GlobeNewswire Inc | Jan 20, 2022 07:30AM EST

January 20, 2022

DANVILLE, Va., Jan. 20, 2022 (GLOBE NEWSWIRE) -- American National Bankshares Inc. (NASDAQ: AMNB) (American National or the Company) today reported fourth quarter 2021 earnings of $11.3 million, or $1.05 per diluted common share. Those results compare to $8.8 million, or $0.80 per diluted common share, during the same quarter in the prior year, and net income of $10.2 million, or $0.94 per diluted common share, recognized for the third quarter of 2021. Earnings for the twelve months ended December 31, 2021 were $43.5 million, or $4.00 per diluted common share, compared to $30.0 million, or $2.73 per diluted common share, for the same period of 2020.

President and Chief Executive Officer, Jeffrey V. Haley, commented, American National finished 2021 on a positive note with strong earnings for the fourth quarter and the full year. Core loan growth for the quarter was 6.6% annualized in spite of some significant paydown activity, and deposit growth continued to exceed expectations. Business activity and our local economies remain fairly robust in spite of factors associated with elevated inflation, supply chain issues and the ongoing pandemic.

I am so proud and appreciative of the efforts of our employees, the support of our customers and our shareholders over the past year. We had a very successful year financially, but also achieved many other milestones as we continue to build the Company for future success.

Fourth quarter 2021 highlights include:

-- Average loans held for investment, excluding U.S. Small Business Administration Paycheck Protection Program (PPP) loans, grew $69.0 million, or 14.9% annualized, during the fourth quarter compared to growth of $39.5 million, or 8.7% annualized, in the third quarter of this year and compared to a decrease of $13.6 million, or 3.0% annualized, in the fourth quarter of the prior year. -- Earnings produced a return on average tangible common equity of 17.63% for the fourth quarter of 2021, compared to 16.01% in the previous quarter and 14.90% for the same quarter in the prior year (non-GAAP). -- Average deposits grew 5.3% during the quarter and 14.9% over the same quarter of 2020; the cost of interest-bearing deposits decreased to 0.14% in the fourth quarter, compared to 0.17% in the previous quarter and 0.43% in the same quarter of the prior year. -- Fully taxable equivalent (FTE) net interest margin was 2.93% for the quarter, down from 3.09% in the third quarter of 2021 and from 3.22% in the same quarter of the prior year (non-GAAP). -- Noninterest revenues decreased $279 thousand, or 5.4%, when compared to the previous quarter, and increased $623 thousand, or 14.8%, compared to the same quarter in the prior year. -- Noninterest expense increased $620 thousand, or 4.2%, when compared to the previous quarter, and increased $804 thousand, or 5.5%, when compared to the same quarter in the prior year. -- The Company recognized a negative provision for loan losses in the fourth quarter of 2021 of $2.0 million compared to a provision expense of $482 thousand in the third quarter of 2021 and $585 thousand in the fourth quarter of 2020. Annualized net charge-offs (recoveries) as a percentage of average loans outstanding were (0.00%) for the fourth quarter 2021, (0.01%) for the third quarter of 2021 and 0.05% for the fourth quarter of 2020. -- Nonperforming assets as a percentage of total assets were 0.07% at December 31, 2021, up from 0.06% at September 30, 2021 but down from 0.12% at December 31, 2020.

SMALL BUSINESS ADMINISTRATIONS PPP

The Company has processed a total of $364.2 million in PPP loans, with total remaining outstanding net PPP loans of $12.2 million at December 31, 2021, down from $37.2 million at September 30, 2021. These quarter-end balances are net of $24.9 million of loans forgiven in the fourth quarter of 2021 compared to $66.9 million forgiven in the third quarter. Total PPP fees recognized in net interest income during the fourth quarter of 2021 were $919,000 compared to the prior quarters $2.4 million. The interest income from the outstanding PPP portfolio generated $68,000 and $169,000, respectively, in the fourth and third quarters of 2021.

NET INTEREST INCOME

Net interest income for the fourth quarter of 2021 was stable compared to the third quarter at $23.1 million. The fourth quarter of 2021 compared to the same quarter of 2020 reflected an increase of $958 thousand, or 4.3%. The FTE net interest margin for the quarter was 2.93%, down from 3.09% in the prior quarter and 3.22% in the same quarter a year ago (non-GAAP). The reduction in PPP income was offset by additional accretion income on purchased loans, higher interest income associated with higher average balances on loans and growth in investment income in the fourth quarter compared to the third quarter of 2021. The increase in net interest income from the same quarter in the prior year was attributable to the same factors as well as the significantly lower rate environment in 2021, which reduced interest expense on deposits $1.2 million, or 64.0%.

The Companys FTE net interest margin includes the impact of acquisition accounting fair value adjustments. During the fourth quarter of 2021, net accretion related to acquisition accounting amounted to $2.1 million compared to $1.3 million in the prior quarter of 2021 and $1.2 million for the same quarter in 2020. Net accretion for the twelve months ended December 31, 2021 amounted to $5.2 million, compared to $3.8 million for the same period in 2020. Estimated remaining net accretion from acquisitions for the periods indicated is as follows (dollars in thousands):

For the years ending (estimated): 2022 $1,1002023 6902024 4292025 2922026 171Thereafter 234

ASSET QUALITY

Nonperforming assets (NPAs) totaled $2.4 million as of December 31, 2021, up slightly from $2.1 million at September 30, 2021, and down significantly from $3.7 million at December 31, 2020. NPAs as a percentage of total assets were 0.07% at December 31, 2021, compared to 0.06% at September 30, 2021 and 0.12% at December 31, 2020.

The Company recorded a negative provision for the fourth quarter of 2021 of $2.0 million compared to the recognition of a provision of $482 thousand in the third quarter and $585 thousand in the fourth quarter in the previous year. The fourth quarter 2021 negative provision compared to the third quarter of 2021 and the fourth quarter of 2020 was the result of continued improvement in economic conditions, ongoing low charge-off and delinquency rates, and overall strong asset quality metrics. In addition, the third quarter provision was higher due to significant loan growth during the period. The allowance for loan losses was $18.7 million at December 31, 2021, compared to $20.6 million at September 30, 2021 and $21.4 million at December 31, 2020. Annualized net charge-offs (recoveries) as a percentage of average loans outstanding were (0.00%) for the fourth quarter of 2021, compared to (0.01%) in the previous quarter and 0.05% for the same quarter in the prior year. The allowance as a percentage of loans held for investment was 0.96% at December 31, 2021, compared to 1.06% at September 30, 2021, and 1.06% at December 31, 2020. Excluding PPP loans, the allowance as a percentage of loans decreased to 0.97% at December 31, 2021, compared to 1.08% at September 30, 2021 and 1.19% at December 31, 2020.

NONINTEREST INCOME

Noninterest income decreased $279 thousand, or 5.4%, to $4.8 million for the quarter ended December 31, 2021 from $5.1 million in the prior quarter and increased $623 thousand, or 14.8%, from the same quarter in the prior year. The fourth quarter of 2021 decrease from the prior quarter was the result of increased write-downs on premises and equipment, net of $190 thousand or 178% and a decrease in mortgage banking income of $243 thousand or 24.6%. The increased expense was partially offset by an increase in other fees and commissions of $162 thousand, or 14.1%, in the fourth quarter compared to the third quarter of 2021.

The fourth quarter of 2021 compared to the fourth quarter of 2020 reflected significant growth in trust fees of $240 thousand, or 23.4%, other fees and commissions of $272 thousand, or 26.2%, income from small business investment companies of $226 thousand, or 95.8%, offset by a $296 thousand, or 28.4%, decrease in mortgage banking income.

NONINTEREST EXPENSE

Noninterest expense for the fourth quarter of 2021 amounted to $15.5 million, up $620 thousand, or 4.2%, when compared to the $14.8 million for the previous quarter and up $804 thousand, or 5.5%, from $14.7 million during the same quarter in the previous year. The increase in the fourth quarter compared to the third quarter of 2021 was due to higher compensation costs associated primarily with incentive accrual adjustments, and in other expenses which included $150,000 in additional charitable contributions. Fourth quarter 2021 increases compared to the same quarter of 2020 were primarily due to increased compensation costs and expense seasonality.

INCOME TAXES

The effective tax rate for the three months ended December 31,2021 was 21.80%, compared to 21.05% for the prior quarter and 20.94% for the same quarter in the prior year. The effective tax rate was relatively consistent among the periods, with slight increases in the 2021 periods attributable to changes in pre-tax earnings and the levels of permanent tax differences.

BALANCE SHEET

Total assets at December 31, 2021 were $3.3 billion, an increase of $45.5 million from September 30, 2021 and $284.6 million from December 31, 2020. The growth over the previous quarter and over the same quarter of 2020 is the result of continued core deposit growth, deployment of excess liquidity into investments, and loan growth.

At December 31, 2021, loans held for investment (net of deferred fees and costs) were $1.9 billion, an increase of $6.2 million, or 1.3%, annualized from September 30, 2021. This increase is net of $25.9 million of PPP loans forgiven during the fourth quarter of 2021. Loans held for investment increased $130.6 million, or 7.2%, from December 31, 2020 excluding PPP loans.

Investment securities available for sale amounted to $692.5 million at December 31, 2021, with growth of $48.6 million, or 7.5%, compared to September 30, 2021, and growth of $226.4 million, or 48.6%, compared to December 31, 2020.

Deposits amounted to $2.9 billion at December 31, 2021, with growth of $28.3 million, or 4.0%, annualized from September 30, 2021 and $279.0 million, or 10.7%, compared to December 31, 2020. The growth over the same quarter and prior quarter of 2020 is a result of continued higher than average cash balances being maintained by customers.

The Company continues to be well-capitalized as defined by regulators, with tangible common equity to tangible assets of 8.17% at December 31, 2021 compared to 8.14% at September 30, 2021 and compared to 8.34% at December 31, 2020. The Companys common equity Tier 1, Tier 1, total, and Tier 1 leverage capital ratios were 12.43%, 13.73%, 14.61% and 9.13%, respectively, at December 31, 2021.

ABOUT AMERICAN NATIONAL

American National is a multi-state bank holding company with total assets of approximately $3.3 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 Nationals management uses these non-GAAP financial measures in its analysis of American Nationals 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 Nationals 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 Nationals 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 Nationals 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.

Consolidated Balance Sheets(Dollars in thousands, except per share data) December 31 2021 2020 (Unaudited) (Audited)Assets Cash and due from banks $ 23,095 $ 30,767 Interest-bearing deposits in other banks 487,773 343,603 Securities available for sale, at fair 692,467 466,091 valueRestricted stock, at cost 8,056 8,715 Loans held for sale 8,481 15,591 Loans, net of deferred fees and costs 1,946,580 2,015,056 Less allowance for loan losses (18,678 ) (21,403 )Net Loans 1,927,902 1,993,653 Premises and equipment, net 35,564 39,723 Other real estate owned, net 143 958 Goodwill 85,048 85,048 Core deposit intangibles, net 4,627 6,091 Bank owned life insurance 29,107 28,482 Other assets 32,334 31,288 Total assets $ 3,334,597 $ 3,050,010 Liabilities Demand deposits -- noninterest-bearing $ 1,009,081 $ 830,094 Demand deposits -- interest-bearing 547,878 501,283 Money market deposits 719,498 666,122 Savings deposits 259,193 217,405 Time deposits 354,703 396,426 Total deposits 2,890,353 2,611,330 Customer repurchase agreements 41,128 42,551 Long-term borrowings 28,232 35,630 Other liabilities 20,092 22,605 Total liabilities 2,979,805 2,712,116 Shareholders' equity Preferred stock, $5 par value, 2,000,000 - - shares authorized, none outstandingCommon stock, $1 par value, 20,000,000shares authorized, 10,766,967 sharesoutstanding at December 31, 2021 and 10,710 10,926 10,982,367 shares outstanding at December31, 2020Capital in excess of par value 147,777 154,850 Retained earnings 201,380 169,681 Accumulated other comprehensive income (5,075 ) 2,437 (loss), netTotal shareholders' equity 354,792 337,894 Total liabilities and shareholders' $ 3,334,597 $ 3,050,010 equity

American National Bankshares Inc.Consolidated Statements of Income(Dollars in thousands, except per share data) For the Three Months Ended For the Twelve Months Ended 12/31/21 9/30/21 12/31/20 12/31/21 12/31/20 (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited)Interest andDividend Income:Interest andfees on $ 21,706 $ 21,974 $ 22,654 $ 87,040 $ 87,700 loansInterest anddividends on securities:Taxable 2,012 1,896 1,536 7,309 6,764 Tax-exempt 92 94 103 385 433 Dividends 115 112 121 464 503 Otherinterest 223 201 84 598 440 incomeTotalinterest and 24,148 24,277 24,498 95,796 95,840 dividendincome Interest Expense:Interest on 655 781 1,821 3,645 9,729 depositsInterest onshort-term 3 3 22 22 259 borrowingsInterest onlong-term 386 400 509 1,738 2,032 borrowingsTotalinterest 1,044 1,184 2,352 5,405 12,020 expense Net Interest 23,104 23,093 22,146 90,391 83,820 Income(Recoveryof)Provision (1,955 ) 482 585 (2,825 ) 8,916 for loanlosses Net InterestIncome After(Recoveryof) 25,059 22,611 21,561 93,216 74,904 Provisionfor LoanLosses Noninterest Income:Trust fees 1,265 1,311 1,025 5,022 4,044 Servicecharges on 695 664 677 2,611 2,557 depositaccountsOther feesand 1,309 1,147 1,037 4,953 3,925 commissionsMortgagebanking 746 989 1,042 4,195 3,514 incomeSecurities 35 - - 35 814 gains, netBrokerage 264 265 192 997 745 feesIncome fromSmallBusiness 462 491 236 1,972 270 InvestmentCompaniesIncome(loss) from 137 132 (58 ) 1,199 321 insuranceinvestmentsLosses onpremises and (297 ) (107 ) (13 ) (885 ) (110 )equipment,netOther 228 231 83 932 763 Totalnoninterest 4,844 5,123 4,221 21,031 16,843 income Noninterest Expense:Salaries andemployee 8,461 8,185 8,225 32,342 29,765 benefitsOccupancyand 1,484 1,513 1,470 6,032 5,586 equipmentFDIC 220 194 206 864 639 assessmentBankfranchise 446 440 425 1,767 1,702 taxCore depositintangible 351 361 391 1,464 1,637 amortizationData 734 748 764 2,958 3,017 processingSoftware 357 344 342 1,368 1,454 Other realestate (17 ) 21 26 131 60 owned, netOther 3,427 3,037 2,810 12,082 10,705 Totalnoninterest 15,463 14,843 14,659 59,008 54,565 expense IncomeBefore 14,440 12,891 11,123 55,239 37,182 Income TaxesIncome Taxes 3,147 2,713 2,329 11,713 7,137 Net Income $ 11,293 $ 10,178 $ 8,794 $ 43,526 $ 30,045 Net IncomePer Common Share:Basic $ 1.05 $ 0.94 $ 0.80 $ 4.00 $ 2.74 Diluted $ 1.05 $ 0.94 $ 0.80 $ 4.00 $ 2.73 WeightedAverageCommon SharesOutstanding:Basic 10,774,268 10,833,875 10,975,349 10,873,817 10,981,623 Diluted 10,776,970 10,836,293 10,978,931 10,877,231 10,985,790

American National Bankshares Inc. Financial Highlights (Dollars inthousands, except pershare data) At or for the Twelve Months 4rd Qtr 3rd Qtr 4th Qtr Ended December 31, 2021 2021 2020 2021 2020 (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited) EARNINGS Interest income $ 24,148 $ 24,277 $ 24,498 $ 95,796 $ 95,840 Interest expense 1,044 1,184 2,352 5,405 12,020 Net interest 23,104 23,093 22,146 90,391 83,820 income(Recovery of)Provision for (1,955 ) 482 585 (2,825 ) 8,916 loan lossesNoninterest 4,844 5,123 4,221 21,031 16,843 incomeNoninterest 15,463 14,843 14,659 59,008 54,565 expenseIncome taxes 3,147 2,713 2,329 11,713 7,137 Net income 11,293 10,178 8,794 43,526 30,045 PER COMMON SHARE Net income per $ 1.05 $ 0.94 $ 0.80 $ 4.00 $ 2.74 share - basicNet income per 1.05 0.94 0.80 4.00 2.73 share - dilutedCash dividends 0.28 0.27 0.27 1.09 1.08 paidBook value per 32.95 32.51 30.77 32.95 30.77 shareBook value pershare - tangible 24.62 24.16 22.47 24.62 22.47 (a)Closing market 37.68 33.04 26.21 37.68 26.21 price FINANCIAL RATIOS Return on 1.35 % 1.27 % 1.18 % 1.37 % 1.08 %average assetsReturn onaverage common 12.82 11.58 10.48 12.50 9.12 equityReturn onaveragetangible 17.63 16.01 14.90 17.34 13.19 common equity(a)Averagecommon equity 10.50 10.99 11.30 10.96 11.88 to averageassetsTangiblecommon equity 8.17 8.14 8.34 8.17 8.34 to tangibleassets (a)Net interestmargin, taxable 2.93 3.09 3.22 3.05 3.30 equivalentEfficiency ratio 53.46 51.03 53.92 51.05 52.80 (a)Effective tax 21.79 21.05 20.94 21.20 19.19 rate PERIOD-END BALANCESSecurities $ 700,523 $ 651,995 $ 474,806 $ 700,523 $ 474,806 Loans held for 8,481 9,518 15,591 8,481 15,591 saleLoans, net 1,946,580 1,940,332 2,015,056 1,946,580 2,015,056 Goodwill andother 89,675 90,026 91,139 89,675 91,139 intangiblesAssets 3,334,597 3,289,063 3,050,010 3,334,597 3,050,010 Assets - 3,244,922 3,199,037 2,958,871 3,244,922 2,958,871 tangible (a)Deposits 2,890,353 2,862,081 2,611,330 2,890,353 2,611,330 Customerrepurchase 41,128 26,595 42,551 41,128 42,551 agreementsLong-term 28,232 28,207 35,630 28,232 35,630 borrowingsShareholders' 354,792 350,387 337,894 354,792 337,894 equityShareholders'equity - 265,117 260,361 246,755 265,117 246,755 tangible (a) AVERAGE BALANCES Securities $ 654,595 $ 569,508 $ 372,529 $ 549,554 $ 347,952 (b)Loans held for 8,121 9,835 8,601 11,257 6,578 saleLoans, net 1,943,238 1,913,446 2,063,397 1,953,121 2,008,683 Interest-earning 3,154,730 2,989,661 2,754,455 2,967,799 2,551,913 assetsGoodwill andother 89,855 90,257 91,358 90,413 91,751 intangiblesAssets 3,357,223 3,199,514 2,971,505 3,176,564 2,773,007 Assets - 3,267,368 3,109,257 2,880,147 3,086,151 2,681,256 tangible (a)Interest-bearing 1,868,695 1,817,595 1,701,395 1,797,385 1,595,694 depositsDeposits 2,914,381 2,768,268 2,536,363 2,736,571 2,342,353 Customerrepurchase 39,645 29,681 40,819 37,632 42,937 agreementsOther short-term - - - - 1 borrowingsLong-term 28,218 28,192 35,617 31,878 35,586 borrowingsShareholders' 352,395 351,646 335,671 348,158 329,353 equityShareholders'equity - 262,540 261,389 244,313 257,745 237,602 tangible (a) AmericanNational Bankshares Inc.Financial Highlights (Dollars inthousands, At or for the Twelve Months except pershare data) 4rd Qtr 3rd Qtr 4th Qtr Ended December 31, 2021 2021 2020 2021 2020 (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited) CAPITAL Weightedaverageshares 10,774,268 10,833,875 10,975,349 10,873,817 10,981,623 outstanding -basicWeightedaverageshares 10,776,970 10,836,293 10,978,931 10,877,231 10,985,790 outstanding -diluted COMMON STOCK REPURCHASE PROGRAM Total sharesof common 16,580 100,764 - 264,579 62,669 stockrepurchasedAverage pricepaid per $ 37.12 $ 32.87 $ - $ 33.10 $ 34.90 share ofcommon stock ALLOWANCE FOR LOAN LOSSESBeginning $ 20,630 $ 20,097 $ 21,088 $ 21,403 $ 13,152 balance(Recovery of)Provision for (1,955 ) 482 585 (2,825 ) 8,916 loan lossesCharge-offs (76 ) (19 ) (331 ) (146 ) (1,006 ) Recoveries 79 70 61 246 341 Ending balance $ 18,678 $ 20,630 $ 21,403 $ 18,678 $ 21,403 LOANS Construction and $ 134,221 $ 120,193 $ 140,071 $ 134,221 $ 140,071 land developmentCommercial realestate - owner 391,517 404,029 373,680 391,517 373,680 occupiedCommercialreal estate - 731,034 713,339 627,569 731,034 627,569 non-owneroccupiedResidential real 289,757 280,351 269,137 289,757 269,137 estateHome equity 93,203 95,317 104,881 93,203 104,881 Commercial and 299,773 320,278 491,256 299,773 491,256 industrialConsumer 7,075 6,825 8,462 7,075 8,462 Total $ 1,946,580 $ 1,940,332 $ 2,015,056 $ 1,946,580 $ 2,015,056 NONPERFORMING ASSETS AT PERIOD-ENDNonperforming loans:90 days past due $ 216 $ - $ 262 $ 216 $ 262 and accruingNonaccrual 2,006 1,903 2,434 2,006 2,434 Other realestate owned 143 213 958 143 958 andrepossessionsNonperforming $ 2,365 $ 2,116 $ 3,654 $ 2,365 $ 3,654 assets ASSET QUALITY RATIOSAllowance forloan losses to 0.96 % 1.06 % 1.06 % 0.96 % 1.06 %total loansAllowance forloan losses to 840.59 1,084.08 793.88 840.59 793.88 nonperformingloansNonperformingassets to total 0.07 0.06 0.12 0.07 0.12 assetsNonperformingloans to total 0.11 0.10 0.13 0.11 0.13 loansAnnualized netcharge-offs (0.00 ) (0.01 ) 0.05 (0.01 ) 0.03 (recoveries) toaverage loans OTHER DATA Fiduciary assetsat period-end $ 752,410 $ 697,528 $ 614,016 $ 752,410 $ 614,016 (c) (d)Retailbrokerageassets at $ 418,850 $ 406,408 $ 362,022 $ 418,850 $ 362,022 period-end(c) (d)Number full-timeequivalent 346 345 342 346 342 employees (e)Number of full 26 26 26 26 26 service officesNumber of loanproduction 1 1 1 1 1 officesNumber of ATMs 36 36 37 36 37 Notes: (a) - This financial measure is not calculated in accordance with GAAP. For areconciliation ofnon-GAAP financial measures, see "Reconciliation of Non-GAAPFinancial 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 theconsolidated balancesheet.(e) - Average for quarter.

Net Interest Income AnalysisFor the Three Months Ended December 31, 2021 and 2020(Dollars in thousands) Interest Average Balance Income/Expense (a) Yield/Rate 2021 2020 2021 2020 2021 2020 (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)Loans: Commercial $ 310,175 $ 507,750 $ 3,386 $ 5,354 4.33 % 4.19 %Real estate 1,634,660 1,556,192 18,244 17,206 4.46 4.42 Consumer 6,524 8,056 112 137 6.81 6.77 Total loans (b) 1,951,359 2,071,998 21,742 22,697 4.45 4.38 Securities: U.S. Treasury 116,629 14,126 242 4 0.83 0.11 Federal agencies 93,042 76,606 265 276 1.14 1.44 & GSEsMortgage-backed 355,492 206,817 1,117 916 1.26 1.77 & CMOsState and 63,148 53,257 314 304 1.99 2.28 municipalOther 26,284 21,723 305 286 4.64 5.27 Total securities 654,595 372,529 2,243 1,786 1.37 1.92 Deposits in 548,776 309,928 223 84 0.16 0.11 other banks Totalinterest-earning 3,154,730 2,754,455 24,208 24,567 3.07 3.56 assets Non-earning 202,493 217,050 assets Total assets $ 3,357,223 $ 2,971,505 Deposits: Demand $ 505,528 $ 433,356 37 50 0.03 0.05 Money market 743,354 647,320 101 380 0.05 0.23 Savings 257,289 215,233 6 16 0.01 0.03 Time 362,524 405,486 511 1,375 0.56 1.35 Total deposits 1,868,695 1,701,395 655 1,821 0.14 0.43 Customerrepurchase 39,645 40,819 3 22 0.03 0.21 agreementsLong-term 28,218 35,617 386 509 5.47 5.72 borrowingsTotalinterest-bearing 1,936,558 1,777,831 1,044 2,352 0.21 0.53 liabilities Noninterestbearing demand 1,045,686 834,968 depositsOther 22,584 23,035 liabilitiesShareholders' 352,395 335,671 equity Totalliabilities and shareholders' equity $ 3,357,223 $ 2,971,505 Interest rate 2.86 % 3.03 %spreadNet interest 2.93 % 3.22 %margin Net interestincome (taxable 23,164 22,215 equivalentbasis)Less: Taxableequivalent 60 69 adjustment (c)Net interest $ 23,104 $ 22,146 income Notes: (a) - Interest income includes net accretion/amortization of acquired loan fairvalue 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 AnalysisFor the Twelve Months Ended December 31, 2021 and 2020(Dollars in thousands) Interest Average Balance Income/Expense (a) Yield/Rate 2021 2020 2021 2020 2021 2020 (Unaudited) (Audited) (Unaudited) (Audited) (Unaudited) (Audited)Loans: Commercial $ 372,538 $ 475,068 $ 18,819 $ 17,768 5.05 % 3.74 %Real estate 1,584,856 1,531,195 67,887 69,525 4.28 4.54 Consumer 6,984 8,998 475 588 6.80 6.53 Total loans (b) 1,964,378 2,015,261 87,181 87,881 4.44 4.36 Securities: U.S. Treasury 57,048 9,010 507 51 0.89 0.57 Federal agencies 97,943 72,112 1,132 1,423 1.16 1.97 & GSEsMortgage-backed 308,158 200,612 4,142 4,060 1.34 2.02 & CMOsState and 61,698 45,836 1,272 1,175 2.06 2.56 municipalOther 24,707 20,382 1,205 1,098 4.88 5.39 Total securities 549,554 347,952 8,258 7,807 1.50 2.24 Deposits in 453,867 188,700 598 440 0.13 0.23 other banks Totalinterest-earning 2,967,799 2,551,913 96,037 96,128 3.24 3.77 assets Non-earning 208,765 221,094 assets Total assets $ 3,176,564 $ 2,773,007 Deposits: Demand $ 476,710 $ 386,790 152 344 0.03 0.09 Money market 710,948 574,510 758 2,634 0.11 0.46 Savings 243,123 198,313 26 117 0.01 0.06 Time 366,604 436,081 2,709 6,634 0.74 1.52 Total deposits 1,797,385 1,595,694 3,645 9,729 0.20 0.61 Customerrepurchase 37,632 42,937 22 259 0.06 0.60 agreementsOther short-term - 1 - - - 0.50 borrowingsLong-term 31,878 35,586 1,738 2,032 5.45 5.71 borrowingsTotalinterest-bearing 1,866,895 1,674,218 5,405 12,020 0.29 0.72 liabilities Noninterestbearing demand 939,186 746,659 depositsOther 22,325 22,777 liabilitiesShareholders' 348,158 329,353 equity Totalliabilities and shareholders' equity $ 3,176,564 $ 2,773,007 Interest rate 2.95 % 3.05 %spreadNet interest 3.05 % 3.30 %margin Net interestincome (taxable 90,632 84,108 equivalentbasis)Less: Taxableequivalent 241 288 adjustment (c)Net interest $ 90,391 $ 83,820 income Notes: (a) - Interest income includes net accretion/amortization of acquired loan fairvalue adjustments and the net accretion/amortization of deferred loan fees andcosts.(b) - Nonaccrual loans are included in the average balances.(c) - A tax rate of 21% was used in adjusting interest on tax-exempt assets toa fully taxable equivalent basis.

American National Bankshares Inc. Reconciliation of Non-GAAP Financial Measures (Dollars inthousands, except pershare data) At or for the Twelve Months 4rd Qtr 3rd Qtr 4th Qtr Ended December 31, 2021 2021 2020 2021 2020 (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited) EFFICIENCY RATIONoninterest $ 15,463 $ 14,843 $ 14,659 $ 59,008 $ 54,565 expenseAdd/subtract: - - (8 ) (111 ) 4 gain/loss onsale of OREOSubtract:core deposit (351 ) (361 ) (391 ) (1,464 ) (1,637 ) intangibleamortization $ 15,112 $ 14,482 $ 14,260 $ 57,433 $ 52,932 Net interest $ 23,104 $ 23,093 $ 22,146 $ 90,391 $ 83,820 incomeTaxequivalent 60 59 69 241 288 adjustmentNoninterest 4,844 5,123 4,221 21,031 16,843 incomeSubtract:gain on (35 ) - - (35 ) (814 ) securitiesAdd: loss on 297 107 13 885 110 fixed assets $ 28,270 $ 28,382 $ 26,449 $ 112,513 $ 100,247 Efficiency 53.46 % 51.03 % 53.92 % 51.05 % 52.80 %ratio TAXEQUIVALENT NET INTERESTINCOMENon-GAAP measures:Interestincome - $ 21,742 $ 22,012 $ 22,697 $ 87,181 $ 87,881 loansInterestincome - 2,466 2,327 1,870 8,856 8,247 investmentsand otherInterestexpense - (655 ) (781 ) (1,821 ) (3,645 ) (9,729 ) depositsInterestexpense -customer (3 ) (3 ) (22 ) (22 ) (259 ) repurchaseagreementsInterestexpense - (386 ) (400 ) (509 ) (1,738 ) (2,032 ) long-termborrowingsTotal netinterest $ 23,164 $ 23,155 $ 22,215 $ 90,632 $ 84,108 incomeLessnon-GAAP measures:Tax benefitonnontaxable (36 ) (38 ) (43 ) (141 ) (181 ) interest -loansTax benefitonnontaxable (24 ) (24 ) (26 ) (100 ) (107 ) interest -securitiesGAAP $ 23,104 $ 23,093 $ 22,146 $ 90,391 $ 83,820 measures RETURN ONAVERAGE TANGIBLEEQUITYReturn onaverage 12.82 % 11.58 % 10.48 % 12.50 % 9.12 %equity (GAAPbasis)Impact ofexcludingaverage 4.81 4.43 4.42 4.84 4.07 goodwill andotherintangiblesReturn onaveragetangible 17.63 % 16.01 % 14.90 % 17.34 % 13.19 %equity(non-GAAP) TANGIBLEEQUITY TO TANGIBLEASSETSEquity toassets ratio 10.64 % 10.65 % 11.08 % 10.64 % 11.08 %(GAAP basis)Impact ofexcludinggoodwill and (2.47 ) (2.51 ) (2.74 ) (2.47 ) (2.74 ) otherintangiblesTangibleequity totangible 8.17 % 8.14 % 8.34 % 8.17 % 8.34 %assets ratio(non-GAAP) TANGIBLE BOOK VALUEBook valueper share $ 32.95 $ 32.51 $ 30.77 $ 32.95 $ 30.77 (GAAP basis)Impact ofexcludinggoodwill and (8.33 ) (8.35 ) (8.30 ) (8.33 ) (8.30 ) otherintangiblesTangiblebook value $ 24.62 $ 24.16 $ 22.47 $ 24.62 $ 22.47 per share(non-GAAP) ADJUSTEDLOAN LOSS ALLOWANCEAllowancefor loan $ 18,678 $ 20,630 $ 21,403 $ 18,678 $ 21,403 lossesCreditdiscount on 4,474 5,258 7,255 4,474 7,255 purchasedloansAdjustedloan loss $ 23,152 $ 25,888 $ 28,658 $ 23,152 $ 28,658 allowance Total loans,net ofdeferred $ 1,946,580 $ 1,940,332 $ 2,015,056 $ 1,946,580 $ 2,015,056 fees andcostsSubtract:PPP loans, (12,239 ) (37,199 ) (211,275 ) (12,239 ) (211,275 ) netTotal loansless PPP $ 1,934,341 $ 1,903,133 $ 1,803,781 $ 1,934,341 $ 1,803,781 loans, net Adjustedloan lossallowance to 1.20 % 1.36 % 1.59 % 1.20 % 1.59 %total loansless PPPloans, net Allowancefor loanlossestototal 0.97 % 1.08 % 1.19 % 0.97 % 1.19 %loans lessPPP loans,net

Contact: Jeffrey W. Farrar Executive Vice President, COO & CFO (434)773-2274 farrarj@amnb.com