American National Bankshares Inc.
Consolidated Balance Sheets
(Dollars in thousands, except per share data)
Unaudited
	June 30
ASSETS	2019			2018
Cash and due from banks	$	34,460		$	24,042
Interest-bearing deposits in other banks	20,454			9,300
Equity securities, at fair value	125			2,177
Securities available for sale, at fair value	334,326			341,247
Restricted stock, at cost	7,796			5,463
Loans held for sale	3,165			2,296
Loans	1,836,241			1,339,379
Less allowance for loan losses	(12,786		)	(13,508		)
Net Loans	1,823,455			1,325,871
Premises and equipment, net	39,038			25,879
Other real estate owned, net	1,433			1,124
Goodwill	84,633			43,872
Core deposit intangibles, net	8,613			1,037
Bank owned life insurance	27,451			18,674
Accrued interest receivable and other assets	33,133			23,549
Total assets	$	2,418,082		$	1,824,531
Liabilities
Demand deposits -- noninterest-bearing	$	554,400		$	420,795
Demand deposits -- interest-bearing	326,105			251,056
Money market deposits	451,343			383,963
Savings deposits	178,723			132,839
Time deposits	488,526			372,093
Total deposits	1,999,097			1,560,746
Short-term borrowings:
Customer repurchase agreements	37,222			6,776
Other short-term borrowings	13,528			5,500
Subordinated debt	7,526			—
Junior subordinated debt	27,978			27,876
Accrued interest payable and other liabilities	20,814			10,285
Total liabilities	2,106,165			1,611,183
Shareholders' equity
Preferred stock, $5 par, 2,000,000 shares authorized,
none outstanding	—			—
Common stock, $1 par, 20,000,000 shares authorized,
11,141,355 shares outstanding at June 30, 2019 and
8,708,127 shares outstanding at June 30, 2018	11,089			8,654
Capital in excess of par value	160,572			77,496
Retained earnings	141,339			135,108
Accumulated other comprehensive loss, net	(1,083		)	(7,910		)
Total shareholders' equity	311,917			213,348
Total liabilities and shareholders' equity	$	2,418,082		$	1,824,531

American National Bankshares Inc.
Consolidated Statements of Income
(Dollars in thousands, except per share data)
Unaudited
	Three Months Ended						Six Months Ended
	June 30						June 30
	2019			2018			2019			2018
Interest and Dividend Income:
Interest and fees on loans	$	22,629		$	14,766		$	38,267		$	29,423
Interest and dividends on securities:
Taxable	1,980			1,540			3,801			2,864
Tax-exempt	239			423			526			842
Dividends	105			78			189			158
Other interest income	258			185			524			373
Total interest and dividend income	25,211			16,992			43,307			33,660
Interest Expense:
Interest on deposits	3,520			1,873			5,992			3,698
Interest on short-term borrowings	178			2			350			12
Interest on long-term borrowings	14			—			14			—
Interest on subordinated debt	122			—			122			—
Interest on junior subordinated debt	388			329			772			619
Total interest expense	4,222			2,204			7,250			4,329
Net Interest Income	20,989			14,788			36,057			29,331
Provision for (recovery of) loan losses	(10		)	(30		)	6			(74		)
Net Interest Income After Provision
for Loan Losses	20,999			14,818			36,051			29,405
Noninterest Income:
Trust fees	933			945			1,847			1,874
Service charges on deposit accounts	724			592			1,318			1,204
Other fees and commissions	1,015			679			1,723			1,321
Mortgage banking income	586			491			992			941
Securities gains, net	147			289			470			410
Brokerage fees	186			209			333			431
Income from Small Business Investment Companies	(137		)	171			31			326
Gains (losses) on premises and equipment, net	(87		)	—			(87		)	3
Other	315			187			506			386
Total noninterest income	3,682			3,563			7,133			6,896
Noninterest Expense:
Salaries	7,048			5,095			11,712			10,092
Employee benefits	1,425			1,111			2,655			2,286
Occupancy and equipment	1,431			1,100			2,515			2,228
FDIC assessment	169			132			294			278
Bank franchise tax	412			291			702			572
Core deposit intangible amortization	458			77			513			154
Data processing	717			467			1,249			889
Software	321			354			645			659
Other real estate owned, net	(44		)	25			(31		)	55

Merger related expenses	10,871			—		11,322		—
Other	3,508			2,350		5,669		4,491
Total noninterest expense	26,316			11,002		37,245		21,704
Income (Loss) Before Income Taxes	(1,635		)	7,379		5,939		14,597
Income Taxes	(405		)	1,399		1,166		2,805
Net Income (Loss)	$	(1,230	)	$	5,980	$	4,773	$	11,792
Net Income (Loss) Per Common Share:
Basic	$	(0.11	)	$	0.69	$	0.48	$	1.36
Diluted	$	(0.11	)	$	0.69	$	0.48	$	1.36
Weighted Average Common Shares Outstanding:
Basic	11,126,800			8,692,107		9,942,566		8,680,739
Diluted	11,126,800			8,704,726		9,952,115		8,695,860

American National Bankshares Inc.
Financial Highlights
Unaudited
	(Dollars in thousands, except per share data)
		2nd Qtr				1st Qtr			2nd Qtr				YTD			YTD
		2019				2019			2018				2019			2018
EARNINGS
Interest income		$	25,211			$	18,096		$	16,992			$	43,307		$	33,660
Interest expense		4,222				3,028			2,204				7,250			4,329
Net interest income		20,989				15,068			14,788				36,057			29,331
Provision for (recovery of) loan losses		(10		)		16			(30		)		6			(74		)
Noninterest income		3,682				3,451			3,563				7,133			6,896
Noninterest expense		26,316				10,929			11,002				37,245			21,704
Income taxes		(405		)		1,571			1,399				1,166			2,805
Net income		(1,230		)		6,003			5,980				4,773			11,792
PER COMMON SHARE
Income per share - basic		$	(0.11	)		$	0.69		$	0.69			$	0.48		$	1.36
Income per share - diluted		(0.11		)		0.69			0.69				0.48			1.36
Cash dividends paid		0.25				0.25			0.25				0.50			0.50
Book value per share		28.00				26.21			24.50				28.00			24.50
Book value per share - tangible (a)		19.63				21.10			19.34				19.63			19.34
Closing market price		38.75				34.92			40.00				38.75			40.00
FINANCIAL RATIOS
Return on average assets		(0.20		)	%	1.29		%	1.31			%	0.44		%	1.29			%
Return on average equity		(1.60		)		10.69			11.27				3.59			11.19
Return on average tangible equity (a)		(1.62		)		13.44			14.44				5.25			14.37
Average equity to average assets		12.62				12.06			11.62				12.38			11.57
Tangible equity to tangible assets (a)		9.41				10.13			9.46				9.41			9.46
Net interest margin, taxable equivalent		3.82				3.50			3.50				3.67			3.48
Efficiency ratio (a)		60.94				56.95			59.96				59.24			59.66
Effective tax rate		(24.77		)		20.74			18.96				19.63			19.22
PERIOD-END BALANCES
Securities		$	342,247			$	331,657		$	348,887			$	342,247		$	348,887
Loans held for sale		3,165				1,252			2,296				3,165			2,296
Loans, net of unearned income		1,836,241				1,360,063			1,339,379				1,836,241			1,339,379
Goodwill and other intangibles		93,246				44,743			44,909				93,246			44,909
Assets		2,418,082				1,868,404			1,824,531				2,418,082			1,824,531
Assets - tangible (a)		2,324,836				1,823,661			1,779,622				2,324,836			1,779,622
Deposits		1,999,097				1,559,790			1,560,746				1,999,097			1,560,746
Customer repurchase agreements		37,222				35,945			6,776				37,222			6,776
Long-term borrowings		35,504				27,953			27,876				35,504			27,876
Shareholders' equity		311,917				229,473			213,348				311,917			213,348
Shareholders' equity - tangible (a)		218,671				184,730			168,439				218,671			168,439

American National Bankshares Inc.
Financial Highlights
Unaudited
	(Dollars in thousands, except per share data)
		2nd Qtr			1st Qtr			2nd Qtr			YTD			YTD
		2019			2019			2018			2019			2018
AVERAGE BALANCES
Securities (b)		$	354,506		$	343,834		$	342,486		$	349,199		$	328,143
Loans held for sale		2,913			1,830			2,616			2,375			2,328
Loans, net of unearned income		1,816,203			1,352,521			1,321,812			1,585,643			1,329,890
Interest-earning assets		2,211,273			1,736,887			1,707,223			1,975,887			1,703,287
Goodwill and other intangibles		93,075			44,778			44,956			69,060			44,993
Assets		2,433,948			1,863,212			1,825,860			2,150,157			1,822,165
Assets - tangible (a)		2,340,873			1,818,434			1,780,904			2,081,097			1,777,172
Interest-bearing deposits		1,463,613			1,131,604			1,145,701			1,298,526			1,151,380
Deposits		2,023,557			1,551,413			1,565,321			1,788,789			1,561,258
Customer repurchase agreements		35,657			42,705			11,347			39,161			11,795
Other short-term borrowings		7,627			61			247			3,865			1,210
Long-term borrowings		36,301			27,937			27,861			32,142			27,848
Shareholders' equity		307,281			224,677			212,256			266,208			210,852
Shareholders' equity - tangible (a)		214,206			179,899			167,300			197,148			165,859
CAPITAL
Weighted average shares outstanding - basic		11,126,800			8,745,174			8,692,107			9,942,566			8,680,739
Weighted average shares outstanding - diluted		11,126,800			8,745,723			8,704,726			9,952,115			8,695,860
ALLOWANCE FOR LOAN LOSSES
Beginning balance		$	12,806		$	12,805		$	13,575		$	12,805		$	13,603
Provision for (recovery of) loan losses		(10		)	16			(30		)	6			(74		)
Charge-offs		(54		)	(69		)	(130		)	(123		)	(174		)
Recoveries		44			54			93			98			153
Ending balance		$	12,786		$	12,806		$	13,508		$	12,786		$	13,508
LOANS
Construction and land development		$	152,876		$	93,759		$	96,740		$	152,876		$	96,740
Commercial real estate		880,146			659,133			633,128			880,146			633,128
Residential real estate		328,400			212,665			207,374			328,400			207,374
Home equity		121,905			99,979			105,558			121,905			105,558
Commercial and industrial		340,427			289,301			291,454			340,427			291,454
Consumer		12,487			5,226			5,125			12,487			5,125
Total		$	1,836,241		$	1,360,063		$	1,339,379		$	1,836,241		$	1,339,379

American National Bankshares Inc.
Financial Highlights
Unaudited
	(Dollars in thousands, except per share data)
		2nd Qtr			1st Qtr			2nd Qtr			YTD			YTD
		2019			2019			2018			2019			2018
NONPERFORMING ASSETS AT PERIOD-END
Nonperforming loans:
90 days past due and accruing		930			197			229			930			229
Nonaccrual		969			1,111			1,861			969			1,861
Other real estate owned		1,433			646			1,124			1,433			1,124
Nonperforming assets		$	3,332		$	1,954		$	3,214		$	3,332		$	3,214
ASSET QUALITY RATIOS
Allowance for loan losses to total loans		0.70		%	0.94		%	1.01		%	0.70		%	1.01		%
Allowance for loan losses to
nonperforming loans		673.30			979.05			646.32			673.30			646.32
Nonperforming assets to total assets		0.14			0.10			0.18			0.14			0.18
Nonperforming loans to total loans		0.10			0.10			0.16			0.10			0.16
Annualized net charge-offs
to average loans		—			—			0.01			—			—
OTHER DATA
Fiduciary assets at period-end (c)(d)		$	547,731		$	533,063		$	510,552		$	547,731		$	510,552
Retail brokerage assets at period-end (c)(d)		$	314,051		$	303,045		$	326,692		$	314,051		$	326,692
Number full-time equivalent employees (e)		371			299			323			371			323
Number of full service offices		28			24			26			28			26
Number of loan production offices		—			—			2			—			2
Number of ATM's		39			33			34			39			34
Notes:
(a) - This financial measure is not calculated in accordance with GAAP. For a reconciliation of
non-GAAP financial measures, see "Reconciliation of Non-GAAP Financial Measures" at the end of
this release.
(b) - Average does not include unrealized gains and losses.
(c) - Market value.
(d) - Assets are not owned by American National and are not reflected in the consolidated balance sheet.
(e) - Average for quarter.

			Net Interest Income Analysis
			For the Three Months Ended June 30, 2019 and 2018
			(Dollars in thousands)
			Unaudited
								Interest
				Average Balance				Income/Expense				Yield/Rate
				2018		2017		2018		2017		2018		2017
Loans:
	Commercial			$	321,263	$	267,996	$	3,899	$	2,652	4.87	%	3.97	%
	Real estate			1,485,665		1,052,105		18,578		12,087		5.00		4.60
	Consumer			12,188		4,327		201		77		6.61		7.14
		Total loans		1,819,116		1,324,428		22,678		14,816		4.99		4.48
Securities:
	Federal agencies & GSEs			140,516		127,033		858		707		2.44		2.23
	Mortgage-backed & CMOs			127,718		108,789		809		609		2.53		2.24
	State and municipal			68,185		91,636		480		653		2.82		2.85
	Other			18,087		15,028		233		176		5.15		4.68
		Total securities		354,506		342,486		2,380		2,145		2.69		2.51
Deposits in other banks				37,651		40,309		258		185		2.75		1.84
	Total interest-earning assets			2,211,273		1,707,223		25,316		17,146		4.58		4.02
Non-earning assets				222,675		118,637
		Total assets		$	2,433,948	$	1,825,860
Deposits:
	Demand			$	335,879	$	246,493	112		13		0.13		0.02
	Money market			448,722		395,135		1,394		802		1.25		0.81
	Savings			179,375		132,190		97		10		0.22		0.03
	Time			499,637		371,883		1,916		1,048		1.54		1.13
		Total deposits		1,463,613		1,145,701		3,519		1,873		0.96		0.66
Customer repurchase agreements				35,657		11,347		140		1		1.57		0.04
Other short-term borrowings				7,627		247		39		1		2.05		1.62
Long-term borrowings				36,301		27,861		524		329		5.77		4.72
	Total interest-bearing
		liabilities		1,543,198		1,185,156		4,222		2,204		1.10		0.75
Noninterest bearing demand deposits				559,944		419,620
Other liabilities				23,525		8,828
Shareholders' equity				307,281		212,256
		Total liabilities and
			shareholders' equity	$	2,433,948	$	1,825,860
Interest rate spread												3.48	%	3.27	%
Net interest margin												3.82	%	3.50	%
Net interest income (taxable equivalent basis)								21,094		14,942
Less: Taxable equivalent adjustment								105		154
Net interest income								$	20,989	$	14,788

			Net Interest Income Analysis
			For the Six Months Ended June 30, 2019 and 2018
			(Dollars in thousands)
			Unaudited
								Interest
				Average Balance				Income/Expense				Yield/Rate
				2019		2018		2019		2018		2019		2018
Loans:
	Commercial			$	293,575	$	263,300	$	6,790	$	5,096	4.66	%	3.90	%
	Real estate			1,285,842		1,064,605		31,294		24,277		4.87		4.56
	Consumer			8,601		4,313		276		153		6.47		7.15
		Total loans		1,588,018		1,332,218		38,360		29,526		4.84		4.44
Securities:
	Federal agencies & GSEs			139,993		115,182		1,708		1,224		2.44		2.13
	Mortgage-backed & CMOs			119,754		108,808		1,502		1,208		2.51		2.22
	State and municipal			73,362		89,000		1,018		1,287		2.78		2.89
	Other			16,090		15,153		411		351		5.11		4.63
		Total securities		349,199		328,143		4,639		4,070		2.66		2.48
Deposits in other banks				38,670		42,926		524		373		2.73		1.75
	Total interest-earning assets			1,975,887		1,703,287		43,523		33,969		4.41		3.99
Non-earning assets				174,270		118,878
		Total assets		$	2,150,157	$	1,822,165
Deposits:
	Demand			$	287,424	$	239,477	126		24		0.09		0.02
	Money market			422,359		402,612		2,548		1,585		1.22		0.79
	Savings			156,843		131,453		107		20		0.14		0.03
	Time			431,900		377,838		3,211		2,069		1.50		1.10
		Total deposits		1,298,526		1,151,380		5,992		3,698		0.93		0.65
Customer repurchase agreements				39,161		11,795		311		2		1.60		0.03
Other short-term borrowings				3,865		1,210		39		10		2.02		1.65
Long-term borrowings				32,142		27,848		908		619		5.65		4.45
	Total interest-bearing
		liabilities		1,373,694		1,192,233		7,250		4,329		1.06		0.73
Noninterest bearing demand deposits				490,263		409,878
Other liabilities				19,992		9,202
Shareholders' equity				266,208		210,852
		Total liabilities and
			shareholders' equity	$	2,150,157	$	1,822,165
Interest rate spread												3.35	%	3.26	%
Net interest margin												3.67	%	3.48	%
Net interest income (taxable equivalent basis)								36,273		29,640
Less: Taxable equivalent adjustment								216		309
Net interest income								$	36,057	$	29,331

American National Bankshares Inc.
Reconciliation of Non-GAAP Financial Measures
Unaudited
	(Dollars in thousands, except per share data)
		2nd Qtr				1st Qtr				2nd Qtr				YTD				YTD
		2019				2019				2018				2019				2018
EFFICIENCY RATIO
Noninterest expense		$	26,316			$	10,929			$	11,002			$	37,245			$	21,704
Add/subtract: loss/(gain) on sale of OREO		76				2				(3		)		78				2
Subtract: core deposit intangible amortization		(458		)		(55		)		(77		)		(513		)		(154		)
Subtract: merger related expense		(10,871		)		(451		)		—				(11,322		)		—
		$	15,063			$	10,425			$	10,922			$	25,488			$	21,552
Net interest income		$	20,989			$	15,068			$	14,788			$	36,057			$	29,331
Tax equivalent adjustment		105				111				154				216				309
Noninterest income		3,682				3,451				3,563				7,133				6,896
Add/subtract: (gain)/loss on securities		(147		)		(323		)		(289		)		(470		)		(410		)
Add/subtract: (gain)/loss on fixed assets		87				—				—				87				(3		)
		$	24,716			$	18,307			$	18,216			$	43,023			$	36,123
Efficiency ratio		60.94			%	56.95			%	59.96			%	59.24			%	59.66			%
TAX EQUIVALENT NET INTEREST INCOME
Non-GAAP measures:
Interest income - loans		$	22,678			$	15,682			$	14,816			$	38,360			$	29,526
Interest income - investments and other		2,638				2,525				2,330				5,163				4,443
Interest expense - deposits		(3,519		)		(2,472		)		(1,873		)		(5,992		)		(3,698		)
Interest expense - customer repurchase
agreements		(140		)		(171		)		(1		)		(311		)		(2		)
Interest expense - other short-term borrowings		(39		)		(1		)		(1		)		(39		)		(10		)
Interest expense - long-term borrowings		(524		)		(384		)		(329		)		(908		)		(619		)
Total net interest income		$	21,094			$	15,179			$	14,942			$	36,273			$	29,640
Less non-GAAP measures:
Tax benefit on nontaxable interest - loans		(49		)		(44		)		(50		)		(93		)		(102		)
Tax benefit on nontaxable interest - securities		(56		)		(67		)		(104		)		(123		)		(207		)
GAAP measures		$	20,989			$	15,068			$	14,788			$	36,057			$	29,331
RETURN ON AVERAGE TANGIBLE EQUITY
Return on average equity (GAAP basis)		(1.6		)	%	10.69			%	11.27			%	3.59			%	11.19			%
Impact of excluding average goodwill
and other intangibles		(0.02		)		2.75				3.17				1.66				3.18
Return on average tangible equity
(non-GAAP)		(1.62		)	%	13.44			%	14.44			%	5.25			%	14.37			%

TANGIBLE EQUITY TO TANGIBLE ASSETS
Equity to assets ratio (GAAP basis)	12.90		%	12.28		%	11.69		%	12.90		%	11.69		%
Impact of excluding goodwill and
other intangibles	3.49			2.15			2.23			3.49			2.23
Tangible equity to tangible assets ratio
(non-GAAP)	9.41		%	10.13		%	9.46		%	9.41		%	9.46		%
TANGIBLE BOOK VALUE
Book value per share (GAAP basis)	$	28.00		$	26.21		$	24.50		$	28.00		$	24.50
Impact of excluding goodwill and
other intangibles	8.37			5.11			5.16			8.37			5.16
Tangible book value per share
(non-GAAP)	$	19.63		$	21.10		$	19.34		$	19.63		$	19.34