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American National Bankshares Reports First Quarter Earnings
Source: Nasdaq GlobeNewswire / 21 Apr 2022 07:30:01 America/New_York
DANVILLE, Va., April 21, 2022 (GLOBE NEWSWIRE) -- American National Bankshares Inc. (NASDAQ: AMNB) (“American National” or the “Company”) today reported first quarter 2022 earnings of $9.0 million, or $0.84 per diluted common share. Those results compare to earnings of $11.3 million, or $1.03 per diluted common share, during the same quarter in the prior year, and earnings of $11.3 million, or $1.05 per diluted common share, for the fourth quarter of 2021.
President and Chief Executive Officer, Jeffrey V. Haley, commented, “American National delivered a solid first quarter for earnings and balance sheet growth. Core loan growth was a highlight and a strengthened economy allowed for some additional release of allowance for credit losses that were built during the early stages of the pandemic. While we are positive on the economic activity in our markets, there are headwinds associated with high inflation, continuing supply chain issues and the tragedy unfolding in Ukraine. It remains to be seen whether the economy will be negatively impacted in the longer term. Although, we tend to perform better financially in a rising rate environment, the rapid rise in treasury interest rates and anticipated monetary policy tightening has created some additional pressure on loan production and competitive pricing as some competitors have been slow to respond to these rate increases. Mortgage rates are significantly higher than one year ago, having some impact on the refinance market and affordability in general. Our customers seem to be thriving well in this environment, and we are most appreciative of their business and support.”
First quarter 2022 highlights include:
- Average loans held for investment, excluding U.S. Small Business Administration Paycheck Protection Program (“PPP”) loans, grew $45.4 million, or 9.5% annualized, during the first quarter as compared to the previous quarter.
- Earnings produced a return on average tangible common equity of 14.14% for the first quarter of 2022, compared to 17.63% in the previous quarter and 18.45% for the same quarter in the prior year (non-GAAP).
- Average deposits declined 4.6% annualized during the quarter but increased 11.6% over the same quarter of 2021; the cost of interest-bearing deposits decreased to 0.12% in the first quarter, compared to 0.14% in the previous quarter and 0.30% in the same quarter of the prior year.
- Fully taxable equivalent (“FTE”) net interest margin was 2.63% for the quarter, down from 2.93% in the fourth quarter of 2021 and from 3.20% in the same quarter of the prior year (non-GAAP).
- Noninterest revenues increased $756 thousand, or 15.6%, when compared to the previous quarter, and decreased $322 thousand, or 5.4%, compared to the same quarter in the prior year.
- Noninterest expense decreased $114 thousand, or less than 1%, when compared to the previous quarter, and increased $1.3 million, or 9.1%, when compared to the same quarter in the prior year.
- The Company recognized a negative provision for loan losses in the first quarter of 2022 of $758 thousand compared to a negative provision of $2.0 million in the fourth quarter of 2021 and no provision expense or recovery in the first quarter of 2021. Annualized net charge-offs (recoveries) as a percentage of average loans outstanding were (0.01%) for the first quarter of 2022, compared to none in the previous quarter or in the same quarter in the prior year.
- Nonperforming assets as a percentage of total assets were 0.06% at March 31, 2022, down from 0.07% at December 31, 2021, and down from 0.10% at March 31, 2021.
NET INTEREST INCOME
Net interest income for the first quarter of 2022 decreased by $2.7 million, or 11.5%, to $20.5 million compared to $23.1 million for the fourth quarter of 2021. The first quarter of 2022 compared to the same quarter of 2021 reflected a decrease of $2.0 million, or 8.8%. The FTE net interest margin for the quarter was 2.63%, down from 2.93% in the prior quarter and 3.20% in the same quarter a year ago (non-GAAP). The first quarter of 2022 recognized $714 thousand less PPP income and $1.5 million less accretion income compared to the fourth quarter of 2021. The decrease in PPP income of $3.1 million offset by the reduced deposit interest expense of $718 thousand drove the decrease in net interest income from the same quarter of the prior year.
The Company’s FTE net interest margin includes the impact of acquisition accounting fair value adjustments. During the first quarter of 2022, net accretion related to acquisition accounting amounted to $566 thousand compared to $2.1 million in the prior quarter and $948 thousand for the same quarter in 2021. There were multiple acquired loan cash basis collections in the fourth quarter of 2021 accounting for the significant difference between quarters. Estimated remaining net accretion from acquisitions for the periods indicated is as follows (dollars in thousands):
For the years ending (estimated): 2022 $ 725 2023 732 2024 434 2025 292 2026 177 Thereafter 246 ASSET QUALITY
Nonperforming assets (“NPAs”) totaled $2.0 million as of March 31, 2022, down from $2.4 million at December 31, 2021, and down substantially from $2.9 million at March 31, 2021. NPAs as a percentage of total assets were 0.06% at March 31, 2022, compared to 0.07% at December 31, 2021 and 0.10% at March 31, 2021. The Company recorded a negative provision for the first quarter of 2022 of $758 thousand compared to a negative provision of $2.0 million in the previous quarter and no provision or recovery in the first quarter of the previous year. The first quarter of 2022 and fourth quarter of 2021 negative provisions were the result of continued improvement in economic conditions, ongoing low charge-off and delinquency rates, and overall strong asset quality metrics. The provision expense that would have been required in the first quarter of 2021 based on loan activity was offset by the adjustments to qualitative factors for improved economic conditions.
The allowance for loan losses was $18.0 million at March 31, 2022, compared to $18.7 million at December 31, 2021 and $21.4 million at March 31, 2021. Annualized net charge-offs (recoveries) as a percentage of average loans outstanding were (0.01%) for the first quarter of 2022, compared to none in the previous quarter or in the same quarter in the prior year. The allowance as a percentage of loans held for investment was 0.90% at March 31, 2022, compared to 0.96% at December 31, 2021, and 1.08% at March 31, 2021. Excluding PPP loans, the allowance as a percentage of loans decreased to 0.91% at March 31, 2022, compared to 0.97% at December 31, 2021 and 1.19% at March 31, 2021.
NONINTEREST INCOME
Noninterest income increased $756 thousand, or 15.6%, to $5.6 million for the quarter ended March 31, 2022 from $4.8 million in the prior quarter and decreased $322 thousand, or 5.4%, from the same quarter in the prior year. The increase in the first quarter of 2022 from the fourth quarter of 2021 was primarily the result of increased income of $310 thousand, or over 200%, in income from insurance investments, non-recurring estate settlement revenues of $200 thousand included in trust and brokerage fees and a gain on premises and equipment, net compared to a loss in the 2021 period.
The first quarter of 2022 compared to the first quarter of 2021 reflected a significant decrease in mortgage banking income of $645 thousand, or 48.9%, and income from insurance investments of $341 thousand, or 43.3%, partially offset by increased trust and brokerage income growth of $385 thousand, or 27.0%,
NONINTEREST EXPENSE
Noninterest expense for the first quarter of 2022 amounted to $15.3 million, down $114 thousand, or less than a 1% decrease, when compared to the $15.5 million for the previous quarter and up $1.3 million, or 9.1%, from $14.1 million during the same quarter in the previous year. The decrease in the first quarter compared to the fourth quarter of 2021 was the net of increased benefit and data processing expenses and decreased charitable contributions.
The first quarter 2022 increase compared to the same quarter of 2021, was primarily due to increased salary and employee benefits expenses including annual salary adjustments and incentive accruals, and reduced loan origination deferral costs. The first quarter of 2021 reflected a reduction in salaries and benefits expense associated with the deferral of $604 thousand in costs associated with the origination of PPP loans during the quarter.
INCOME TAXES
The effective tax rate for the three months ended March 31, 2022 was 21.49%, compared to 21.79% for the prior quarter and 20.95% for the same quarter in the prior year. The effective tax rate was relatively consistent in the last two quarters, with a slight increase from the March 31, 2021 quarter attributable to changes in pre-tax earnings and the levels of permanent tax differences.
BALANCE SHEET
Total assets at March 31, 2022 were $3.3 billion, an increase of $11.6 million from December 31, 2021 and $272.8 million from March 31, 2021. The growth over the previous quarter and over the same quarter of 2021 is the result of continued core deposit growth and loan growth.
At March 31, 2022, loans held for investment (net of deferred fees and costs) were $2.0 billion, an increase of $41.4 million, or 8.5%, annualized from December 31, 2021. This increase is net of $11.6 million of PPP loans forgiven during the first quarter of 2022. Loans held for investment, excluding PPP loans, increased $192.5 million, or 10.7%, from March 31, 2021. The Company had PPP loan net balances remaining of $689 thousand at March 31, 2022 compared to $12.2 million at December 31, 2021 and $183.8 million at March 31, 2021.
Investment securities available for sale amounted to $686.2 million at March 31, 2022, with a less than 1% decrease of $6.3 million, compared to December 31, 2021, and growth of $204.0 million, or 42.3%, compared to March 31, 2021.
Deposits amounted to $2.9 billion at March 31, 2022, with growth of $35.9 million, or 5.0%; annualized from December 31, 2021 and $293.7 million, or 11.2%, compared to March 31, 2021. The growth over the prior quarter and same quarter of 2021 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 7.54% at March 31, 2022 compared to 8.17% at December 31, 2021 and compared to 8.42% at March 31, 2021 (non-GAAP). The Company’s common equity Tier 1, Tier 1, total, and Tier 1 leverage capital ratios were 12.04%, 13.28%, 14.09% and 9.31%, respectively, at March 31, 2022.
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 $1.1 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 March 31 2022 2021 Assets Cash and due from banks $ 34,506 $ 33,266 Interest-bearing deposits in other banks 452,562 383,984 Securities available for sale, at fair value 686,176 482,143 Restricted stock, at cost 8,484 8,024 Loans held for sale 2,524 17,929 Loans, net of deferred fees and costs 1,988,008 1,978,640 Less allowance for loan losses (17,988 ) (21,416 ) Net Loans 1,970,020 1,957,224 Premises and equipment, net 35,383 39,336 Other real estate owned, net 143 443 Goodwill 85,048 85,048 Core deposit intangibles, net 4,297 5,710 Bank owned life insurance 29,159 28,635 Other assets 37,936 31,690 Total assets $ 3,346,238 $ 3,073,432 Liabilities Demand deposits -- noninterest-bearing $ 1,024,778 $ 907,721 Demand deposits -- interest-bearing 539,252 455,457 Money market deposits 759,782 688,051 Savings deposits 271,384 236,518 Time deposits 331,011 344,787 Total deposits 2,926,207 2,632,534 Customer repurchase agreements 38,527 39,205 Long-term borrowings 28,257 35,656 Other liabilities 18,173 24,244 Total liabilities 3,011,164 2,731,639 Shareholders' equity Preferred stock, $5 par value, 2,000,000 shares authorized, none outstanding - - Common stock, $1 par value, 20,000,000 shares authorized, 10,713,958 shares outstanding at March 31, 2022 and 10,958,171 shares outstanding at March 31, 2021 10,638 10,894 Capital in excess of par value 144,848 153,651 Retained earnings 207,373 178,015 Accumulated other comprehensive loss, net (27,785 ) (767 ) Total shareholders' equity 335,074 341,793 Total liabilities and shareholders' equity $ 3,346,238 $ 3,073,432
American National Bankshares Inc. Consolidated Statements of Income (Dollars in thousands, except per share data) Unaudited For the Three Months Ended 3/31/22 12/31/21 3/31/21 Interest and Dividend Income: Interest and fees on loans $ 18,788 $ 21,706 $ 22,273 Interest and dividends on securities: Taxable 2,239 2,012 1,632 Tax-exempt 90 92 103 Dividends 113 115 119 Other interest income 177 223 77 Total interest and dividend income 21,407 24,148 24,204 Interest Expense: Interest on deposits 569 655 1,287 Interest on short-term borrowings 6 3 11 Interest on long-term borrowings 379 386 483 Total interest expense 954 1,044 1,781 Net Interest Income 20,453 23,104 22,423 (Recovery of) provision for loan losses (758 ) (1,955 ) - Net Interest Income After (Recovery of) Provision for Loan Losses 21,211 25,059 22,423 Noninterest Income: Trust and brokerage fees 1,809 1,529 1,424 Service charges on deposit accounts 689 695 622 Interchange fees 981 1,127 889 Other fees and commissions 266 182 250 Mortgage banking income 673 746 1,318 Securities gains, net - 35 - Income from Small Business Investment Companies 493 462 428 Income from insurance investments 447 137 788 Gains (losses) on premises and equipment, net 4 (297 ) (49 ) Other 238 228 252 Total noninterest income 5,600 4,844 5,922 Noninterest Expense: Salaries and employee benefits 8,598 8,461 7,518 Occupancy and equipment 1,542 1,484 1,533 FDIC assessment 239 220 224 Bank franchise tax 476 446 438 Core deposit intangible amortization 330 351 381 Data processing 847 734 778 Software 363 357 329 Other real estate owned, net (1 ) (17 ) 117 Other 2,955 3,427 2,747 Total noninterest expense 15,349 15,463 14,065 Income Before Income Taxes 11,462 14,440 14,280 Income Taxes 2,463 3,147 2,991 Net Income $ 8,999 $ 11,293 $ 11,289 Net Income Per Common Share: Basic $ 0.84 $ 1.05 $ 1.03 Diluted $ 0.84 $ 1.05 $ 1.03 Weighted Average Common Shares Outstanding: Basic 10,754,287 10,774,268 10,971,466 Diluted 10,756,902 10,776,970 10,976,177
American National Bankshares Inc. Financial Highlights Unaudited (Dollars in thousands, except per share data) 1st Qtr 4th Qtr 1st Qtr 2022 2021 2021 EARNINGS Interest income $ 21,407 $ 24,148 $ 24,204 Interest expense 954 1,044 1,781 Net interest income 20,453 23,104 22,423 (Recovery of) provision for loan losses (758 ) (1,955 ) - Noninterest income 5,600 4,844 5,922 Noninterest expense 15,349 15,463 14,065 Income taxes 2,463 3,147 2,991 Net income 8,999 11,293 11,289 PER COMMON SHARE Net income per share - basic $ 0.84 $ 1.05 $ 1.03 Net income per share - diluted 0.84 1.05 1.03 Cash dividends paid 0.28 0.28 0.27 Book value per share 31.27 32.95 31.19 Book value per share - tangible (a) 22.94 24.62 22.91 Closing market price 37.68 37.68 33.07 FINANCIAL RATIOS Return on average assets 1.08 % 1.35 % 1.49 % Return on average common equity 10.24 12.82 13.19 Return on average tangible common equity (a) 14.14 17.63 18.45 Average common equity to average assets 10.59 10.50 11.31 Tangible common equity to tangible assets (a) 7.54 8.17 8.42 Net interest margin, taxable equivalent 2.63 2.93 3.20 Efficiency ratio (a) 57.53 53.46 47.70 Effective tax rate 21.49 21.79 20.95 PERIOD-END BALANCES Securities $ 694,660 $ 700,523 $ 490,167 Loans held for sale 2,524 8,481 17,929 Loans, net 1,988,008 1,946,580 1,978,640 Goodwill and other intangibles 89,345 89,675 90,758 Assets 3,346,238 3,334,597 3,073,432 Assets - tangible (a) 3,256,893 3,244,922 2,982,674 Deposits 2,926,207 2,890,353 2,632,534 Customer repurchase agreements 38,527 41,128 39,205 Long-term borrowings 28,257 28,232 35,656 Shareholders' equity 335,074 354,792 341,793 Shareholders' equity - tangible (a) 245,729 265,117 251,035 AVERAGE BALANCES Securities (b) $ 710,873 $ 654,595 $ 458,760 Loans held for sale 4,324 8,121 11,237 Loans, net 1,966,586 1,943,238 2,009,166 Interest-earning assets 3,126,561 3,154,730 2,814,291 Goodwill and other intangibles 89,525 89,855 90,976 Assets 3,320,314 3,357,223 3,026,952 Assets - tangible (a) 3,230,789 3,267,368 2,935,976 Interest-bearing deposits 1,880,873 1,868,695 1,740,418 Deposits 2,880,893 2,914,381 2,582,539 Customer repurchase agreements 41,337 39,645 43,746 Long-term borrowings 28,241 28,218 35,640 Shareholders' equity 351,539 352,395 342,231 Shareholders' equity - tangible (a) 262,014 262,540 251,255 American National Bankshares Inc. Financial Highlights Unaudited (Dollars in thousands, except per share data) 1st Qtr 4th Qtr 1st Qtr 2022 2021 2021 CAPITAL Weighted average shares outstanding - basic 10,754,287 10,774,268 10,971,466 Weighted average shares outstanding - diluted 10,756,902 10,776,970 10,976,177 COMMON STOCK REPURCHASE PROGRAM Total shares of common stock repurchased 88,929 16,580 54,023 Average price paid per share of common stock $ 38.18 $ 37.12 $ 29.51 ALLOWANCE FOR LOAN LOSSES Beginning balance $ 18,678 $ 20,630 $ 21,403 (Recovery of) provision for loan losses (758 ) (1,955 ) - Charge-offs (37 ) (76 ) (22 ) Recoveries 105 79 35 Ending balance $ 17,988 $ 18,678 $ 21,416 LOANS Construction and land development $ 148,276 $ 134,221 $ 159,801 Commercial real estate - owner occupied 402,306 391,517 364,549 Commercial real estate - non-owner occupied 752,817 731,034 628,742 Residential real estate 295,949 289,757 266,595 Home equity 89,593 93,203 100,643 Commercial and industrial 291,697 299,773 447,109 Consumer 7,370 7,075 11,201 Total $ 1,988,008 $ 1,946,580 $ 1,978,640 NONPERFORMING ASSETS AT PERIOD-END Nonperforming loans: 90 days past due and accruing $ 71 $ 216 $ 162 Nonaccrual 1,762 2,006 2,323 Other real estate owned and repossessions 143 143 443 Nonperforming assets $ 1,976 $ 2,365 $ 2,928 ASSET QUALITY RATIOS Allowance for loan losses to total loans 0.90 % 0.96 % 1.08 % Allowance for loan losses to nonperforming loans 981.34 840.59 861.81 Nonperforming assets to total assets 0.06 0.07 0.10 Nonperforming loans to total loans 0.09 0.11 0.13 Annualized net recoveries to average loans (0.01 ) (0.00 ) (0.00 ) OTHER DATA Fiduciary assets at period-end (c) (d) $ 727,022 $ 752,410 $ 666,653 Retail brokerage assets at period-end (c) (d) $ 405,742 $ 418,850 $ 382,419 Number full-time equivalent employees (e) 338 346 340 Number of full service offices 26 26 26 Number of loan production offices 1 1 1 Number of ATMs 36 36 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. (c) - Market value. (d) - Assets are not owned by American National and are not reflected in the consolidated balance sheet. (e) - Average for quarter.
American National Bankshares Inc. Net Interest Income Analysis For the Three Months Ended March 31, 2022 and 2021 (Dollars in thousands) Unaudited Interest Average Balance Income/Expense (a) Yield/Rate 2022 2021 2022 2021 2022 2021 Loans: Commercial $ 290,051 $ 464,677 $ 2,632 $ 5,790 3.68 % 5.05 % Real estate 1,674,350 1,548,091 16,078 16,390 3.84 4.23 Consumer 6,509 7,635 112 127 6.98 6.75 Total loans (b) 1,970,910 2,020,403 18,822 22,307 3.83 4.43 Securities: U.S. Treasury 147,001 15,303 323 12 0.88 0.31 Federal agencies & GSEs 104,905 105,337 293 305 1.12 1.16 Mortgage-backed & CMOs 361,583 258,003 1,207 973 1.34 1.51 State and municipal 67,524 58,493 331 315 1.96 2.15 Other 29,860 21,624 312 275 4.18 5.09 Total securities 710,873 458,760 2,466 1,880 1.39 1.64 Deposits in other banks 444,778 335,128 177 77 0.16 0.09 Total interest-earning assets 3,126,561 2,814,291 21,465 24,264 2.75 3.46 Non-earning assets 193,753 212,661 Total assets $ 3,320,314 $ 3,026,952 Deposits: Demand $ 525,508 $ 450,953 37 40 0.03 0.04 Money market 752,386 683,948 101 276 0.05 0.16 Savings 264,057 227,404 7 7 0.01 0.01 Time 338,922 378,113 424 964 0.51 1.03 Total deposits 1,880,873 1,740,418 569 1,287 0.12 0.30 Customer repurchase agreements 41,337 43,746 6 11 0.06 0.10 Long-term borrowings 28,241 35,640 379 483 5.37 5.42 Total interest-bearing liabilities 1,950,451 1,819,804 954 1,781 0.20 0.40 Noninterest bearing demand deposits 1,000,020 842,121 Other liabilities 18,304 22,796 Shareholders' equity 351,539 342,231 Total liabilities and shareholders' equity $ 3,320,314 $ 3,026,952 Interest rate spread 2.55 % 3.06 % Net interest margin 2.63 % 3.20 % Net interest income (taxable equivalent basis) 20,511 22,483 Less: Taxable equivalent adjustment (c) 58 60 Net interest income $ 20,453 $ 22,423 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. (c) - A tax rate of 21% was used in adjusting interest on tax-exempt assets to a fully taxable equivalent basis.
American National Bankshares Inc. Reconciliation of Non-GAAP Financial Measures Unaudited (Dollars in thousands, except per share data) 1st Qtr 4th Qtr 1st Qtr 2022 2021 2021 EFFICIENCY RATIO Noninterest expense $ 15,349 $ 15,463 $ 14,065 Subtract: loss on sale of OREO - - (111 ) Subtract: core deposit intangible amortization (330 ) (351 ) (381 ) $ 15,019 $ 15,112 $ 13,573 Net interest income $ 20,453 $ 23,104 $ 22,423 Tax equivalent adjustment 58 60 60 Noninterest income 5,600 4,844 5,922 Subtract: gain on securities - (35 ) - Add/subtract: (gain)/loss on fixed assets (4 ) 297 49 $ 26,107 $ 28,270 $ 28,454 Efficiency ratio 57.53 % 53.46 % 47.70 % TAX EQUIVALENT NET INTEREST INCOME Non-GAAP measures: Interest income - loans $ 18,822 $ 21,742 $ 22,307 Interest income - investments and other 2,643 2,466 1,957 Interest expense - deposits (569 ) (655 ) (1,287 ) Interest expense - customer repurchase agreements (6 ) (3 ) (11 ) Interest expense - long-term borrowings (379 ) (386 ) (483 ) Total net interest income $ 20,511 $ 23,164 $ 22,483 Less non-GAAP measures: Tax benefit on nontaxable interest - loans (34 ) (36 ) (34 ) Tax benefit on nontaxable interest - securities (24 ) (24 ) (26 ) GAAP measures $ 20,453 $ 23,104 $ 22,423 RETURN ON AVERAGE TANGIBLE EQUITY Return on average equity (GAAP basis) 10.24 % 12.82 % 13.19 % Impact of excluding average goodwill and other intangibles 3.90 4.81 5.26 Return on average tangible equity (non-GAAP) 14.14 % 17.63 % 18.45 % TANGIBLE EQUITY TO TANGIBLE ASSETS Equity to assets ratio (GAAP basis) 10.01 % 10.64 % 11.12 % Impact of excluding goodwill and other intangibles (2.47 ) (2.47 ) (2.70 ) Tangible equity to tangible assets ratio (non-GAAP) 7.54 % 8.17 % 8.42 % TANGIBLE BOOK VALUE Book value per share (GAAP basis) $ 31.27 $ 32.95 $ 31.19 Impact of excluding goodwill and other intangibles (8.33 ) (8.33 ) (8.28 ) Tangible book value per share (non-GAAP) $ 22.94 $ 24.62 $ 22.91 ADJUSTED LOAN LOSS ALLOWANCE Allowance for loan losses $ 17,988 $ 18,678 $ 21,416 Credit discount on purchased loans 4,001 4,474 6,528 Adjusted loan loss allowance $ 21,989 $ 23,152 $ 27,944 Total loans, net $ 1,988,008 $ 1,946,580 $ 1,978,640 Subtract: PPP loans, net (689 ) (12,239 ) (183,783 ) Total loans less PPP loans, net $ 1,987,319 $ 1,934,341 $ 1,794,857 Adjusted loan loss allowance to total loans less PPP loans, net 1.11 % 1.20 % 1.56 % Allowance for loan losses to total loans less PPP loans, net 0.91 % 0.97 % 1.19 % Contact: Jeffrey W. Farrar Executive Vice President, COO & CFO (434)773-2274 farrarj@amnb.com
- Average loans held for investment, excluding U.S. Small Business Administration Paycheck Protection Program (“PPP”) loans, grew $45.4 million, or 9.5% annualized, during the first quarter as compared to the previous quarter.