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

Attached files

file	filename
EX-99.1 - EXHIBIT 99.1 - AMERICAN NATIONAL BANKSHARES INC.	earningsreleaseq1-2018final.htm
8-K - 8-K - AMERICAN NATIONAL BANKSHARES INC.	a8-kearningsrelease04192018.htm



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

	March 31
ASSETS	2018			2017

Cash and due from banks	$	18,772		$	27,418
Interest-bearing deposits in other banks	57,881			67,372

Securities available for sale, at fair value	312,668			292,567
Restricted stock, at cost	5,221			5,492
Loans held for sale	1,792			1,872

Loans	1,321,221			1,219,958
Less allowance for loan losses	(13,575		)	(13,108		)
Net Loans	1,307,646			1,206,850

Premises and equipment, net	25,759			25,658
Other real estate owned, net	1,716			1,664
Goodwill	43,872			43,872
Core deposit intangibles, net	1,114			1,554
Bank owned life insurance	18,566			18,270
Accrued interest receivable and other assets	22,567			23,216

Total assets	$	1,817,574		$	1,715,805


Liabilities
Demand deposits -- noninterest-bearing	$	400,225		$	381,247
Demand deposits -- interest-bearing	233,973			222,356
Money market deposits	409,290			314,495
Savings deposits	134,171			126,774
Time deposits	381,592			371,232
Total deposits	1,559,251			1,416,104

Customer repurchase agreements	10,466			47,776
Long-term borrowings	—			9,985
Junior subordinated debt	27,851			27,749
Accrued interest payable and other liabilities	10,166			9,950
Total liabilities	1,607,734			1,511,564

Shareholders' equity
Preferred stock, $5 par, 2,000,000 shares authorized,	—			—
none outstanding
Common stock, $1 par, 20,000,000 shares authorized,
8,675,033 shares outstanding at March 31, 2018 and	8,621			8,591
8,638,744 shares outstanding at March 31, 2017	76,525			75,445
Capital in excess of par value	131,299			121,590
Retained earnings	(6,605		)	(1,385		)
Accumulated other comprehensive loss, net	209,840			204,241
Total shareholders' equity

Total liabilities and shareholders' equity	$	1,817,574		$	1,715,805



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

	Three Months Ended
	March 31
	2018			2017
Interest and Dividend Income:
Interest and fees on loans	$	14,657		$	12,704
Interest and dividends on securities:
Taxable	1,324			1,154
Tax-exempt	419			635
Dividends	80			79
Other interest income	188			109
Total interest and dividend income	16,668			14,681

Interest Expense:
Interest on deposits	1,825			1,200
Interest on short-term borrowings	10			28
Interest on long-term borrowings	—			80
Interest on junior subordinated debt	290			239
Total interest expense	2,125			1,547

Net Interest Income	14,543			13,134
Provision for loan losses	(44		)	300

Net Interest Income After Provision
for Loan Losses	14,587			12,834

Noninterest Income:
Trust fees	929			912
Service charges on deposit accounts	551			523
Other fees and commissions	703			673
Mortgage banking income	450			529
Securities gains, net	121			259
Brokerage fees	222			192
Income from Small Business Investment Companies	155			26
Other	202			157
Total noninterest income	3,333			3,271

Noninterest Expense:
Salaries	4,997			4,799
Employee benefits	1,175			1,120
Occupancy and equipment	1,128			1,068
FDIC assessment	146			129
Bank franchise tax	281			256
Core deposit intangible amortization	77			165
Data processing	422			487
Software	305			279
Other real estate owned, net	30			43
Other	2,141			2,095
Total noninterest expense	10,702			10,441

Income Before Income Taxes	7,218			5,664
Income Taxes	1,406			1,601
Net Income	$	5,812		$	4,063



Net Income Per Common Share:
Basic	$	0.67	$	0.47
Diluted	$	0.67	$	0.47
Average Common Shares Outstanding:
Basic	8,669,728		8,633,219
Diluted	8,687,351		8,651,139



American National Bankshares Inc.
Financial Highlights
Unaudited

	(Dollars in thousands, except per share data)
		1st Qtr				4th Qtr				1st Qtr			YTD				YTD
		2018				2017				2017			2018				2017
EARNINGS
Interest income		$	16,668			$	16,480			$	14,681		$	16,668			$	14,681
Interest expense		2,125				2,117				1,547			2,125				1,547
Net interest income		14,543				14,363				13,134			14,543				13,134
Provision for loan losses		(44		)		(74		)		300			(44		)		300
Noninterest income		3,333				3,804				3,271			3,333				3,271
Noninterest expense		10,702				11,021				10,441			10,702				10,441
Income taxes		1,406				5,100				1,601			1,406				1,601
Net income		5,812				2,120				4,063			5,812				4,063

PER COMMON SHARE
Income per share - basic		$	0.67			$	0.25			$	0.47		$	0.67			$	0.47
Income per share - diluted		0.67				0.24				0.47			0.67				0.47
Cash dividends paid		0.25				0.25				0.24			0.25				0.24
Book value per share		24.19				24.13				23.64			24.19				23.64
Book value per share - tangible (a)		19.00				18.92				18.38			19.00				18.38
Closing market price		37.60				38.30				37.25			37.60				37.25

FINANCIAL RATIOS
Return on average assets		1.28			%	0.47			%	0.96		%	1.28			%	0.96		%
Return on average equity		11.10				4.00				7.99			11.10				7.99
Return on average tangible equity (b)		14.29				5.21				10.56			14.29				10.56
Average equity to average assets		11.52				11.64				11.97			11.52				11.97
Tangible equity to tangible assets (a)		9.30				9.24				9.51			9.30				9.51
Net interest margin, taxable equivalent		3.46				3.46				3.44			3.46				3.44
Efficiency ratio (c)		59.79				59.93				62.97			59.79				62.97
Effective tax rate		19.48				70.64				28.27			19.48				28.27

PERIOD-END BALANCES
Securities		$	317,889			$	327,447			$	298,059		$	317,889			$	298,059
Loans held for sale		1,792				1,639				1,872			1,792				1,872
Loans, net of unearned income		1,321,221				1,336,125				1,219,958			1,321,221				1,219,958
Goodwill and other intangibles		44,986				45,063				45,426			44,986				45,426
Assets		1,817,574				1,816,078				1,715,805			1,817,574				1,715,805
Assets - tangible (a)		1,772,588				1,771,015				1,670,379			1,772,588				1,670,379
Deposits		1,559,251				1,534,726				1,416,104			1,559,251				1,416,104
Customer repurchase agreements		10,466				10,726				47,776			10,466				47,776
Other short-term borrowings		—				24,000				—			—				—
Long-term borrowings		27,851				27,826				37,734			27,851				37,734
Shareholders' equity		209,840				208,717				204,241			209,840				204,241
Shareholders' equity - tangible (a)		164,854				163,654				158,815			164,854				158,815



American National Bankshares Inc.
Financial Highlights
Unaudited

	(Dollars in thousands, except per share data)
		1st Qtr			4th Qtr			1st Qtr			YTD			YTD
		2018			2017			2017			2018			2017
AVERAGE BALANCES
Securities (d)		$	312,783		$	304,254		$	324,588		$	312,783		$	324,588
Loans held for sale		2,037			4,269			2,414			2,037			2,414
Loans, net of unearned income		1,338,058			1,301,833			1,195,560			1,338,058			1,195,560
Interest-earning assets		1,698,451			1,695,091			1,574,460			1,698,451			1,574,460
Goodwill and other intangibles		45,031			45,109			45,517			45,031			45,517
Assets		1,818,429			1,820,499			1,699,730			1,818,429			1,699,730
Assets - tangible (a)		1,773,398			1,775,390			1,654,213			1,773,398			1,654,213
Interest-bearing deposits		1,157,122			1,109,286			1,021,110			1,157,122			1,021,110
Deposits		1,557,149			1,520,665			1,392,117			1,557,149			1,392,117
Customer repurchase agreements		12,247			42,540			45,106			12,247			45,106
Other short-term borrowings		2,183			951			11,833			2,183			11,833
Long-term borrowings		27,836			34,331			37,717			27,836			37,717
Shareholders' equity		209,433			211,864			203,459			209,433			203,459
Shareholders' equity - tangible (a)		164,402			166,755			157,942			164,402			157,942

CAPITAL
Average shares outstanding - basic		8,669,728			8,648,494			8,633,219			8,669,728			8,633,219
Average shares outstanding - diluted		8,687,351			8,668,765			8,651,139			8,687,351			8,651,139

ALLOWANCE FOR LOAN LOSSES
Beginning balance		$	13,603		$	13,858		$	12,801		$	13,603		$	12,801
Provision for loan losses		(44		)	(74		)	300			(44		)	300
Charge-offs		(44		)	(280		)	(49		)	(44		)	(49		)
Recoveries		60			99			56			60			56
Ending balance		$	13,575		$	13,603		$	13,108		$	13,575		$	13,108

LOANS
Construction and land development		$	93,031		$	123,147		$	130,691		$	93,031		$	130,691
Commercial real estate		624,164			637,701			538,069			624,164			538,069
Residential real estate		207,256			209,326			216,035			207,256			216,035
Home equity		108,024			109,857			110,844			108,024			110,844
Commercial and industrial		284,257			251,666			219,455			284,257			219,455
Consumer		4,489			4,428			4,864			4,489			4,864
Total		$	1,321,221		$	1,336,125		$	1,219,958		$	1,321,221		$	1,219,958

NONPERFORMING ASSETS AT PERIOD-END
Nonperforming loans:
90 days past due and accruing		$	273		$	359		$	1,061		$	273		$	1,061
Nonaccrual		1,598			2,201			2,428			1,598			2,428
Other real estate owned		1,716			1,225			1,664			1,716			1,664
Nonperforming assets		$	3,587		$	3,785		$	5,153		$	3,587		$	5,153



American National Bankshares Inc.
Financial Highlights
Unaudited

	(Dollars in thousands, except per share data)
		1st Qtr			4th Qtr			1st Qtr			YTD			YTD
		2018			2017			2017			2018			2017
ASSET QUALITY RATIOS
Allowance for loan losses to total loans		1.03		%	1.02		%	1.07		%	1.03		%	1.07		%
Allowance for loan losses to
nonperforming loans		725.55			531.37			375.70			725.55			375.70
Nonperforming assets to total assets		0.20			0.21			0.30			0.20			0.30
Nonperforming loans to total loans		0.14			0.19			0.29			0.14			0.29
Annualized net charge-offs (recoveries)
to average loans		0.00			0.06			0.00			0.00			0.00

OTHER DATA
Fiduciary assets at period-end (e) (f)		$	509,668		$	518,284		$	519,901		$	509,668		$	519,901
Retail brokerage assets at period-end (e) (f)		$	316,064		$	321,151		$	292,505		$	316,064		$	292,505
Number full-time equivalent employees (g)		326			328			326			326			326
Number of full service offices		26			26			27			26			27
Number of loan production offices		2			2			2			2			2
Number of ATM's		34			34			34			34			34


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, 2018 and 2017
			(Dollars in thousands)
			Unaudited
								Interest
				Average Balance				Income/Expense				Yield/Rate

				2018		2017		2018		2017		2018		2017
Loans:
	Commercial			$	258,552	$	219,922	$	2,444	$	2,054	3.83	%	3.79	%
	Real estate			1,077,243		973,215		12,189		10,624		4.53		4.37
	Consumer			4,300		4,837		76		91		7.17		7.63
		Total loans		1,340,095		1,197,974		14,709		12,769		4.40		4.27

Securities:
	Federal agencies & GSEs			103,199		96,965		517		442		2.00		1.82
	Mortgage-backed & CMOs			108,826		78,054		600		413		2.21		2.12
	State and municipal			86,336		131,397		634		1,152		2.94		3.51
	Other			14,422		18,172		175		186		4.85		4.09
		Total securities		312,783		324,588		1,926		2,193		2.46		2.70

Deposits in other banks				45,573		51,898		188		109		1.67		0.85

	Total interest-earning assets			1,698,451		1,574,460		16,823		15,071		3.97		3.84

Non-earning assets				119,978		125,270

		Total assets		$	1,818,429	$	1,699,730

Deposits:
	Demand			$	232,383	$	215,930	11		11		0.02		0.02
	Money market			410,171		305,639		783		241		0.77		0.32
	Savings			130,708		124,250		9		9		0.03		0.03
	Time			383,860		375,291		1,022		939		1.08		1.01
		Total deposits		1,157,122		1,021,110		1,825		1,200		0.64		0.48

Customer repurchase agreements				12,247		45,106		1		1		0.03		0.01
Other short-term borrowings				2,183		11,833		9		27		1.65		0.91
Long-term borrowings				27,836		37,717		290		319		4.17		3.38
	Total interest-bearing
		liabilities		1,199,388		1,115,766		2,125		1,547		0.72		0.56

Noninterest bearing demand deposits				400,027		371,007
Other liabilities				9,581		9,498
Shareholders' equity				209,433		203,459
		Total liabilities and
			shareholders' equity	$	1,818,429	$	1,699,730

Interest rate spread												3.25	%	3.28	%
Net interest margin												3.46	%	3.44	%

Net interest income (taxable equivalent basis)								14,698		13,524
Less: Taxable equivalent adjustment (a)								155		390
Net interest income								$	14,543	$	13,134


Notes:

(a) - Calculated using 21% and 35% statutory tax rate in 2018 and 2017, respectively, due to tax rate change.

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AMERICAN NATIONAL BANKSHARES INC. - FORM 8-K - EX-99.2 - EXHIBIT 99.2 - April 19, 2018

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