• American National Bankshares Inc. Reports Fourth Quarter 2017 Earnings

    Source: Nasdaq GlobeNewswire / 18 Jan 2018 16:05:26   Eastern Standard Time

    • 2017 loan growth $171 million or 14.7%
    • Q4 2017 net income of $2.1 million
    • New tax law negatively impacts earnings with a one-time charge, deferred tax write down of $2.7 million
    • Net interest margin of 3.46% for Q4 2017
    • Average shareholders’ equity for Q4 of $211.9 million is 11.64% of average assets

    DANVILLE, Va., Jan. 18, 2018 (GLOBE NEWSWIRE) -- American National Bankshares Inc. (“American National”) (NASDAQ:AMNB), parent company of American National Bank and Trust Company, today announced net income for the fourth quarter of 2017 of $2,120,000 compared to $4,122,000 for the fourth quarter of 2016, a $2,002,000 or 48.6% decrease.  Basic and diluted net income per common share was $0.25 and $0.24, respectively for the fourth quarter of 2017 compared to $0.48 for the 2016 quarter.  Net income for the fourth quarter of 2017 produced a return on average assets of 0.47%, a return on average equity of 4.00%, and a return on average tangible equity of 5.21%.

    Net income for the year ended December 31, 2017 was $15,249,000 compared to $16,301,000 for 2016, a $1,052,000 or 6.5% decrease. Basic and diluted net income per common share was $1.76 for the 2017 period compared to $1.89 for the 2016 period.

    Deferred Tax Asset Adjustment

    The enactment of the new federal tax law, signed in late December 2017, negatively affected net income for the current quarter and year.

    The law provides for the corporate tax rate to be reduced from 35% to 21%. The new tax rates become effective in 2018, but the 2017 enactment requires companies to revalue their deferred tax assets at the new tax rate in 2017. Accordingly, American National recognized a $2.7 million charge ($0.31 per share) to its deferred tax asset and a corresponding increase in income tax expense in the fourth quarter. 

    Beginning in 2018, income tax expense will be positively affected by the substantial reduction in the corporate tax rate.

    Financial Performance and Overview

    Jeffrey V. Haley, President and Chief Executive Officer, reported, “For 2017 we continued to see robust growth in loans. Our loan portfolio grew $171 million or 14.7%. This growth was widespread throughout our markets, but especially evident in our de novo offices and our Guilford County offices. 

    “Deposits have continued to grow also. They increased $164 million or 12.0%. This growth was also widespread.

    “Our national and local economies are improving and market interest rates are increasing. An improving economy and rising rates are good for American National.

    “Our continuing challenge in this environment is achieving a reasonable yield on our earnings assets, mostly loans, and maintaining control of the cost of our liabilities, mostly deposits. Rising rates are good for us, but the benefit of those increases is reduced by competition for high quality loan customers and, on the liability side, also reduced by the desire of high volume, high value deposit customers for better returns. The net result is continuing and increasing pressure on net interest margin.

    “We are pleased that for the fourth quarter of 2017 our net interest margin was 3.46% compared to 3.45% for the comparable quarter of 2016.

    “For 2017 our net interest margin was 3.50% compared to 3.52% for 2016.

    “Net income for the fourth quarter of 2017 was $2.1 million or $0.24 per diluted share, a decrease of $2.0 million or 48.6%. Without the impact of the one-time, deferred tax write-down, net income would have been $4.8 million or $0.55 per diluted share, approximately a $700,000 increase.

    “Net income for 2017 was $15.2 million or $1.76 per diluted share, a decrease of $1.1 million or 6.5%. Without the impact of the one-time, deferred tax write-down, net income would have been $17.9 million or $2.07 per diluted share, approximately a $1.6 million increase.

    “A lot of factors impacted earnings in 2017, but the major driver was the recently enacted tax reform legislation.

    “The cut in the tax rate for corporations from 35% to 21% is a good event for the economy. However, the 14% reduction in the statutory tax rate requires every corporation to revalue its deferred tax assets. Deferred taxes are how we reconcile the many differences between income as defined by generally accepted accounting principles and income as defined by the IRS. The short version of this long, technical story is that American National had to write down its deferred tax asset $2.7 million, or $0.31 per share, in December 2017, in advance of receiving the benefit of the tax rate cut, which began in January 2018.

    “Notwithstanding the one-time charge to income taxes, the fourth quarter results were excellent. The primary driver was a $1.7 million or 13.6% increase in net interest income, mostly the result of higher interest income on the loan portfolio. Interest income was driven by higher loan volume; average loan volume for the quarter was up $191 million or 17.2%, compared to the first quarter of 2016.”

    Haley concluded, “American National has a long and enviable legacy of a strong balance sheet. Over the past three years we have had substantial growth in that balance sheet, while maintaining high asset quality and exceptional capital ratios. We are working hard to continue that strategy. In the meantime, we are seeing improvement in the local economies of our various markets. That should continue to provide us with increasing opportunities to do what we do best – provide our customers with the best possible banking services and products. We look forward optimistically to the opportunities that 2018 will surely provide.”

    Capital

    American National’s capital ratios remain strong and exceed all regulatory requirements. 

    For the quarter ended December 31, 2017, average shareholders’ equity was 11.64% of average assets, compared to 12.39% for the quarter ended December 31, 2016.

    Book value per common share was $24.08 at December 31, 2017, compared to $23.37 at December 31, 2016.

    Tangible book value per common share was $18.87 at December 31, 2017, compared to $18.08 at December 31, 2016.

    Credit Quality Measurements

    Non-performing assets ($2,201,000 of non-performing loans, $359,000 of 90 day past due and accruing loans, and $1,225,000 of other real estate owned) represented 0.21% of total assets at December 31, 2017, compared to 0.29% at December 31, 2016.

    Annualized net charge offs to average loans were six basis points for the fourth quarter of 2017, compared to zero for the same quarter in 2016.

    Other real estate owned was $1,225,000 at December 31, 2017, compared to $1,328,000 at December 31, 2016, a decrease of $103,000 or 7.8%.

    Merger Related Financial Impact

    The acquisition accounting adjustments related to our two recent acquisitions have had and continue to have a positive impact on net interest income and income before income tax for American National.  The impact of these adjustments is summarized below (dollars in thousands):


    For the quarter ended December 31,  2017  2016
    Net Interest Income $  529  $  427
    Income Before Income Taxes $  449  $  252
         
    For the year ended December 31,  2017  2016
    Net Interest Income $  2,114  $  2,136
    Income Before Income Taxes $  1,586  $  1,172


    The fourth quarter of 2017 includes $348,000 in cash basis accretion income related to the early payoff of several acquired loans, compared to $123,000 for the comparable quarter of 2016.

    For 2017, cash basis accretion income totaled $968,000, compared to $465,000 for 2016.

    Net Interest Income

    Net interest income before the provision for loan losses increased to $14,363,000 in the fourth quarter of 2017 from $12,646,000 in the fourth quarter of 2016, an increase of $1,717,000 or 13.6%.

    For the 2017 quarter, the net interest margin was 3.46% compared to 3.45% for the same quarter in 2016, an increase of 0.01%.

    The major drivers affecting margin were:

    • Positively affecting margin was $179.5 million (11.8%) increase in average earning assets, at a 10 basis point higher yield.
    • Positively affecting margin was a $52.3 million (14.6%) increase in average noninterest bearing deposits.
    • Negatively affecting margin was a $98.3 million (35.5%) increase in the average balance of money market deposits, at a 45 basis point higher cost.

    Provision for Loan Losses and Allowance for Loan Losses

    Provision expense for the fourth quarter of 2017 was ($74,000) compared to $50,000 for the fourth quarter of 2016, a decrease of $124,000. The negative provision expense in the 2017 quarter was related to the payoff and revaluation of various purchased credit impaired loans and adjustment of their related loss reserves.

    The allowance for loan losses as a percentage of total loans was 1.02% at December 31, 2017 compared to 1.10% at December 31, 2016. There was significant growth in the loans in the fourth quarter, a net increase of $41.0 million. The need for additional loan loss provision was mitigated by continued high asset quality, low charge offs, and improvement in various qualitative factors, notably economic, political and regulatory, used in the determination of the allowance.

    Noninterest Income

    Noninterest income totaled $3,804,000 in the fourth quarter of 2017, compared with $3,721,000 in the fourth quarter of 2016, an increase of $83,000 or 2.2%.

    Trust income increased $46,000 (4.8%) from the prior year quarter. Securities gains showed a $47,000 (26.9%) increase from the prior year quarter.  Secondary market mortgage income showed an increase of $61,000 (11.2%), related to higher mortgage volume.

    Noninterest Expense

    Noninterest expense totaled $11,021,000 in the fourth quarter of 2017, compared to $10,360,000 in the fourth quarter of 2016, an increase of $661,000 or 6.4%.

    Salaries expense, the largest component, increased $529,000 or 11.3%.  This increase resulted primarily due to the addition of eight FTEs during 2017. American National added two mortgage loan originators, a trust officer, and several branch level personnel. On the support side of the bank, additions were made to the credit function, risk, and loan review.   

    About American National

    American National is a multi-state bank holding company with total assets of approximately $1.8 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 and two loan production offices. American National Bank also manages an additional $839 million of trust, investment and brokerage assets in its Trust and Investment Services Division. Additional information about the company and the bank is available on the bank's website at www.amnb.com.

    Forward-Looking Statements

    This press release contains forward-looking statements within the meaning of federal securities laws. Certain of the statements involve significant risks and uncertainties. The statements herein are based on certain assumptions and analyses by American National and are factors it believes are appropriate in the circumstances. Actual results could differ materially from those contained in or implied by such statements for a variety of reasons including, but not limited to: changes in interest rates; changes in accounting principles, policies or guidelines; significant changes in the economic scenario; significant changes in regulatory requirements or law; significant changes in securities markets; and changes regarding acquisitions and dispositions. Consequently, all forward-looking statements made herein are qualified by these cautionary statements and the cautionary language in American National's most recent Form 10-K report and other documents filed with the Securities and Exchange Commission.  American National does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.


     American National Bankshares Inc. 
     Consolidated Balance Sheets 
     (Dollars in thousands, except per share data) 
    Unaudited
         
      December 31
    ASSETS  2017   2016 
         
    Cash and due from banks $  28,594  $  20,268 
    Interest-bearing deposits in other banks    23,883     32,939 
         
    Securities available for sale, at fair value    321,337     346,502 
    Restricted stock, at cost    6,110     6,224 
    Loans held for sale    1,639     5,996 
         
    Loans    1,336,125     1,164,821 
      Less allowance for loan losses    (13,603)    (12,801)
        Net Loans    1,322,522     1,152,020 
         
    Premises and equipment, net    25,901     25,439 
    Other real estate owned, net    1,225     1,328 
    Goodwill    43,872     43,872 
    Core deposit intangibles, net    1,191     1,719 
    Bank owned life insurance    18,460     18,163 
    Accrued interest receivable and other assets    20,940     24,168 
         
        Total assets $  1,815,674  $  1,678,638 
         
         
    Liabilities    
      Demand deposits -- noninterest-bearing $  394,344  $  378,600 
      Demand deposits -- interest-bearing    226,914     209,430 
      Money market deposits    403,024     283,035 
      Savings deposits    126,786     120,720 
      Time deposits    383,658     378,855 
        Total deposits    1,534,726     1,370,640 
         
      Short-term borrowings:    
        Customer repurchase agreements    10,726     39,166 
        Other short-term borrowings    24,000     20,000 
      Long-term borrowings    -     9,980 
      Junior subordinated debt    27,826     27,724 
      Accrued interest payable and other liabilities    10,083     9,748 
        Total liabilities    1,607,361     1,477,258 
         
    Shareholders' equity    
      Preferred stock, $5 par, 2,000,000 shares authorized,    
        none outstanding    -     - 
      Common stock, $1 par, 20,000,000 shares authorized,    
        8,650,547 shares outstanding at December 31, 2017 and    
        8,618,051 shares outstanding at December 31, 2016    8,604     8,578 
      Capital in excess of par value    76,179     75,076 
      Retained earnings    126,465     119,600 
      Accumulated other comprehensive loss, net    (2,935)    (1,874)
        Total shareholders' equity    208,313     201,380 
         
        Total liabilities and shareholders' equity $  1,815,674  $  1,678,638 

     

    American National Bankshares Inc.  
    Consolidated Statements of Income 
    (Dollars in thousands, except per share data) 
    Unaudited 
              
      Three Months Ended Twelve Months Ended 
      December 31 December 31 
       2017   2016  2017  2016  
    Interest and Dividend Income:          
       Interest and fees on loans $  14,426  $  12,182 $  55,276 $  47,971  
       Interest and dividends on securities:         
         Taxable    1,271     1,108    4,666    4,454  
         Tax-exempt    439     728    2,043    3,135  
         Dividends    79     76    319    334  
       Other interest income    265     73    734    276  
         Total interest and dividend income    16,480     14,167    63,038    56,170  
              
    Interest Expense:         
       Interest on deposits    1,713     1,201    5,794    5,103  
       Interest on short-term borrowings    79     4    173    10  
       Interest on long-term borrowings    53     82    296    325  
       Interest on junior subordinated debt    272     234    1,028    878  
         Total interest expense    2,117     1,521    7,291    6,316  
              
    Net Interest Income     14,363     12,646    55,747    49,854  
       Provision for loan losses    (74)    50    1,016    250  
              
    Net Interest Income After Provision         
      for Loan Losses     14,437     12,596    54,731    49,604  
              
     Noninterest Income:          
       Trust fees    1,008     962    3,926    3,791  
       Service charges on deposit accounts    504     528    2,002    2,048  
       Other fees and commissions    723     689    2,895    2,680  
       Mortgage banking income    605     544    2,208    1,713  
       Securities gains, net    222     175    812    836  
       Brokerage fees    226     207    829    843  
       Income from Small Business Investment Companies    118     225    236    463  
       Gains (losses) on premises and equipment, net    7     -    344    (9) 
       Other    391     391    975    1,140  
         Total noninterest income    3,804     3,721    14,227    13,505  
              
    Noninterest Expense:          
       Salaries    5,225     4,696    19,829    17,568  
       Employee benefits    1,094     1,061    4,519    4,264  
       Occupancy and equipment     1,120     1,084    4,487    4,246  
       FDIC assessment    137     128    538    647  
       Bank franchise tax    277     226    1,072    995  
       Core deposit intangible amortization    80     175    528    964  
       Data processing    550     488    2,014    1,828  
       Software    291     271    1,144    1,143  
       Other real estate owned, net    130     22    303    336  
       Other     2,117     2,209    8,449    7,810  
         Total noninterest expense    11,021     10,360    42,883    39,801  
              
    Income Before Income Taxes    7,220     5,957    26,075    23,308  
    Income Taxes    5,100     1,835    10,826    7,007  
    Net Income  $  2,120  $  4,122 $  15,249 $  16,301  
              
    Net Income Per Common Share:          
       Basic $  0.25  $  0.48 $  1.76 $  1.89  
       Diluted $  0.24  $  0.48 $  1.76 $  1.89  
    Average Common Shares Outstanding:          
       Basic    8,648,494     8,615,700    8,641,717    8,611,507  
       Diluted    8,668,765     8,629,777    8,660,628    8,621,241  
              

     

    American National Bankshares Inc.              
    Financial Highlights              
    Unaudited               
                     
     (Dollars in thousands, except per share data)             
        4th Qtr 3rd Qtr 4th Qtr  YTD YTD   
         2017   2017   2016    2017   2016    
    EARNINGS               
      Interest income $   16,480   $  16,274  $  14,167   $   63,038   $  56,170    
      Interest expense  2,117    1,936   1,521      7,291    6,316    
      Net interest income 14,363    14,338   12,646    55,747    49,854    
      Provision for loan losses   (74)    440     50      1,016    250    
      Noninterest income 3,804    3,804   3,721      14,227    13,505    
      Noninterest expense 11,021    10,710   10,360      42,883    39,801    
      Income taxes  5,100    2,205   1,835      10,826    7,007    
      Net income  2,120    4,787   4,122    15,249    16,301    
                     
    PER COMMON SHARE              
      Income per share - basic$   0.25   $  0.55  $  0.48   $   1.76   $  1.89    
      Income per share - diluted   0.24      0.55     0.48      1.76      1.89    
      Cash dividends paid   0.25      0.24     0.24      0.97      0.96    
      Book value per share   24.08      24.31     23.37      24.08      23.37    
      Book value per share - tangible (a)   18.87      19.09     18.08      18.87      18.08    
      Closing market price   38.30      41.20     34.80      38.30      34.80    
                     
    FINANCIAL RATIOS              
      Return on average assets 0.47  % 1.08 % 1.00 % 0.87  % 1.02 % 
      Return on average equity 4.00    9.16   8.10    7.34    8.07    
      Return on average tangible equity (b) 5.21    11.81   10.73    9.59    10.85    
      Average equity to average assets 11.64    11.79   12.39    11.82    12.64    
      Tangible equity to tangible assets (a) 9.22    9.51   9.54    9.22    9.54    
      Net interest margin, taxable equivalent 3.46    3.56   3.45    3.50    3.52    
      Efficiency ratio (c)  59.93    59.14   62.32    60.89    61.47    
      Effective tax rate  70.64    31.54   30.80    41.52    30.06    
                     
    PERIOD-END BALANCES             
      Securities $   327,447   $  277,714  $  352,726   $   327,447   $  352,726    
      Loans held for sale   1,639      3,386     5,996      1,639      5,996    
      Loans, net of unearned income   1,336,125      1,295,154     1,164,821      1,336,125      1,164,821    
      Goodwill and other intangibles   45,063      45,143     45,591      45,063      45,591    
      Assets     1,815,674      1,780,541     1,678,638      1,815,674      1,678,638    
      Assets - tangible (a)   1,770,611      1,735,398     1,633,047      1,770,611      1,633,047    
      Deposits    1,534,726      1,480,205     1,370,640      1,534,726      1,370,640    
      Customer repurchase agreements   10,726      43,240     39,166      10,726      39,166    
      Other short-term borrowings   24,000      -     20,000      24,000      20,000    
      Long-term borrowings   27,826      37,796     37,704      27,826      37,704    
      Shareholders' equity   208,313      210,214     201,380      208,313      201,380    
      Shareholders' equity - tangible (a)   163,250      165,071     155,789      163,250      155,789    
                     
    AVERAGE BALANCES             
      Securities (d) $   304,254   $  281,246  $  345,035   $   301,377   $  351,961    
      Loans held for sale   4,269      3,607     4,758      3,185      3,171    
      Loans, net of unearned income   1,301,833      1,291,822     1,110,524      1,262,264      1,060,106    
      Interest-earning assets   1,695,091      1,646,241     1,515,597      1,631,853      1,470,648    
      Goodwill and other intangibles   45,109      45,191     45,693      45,287      46,037    
      Assets     1,820,486      1,773,636     1,643,250      1,758,009      1,598,149    
      Assets - tangible (a)   1,775,377      1,728,445     1,597,557      1,712,722      1,552,112    
      Interest-bearing deposits   1,109,286      1,066,827     986,622      1,061,519      970,728    
      Deposits    1,520,665      1,468,523     1,345,743      1,454,182      1,301,043    
      Customer repurchase agreements   42,540      48,461     45,281      46,335      46,832    
      Other short-term borrowings   951      -     1,087      3,158      656    
      Long-term borrowings   34,331      37,780     37,686      36,887      37,640    
      Shareholders' equity   211,851      209,026     203,603      207,804      202,074    
      Shareholders' equity - tangible (a)   166,742      163,835     157,910      162,517      156,037    
                     
    American National Bankshares Inc.             
    Financial Highlights              
    Unaudited               
                     
     (Dollars in thousands, except per share data)             
        4th Qtr 3rd Qtr 4th Qtr  YTD YTD   
         2017   2017   2016    2017   2016    
    CAPITAL                
      Average common shares outstanding - basic   8,648,494      8,644,310     8,615,700      8,641,717      8,611,507    
      Average common shares outstanding - diluted   8,668,765      8,663,246     8,629,777      8,660,628      8,621,241    
                     
    ALLOWANCE FOR LOAN LOSSES             
      Beginning balance$   13,858   $  13,632  $  12,757   $   12,801   $  12,601    
      Provision for loan losses   (74)    440   50    1,016    250    
      Charge-offs  (280)  (277)  (81)   (690)  (326)   
      Recoveries  99    63   75    476    276    
      Ending balance $   13,603   $  13,858  $  12,801   $   13,603   $  12,801    
                     
    LOANS               
      Construction and land development$   123,147   $  137,869  $  114,258   $   123,147   $  114,258    
      Commercial real estate   637,701      602,434     510,960      637,701      510,960    
      Residential real estate   209,326      209,201     215,104      209,326      215,104    
      Home equity    109,857      110,926     110,751      109,857      110,751    
      Commercial and industrial   251,666      230,484     208,717      251,666      208,717    
      Consumer    4,428      4,240     5,031      4,428      5,031    
      Total  $ 1,336,125   $ 1,295,154  $ 1,164,821   $ 1,336,125   $ 1,164,821    
                     
    NONPERFORMING ASSETS AT PERIOD-END             
      Nonperforming loans:             
        90 days past due and accruing$   359   $  538  $  587   $   359   $  587    
        Nonaccrual  2,201    2,498   2,965    2,201    2,965    
      Other real estate owned 1,225    2,101   1,328    1,225    1,328    
      Nonperforming assets$   3,785   $  5,137  $  4,880   $   3,785   $  4,880    
                     
    ASSET QUALITY RATIOS             
      Allowance for loan losses to total loans 1.02  % 1.07 % 1.10 % 1.02  % 1.10 % 
      Allowance for loan losses to             
        nonperforming loans 531.37    456.46   360.39    531.37    360.39    
      Nonperforming assets to total assets 0.21    0.29   0.29    0.21    0.29    
      Nonperforming loans to total loans 0.19    0.23   0.30    0.19    0.30    
      Annualized net charge-offs              
        to average loans 0.06    0.07   0.00    0.02    0.00    
                     
                     
    OTHER DATA              
      Fiduciary assets at period-end (e) (f)$   518,284   $  517,294  $  498,767   $   518,284   $  498,767    
      Retail brokerage assets at period-end (e) (f)$   321,151   $  307,281  $  282,454   $   321,151   $  282,454    
      Number full-time equivalent employees (g)   328      335     320      328      320    
      Number of full service offices   26      26     26      26      26    
      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 December 31, 2017 and 2016
     (Dollars in thousands)
     Unaudited
                    
            Interest     
        Average Balance Income/Expense Yield/Rate 
                    
         2017  2016  2017  2016 2017 2016 
    Loans:             
     Commercial$  233,689  $  204,489  $  2,253  $  2,003  3.82 %3.90 %
     Real estate   1,068,273     905,721     12,171     10,143  4.56  4.48  
     Consumer   4,140     5,072     81     98  7.76  7.69  
     Total loans
       1,306,102     1,115,282     14,505     12,244  4.44  4.39  
                    
    Securities:            
     Federal agencies & GSEs   104,523     96,134     508     423  1.94  1.76  
     Mortgage-backed & CMOs   92,339     79,643     501     400  2.17  2.01  
     State and municipal   92,636     152,518     829     1,311  3.58  3.44  
     Other    14,756     16,740     171     150  4.64  3.58  
     Total securities
       304,254     345,035     2,009     2,284  2.64  2.65  
                    
    Deposits in other banks   84,735     55,280     265     73  1.24  0.53  
                    
     Total interest-earning assets   1,695,091     1,515,597     16,779     14,601  3.95  3.85  
                    
    Non-earning assets   125,395     127,653          
                    
     Total assets
    $ 1,820,486  $ 1,643,250          
                    
    Deposits:            
     Demand$  220,150  $  204,910     11     10  0.02  0.02  
     Money market   374,691     276,435     623     148  0.66  0.21  
     Savings   126,274     119,770     10     9  0.03  0.03  
     Time    388,171     385,507     1,069     1,034  1.09  1.07  
     Total deposits
       1,109,286     986,622     1,713     1,201  0.61  0.48  
                    
    Customer repurchase agreements   42,540     45,281     74     2  0.69  0.02  
    Other short-term borrowings   951     1,087     4     2  1.68  0.74  
    Long-term borrowings   34,331     37,686     326     316  3.80  3.35  
     Total interest-bearing            
             liabilities
       1,187,108     1,070,676     2,117     1,521  0.71  0.57  
                    
    Noninterest bearing demand deposits   411,379     359,121          
    Other liabilities   10,148     9,850          
    Shareholders' equity   211,851     203,603          
     Total liabilities and
                
                 shareholders' equity$ 1,820,486  $ 1,643,250          
                    
    Interest rate spread        3.24 %3.28 %
    Net interest margin        3.46 %3.45 %
                    
    Net interest income (taxable equivalent basis)      14,662     13,080      
    Less: Taxable equivalent adjustment       299     434      
    Net interest income    $ 14,363  $ 12,646      
                    

     

     Net Interest Income Analysis
     For the Years Ended December 31, 2017 and 2016
     (Dollars in thousands)
     Unaudited
                    
            Interest     
        Average Balance Income/Expense Yield/Rate 
                    
         2017  2016  2017  2016 2017 2016 
    Loans:             
     Commercial$  229,239  $  198,326  $  8,829  $  7,856  3.85 %3.96 %
     Real estate   1,031,558     859,721     46,400     39,763  4.50  4.63  
     Consumer   4,652     5,230     352     605  7.57  11.57  
      Total loans   1,265,449     1,063,277     55,581     48,224  4.39  4.54  
                    
    Securities:            
     Federal agencies & GSEs   97,670     96,009     1,849     1,674  1.89  1.74  
     Mortgage-backed & CMOs   82,042     79,720     1,725     1,635  2.10  2.05  
     State and municipal   105,869     160,279     3,781     5,647  3.57  3.52  
     Other    15,796     15,953     707     560  4.48  3.51  
      Total securities   301,377     351,961     8,062     9,516  2.68  2.70  
                    
    Deposits in other banks   65,027     55,410     734     276  1.13  0.50  
                    
     Total interest-earning assets   1,631,853     1,470,648     64,377     58,016  3.95  3.94  
                    
    Non-earning assets   126,156     127,501          
                    
      Total assets$ 1,758,009  $ 1,598,149          
                    
    Deposits:            
     Demand$  217,833  $  216,521     43     99  0.02  0.05  
     Money market   335,085     239,262     1,668     432  0.50  0.18  
     Savings   125,157     118,144     38     47  0.03  0.04  
     Time    383,444     396,801     4,045     4,525  1.05  1.14  
      Total deposits   1,061,519     970,728     5,794     5,103  0.55  0.53  
                    
    Customer repurchase agreements   46,335     46,832     142     5  0.31  0.01  
    Other short-term borrowings   3,158     656     31     5  0.98  0.76  
    Long-term borrowings   36,887     37,640     1,324     1,203  3.59  3.20  
     Total interest-bearing            
             liabilities
       1,147,899     1,055,856     7,291     6,316  0.64  0.60  
                    
    Noninterest bearing demand deposits   392,663     330,315          
    Other liabilities   9,643     9,904          
    Shareholders' equity   207,804     202,074          
      Total liabilities and            
                   shareholders' equity$ 1,758,009  $ 1,598,149          
                    
    Interest rate spread        3.31 %3.34 %
    Net interest margin        3.50 %3.52 %
                    
    Net interest income (taxable equivalent basis)      57,086     51,700      
    Less: Taxable equivalent adjustment       1,339     1,846      
    Net interest income    $ 55,747  $ 49,854      
                    

     

    Contact:      William W. Traynham, Chief Financial Officer
                         434-773-2242
                         traynhamw@amnb.com

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