AMERICAN NATIONAL BANKSHARES INC. - FORM 8-K - EX-99.2 - EXHIBIT 99.2

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file	filename
EX-99.1 - EXHIBIT 99.1 - AMERICAN NATIONAL BANKSHARES INC.	earningsreleaseq1-2017final.htm
8-K - 8-K - AMERICAN NATIONAL BANKSHARES INC.	a8-kearningsrelease4202017.htm



American National Bankshares Inc.
Consolidated Balance Sheets
(Dollars in thousands, except share and per share data)
Unaudited

	March 31
ASSETS	2017			2016

Cash and due from banks	$	27,418		$	26,345
Interest-bearing deposits in other banks	67,372			61,186

Securities available for sale, at fair value	292,567			356,998
Restricted stock, at cost	5,492			5,355
Loans held for sale	1,872			785

Loans	1,219,958			1,034,564
Less allowance for loan losses	(13,108		)	(12,675		)
Net Loans	1,206,850			1,021,889

Premises and equipment, net	25,658			23,241
Other real estate owned, net	1,664			1,493
Goodwill	43,872			43,872
Core deposit intangibles, net	1,554			2,395
Bank owned life insurance	18,270			17,773
Accrued interest receivable and other assets	23,216			21,222

Total assets	$	1,715,805		$	1,582,554


Liabilities
Demand deposits -- noninterest-bearing	$	381,247		$	321,599
Demand deposits -- interest-bearing	222,356			231,970
Money market deposits	314,495			218,543
Savings deposits	126,774			119,286
Time deposits	371,232			401,033
Total deposits	1,416,104			1,292,431


Customer repurchase agreements	47,776			42,184
Long-term borrowings	9,985			9,963
Junior subordinated debt	27,749			27,648
Accrued interest payable and other liabilities	9,950			9,885
Total liabilities	1,511,564			1,382,111

Shareholders' equity
Preferred stock, $5 par, 2,000,000 shares authorized,
none outstanding	—			—
Common stock, $1 par, 20,000,000 shares authorized,
8,638,744 shares outstanding at March 31, 2017 and
8,612,658 shares outstanding at March 31, 2016 and	8,591			8,575
Capital in excess of par value	75,445			74,744
Retained earnings	121,590			113,628
Accumulated other comprehensive income (loss), net	(1,385		)	3,496
Total shareholders' equity	204,241			200,443

Total liabilities and shareholders' equity	$	1,715,805		$	1,582,554



Consolidated Statements of Income
(Dollars in thousands, except share and per share data)
Unaudited

	Three Months Ended
	March 31
	2017		2016
Interest and Dividend Income:
Interest and fees on loans	$	12,704	$	12,115
Interest and dividends on securities:
Taxable	1,154		1,084
Tax-exempt	635		823
Dividends	79		91
Other interest income	109		58
Total interest and dividend income	14,681		14,171

Interest Expense:
Interest on deposits	1,200		1,297
Interest on short-term borrowings	28		1
Interest on long-term borrowings	80		81
Interest on junior subordinated debt	239		208
Total interest expense	1,547		1,587

Net Interest Income	13,134		12,584
Provision for loan losses	300		50

Net Interest Income After Provision
for Loan Losses	12,834		12,534

Noninterest Income:
Trust fees	912		930
Service charges on deposit accounts	484		492
Other fees and commissions	712		672
Mortgage banking income	529		292
Securities gains, net	259		366
Brokerage fees	192		204
Income from Small Business Investment Companies	26		166
Other	157		175
Total noninterest income	3,271		3,297

Noninterest Expense:
Salaries	4,799		4,215
Employee benefits	1,183		1,114
Occupancy and equipment	1,068		1,099
FDIC assessment	129		188
Bank franchise tax	256		256
Core deposit intangible amortization	165		288
Data processing	487		444
Software	279		297
Other real estate owned, net	43		104
Other	2,032		1,913
Total noninterest expense	10,441		9,918

Income Before Income Taxes	5,664		5,913
Income Taxes	1,601		1,785
Net Income	$	4,063	$	4,128



Net Income Per Common Share:
Basic	$	0.47	$	0.48
Diluted	$	0.47	$	0.48
Average Common Shares Outstanding:
Basic	8,633,219		8,611,840
Diluted	8,651,139		8,617,008



American National Bankshares Inc.
Financial Highlights

	(In thousands, except share, ratio and
	nonfinancial data, unaudited)	1st Qtr			4th Qtr			1st Qtr			YTD			YTD
		2017			2016			2016			2017			2016
EARNINGS
Interest income		$	14,681		$	14,167		$	14,171		$	14,681		$	14,171
Interest expense		1,547			1,521			1,587			1,547			1,587
Net interest income		13,134			12,646			12,584			13,134			12,584
Provision for loan losses		300			50			50			300			50
Noninterest income		3,271			3,721			3,297			3,271			3,297
Noninterest expense		10,441			10,360			9,918			10,441			9,918
Income taxes		1,601			1,835			1,785			1,601			1,785
Net income		4,063			4,122			4,128			4,063			4,128

PER COMMON SHARE
Income per share - basic		$	0.47		$	0.48		$	0.48		$	0.47		$	0.48
Income per share - diluted		0.47			0.48			0.48			0.47			0.48
Cash dividends paid		0.24			0.24			0.24			0.24			0.24
Book value per share		23.64			23.37			23.27			23.64			23.27
Book value per share - tangible (a)		18.38			18.08			17.90			18.38			17.90
Closing market price		37.25			34.80			25.33			37.25			25.33

FINANCIAL RATIOS
Return on average assets		0.96		%	1.00		%	1.06		%	0.96		%	1.06		%
Return on average equity		7.99			8.10			8.28			7.99			8.28
Return on average tangible equity (b)		10.56			10.73			11.27			10.56			11.27
Average equity to average assets		11.97			12.39			12.86			11.97			12.86
Tangible equity to tangible assets (a)		9.51			9.54			10.04			9.51			10.04
Net interest margin, taxable equivalent		3.44			3.45			3.67			3.44			3.67
Efficiency ratio (c)		62.97			62.32			61.36			62.97			61.36
Effective tax rate		28.27			30.80			30.19			28.27			30.19

PERIOD-END BALANCES
Securities		$	298,059		$	352,726		$	362,353		$	298,059		$	362,353
Loans held for sale		1,872			5,996			785			1,872			785
Loans, net of unearned income		1,219,958			1,164,821			1,034,564			1,219,958			1,034,564
Goodwill and other intangibles		45,426			45,591			46,267			45,426			46,267
Assets		1,715,805			1,678,638			1,582,554			1,715,805			1,582,554
Assets - tangible (a)		1,670,379			1,633,047			1,536,287			1,670,379			1,536,287
Deposits		1,416,104			1,370,640			1,292,431			1,416,104			1,292,431
Customer repurchase agreements		47,776			39,166			42,184			47,776			42,184
Other short-term borrowings		—			20,000			—			—			—
Long-term borrowings		37,734			37,704			37,611			37,734			37,611
Shareholders' equity		204,241			201,380			200,443			204,241			200,443
Shareholders' equity - tangible (a)		158,815			155,789			154,176			158,815			154,176



American National Bankshares Inc.
Financial Highlights

	(In thousands, except share, ratio and
	nonfinancial data, unaudited)	1st Qtr			4th Qtr			1st Qtr			YTD			YTD
		2017			2016			2016			2017			2016
AVERAGE BALANCES
Securities (d)		$	324,588		$	345,035		$	347,290		$	324,588		$	347,290
Loans held for sale		2,414			4,758			2,055			2,414			2,055
Loans, net of unearned income		1,195,560			1,110,524			1,016,696			1,195,560			1,016,696
Interest-earning assets		1,574,460			1,515,597			1,424,808			1,574,460			1,424,808
Goodwill and other intangibles		45,517			45,693			46,441			45,517			46,441
Assets		1,699,730			1,643,250			1,551,124			1,699,730			1,551,124
Assets - tangible (a)		1,654,213			1,597,557			1,504,683			1,654,213			1,504,683
Interest-bearing deposits		1,021,110			986,622			950,271			1,021,110			950,271
Deposits		1,392,117			1,345,743			1,260,534			1,392,117			1,260,534
Customer repurchase agreements		45,106			45,281			44,412			45,106			44,412
Other short-term borrowings		11,833			1,087			—			11,833			—
Long-term borrowings		37,717			37,686			37,593			37,717			37,593
Shareholders' equity		203,459			203,603			199,525			203,459			199,525
Shareholders' equity - tangible (a)		157,942			157,910			153,084			157,942			153,084

CAPITAL
Average shares outstanding - basic		8,633,219			8,615,700			8,611,840			8,633,219			8,611,840
Average shares outstanding - diluted		8,651,139			8,629,777			8,617,008			8,651,139			8,617,008

ALLOWANCE FOR LOAN LOSSES
Beginning balance		$	12,801		$	12,757		$	12,601		$	12,801		$	12,601
Provision for loan losses		300			50			50			300			50
Charge-offs		(49		)	(81		)	(40		)	(49		)	(40		)
Recoveries		56			75			64			56			64
Ending balance		$	13,108		$	12,801		$	12,675		$	13,108		$	12,675

LOANS
Construction and land development		$	130,691		$	114,258		$	82,711		$	130,691		$	82,711
Commercial real estate		538,069			510,960			424,538			538,069			424,538
Residential real estate		216,035			215,104			225,737			216,035			225,737
Home equity		110,844			110,751			100,019			110,844			100,019
Commercial and industrial		219,455			208,717			196,110			219,455			196,110
Consumer		4,864			5,031			5,449			4,864			5,449
Total		$	1,219,958		$	1,164,821		$	1,034,564		$	1,219,958		$	1,034,564



American National Bankshares Inc.
Financial Highlights

	(In thousands, except share, ratio and
	nonfinancial data, unaudited)	1st Qtr			4th Qtr			1st Qtr				YTD			YTD
		2017			2016			2016				2017			2016
NONPERFORMING ASSETS AT PERIOD-END
Nonperforming loans:
90 days past due and accruing		$	1,061		$	587		$	371			$	1,061		$	371
Nonaccrual		2,428			2,965			4,905				2,428			4,905
Other real estate owned		1,664			1,328			1,493				1,664			1,493
Nonperforming assets		$	5,153		$	4,880		$	6,769			$	5,153		$	6,769

ASSET QUALITY RATIOS
Allowance for loan losses to total loans		1.07		%	1.10		%	1.23			%	1.07		%	1.23			%
Allowance for loan losses to
nonperforming loans		375.70			360.39			240.24				375.70			240.24
Nonperforming assets to total assets		0.30			0.29			0.43				0.30			0.43
Nonperforming loans to total loans		0.29			0.30			0.51				0.29			0.51
Annualized net charge-offs (recoveries)
to average loans		0.00			0.00			(0.01		)		0.00			(0.01		)


OTHER DATA
Fiduciary assets at period-end (e) (f)		$	519,901		$	498,767		$	491,257			$	519,901		$	491,257
Retail brokerage assets at period-end (e) (f)		$	292,505		$	282,454		$	268,542			$	292,505		$	268,542
Number full-time equivalent employees (g)		326			320			301				326			301
Number of full service offices		27			26			25				27			25
Number of loan production offices		2			2			2				2			2
Number of ATM's		34			34			33				34			33


Notes:

(a) - Excludes goodwill and other intangible assets.
(b) - Excludes amortization expense, net of tax, of intangible assets.
(c) - The efficiency ratio is calculated by dividing noninterest expense excluding gains or losses on the sale of OREO by
net interest income including tax equivalent income on nontaxable loans and securities and noninterest income and
excluding (i) gains or losses on securities and (ii) gains or losses on sale of premises and equipment.
(d) - Average does not include unrealized gains and losses.
(e) - Market value.
(f) - Assets are not owned by the Company and are not reflected in the consolidated balance sheet.
(g) - Average for quarter.



			Net Interest Income Analysis
			For the Three Months Ended March 31, 2017 and 2016
			(in thousands, except rates)

								Interest
				Average Balance				Income/Expense				Yield/Rate

				2017		2016		2017		2016		2017		2016
Loans:
	Commercial			$	219,922	$	188,275	$	2,054	$	1,855	3.79	%	3.96	%
	Real estate			973,215		824,970		10,624		10,090		4.37		4.89
	Consumer			4,837		5,506		91		231		7.63		16.87
		Total loans		1,197,974		1,018,751		12,769		12,176		4.27		4.79

Securities:
	Federal agencies & GSEs			96,965		88,283		442		378		1.82		1.71
	Mortgage-backed & CMOs			78,054		75,891		413		400		2.12		2.11
	State and municipal			131,397		166,187		1,152		1,493		3.51		3.59
	Other			18,172		16,929		186		146		4.09		3.45
		Total securities		324,588		347,290		2,193		2,417		2.70		2.78

Deposits in other banks				51,898		58,767		109		58		0.85		0.40

	Total interest-earning assets			1,574,460		1,424,808		15,071		14,651		3.84		4.12

Non-earning assets				125,270		126,316

		Total assets		$	1,699,730	$	1,551,124

Deposits:
	Demand			$	215,930	$	231,368	11		36		0.02		0.06
	Money market			305,639		205,274		241		76		0.32		0.15
	Savings			124,250		117,650		9		14		0.03		0.05
	Time			375,291		395,979		939		1,171		1.01		1.19
		Total deposits		1,021,110		950,271		1,200		1,297		0.48		0.55

Customer repurchase agreements				45,106		44,412		1		1		0.01		0.01
Other short-term borrowings				11,833		—		27		—		0.91		—
Long-term borrowings				37,717		37,593		319		289		3.38		3.08
	Total interest-bearing
		liabilities		1,115,766		1,032,276		1,547		1,587		0.56		0.62

Noninterest bearing demand deposits				371,007		310,263
Other liabilities				9,498		9,060
Shareholders' equity				203,459		199,525
		Total liabilities and
			shareholders' equity	$	1,699,730	$	1,551,124

Interest rate spread												3.28	%	3.50	%
Net interest margin												3.44	%	3.67	%

Net interest income (taxable equivalent basis)								13,524		13,064
Less: Taxable equivalent adjustment								390		480
Net interest income								$	13,134	$	12,584

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AMERICAN NATIONAL BANKSHARES INC. - FORM 8-K - EX-99.2 - EXHIBIT 99.2 - April 20, 2017

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