			1.57			1.60			1.57
Allowance for loan losses to
nonperforming loans		241.64			324.22			236.09			241.64			236.09
OTHER DATA
Fiduciary assets at period-end (c)	$	380,259		$	368,018		$	363,205		$	380,259		$	363,205
Retail brokerage assets at period-end (c)	$	50,175		$	49,311		$	51,848		$	50,175		$	51,848
Number full-time equivalent employees (d)		242			242			235			242			235
Number of full service offices		18			18			18			18			18
Number of loan production offices		1			1			1			1			1
Number of ATM's		26			26			26			26			26
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

American National Bankshares Inc. and Subsidiaries
Net Interest Income Analysis
For the Three Months Ended March 31, 2011 and 2010
(in thousands, except rates)
					Interest
	Average Balance				Income/Expense				Yield/Rate
	2011		2010		2011		2010		2011			2010
Loans:
Commercial	$	77,925	$	79,279	$	880	$	953		4.52	%		4.81	%
Real estate		432,688		434,795		5,695		6,095		5.26			5.61
Consumer		7,505		6,773		136		134		7.25			7.91
Total loans		518,118		520,847		6,711		7,182		5.18			5.52
Securities:
Federal agencies & GSE		43,345		65,751		323		551		2.98			3.35
Mortgage-backed & CMO's		59,297		43,783		490		501		3.31			4.58
State and municipal		117,916		67,538		1,408		927		4.78			5.49
Other		6,037		7,624		58		69		3.84			3.62
Total securities		226,595		184,696		2,279		2,048		4.02			4.44
Deposits in other banks		20,578		30,640		70		91		1.36			1.19
Total interest earning assets		765,291		736,183		9,060		9,321		4.74			5.06
Nonearning assets		72,860		74,437
Total assets	$	838,151	$	810,620
Deposits:
Demand	$	96,698	$	97,062		18		21		0.07			0.09
Money market		63,125		80,809		83		90		0.53			0.45
Savings		62,505		62,801		21		22		0.13			0.14
Time		319,776		266,537		1,458		1,502		1.82			2.25
Total deposits		542,104		507,209		1,580		1,635		1.17			1.29
Customer repurchase agreements		43,762		63,947		80		105		0.73			0.66
Other short-term borrowings		136		-		-		-		0.47			-
Long-term borrowings		27,855		29,248		396		407		5.69			5.57
Total interest bearing liabilities		613,857		600,404		2,056		2,147		1.34			1.43
Noninterest bearing
demand deposits		110,818		98,876
Other liabilities		4,252		4,004
Shareholders' equity		109,224		107,336
Total liabilities and
shareholders' equity	$	838,151	$	810,620
Interest rate spread										3.40	%		3.63	%
Net interest margin										3.66	%		3.90	%
Net interest income (taxable equivalent basis)						7,004		7,174
Less: Taxable equivalent adjustment						399		270
Net interest income					$	6,605	$	6,904