ex_429218.htm

EX-99.1 2 ex_429218.htm EXHIBIT 99.1 ex_429218.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 FOURTH QUARTER AND FULL YEAR 2022 EARNINGS

Danville, VA, January 19, 2023 – American National Bankshares Inc. (NASDAQ: AMNB) (“American National” or the “Company”) today reported fourth quarter 2022 earnings of $8.0 million, or $0.76 per diluted common share. Those results compare to $11.3 million, or $1.05 per diluted common share, during the same quarter in the prior year, and earnings of $9.3 million, or $0.87 per diluted common share, for the third quarter of 2022. Earnings for the twelve months ended December 31, 2022 were $34.4 million, or $3.23 per diluted common share, compared to $43.5 million, or $4.00 per diluted common share, for the same period of 2021.

President and Chief Executive Officer Jeffrey V. Haley commented, “American National finished 2022 on a positive note with strong earnings for the fourth quarter and the full year. Loan growth was again exceptional, and while we experienced deposit outflows during the period consistent with industry trends, we are pleased with balance sheet trends overall. While there has been some slowing, business activity and our local economies remain fairly stable in spite of factors associated with elevated inflation and rising rates.”

“I am so proud and appreciative of the efforts of our employees, the support of our customers and our shareholders over the past year. In October, American National was named one of the “Best Banks to Work For” by American Banker for the third consecutive year. This achievement is a testament to our efforts to provide a great place to work for a great team. We had a very successful year financially and achieved many other nonfinancial initiatives during the year as we prepare the Company for future growth and success.”

Fourth quarter 2022 highlights include:

●

Earnings produced a return on average tangible common equity of 14.50% for the fourth quarter of 2022, compared to 15.74% in the previous quarter and 17.63% for the same quarter in the prior year (non-GAAP).

●

Net interest income increased $281 thousand, or 1.2%, when compared to the previous quarter, and increased $1.2 million, or 5.1%, when compared to the same quarter in 2021.

●

Fully taxable equivalent (“FTE”) net interest margin was 3.33% for the quarter, up from 3.20% in the third quarter of 2022 and up from 2.93% in the same quarter of the prior year (non-GAAP).

●

Noninterest revenues decreased $1.2 million, or 24.2%, when compared to the previous quarter, and decreased $1.2 million , or 25.5%, compared to the same quarter in the prior year.

●

Noninterest expense increased $386 thousand, or 2.3%, when compared to the previous quarter, and increased $1.4 million, or 8.9%, 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 $104.6 million, or 20.3% annualized, during the fourth quarter compared to $57.2 million, or 11.4% annualized, growth in the third quarter of this year and $69.0 million, or 14.9% annualized, growth in the fourth quarter of the prior year.

●

The Company recognized a provision for loan losses in the fourth quarter of 2022 of $1.2 million compared to $615 thousand in the third quarter of 2022 and a negative provision of $2.0 million in the fourth quarter of 2021. Annualized net charge-offs (recoveries) as a percentage of average loans outstanding were 0.15% for the fourth quarter of 2022 compared to (0.01%) in the previous quarter and (0.00%) in the same quarter of 2021.

●

Nonperforming assets as a percentage of total assets were 0.05% at December 31, 2022 and September 30, 2022, down from 0.07% at December 31, 2021.

NET INTEREST INCOME

Net interest income for the fourth quarter of 2022 increased by $281 thousand, or 1.2%, to $24.3 million compared to $24.0 million for the third quarter of 2022. The fourth quarter of 2022 compared to the same quarter of 2021 reflected an increase of $1.2 million, or 5.1%. The FTE net interest margin for the quarter was 3.33%, up from 3.20% in the prior quarter and 2.93% in the same quarter a year ago (non-GAAP). The margin expansion relative to the previous quarter was primarily due to a 34-basis point increase in yield on average earning assets partially offset by a 36-basis point increase in the cost of interest-bearing liabilities. 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 higher interest cost on liabilities was also a result of higher interest rates and some additional borrowing costs associated with short term FHLB advances during the period. The increase in margin from fourth 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 fourth quarter of 2022, net accretion related to acquisition accounting amounted to $253 thousand compared to $454 thousand in the prior quarter and $2.1 million for the same quarter in 2021. Estimated remaining net accretion from acquisitions for the periods indicated is as follows (dollars in thousands):

For the years ending December 31, (estimated):

2023	$	744
2024		457
2025		324
2026		252
2027		116
Thereafter		112

ASSET QUALITY

Nonperforming assets (“NPAs”) totaled $1.4 million as of December 31, 2022 and as of September 30, 2022, down substantially from $2.4 million at December 31, 2021. NPAs as a percentage of total assets were 0.05% at December 31, 2022 and September 30, 2022, and 0.07% at December 31, 2021. The Company recorded a provision for loan losses for the fourth quarter of 2022 of $1.2 million compared to $615 thousand in the previous quarter and a negative provision of $2.0 million in the fourth quarter of the previous year. The provision expense increase for the fourth quarter as compared to third quarter of 2022 was a function of continued loan growth coupled with charge-off activity during the period. The negative provision in the fourth quarter of 2021 was the result of continued improvement in economic conditions, ongoing low charge-off and delinquency rates, and overall strong asset quality metrics.

The allowance for loan losses was $19.6 million at December 31, 2022, compared to $19.2 million at September 30, 2022 and $18.7 million at December 31, 2021. Annualized net charge-offs (recoveries) as a percentage of average loans outstanding were 0.15% for the fourth quarter of 2022 compared to (0.01%) and (0.00%) in the third quarter of 2022 and fourth quarter of 2021, respectively. The allowance as a percentage of loans held for investment was 0.89% at December 31, 2022, compared to 0.91% at September 30, 2022, and 0.96% at December 31, 2021.

NONINTEREST INCOME

Noninterest income decreased $1.2 million, or 24.2%, to $3.6 million for the quarter ended December 31, 2022 from the prior quarter and $1.2 million, or 25.5%, from $4.8 million in the same quarter in the prior year. The decrease in the fourth quarter of 2022 compared to the third quarter was primarily due to a reduction in equity income from investments in small business investment companies. During the fourth quarter of 2022, investments in these entities resulted in losses recorded of $263 thousand, compared to earnings of $501 thousand in the prior quarter and $462 thousand in the same quarter of the prior year. In addition, an impairment charge of $146 thousand was recorded during the fourth quarter of 2022 on an acquired real estate property from a previous acquisition. Mortgage income also decreased $212 thousand in the fourth quarter of 2022 as demand continues to slow due to higher mortgage rates. The decrease for the fourth quarter of 2022 as compared to the same quarter in the prior year can also be attributed to the aforementioned small business investment company losses and from mortgage revenue contraction associated with lower volumes due to higher mortgage rates. Mortgage banking income decreased by $570 thousand, or 76.4%, compared to the same quarter of 2021.

NONINTEREST EXPENSE

Noninterest expense for the fourth quarter of 2022 amounted to $16.8 million, up $386 thousand, or 2.3%, when compared to $16.4 million for the previous quarter and up $1.4 million, or 8.9%, from $15.5 million for the same quarter in the previous year. The increase in the fourth quarter compared to the third quarter of 2022 was primarily from increased charitable contributions and data processing and technology costs. The increase from the same quarter of 2021 was the result of higher compensation associated with a lower staffing vacancy rate and increased incentive accruals.

INCOME TAXES

The effective tax rate for the three months ended December 31, 2022 was 18.90%, compared to 20.92% for the prior quarter and 21.79% for the same quarter in the prior year. The Company recognized a tax benefit in the fourth quarter of 2022 resulting from adjustments from investment partnership income tax returns. 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 December 31, 2022 were $3.1 billion, an increase of $16.6 million from September 30, 2022 and a decrease of $268.7 million from December 31, 2021. The increase from the previous quarter is due to an increase in loans, net, partially offset by lower interest-bearing deposits in other banks resulting from a decrease in deposits and a decrease in the investment portfolio for maturities during the period.

At December 31, 2022, loans held for investment (net of deferred fees and costs) were $2.2 billion, an increase of $67.0 million, or 12.7% annualized, from September 30, 2022. Loans held for investment (net of deferred fees and costs) increased $239.9 million, or 12.3%, from December 31, 2021.

Investment securities available for sale amounted to $608.1 million at December 31, 2022, a decrease of $33.8 million, or 5.3%, compared to September 30, 2022, and a decrease of $84.4 million, or 12.2%, compared to December 31, 2021.

Deposits amounted to $2.6 billion at December 31, 2022, a decrease of $94.5 million, or 14.1% annualized, from September 30, 2022 and a decrease of $294.0 million, or 10.2%, compared to December 31, 2021.

The Company continues to be well-capitalized as defined by regulators, with tangible common equity to tangible assets of 7.82% at December 31, 2022 compared to 7.59% at September 30, 2022 and compared to 8.17% at December 31, 2021 (non-GAAP). The Company’s common equity Tier 1, Tier 1, total, and Tier 1 leverage capital ratios were 11.69%, 12.84%, 13.65% and 10.35%, respectively, at December 31, 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 $1.2 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.

American National Bankshares Inc.

Consolidated Balance Sheets

(Dollars in thousands, except per share data)

Unaudited

	December 31,
	2022			2021
Assets
Cash and due from banks	$	32,207		$	23,095
Interest-bearing deposits in other banks		41,133			487,773
Securities available for sale, at fair value		608,062			692,467
Restricted stock, at cost		12,651			8,056
Loans held for sale		1,061			8,481
Loans, net of deferred fees and costs		2,186,449			1,946,580
Less allowance for loan losses		(19,555	)		(18,678	)
Net Loans		2,166,894			1,927,902
Premises and equipment, net		32,900			35,564
Assets held-for-sale		1,382			-
Other real estate owned, net		27			143
Goodwill		85,048			85,048
Core deposit intangibles, net		3,367			4,627
Bank owned life insurance		29,692			29,107
Other assets		51,478			32,334

Total assets	$	3,065,902		$	3,334,597


Liabilities
Demand deposits -- noninterest-bearing	$	1,010,602		$	1,009,081
Demand deposits -- interest-bearing		484,037			547,878
Money market deposits		574,330			719,498
Savings deposits		269,426			259,193
Time deposits		257,933			354,703
Total deposits		2,596,328			2,890,353
Customer repurchase agreements		370			41,128
Other short-term borrowings		100,531			-
Long-term borrowings		28,334			28,232
Other liabilities		19,165			20,092
Total liabilities		2,744,728			2,979,805

Shareholders' equity
Preferred stock, $5 par value, 2,000,000 shares authorized, none outstanding		-			-
Common stock, $1 par value, 20,000,000 shares authorized, 10,608,781 shares outstanding at December 31, 2022 and 10,766,967 shares outstanding at December 31, 2021		10,538			10,710
Capital in excess of par value		141,948			147,777
Retained earnings		223,664			201,380
Accumulated other comprehensive (loss), net		(54,976	)		(5,075	)
Total shareholders' equity		321,174			354,792

Total liabilities and shareholders' equity	$	3,065,902		$	3,334,597

American National Bankshares Inc.

Consolidated Statements of Income

(Dollars in thousands, except per share data)

Unaudited

	For the Three Months Ended									For the Twelve Months Ended
	12/31/22			9/30/22			12/31/21			12/31/22			12/31/21
Interest and Dividend Income:
Interest and fees on loans	$	23,544		$	21,160		$	21,706		$	82,568		$	87,040
Interest and dividends on securities:
Taxable		2,721			2,664			2,012			10,065			7,309
Tax-exempt		110			110			92			407			385
Dividends		126			118			115			473			464
Other interest income		415			1,099			223			2,491			598
Total interest and dividend income		26,916			25,151			24,148			96,004			95,796

Interest Expense:
Interest on deposits		1,597			741			655			3,553			3,645
Interest on short-term borrowings		633			11			3			659			22
Interest on long-term borrowings		398			392			386			1,554			1,738
Total interest expense		2,628			1,144			1,044			5,766			5,405

Net Interest Income		24,288			24,007			23,104			90,238			90,391
Provision for (recovery of) for loan losses		1,159			615			(1,955	)		1,597			(2,825	)

Net Interest Income After Provision for (recovery of) Loan Losses		23,129			23,392			25,059			88,641			93,216

Noninterest Income:
Trust and brokerage fees		1,522			1,603			1,529			6,521			6,019
Service charges on deposit accounts		597			681			695			2,676			2,611
Interchange fees		1,117			1,013			1,127			4,107			4,152
Other fees and commissions		207			233			182			906			801
Mortgage banking income		176			388			746			1,666			4,195
Securities gains, net		-			-			35			-			35
Income (loss) from Small Business Investment Companies		(263	)		501			462			1,409			1,972
Income from insurance investments		103			100			137			747			1,199
Losses on premises and equipment, net		(146	)		(2	)		(297	)		(228	)		(885	)
Other		297			243			228			1,003			932
Total noninterest income		3,610			4,760			4,844			18,807			21,031

Noninterest Expense:
Salaries and employee benefits		9,446			9,618			8,461			36,382			32,342
Occupancy and equipment		1,499			1,514			1,484			6,075			6,032
FDIC assessment		209			227			220			903			864
Bank franchise tax		501			488			446			1,953			1,767
Core deposit intangible amortization		300			310			351			1,260			1,464
Data processing		864			818			734			3,310			2,958
Software		417			362			357			1,505			1,368
Other real estate owned, net		(1	)		3			(17	)		3			131
Other		3,599			3,108			3,427			12,695			12,082
Total noninterest expense		16,834			16,448			15,463			64,086			59,008

Income Before Income Taxes		9,905			11,704			14,440			43,362			55,239
Income Taxes		1,872			2,448			3,147			8,934			11,713
Net Income	$	8,033		$	9,256		$	11,293		$	34,428		$	43,526

Net Income Per Common Share:
Basic	$	0.76		$	0.87		$	1.05		$	3.23		$	4.00
Diluted	$	0.76		$	0.87		$	1.05		$	3.23		$	4.00
Weighted Average Common Shares Outstanding:
Basic		10,607,678			10,640,952			10,774,268			10,672,314			10,873,817
Diluted		10,609,937			10,643,073			10,776,970			10,674,613			10,877,231

American National Bankshares Inc.

Financial Highlights

Unaudited

(Dollars in thousands, except per share data)										At or for the Twelve Months
	4th Qtr			3rd Qtr			4th Qtr			Ended December 31,
	2022			2022			2021			2022			2021
EARNINGS
Interest income	$	26,916		$	25,151		$	24,148		$	96,004		$	95,796
Interest expense		2,628			1,144			1,044			5,766			5,405
Net interest income		24,288			24,007			23,104			90,238			90,391
Provision for (recovery of) loan losses		1,159			615			(1,955	)		1,597			(2,825	)
Noninterest income		3,610			4,760			4,844			18,807			21,031
Noninterest expense		16,834			16,448			15,463			64,086			59,008
Income taxes		1,872			2,448			3,147			8,934			11,713
Net income		8,033			9,256			11,293			34,428			43,526

PER COMMON SHARE
Net income per share - basic	$	0.76		$	0.87		$	1.05		$	3.23		$	4.00
Net income per share - diluted		0.76			0.87			1.05			3.23			4.00
Cash dividends paid		0.30			0.28			0.28			1.14			1.09
Book value per share		30.27			29.54			32.95			30.27			32.95
Book value per share - tangible (a)		21.94			21.18			24.62			21.94			24.62
Closing market price		36.93			31.95			37.68			36.93			37.68

FINANCIAL RATIOS
Return on average assets		1.05	%		1.17	%		1.35	%		1.43	%		1.37	%
Return on average common equity		10.15			11.21			12.82			13.81			12.50
Return on average tangible common equity (a)		14.50			15.74			17.63			19.41			17.34
Average common equity to average assets		10.33			10.42			10.50			10.35			10.96
Tangible common equity to tangible assets (a)		7.82			7.59			8.17			7.82			8.17
Net interest margin, taxable equivalent (a)		3.33			3.20			2.93			2.97			3.05
Efficiency ratio (a)		58.82			55.98			53.45			57.37			51.05
Effective tax rate		18.90			20.92			21.79			20.60			21.20

PERIOD-END BALANCES
Securities	$	620,713		$	650,267		$	700,523		$	620,713		$	700,523
Loans held for sale		1,061			2,852			8,481			1,061			8,481
Loans, net		2,186,449			2,119,415			1,946,580			2,186,449			1,946,580
Goodwill and other intangibles		88,415			88,715			89,675			88,415			89,675
Assets		3,065,902			3,049,320			3,334,597			3,065,902			3,334,597
Assets - tangible (a)		2,977,487			2,960,605			3,244,922			2,977,487			3,244,922
Deposits		2,596,328			2,690,870			2,890,353			2,596,328			2,890,353
Customer repurchase agreements		370			625			41,128			370			41,128
Long-term borrowings		28,334			28,308			28,232			28,334			28,232
Shareholders' equity		321,174			313,390			354,792			321,174			354,792
Shareholders' equity - tangible (a)		232,759			224,675			265,117			232,759			265,117

AVERAGE BALANCES
Securities (b)	$	713,996		$	728,535		$	654,595		$	720,001		$	549,554
Loans held for sale		972			3,915			8,121			3,235			11,257
Loans, net		2,168,636			2,064,088			1,943,238			2,052,158			1,953,121
Interest-earning assets		2,920,992			3,005,292			3,154,730			3,042,775			2,967,799
Goodwill and other intangibles		88,593			88,886			89,855			89,048			90,413
Assets		3,066,362			3,170,328			3,357,223			3,211,668			3,176,564
Assets - tangible (a)		2,977,769			3,081,442			3,267,368			3,122,620			3,086,151
Interest-bearing deposits		1,609,503			1,723,931			1,868,695			1,765,134			1,797,385
Deposits		2,641,133			2,775,516			2,914,381			2,794,005			2,736,571
Customer repurchase agreements		704			18,719			39,645			24,005			37,632
Long-term borrowings		28,318			28,293			28,218			28,280			31,878
Shareholders' equity		316,697			330,318			352,395			332,356			348,158
Shareholders' equity - tangible (a)		228,104			241,432			262,540			243,308			257,745

American National Bankshares Inc.

Financial Highlights

Unaudited

(Dollars in thousands, except per share data)										At or for the Twelve Months
	4th Qtr			3rd Qtr			4th Qtr			Ended December 31,
	2022			2022			2021			2022			2021
CAPITAL
Weighted average shares outstanding - basic		10,607,678			10,640,952			10,774,268			10,672,314			10,873,817
Weighted average shares outstanding - diluted		10,609,937			10,643,073			10,776,970			10,674,613			10,877,231

COMMON STOCK REPURCHASE PROGRAM
Total shares of common stock repurchased		3,269			60,104			16,580			206,978			264,579
Average price paid per share of common stock	$	36.44		$	34.26		$	37.12		$	36.26		$	33.10

ALLOWANCE FOR LOAN LOSSES
Beginning balance	$	19,189		$	18,505		$	20,630		$	18,678		$	21,403
Provision for (recovery of) loan losses		1,159			615			(1,955	)		1,597			(2,825	)
Charge-offs		(834	)		(31	)		(76	)		(1,019	)		(146	)
Recoveries		41			100			79			299			246
Ending balance	$	19,555		$	19,189		$	18,678		$	19,555		$	18,678

LOANS
Construction and land development	$	197,525		$	210,500		$	134,221		$	197,525		$	134,221
Commercial real estate - owner occupied		418,462			423,678			391,517			418,462			391,517
Commercial real estate - non-owner occupied		827,728			764,963			731,034			827,728			731,034
Residential real estate		338,132			324,468			289,757			338,132			289,757
Home equity		93,740			93,659			93,203			93,740			93,203
Commercial and industrial		304,247			295,541			299,773			304,247			299,773
Consumer		6,615			6,606			7,075			6,615			7,075
Total	$	2,186,449		$	2,119,415		$	1,946,580		$	2,186,449		$	1,946,580

NONPERFORMING ASSETS AT PERIOD-END
Nonperforming loans:
90 days past due and accruing	$	16		$	18		$	216		$	16		$	216
Nonaccrual		1,307			1,171			2,006			1,307			2,006
Other real estate owned and repossessions		80			196			143			80			143
Nonperforming assets	$	1,403		$	1,385		$	2,365		$	1,403		$	2,365

ASSET QUALITY RATIOS
Allowance for loan losses to total loans		0.89	%		0.91	%		0.96	%		0.89	%		0.96	%
Allowance for loan losses to nonperforming loans		1,478.08			1,613.88			840.59			1,478.08			840.59
Nonperforming assets to total assets		0.05			0.05			0.07			0.05			0.07
Nonperforming loans to total loans		0.06			0.06			0.11			0.06			0.11
Annualized net (recoveries) charge-offs to average loans		0.15			(0.01	)		(0.00	)		0.05			(0.01	)


OTHER DATA
Fiduciary assets at period-end (c) (d)	$	736,121		$	693,153		$	752,410		$	736,121		$	752,410
Retail brokerage assets at period-end (c) (d)	$	413,235		$	376,891		$	418,850		$	413,235		$	418,850
Number full-time equivalent employees (e)		359			363			346			359			346
Number of full service offices		26			26			26			26			26
Number of loan production offices		1			1			1			1			1
Number of ATMs		34			34			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.

(d) - Assets are not owned by American National and are not reflected in the consolidated balance sheet.

(e) - Average for period.

Net Interest Income Analysis

For the Three Months Ended December 31, 2022 and 2021

(Dollars in thousands)

Unaudited

					Interest
	Average Balance				Income/Expense (a)				Yield/Rate
	2022		2021		2022		2021		2022			2021
Loans:
Commercial	$	304,303	$	310,175	$	3,464	$	3,386		4.52	%		4.33	%
Real estate		1,858,591		1,634,660		20,014		18,244		4.31			4.46
Consumer		6,714		6,524		107		112		6.32			6.81
Total loans (b)		2,169,608		1,951,359		23,585		21,742		4.34			4.45

Securities:
U.S. Treasury		152,082		116,629		351		242		0.92			0.83
Federal agencies & GSEs		105,119		93,042		364		265		1.39			1.14
Mortgage-backed & CMOs		345,217		355,492		1,498		1,117		1.74			1.26
State and municipal		69,451		63,148		361		314		2.08			1.99
Other		42,127		26,284		410		305		3.89			4.64
Total securities		713,996		654,595		2,984		2,243		1.67			1.37

Deposits in other banks		37,388		548,776		415		223		4.40			0.16

Total interest-earning assets		2,920,992		3,154,730		26,984		24,208		3.69			3.07

Non-earning assets		145,370		202,493

Total assets	$	3,066,362	$	3,357,223

Deposits:
Demand	$	494,572	$	505,528		95		37		0.08			0.03
Money market		590,509		743,354		974		101		0.65			0.05
Savings		273,580		257,289		67		6		0.10			0.01
Time		250,842		362,524		461		511		0.73			0.56
Total deposits		1,609,503		1,868,695		1,597		655		0.39			0.14

Customer repurchase agreements		704		39,645		-		3		-			0.03
Other short-term borrowings		62,004		-		633		-		4.08			-
Long-term borrowings		28,318		28,218		398		386		5.62			5.47
Total interest-bearing liabilities		1,700,529		1,936,558		2,628		1,044		0.62			0.21

Noninterest bearing demand deposits		1,031,630		1,045,686
Other liabilities		17,506		22,584
Shareholders' equity		316,697		352,395
Total liabilities and shareholders' equity	$	3,066,362	$	3,357,223

Interest rate spread										3.07	%		2.86	%
Net interest margin										3.33	%		2.93	%

Net interest income (taxable equivalent basis)						24,356		23,164
Less: Taxable equivalent adjustment (c)						68		60
Net interest income					$	24,288	$	23,104

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.

Net Interest Income Analysis

For the Twelve Months Ended December 31, 2022 and 2021

(Dollars in thousands)

Unaudited

					Interest
	Average Balance				Income/Expense (a)				Yield/Rate
	2022		2021		2022		2021		2022			2021
Loans:
Commercial	$	292,833	$	372,538	$	11,448	$	18,819		3.91	%		5.05	%
Real estate		1,755,982		1,584,856		70,837		67,887		4.03			4.28
Consumer		6,578		6,984		423		475		6.43			6.80
Total loans (b)		2,055,393		1,964,378		82,708		87,181		4.02			4.44

Securities:
U.S. Treasury		150,886		57,048		1,372		507		0.91			0.89
Federal agencies & GSEs		107,311		97,943		1,348		1,132		1.26			1.16
Mortgage-backed & CMOs		355,331		308,158		5,420		4,142		1.53			1.34
State and municipal		68,928		61,698		1,399		1,272		2.03			2.06
Other		37,545		24,707		1,510		1,205		4.02			4.88
Total securities		720,001		549,554		11,049		8,258		1.53			1.50

Deposits in other banks		267,381		453,867		2,491		598		0.93			0.13

Total interest-earning assets		3,042,775		2,967,799		96,248		96,037		3.16			3.24

Non-earning assets		168,893		208,765

Total assets	$	3,211,668	$	3,176,564

Deposits:
Demand	$	522,043	$	476,710		202		152		0.04			0.03
Money market		688,631		710,948		1,648		758		0.24			0.11
Savings		273,788		243,123		102		26		0.04			0.01
Time		280,672		366,604		1,601		2,709		0.57			0.74
Total deposits		1,765,134		1,797,385		3,553		3,645		0.20			0.20

Customer repurchase agreements		24,005		37,632		26		22		0.11			0.06
Other short-term borrowings		15,629		-		633		-		4.05			-
Long-term borrowings		28,280		31,878		1,554		1,738		5.50			5.45
Total interest-bearing liabilities		1,833,048		1,866,895		5,766		5,405		0.31			0.29

Noninterest bearing demand deposits		1,028,871		939,186
Other liabilities		17,393		22,325
Shareholders' equity		332,356		348,158
Total liabilities and shareholders' equity	$	3,211,668	$	3,176,564

Interest rate spread										2.85	%		2.95	%
Net interest margin										2.97	%		3.05	%

Net interest income (taxable equivalent basis)						90,482		90,632
Less: Taxable equivalent adjustment (c)						244		241
Net interest income					$	90,238	$	90,391

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.

American National Bankshares Inc.

Reconciliation of Non-GAAP Financial Measures

Unaudited

(Dollars in thousands, except per share data)										At or for the Twelve Months
	4th Qtr			3rd Qtr			4th Qtr			Ended December 31,
	2022			2022			2021			2022			2021
EFFICIENCY RATIO
Noninterest expense	$	16,834		$	16,448		$	15,463		$	64,086		$	59,008
Subtract: loss (gain) on sale of OREO		2			-			-			2			(111	)
Subtract: core deposit intangible amortization		(300	)		(310	)		(351	)		(1,260	)		(1,464	)
	$	16,536		$	16,138		$	15,112		$	62,828		$	57,433

Net interest income	$	24,288		$	24,007		$	23,104		$	90,238		$	90,391
Tax equivalent adjustment		68			59			60			244			241
Noninterest income		3,610			4,760			4,844			18,807			21,031
Subtract: gain on securities		-			-			(35	)		-			(35	)
Add: loss on fixed assets		146			2			297			228			885
	$	28,112		$	28,828		$	28,270		$	109,517		$	112,513

Efficiency ratio		58.82	%		55.98	%		53.46	%		57.37	%		51.05	%

TAX EQUIVALENT NET INTEREST INCOME
Non-GAAP measures:
Interest income - loans	$	23,585		$	21,191		$	21,742		$	82,708		$	87,181
Interest income - investments and other		3,399			4,019			2,466			13,540			8,856
Interest expense - deposits		(1,597	)		(741	)		(655	)		(3,553	)		(3,645	)
Interest expense - customer repurchase agreements		-			(11	)		(3	)		(26	)		(22	)
Interest expense - other short-term borrowings		(633	)		-			-			(633	)		-
Interest expense - long-term borrowings		(398	)		(392	)		(386	)		(1,554	)		(1,738	)
Total net interest income	$	24,356		$	24,066		$	23,164		$	90,482		$	90,632
Less non-GAAP measures:
Tax benefit on nontaxable interest - loans		(41	)		(31	)		(36	)		(139	)		(141	)
Tax benefit on nontaxable interest - securities		(27	)		(28	)		(24	)		(105	)		(100	)
GAAP measures	$	24,288		$	24,007		$	23,104		$	90,238		$	90,391

NET INTEREST MARGIN
Net interest margin (FTE) (non-GAAP)		3.33	%		3.20	%		2.93	%		2.97	%		3.05	%
Net interest margin (GAAP)		3.32	%		3.19	%		2.93	%		2.97	%		3.05	%

RETURN ON AVERAGE TANGIBLE EQUITY
Return on average equity (GAAP basis)		10.15	%		11.21	%		12.82	%		13.81	%		12.50	%
Impact of excluding average goodwill and other intangibles		4.35			4.53			4.81			5.60			4.84
Return on average tangible equity (non-GAAP)		14.50	%		15.74	%		17.63	%		19.41	%		17.34	%

TANGIBLE EQUITY TO TANGIBLE ASSETS
Equity to assets ratio (GAAP basis)		10.48	%		10.28	%		10.64	%		10.48	%		10.64	%
Impact of excluding goodwill and other intangibles		(2.66	)		(2.69	)		(2.47	)		(2.66	)		(2.47	)
Tangible equity to tangible assets ratio (non-GAAP)		7.82	%		7.59	%		8.17	%		7.82	%		8.17	%

TANGIBLE BOOK VALUE
Book value per share (GAAP basis)	$	30.27		$	29.54		$	32.95		$	30.27		$	32.95
Impact of excluding goodwill and other intangibles		(8.33	)		(8.36	)		(8.33	)		(8.33	)		(8.33	)
Tangible book value per share (non-GAAP)	$	21.94		$	21.18		$	24.62		$	21.94		$	24.62

ADJUSTED LOAN LOSS ALLOWANCE
Allowance for loan losses	$	19,555		$	19,189		$	18,678		$	19,555		$	18,678
Credit discount on purchased loans		3,068			3,477			4,474			3,068			4,474
Adjusted loan loss allowance	$	22,623		$	22,666		$	23,152		$	22,623		$	23,152

Total loans, net	$	2,186,449		$	2,119,415		$	1,946,580		$	2,186,449		$	1,946,580
Subtract: PPP loans, net		(74	)		(95	)		(12,239	)		(74	)		(12,239	)
Total loans less PPP loans, net	$	2,186,375		$	2,119,320		$	1,934,341		$	2,186,375		$	1,934,341

Adjusted loan loss allowance to total loans less PPP loans, net		1.03	%		1.07	%		1.20	%		1.03	%		1.20	%

Allowance for loan losses to total loans less PPP loans, net		0.89	%		0.91	%		0.97	%		0.89	%		0.97	%