0001437749-20-021520.txt : 20201023 0001437749-20-021520.hdr.sgml : 20201023 20201022174117 ACCESSION NUMBER: 0001437749-20-021520 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 14 CONFORMED PERIOD OF REPORT: 20201022 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20201023 DATE AS OF CHANGE: 20201022 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN NATIONAL BANKSHARES INC. CENTRAL INDEX KEY: 0000741516 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 541284688 STATE OF INCORPORATION: VA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-12820 FILM NUMBER: 201255585 BUSINESS ADDRESS: STREET 1: 628 MAIN ST CITY: DANVILLE STATE: VA ZIP: 24541 BUSINESS PHONE: 4347925111 MAIL ADDRESS: STREET 1: 628 MAIN STREET STREET 2: P O BOX 191 CITY: DANVILLE STATE: VA ZIP: 24543 FORMER COMPANY: FORMER CONFORMED NAME: AMERICAN NATIONAL BANKSHARES INC DATE OF NAME CHANGE: 19920703 8-K 1 americannb20201022_8k.htm FORM 8-K americannb20200408_8k.htm
false 0000741516 0000741516 2020-10-22 2020-10-22
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported) October 22, 2020
 
AMERICAN NATIONAL BANKSHARES INC.
(Exact name of registrant as specified in its charter)
 
Virginia
0-12820
54-1284688
(State or other jurisdiction of incorporation)
(Commission File Number)
(I.R.S. Employer Identification No.)
 
 
 
628 Main Street, Danville, VA 24541
(Address of principal executive offices) (Zip Code)
 
Registrant’s telephone number, including area code: 434-792-5111
 
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13a-4(c))
 
Securities registered pursuant to Section 12(b) of the Act:
 
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, $1.00 par value
AMNB
Nasdaq Global Select Market
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.
Emerging growth company
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
 
 

 
Item 2.02 Results of Operations and Financial Condition
 
On October 22, 2020, American National Bankshares Inc. ("the Company") reports earnings for third quarter 2020.
 
Item 9.01 Financial Statements and Exhibits
 
(d) Exhibits:
 
Exhibit No. Description
   
99.1
Press release, dated October 22, 2020.
104 Cover Page Interactive Data File (embedded within the Inline XBRL document).
 
 

SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
      American National Bankshares Inc.
      (Registrant)
       
Date: October 22, 2020 By: /s/ Jeffrey W. Farrar
      Jeffrey W. Farrar
      Executive Vice President,
      Chief Financial Officer, and Chief Operating Officer
 
 

EX-99.1 2 ex_208157.htm EXHIBIT 99.1 ex_194883.htm

Exhibit 99.1

 

 

FOR IMMEDIATE RELEASE

Contact:

Jeffrey W. Farrar

Executive Vice President, COO & CFO

(434)773-2274

farrarj@amnb.com

 

AMERICAN NATIONAL BANKSHARES

REPORTS THIRD QUARTER EARNINGS

 

Danville, VA, October 22, 2020 – American National Bankshares Inc. (NASDAQ: AMNB) (“American National” or the “Company”) today reported third quarter 2020 earnings of $7.2 million, or $0.66 per diluted common share. Those results compare to $8.7 million, or $0.78 per diluted common share, during the same quarter in the prior year, and net income of $5.5 million, or $0.50 per diluted common share, recognized for the second quarter of 2020. Earnings for the first nine months of 2020 were $21.3 million, or $1.93 per diluted common share, compared to $13.5 million, or $1.30 per diluted common share for the same period of 2019.  Earnings for the nine months of 2019 were impacted by $11.3 million in merger related expenses.

 

President and Chief Executive Officer Jeffrey V. Haley commented, “We are pleased to report a strong quarter given the continuing challenges our nation and economy face with the pandemic. Capital, liquidity and credit quality all remain strong. Earnings and overall profitability continue to be relatively strong, and core deposit growth continued during the quarter at a robust pace.”  

 

Third quarter 2020 highlights include:

 

 

Earnings produced a return on average assets of 1.01% for the third quarter of 2020, compared to 0.80% in the previous quarter and 1.43% for the same quarter in the prior year.

 

 

Average deposits grew 4.7% during the quarter and 21.0% over the same quarter of 2019; the cost of deposits decreased to 0.52% in the third quarter, compared to 0.64% in the previous quarter and 1.00% in the same quarter of the prior year.

 

 

Net interest margin was 3.26% for the quarter, up from 3.22% in the second quarter of 2020 and down from 3.75% in the same quarter of the prior year (non-GAAP).

 

 

Noninterest revenues increased $457 thousand, or 11.9%, when compared to the previous quarter, and increased $121 thousand, or 2.9%, compared to the same quarter in the prior year.

 

 

Noninterest expense increased $1.7 million, or 13.7%, when compared to the previous quarter, and increased $348 thousand, or 2.5% when compared to the same quarter in the prior year.

 

 

The third quarter provision for loan losses totaled $2.6 million, which compares to a provision of $4.8 million for the previous quarter, and a recovery of $12 thousand in the same quarter in the prior year. The allowance for loan losses as a percentage of loans held for investment increased to 1.01% at period end. Excluding Paycheck Protection Program (“PPP”) loans, the allowance as a percentage of loans increased to 1.16% at period end.

 

 

Nonperforming assets as a percentage of total assets remained stable at 0.16% at September 30, 2020 and at June 30, 2020, and up from 0.15% at September 30, 2019.

 

 

Annualized net charge-offs were 0.01% for the third quarter of 2020, compared to zero for the corresponding quarter in the prior year and down from 0.06% for the second quarter of 2020.

 

 

During the third quarter of 2020, the Company continued to participate in the Small Business Administration’s PPP under the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, which was intended to provide economic relief to small businesses that have been adversely impacted by the COVID-19 global pandemic. The Company had outstanding net PPP loans of $266.0 million at September 30, 2020, which compares to $264.0 million at June 30, 2020. The Company had net unamortized PPP loan origination fees with a balance of $6.8 million at September 30, 2020, which compares to $7.8 million at June 30, 2020.

 

 

 

NET INTEREST INCOME

 

Net interest income for the third quarter of 2020 was $21.5 million, an increase of $1.2 million, or 6.1%, from the prior quarter and an increase of $873 thousand, or 4.2%, from the third quarter of 2019. The third quarter of 2020 included $800,000 in cash basis accretion income related to the collection of a purchased loan previously charged off in a prior American National bank acquisition. The fully taxable equivalent (“FTE”) net interest margin for the quarter was 3.26%, up from 3.22% in the prior quarter and down from 3.75% in the same period a year ago (non-GAAP). The increase from second quarter was attributable to the increase in cash basis accretion during the period, partially offset by the full quarter impact of lower yielding PPP loans and the continuing effects of a significantly lower rate environment. The decrease from the same quarter in the prior period was attributable to lower yielding PPP loans coupled with a significantly lower rate environment.

 

The Company’s FTE net interest margin includes the impact of acquisition accounting fair value adjustments. During the third quarter of 2020, net accretion related to acquisition accounting amounted to $861 thousand, compared to $948 thousand for the same period in 2019 and $801 thousand in the prior quarter. Estimated remaining net accretion from acquisitions for the periods indicated is as follows (dollars in thousands):

 

For the remaining three months of 2020 (estimated)

$530 

For the years ending (estimated):

 
 

2021

1,850 

 

2022

1,139 

 

2023

697 

 

2024

367 

 

2025

266 

Thereafter

978 

 

ASSET QUALITY/LOAN LOSS PROVISION

 

Nonperforming assets (“NPAs”) totaled $4.6 million as of September 30, 2020 and June 30, 2020, and up from $3.7 million at September 30, 2019. NPAs as a percentage of total assets were 0.16% at September 30, 2020 and June 30, 2020, compared to 0.15% at September 30, 2019.

 

The provision for loan losses was $2.6 million for the third quarter of 2020, as compared to $4.8 million for the previous quarter and a recovery of $12 thousand for the same period in the previous year. A smaller provision was needed in the third quarter compared to the second as economic factors stabilized; however, the bank continues to see stress in certain industry segments, has an active Disaster Assistance Program, and recorded higher specific reserves during the period. The allowance for loan losses was $21.1 million at September 30, 2020, compared to $18.5 million at June 30, 2020 and $12.8 million at September 30, 2019. Annualized net charge-offs as a percentage of average loans outstanding was 0.01% for the third quarter of 2020, compared to 0.06% in the previous quarter and none for the same period in the prior year. The allowance as a percentage of loans held for investment was 1.01% at September 30, 2020, compared to 0.88% at June 30, 2020 and 0.71% at September 30, 2019. Excluding PPP loans, the allowance as a percentage of loans increased to 1.16% at September 30, 2020, compared to 1.01% at June 30, 2020 and 0.71% at September 30, 2019.

 

American National continues to utilize a Disaster Assistance Program during the pandemic for borrowers. At September 30, 2020, American National has provided interest only and payment deferrals to customers with balances amounting to $135.2 million, representing 6.5% of total loans held for investment, which compares to $395 million or 18.8% of outstanding loans held for investment at June 30, 2020. At September 30, 2020, in accordance with Section 4013 of the CARES Act, the Company has granted $15 million in second time payment or interest deferrals, representing less than 1% of total loans held for investment.

 

American National continues to use an incurred loss model for its allowance methodology and has not implemented the new current expected credit losses standard (“CECL”). CECL incorporates an estimation of expected losses over the life of the loans instead of the current model which is an incurred loss model. The CECL implementation guidance was amended in October 2019 allowing for the deferral of CECL for smaller reporting companies. American National qualified under this amendment and elected to defer the implementation until January 2023.

 

 

 

NONINTEREST INCOME

 

Noninterest income increased $457 thousand or 11.9% to $4.3 million for the quarter ended September 30, 2020 from $3.8 million in the prior quarter and increased $121 thousand or 2.9% from the same period in the prior year.  Mortgage banking income was higher by $137 thousand or 15.3% over the prior quarter primarily the result of increased mortgage loan refinance volumes due to the current low interest rate environment. Trust revenues were up $101 thousand or 10.6% over the previous quarter. Income from small business investment companies (“SBICs”) was up $217 thousand or 182.4% over the previous quarter. Comparing the third quarter of 2020 to the third quarter of 2019, the increase was reflective of increased mortgage banking income and trust revenues, offset by decreased service charges on deposit accounts and securities gains.

 

NONINTEREST EXPENSE

 

Noninterest expense for the third quarter of 2020 amounted to $14.1 million, up $1.7 million, or 13.7%, when compared to the $12.4 million for the previous quarter and up from $13.8 million or 2.5% when compared to the same period in the previous year. The increase from the second quarter of 2020 was a result of the deferral of salary expenses of $1.6 million related to PPP originations in the second quarter. The third quarter of 2019 reflected a small bank credit from the Federal Deposit Insurance Corporation (“FDIC”) assessment which accounted for the majority of the change period over period.

 

INCOME TAXES

 

The effective tax rate for the three months ended September 30, 2020 was 20.0%, compared to 20.6% for the prior quarter and 21.1% for the same period in the prior year.

 

BALANCE SHEET

 

Total assets at September 30, 2020 were $2.9 billion, an increase of $38.8 million from June 30, 2020 and $448.8 million from the same quarter one year ago.  The improvement over the same period a year ago is primarily due to loan growth from the origination of PPP loans and an increase in cash and cash equivalents, partially attributable to the PPP deposits.

 

At September 30, 2020, loans held for investment (net of deferred fees and costs) were $2.1 billion, a decrease of $15.6 million or 3.0% annualized from June 30, 2020. Loans held for investment increased $281.6 million or 15.6%, from June 30, 2019. Excluding PPP loans, loans held for investment were only slightly higher year over year.

 

Deposits amounted to $2.5 billion at September 30, 2020, with growth of $38.9 million or 6.4% annualized from June 30, 2020 and $428.8 million or 21.0% annualized compared to the same quarter of 2019.  The growth over the prior quarter and prior period of 2019 relates to the continued growth in new accounts and higher average cash balances.  Customers have continued to maintain higher cash balances throughout the second and third quarters of 2020 as future liquidity needs remain uncertain.  This buildup of cash reserves primarily accounts for the significant increase over the same period of 2019.

 

The Company continues to be well-capitalized as defined by regulators, with tangible common equity to tangible assets of 8.55% at September 30, 2020 as compared to 8.49% at June 30, 2020 and 9.50% at September 30, 2019.

 

 

 

ABOUT AMERICAN NATIONAL

 

American National is a multi-state bank holding company with total assets of approximately $2.9 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 25 banking offices. American National Bank also manages an additional $884 million 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; (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 implementation of new technologies, and the ability to develop and maintain secure and reliable electronic systems; (6) accounting principles, policies, and guidelines; and (7) 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

 
                 
   

September 30

 
   

2020

   

2019

 

Assets

               

Cash and due from banks

  $

35,633

    $ 47,025  

Interest-bearing deposits in other banks

    234,638       95,592  

Securities available for sale, at fair value

    358,493       308,490  

Restricted stock, at cost

    8,707       8,621  

Loans held for sale

    6,789       5,646  

Loans, net of unearned income

    2,086,094       1,804,447  

Less allowance for loan losses

    (21,088 )     (12,758 )

Net Loans

    2,065,006       1,791,689  
                 

Premises and equipment, net

    39,979       39,261  

Other real estate owned, net

    999       1,353  

Goodwill

    85,048       84,633  

Core deposit intangibles, net

    6,482       8,165  

Bank owned life insurance

    28,278       27,612  

Accrued interest receivable and other assets

    33,252       36,442  
                 

Total assets

  $ 2,903,304     $ 2,454,529  
                 

Liabilities

               
Noninterest-bearing deposits   $ 820,384     $ 604,498  
Interest-bearing deposits     1,650,316       1,437,364  

Total deposits

    2,470,700       2,041,862  

Customer repurchase agreements

    41,906      

38,924

 
Long-term borrowings     35,609       35,524  
Other liabilities     23,108       20,973  

Total liabilities

    2,571,323       2,137,283  
                 

Shareholders' equity

               

Preferred stock, $5 par, 2,000,000 shares authorized,

               

none outstanding

    -       -  

Common stock, $1 par, 20,000,000 shares authorized,

               

10,969,753 shares outstanding at September 30, 2020 and

               

11,116,250 shares outstanding at September 30, 2019

    10,919       11,063  

Capital in excess of par value

    154,495       159,792  

Retained earnings

    163,855       147,030  

Accumulated other comprehensive income (loss), net

    2,712       (639 )

Total shareholders' equity

    331,981       317,246  
                 

Total liabilities and shareholders' equity

  $ 2,903,304     $ 2,454,529  

 

 

 

 

 

American National Bankshares Inc.

 

Consolidated Statements of Income

 

(Dollars in thousands, except per share data)

 

Unaudited

 
                                 
   

Three Months Ended

   

Six Months Ended

 
   

September 30

   

September 30

 
   

2020

   

2019

   

2020

   

2019

 

Interest and Dividend Income:

                               

Interest and fees on loans

  $ 22,346     $ 22,470     $ 65,046     $ 60,737  

Interest and dividends on securities:

                               

Taxable

    1,545       1,890       5,228       5,691  

Tax-exempt

    107       134       330       660  

Dividends

    122       135       382       324  

Other interest income

    59       329       356       853  

Total interest and dividend income

    24,179       24,958       71,342       68,265  
                                 

Interest Expense:

                               

Interest on deposits

    2,118       3,655       7,908       9,647  

Interest on short-term borrowings

    42       166       237       516  

Interest on long-term borrowings

    524       515       1,523       1,423  

Total interest expense

    2,684       4,336       9,668       11,586  
                                 

Net Interest Income

    21,495       20,622       61,674       56,679  

Provision for (recovery of) loan losses

    2,619       (12 )     8,331       (6 )
                                 

Net Interest Income After Provision for

                               

(Recovery of) Loan Losses

    18,876       20,634       53,343       56,685  
                                 

Noninterest Income:

                               

Trust fees

    1,054       979       3,019       2,826  

Service charges on deposit accounts

    618       783       1,880       2,101  

Other fees and commissions

    996       1,003       2,888       2,726  

Mortgage banking income

    1,030       710       2,472       1,702  

Securities gains, net

    -       105       814       575  

Brokerage fees

    170       183       553       516  

Income from Small Business Investment Companies

    98       143       34       174  

Losses on premises and equipment, net

    (15 )     (2 )     (97 )     (89 )

Other

    341       267       1,059       773  

Total noninterest income

    4,292       4,171       12,622       11,304  
                                 

Noninterest Expense:

                               

Salaries and employee benefits

    7,989       7,662       21,540       22,029  

Occupancy and equipment

    1,423       1,448       4,116       3,963  

FDIC assessment (credit)

    162       (175 )     433       119  

Bank franchise tax

    426       411       1,277       1,113  

Core deposit intangible amortization

    402       448       1,246       961  

Data processing

    705       589       2,253       1,838  

Software

    353       287       1,112       932  

Other real estate owned, net

    28       47       34       16  

Merger related expenses

    -       -       -       11,322  

Other

    2,652       3,075       7,895       8,744  

Total noninterest expense

    14,140       13,792       39,906       51,037  
                                 

Income Before Income Taxes

    9,028       11,013       26,059       16,952  

Income Taxes

    1,801       2,321       4,808       3,487  

Net Income

  $ 7,227     $ 8,692     $ 21,251     $ 13,465  
                                 

Net Income Per Common Share:

                               

Basic

  $ 0.66     $ 0.78     $ 1.93     $ 1.30  

Diluted

  $ 0.66     $ 0.78     $ 1.93     $ 1.30  

Weighted Average Common Shares Outstanding:

                               

Basic

    10,966,645       11,127,603       10,983,729       10,341,919  

Diluted

    10,969,901       11,138,008       10,988,090       10,351,753  

 

 

 

 

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,

 
       

2020

   

2020

   

2019

   

2020

   

2019

 

EARNINGS

                                           

Interest income

  $ 24,179     $ 23,297     $ 24,958     $ 71,342     $ 68,265  

Interest expense

    2,684       3,037       4,336       9,668       11,586  

Net interest income

    21,495       20,260       20,622       61,674       56,679  

Provision for (recovery of) loan losses

    2,619       4,759       (12 )     8,331       (6 )

Noninterest income

    4,292       3,835       4,171       12,622       11,304  

Noninterest expense

    14,140       12,432       13,792       39,906       51,037  

Income taxes

    1,801       1,422       2,321       4,808       3,487  

Net income

    7,227       5,482       8,692       21,251       13,465  
                                             

PER COMMON SHARE

                                       

Net income per share - basic

  $ 0.66     $ 0.50     $ 0.78     $ 1.93     $ 1.30  

Net income per share - diluted

    0.66       0.50       0.78       1.93       1.30  

Cash dividends paid

    0.27       0.27       0.27       0.81       0.77  

Book value per share

    30.26       29.86       28.54       30.26       28.54  

Book value per share - tangible (a)

    21.92       21.48       20.19       21.92       20.19  

Closing market price

    20.92       25.04       35.47       20.92       35.47  
                                             

FINANCIAL RATIOS

                                         

Return on average assets

    1.01

%

    0.80

%

    1.43

%

    1.05

%

    0.80

%

Return on average equity

    8.76       6.68       11.04       8.66       6.35  

Return on average tangible equity (a)

    12.66       9.85       16.31       12.60       9.23  

Average equity to average assets

    11.50       11.91       12.98       12.09       12.60  

Tangible equity to tangible assets (a)

    8.55       8.49       9.50       8.55       9.50  

Net interest margin, taxable equivalent

    3.26       3.22       3.75       3.32       3.70  

Efficiency ratio (a)

    53.00       49.74       53.79       52.40       57.25  

Effective tax rate

    19.95       20.60       21.08       18.45       20.57  
                                             

PERIOD-END BALANCES

                                       

Securities

  $ 367,200     $ 331,217     $ 317,111     $ 367,200     $ 317,111  

Loans held for sale

    6,789       2,845       5,646       6,789       5,646  

Loans, net

    2,086,094       2,101,711       1,804,447       2,086,094       1,804,447  

Goodwill and other intangibles

    91,530       91,932       92,798       91,530       92,798  

Assets

    2,903,304       2,864,539       2,454,529       2,903,304       2,454,529  

Assets - tangible (a)

    2,811,774       2,772,607       2,361,731       2,811,774       2,361,731  

Deposits

    2,470,700       2,431,776       2,041,862       2,470,700       2,041,862  

Customer repurchase agreements

    41,906       46,296       38,924       41,906       38,924  

Long-term borrowings

    35,609       35,588       35,524       35,609       35,524  

Shareholders' equity

    331,981       327,433       317,246       331,981       317,246  

Shareholders' equity - tangible (a)

    240,451       235,501       224,448       240,451       224,448  
                                             

AVERAGE BALANCES

                                       

Securities (b)

  $ 333,778     $ 315,659     $ 323,202     $ 339,701     $ 340,439  

Loans held for sale

    9,943       4,554       3,904       5,899       2,890  

Loans, net

    2,092,412       2,048,277       1,817,732       1,990,312       1,663,856  

Interest-earning assets

    2,648,990       2,525,998       2,207,935       2,483,908       2,054,087  

Goodwill and other intangibles

    91,749       92,161       93,077       91,883       77,154  

Assets

    2,870,213       2,755,470       2,426,678       2,706,359       2,243,343  

Assets - tangible (a)

    2,778,464       2,663,309       2,333,601       2,614,476       2,166,189  

Interest-bearing deposits

    1,619,960       1,564,430       1,443,947       1,560,204       1,347,532  

Deposits

    2,434,645       2,325,331       2,012,653       2,277,211       1,864,230  

Customer repurchase agreements

    45,689       43,716       39,470       43,649       39,265  

Other short-term borrowings

    -       -       1,986       1       3,502  

Long-term borrowings

    35,597       35,575       35,806       35,575       33,107  

Shareholders' equity

    330,038       328,051       314,980       327,231       282,644  

Shareholders' equity - tangible (a)

    238,289       235,890       221,903       235,348       205,490  

 

 

 

 

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,

 
       

2020

   

2020

   

2019

   

2020

   

2019

 

CAPITAL

                                           

Weighted average shares outstanding - basic

    10,966,645       10,959,545       11,127,603       10,983,729       10,341,919  

Weighted average shares outstanding - diluted

    10,969,901       10,963,248       11,138,008       10,988,090       10,351,753  
                                             

ALLOWANCE FOR LOAN LOSSES

                                       

Beginning balance

  $ 18,507     $ 14,065     $ 12,786     $ 13,152     $ 12,805  

Provision for (recovery of) loan losses

    2,619       4,759       (12 )     8,331       (6 )

Charge-offs

    (126 )     (444 )     (66 )     (675 )     (189 )

Recoveries

    88       127       50       280       148  

Ending balance

  $ 21,088     $ 18,507     $ 12,758     $ 21,088     $ 12,758  
                                             

LOANS

                                           

Construction and land development

  $ 151,613     $ 141,392     $ 143,788     $ 151,613     $ 143,788  

Commercial real estate - owner occupied

    382,121       388,947       348,857       382,121       348,857  

Commercial real estate - non-owner occupied

    608,954       589,821       534,362       608,954       534,362  

Residential real estate

    279,815       291,242       318,833       279,815       318,833  

Home equity

    111,448       114,397       122,074       111,448       122,074  

Commercial and industrial

    543,746       566,859       324,508       543,746       324,508  

Consumer

    8,397       9,053       12,025       8,397       12,025  

Total

  $ 2,086,094     $ 2,101,711     $ 1,804,447     $ 2,086,094     $ 1,804,447  
                                             

NONPERFORMING ASSETS AT PERIOD-END

                                       

Nonperforming loans:

                                       

90 days past due and accruing

  $ 285     $ 375     $ 874     $ 285     $ 874  

Nonaccrual

    3,088       2,855       1,446       3,088       1,446  

Other real estate owned and repossessions

    1,210       1,346       1,353       1,210       1,353  

Nonperforming assets

  $ 4,583     $ 4,576     $ 3,673     $ 4,583     $ 3,673  
                                             

ASSET QUALITY RATIOS

                                       

Allowance for loan losses to total loans

    1.01

%

    0.88

%

    0.71

%

    1.01

%

    0.71

%

Allowance for loan losses to

                                       

nonperforming loans

    625.20       572.97       549.91       625.20       549.91  

Nonperforming assets to total assets

    0.16       0.16       0.15       0.16       0.15  

Nonperforming loans to total loans

    0.16       0.15       0.13       0.16       0.13  

Annualized net charge-offs

                                       

to average loans

    0.01       0.06       0.00       0.03       0.00  
                                             
                                             

OTHER DATA

                                         

Fiduciary assets at period-end (c) (d)

  $ 569,095     $ 536,014     $ 546,407     $ 569,095     $ 546,407  

Retail brokerage assets at period-end (c) (d)

  $ 314,809     $ 301,096     $ 308,820     $ 314,809     $ 308,820  

Number full-time equivalent employees (e)

    341       345       365       341       365  

Number of full service offices

    25       26       28       25       28  

Number of loan production offices

    1       1       1       1       1  

Number of ATMs

    37       38       40       37       40  
                                             
                                             

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 September 30, 2020 and 2019

 
 

(Dollars in thousands)

 
 

Unaudited

 
                                                   
                     

Interest

                 
     

Average Balance

   

Income/Expense (a)

   

Yield/Rate

 
                                                   
     

2020

   

2019

   

2020

   

2019

   

2020

   

2019

 

Loans:

                                                 

Commercial

  $ 544,712     $ 320,802     $ 4,495     $ 3,820       3.28

%

    4.72

%

Real estate

    1,549,078       1,489,155       17,755       18,487       4.58       4.97  

Consumer

    8,565       11,679       144       209       6.69       7.10  

Total loans (b)

    2,102,355       1,821,636       22,394       22,516       4.26       4.94  
                                                   

Securities:

                                               

U.S. Treasury

    10,541       -       3       -       0.11       -  

Federal agencies & GSEs

    61,405       127,956       287       767       1.87       2.40  

Mortgage-backed & CMOs

    194,585       133,121       942       851       1.94       2.56  

State and municipal

    46,432       45,830       294       330       2.53       2.88  

Other

    20,815       16,295       275       242       5.28       5.94  

Total securities

    333,778       323,202       1,801       2,190       2.16       2.71  
                                                   

Deposits in other banks

    212,857       63,097       59       329       0.11       2.07  
                                                   

Total interest-earning assets

    2,648,990       2,207,935       24,254       25,035       3.66       4.53  
                                                   

Non-earning assets

    221,223       218,743                                  
                                                   

Total assets

  $ 2,870,213     $ 2,426,678                                  
                                                   

Deposits:

                                               

Demand

  $ 410,228     $ 324,058       56       119       0.05       0.15  

Money market

    580,200       453,873       475       1,415       0.33       1.24  

Savings

    206,493       176,673       24       94       0.05       0.21  

Time

    423,039       489,343       1,563       2,027       1.47       1.64  

Total deposits

    1,619,960       1,443,947       2,118       3,655       0.52       1.00  
                                                   

Customer repurchase agreements

    45,689       39,470       42       150       0.37       1.51  

Other short-term borrowings

    -       1,986       -       12       -       2.42  

Long-term borrowings

    35,597       35,806       524       519       5.89       5.80  

Total interest-bearing

                                               

liabilities

    1,701,246       1,521,209       2,684       4,336       0.63       1.13  
                                                   

Noninterest bearing demand deposits

    814,685       568,706                                  

Other liabilities

    24,244       21,783                                  

Shareholders' equity

    330,038       314,980                                  

Total liabilities and

                                               
 shareholders' equity

 

  $ 2,870,213     $ 2,426,678                                  
                                                   

Interest rate spread

                                    3.03

%

    3.40

%

Net interest margin

                                    3.26

%

    3.75

%

                                                   

Net interest income (taxable equivalent basis)

              21,570       20,699                  

Less: Taxable equivalent adjustment (c)

              75       77                  

Net interest income

                  $ 21,495     $ 20,622                  
                                                   
                                                   

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, 2020 and 2019

 
 

(Dollars in thousands)

 
 

Unaudited

 
                                                   
                     

Interest

                 
     

Average Balance

   

Income/Expense (a)

   

Yield/Rate

 
                                                   
     

2020

   

2019

   

2020

   

2019

   

2020

   

2019

 

Loans:

                                                 

Commercial

  $ 464,094     $ 302,750     $ 12,414     $ 10,609       3.57

%

    4.69

%

Real estate

    1,522,803       1,354,358       52,319       49,782       4.58       4.90  

Consumer

    9,314       9,638       451       485       6.47       6.73  

Total loans (b)

    1,996,211       1,666,746       65,184       60,876       4.36       4.87  
                                                   

Securities:

                                               

U.S. Treasury

    7,292       -       47       -       0.86       -  

Federal agencies & GSEs

    70,604       135,937       1,147       2,475       2.17       2.43  

Mortgage-backed & CMOs

    198,528       124,258       3,144       2,353       2.11       2.52  

State and municipal

    43,345       64,084       871       1,348       2.68       2.80  

Other

    19,932       16,160       812       653       5.43       5.39  

Total securities

    339,701       340,439       6,021       6,829       2.36       2.67  
                                                   

Deposits in other banks

    147,996       46,902       356       853       0.32       2.43  
                                                   

Total interest-earning assets

    2,483,908       2,054,087       71,561       68,558       3.84       4.45  
                                                   

Non-earning assets

    222,451       189,256                                  
                                                   

Total assets

  $ 2,706,359     $ 2,243,343                                  
                                                   

Deposits:

                                               

Demand

  $ 371,155     $ 299,769       294       245       0.11       0.11  

Money market

    550,063       432,980       2,254       3,962       0.55       1.22  

Savings

    192,632       163,525       101       201       0.07       0.16  

Time

    446,354       451,258       5,259       5,239       1.57       1.55  

Total deposits

    1,560,204       1,347,532       7,908       9,647       0.68       0.96  
                                                   

Customer repurchase agreements

    43,649       39,265       237       461       0.73       1.57  

Other short-term borrowings

    1       3,502       -       51       0.50       1.94  

Long-term borrowings

    35,575       33,107       1,523       1,427       5.71       5.75  

Total interest-bearing

                                               

liabilities

    1,639,429       1,423,406       9,668       11,586       0.79       1.09  
                                                   

Noninterest bearing demand deposits

    717,007       516,698                                  

Other liabilities

    22,692       20,595                                  

Shareholders' equity

    327,231       282,644                                  

Total liabilities and

                                               
 shareholders' equity

 

  $ 2,706,359     $ 2,243,343                                  
                                                   

Interest rate spread

                                    3.05

%

    3.36

%

Net interest margin

                                    3.32

%

    3.70

%

                                                   

Net interest income (taxable equivalent basis)

              61,893       56,972                  

Less: Taxable equivalent adjustment (c)

              219       293                  

Net interest income

                  $ 61,674     $ 56,679                  
                                                   
                                                   

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,

 
     

2020

   

2020

   

2019

   

2020

   

2019

 

EFFICIENCY RATIO

                                       

Noninterest expense

  $ 14,140     $ 12,432     $ 13,792     $ 39,906     $ 51,037  

Add/subtract: gain/loss on sale of OREO

    (23 )     8       (22 )     12       55  

Subtract: core deposit intangible amortization

    (402 )     (417 )     (448 )     (1,246 )     (961 )

Subtract: merger related expenses

    -       -       -       -       (11,322 )
      $ 13,715     $ 12,023     $ 13,322     $ 38,672     $ 38,809  
                                           

Net interest income

  $ 21,495     $ 20,260     $ 20,622     $ 61,674     $ 56,679  

Tax equivalent adjustment

    75       75       77       219       293  

Noninterest income

    4,292       3,835       4,171       12,622       11,304  

Subtract: gain on securities

    -       -       (105 )     (814 )     (575 )

Add: loss on fixed assets

    15       -       2       97       89  
      $ 25,877     $ 24,170     $ 24,767     $ 73,798     $ 67,790  
                                           

Efficiency ratio

    53.00

%

    49.74

%

    53.79

%

    52.40

%

    57.25

%

                                           

TAX EQUIVALENT NET INTEREST INCOME

                                       

Non-GAAP measures:

                                       

Interest income - loans

  $ 22,394     $ 21,427     $ 22,516     $ 65,184     $ 60,876  

Interest income - investments and other

    1,860       1,945       2,519       6,377       7,682  

Interest expense - deposits

    (2,118 )     (2,478 )     (3,655 )     (7,908 )     (9,647 )

Interest expense - customer repurchase

                                       

agreements

    (42 )     (66 )     (150 )     (237 )     (461 )

Interest expense - other short-term borrowings

    -       -       (12 )     -       (51 )

Interest expense - long-term borrowings

    (524 )     (493 )     (519 )     (1,523 )     (1,427 )

Total net interest income

  $ 21,570     $ 20,335     $ 20,699     $ 61,893     $ 56,972  

Less non-GAAP measures:

                                       

Tax benefit on nontaxable interest - loans

    (48 )     (48 )     (46 )     (138 )     (139 )

Tax benefit on nontaxable interest - securities

    (27 )     (27 )     (31 )     (81 )     (154 )

GAAP measures

  $ 21,495     $ 20,260     $ 20,622     $ 61,674     $ 56,679  
                                           

RETURN ON AVERAGE TANGIBLE EQUITY

                                       

Return on average equity (GAAP basis)

    8.76

%

    6.68

%

    11.04

%

    8.66

%

    6.35

%

Impact of excluding average goodwill

                                       

and other intangibles

    3.90       3.17       5.27       3.94       2.88  

Return on average tangible equity

                                       

(non-GAAP)

    12.66

%

    9.85

%

    16.31

%

    12.60

%

    9.23

%

                                           

TANGIBLE EQUITY TO TANGIBLE ASSETS

                                       

Equity to assets ratio (GAAP basis)

    11.43

%

    11.43

%

    12.92

%

    11.43

%

    12.92

%

Impact of excluding goodwill and

                                       

other intangibles

    2.88       2.94       3.42       2.88       3.42  

Tangible equity to tangible assets ratio

                                       

(non-GAAP)

    8.55

%

    8.49

%

    9.50

%

    8.55

%

    9.50

%

                                           

TANGIBLE BOOK VALUE

                                       

Book value per share (GAAP basis)

  $ 30.26     $ 29.86     $ 28.54     $ 30.26     $ 28.54  

Impact of excluding goodwill and

                                       

other intangibles

    8.34       8.38       8.35       8.34       8.35  

Tangible book value per share

                                       

(non-GAAP)

  $ 21.92     $ 21.48     $ 20.19     $ 21.92     $ 20.19  
                                           

ADJUSTED LOAN LOSS ALLOWANCE

                                       

Allowance for loan losses

  $ 21,088     $ 18,507     $ 12,758     $ 21,088     $ 12,758  

Credit discount on purchased loans

    7,896       9,868       12,937       7,896       12,937  

Adjusted loan loss allowance

  $ 28,984     $ 28,375     $ 25,695     $ 28,984     $ 25,695  
                                           

Total loans, net

  $ 2,086,094     $ 2,101,711     $ 1,804,447     $ 2,086,094     $ 1,804,447  

Subtract: PPP loans, net

    (265,941 )     (264,022 )     -       (265,941 )     -  

Total loans less PPP loans, net

  $ 1,820,153     $ 1,837,689     $ 1,804,447     $ 1,820,153     $ 1,804,447  
                                           

Adjusted loan loss allowance to

                                       

total loans less PPP loans, net

    1.59

%

    1.54

%

    1.42

%

    1.59

%

    1.42

%

 

 

 
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Document, Type 8-K
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Entity, Incorporation, State or Country Code VA
Entity, File Number 0-12820
Entity, Tax Identification Number 54-1284688
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Entity, Address, State or Province VA
Entity, Address, Postal Zip Code 24541
City Area Code 434
Local Phone Number 792-5111
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Security Exchange Name NASDAQ
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