DANVILLE, Va., April 27 /PRNewswire-FirstCall/ -- American National Bankshares Inc. , parent company of American National Bank and Trust Company, today announced first quarter 2009 net income of $0.77 million. Earnings per share were $0.13 on both a basic and diluted basis. This net income produced returns on average assets and average equity of 0.38% and 2.99%, respectively. Annualized return on average tangible equity was 4.32%.
Financial Performance
"Our first quarter earnings are down $1.5 million from the same period a year ago. While we are very disappointed in our results," stated Charles H. Majors, President and Chief Executive Officer, "we are pleased American National remains profitable with strong capital and credit quality measures.
"The largest driver of first quarter results was a valuation adjustment on certain foreclosed real estate which resulted in a pre-tax charge of $1.2 million. This property represents one relationship, an acquisition and development credit in the North Carolina Triad area, and constitutes over 60% of the Bank's other real estate owned.
"We're all aware that these are difficult economic times for the nation, region and the banking industry. The board and senior management of this Bank are actively seeking new ways to improve revenue and reduce expense in this challenging time. We are optimistic that, when the business cycle improves, high quality growth in the balance sheet will resume and we are making every effort to get our fiscal house in order for that day."
Capital
American National's capital ratios are among the highest in its peer group. At March 31, 2009, total shareholders' equity was 12.3% of assets, and the ratio of tangible equity to tangible assets was 9.6%.
Credit Quality Measurements
Nonperforming assets were below industry averages and represented 0.74% of total assets at March 31, 2009, compared to 0.91% at December 31, 2008. Nonperforming assets at March 31, 2009 consisted of $2.82 million of nonaccrual loans and $3.35 million of foreclosed real estate. Net charge-offs decreased to $338,000 during the first quarter of 2009 compared to $859,000 in fourth quarter of 2008. The allowance for loans losses was $7.84 million, or 1.38% of loans, at March 31, 2009 compared to 1.37% at December 31, 2008 and 1.34% at March 31, 2008.
Net Interest Income
Net interest income declined to $6.41 million in the first quarter of 2009 from $6.72 million in the first quarter of 2008, a net decrease of $312,000 or 4.6%. Net interest income has been adversely impacted by a series of rate reductions enacted by the Federal Reserve beginning in September 2007 and continuing through December 2008, which cumulatively resulted in a 4% decline in market interest rates. The Company's net interest margin has declined 27 basis points (0.27%) in the first quarter 2009 compared to the same period in 2008.
Noninterest Income
Noninterest income totaled $0.73 million in the first quarter of 2009, compared with $2.14 million in the first quarter of 2008. Noninterest income was significantly reduced in the first quarter of 2009 by a $1.2 million valuation adjustment of one item of foreclosed real estate, noted above.
Noninterest Expense
Noninterest expense totaled $5.88 million in the first quarter of 2009, compared to $5.45 million in the first quarter of 2008. The major factor impacting noninterest expense was deposit insurance premiums, which increased $200,000 for the first quarter of 2009 compared to the same period in 2008. The significant increase was primarily the result of industry-wide conditions which resulted in increased FDIC premiums to all member banks.
About American National
American National Bankshares Inc. is a bank holding company with assets of $829 million. Headquartered in Danville, Virginia, it is the holding company of American National Bank and Trust Company, a community bank serving Southern and Central Virginia and the northern portion of Central North Carolina with twenty banking offices. The Bank also manages an additional $388 million of assets in its Trust and Investment Services Division.
American National Bank and Trust Company provides a full array of financial products and services. Additional information is available on the Bank's website at http://www.amnb.com/. The shares of American National Bankshares Inc. are traded on the NASDAQ Global Select Market under the symbol "AMNB."
Forward-Looking Statements
This press release may contain "forward-looking statements," within the meaning of federal securities laws that involve significant risks and uncertainties. Statements herein are based on certain assumptions and analyses by the Company 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; and significant changes in securities markets. Consequently, all forward-looking statements made herein are qualified by these cautionary statements and the cautionary language in the Company's most recent Form 10-K report and other documents filed with the Securities and Exchange Commission. American National Bankshares Inc. 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. and Subsidiaries Consolidated Balance Sheets (Dollars in thousands, except share and per share data) Unaudited --------- March 31 -------- ASSETS 2009 2008 ---- ---- Cash and due from banks $13,632 $20,310 Interest-bearing deposits in other banks 18,188 4,218 Securities available for sale, at fair value 167,981 149,636 Securities held to maturity 6,811 11,039 ----- ------ Total securities 174,792 160,675 ------- ------- Loans held for sale 2,782 1,681 Loans, net of unearned income 569,003 554,667 Less allowance for loan losses (7,836) (7,425) ------ ------ Net Loans 561,167 547,242 ------- ------- Premises and equipment, net 18,282 13,392 Other real estate owned 3,345 550 Goodwill 22,468 22,468 Core deposit intangibles, net 1,981 2,358 Accrued interest receivable and other assets 12,841 12,155 ------ ------ Total assets $829,478 $785,049 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Demand deposits -- noninterest-bearing $98,926 $101,195 Demand deposits -- interest-bearing 94,505 103,365 Money market deposits 72,085 52,574 Savings deposits 63,553 64,198 Time deposits 286,819 260,207 ------- ------- Total deposits 615,888 581,539 ------- ------- Short-term borrowings: Customer repurchase agreements 60,768 58,179 Other short-term borrowings 12,440 3,225 Long-term borrowings 13,750 12,900 Trust preferred capital notes 20,619 20,619 Accrued interest payable and other liabilities 4,098 5,714 ----- ----- Total liabilities 727,563 682,176 ------- ------- Shareholders' equity: Common stock, $1 par, 10,000,000 shares authorized, 6,079,161 shares outstanding at March 31, 2009 and 6,100,185 shares outstanding at March 31, 2008 6,079 6,100 Capital in excess of par value 26,488 26,472 Retained earnings 70,379 69,866 Accumulated other comprehensive income (loss), net (1,031) 435 ------ --- Total shareholders' equity 101,915 102,873 ------- ------- Total liabilities and shareholders' equity $829,478 $785,049 ======== ======== American National Bankshares Inc. and Subsidiaries Consolidated Statements of Income (Dollars in thousands, except share and per share data) Unaudited --------- Three Months Ended March 31 -------- 2009 2008 ---- ---- Interest and Dividend Income: Interest and fees on loans $8,034 $9,444 Interest and dividends on securities: Taxable 1,120 1,231 Tax-exempt 386 432 Dividends 22 77 Other interest income 88 76 -- -- Total interest and dividend income 9,650 11,260 ----- ------ Interest Expense: Interest on deposits 2,527 3,582 Interest on short-term borrowings 236 484 Interest on long-term borrowings 131 126 Interest on trust preferred capital notes 343 343 --- --- Total interest expense 3,237 4,535 ----- ----- Net Interest Income 6,413 6,725 Provision for loan losses 350 140 --- --- Net Interest Income After Provision for Loan Losses 6,063 6,585 ----- ----- Noninterest Income: Trust fees 758 880 Service charges on deposit accounts 502 565 Other fees and commissions 242 203 Mortgage banking income 286 195 Brokerage fees 57 143 Securities gains (losses), net - 30 Net loss on foreclosed real estate (1,196) (7) Other 85 126 -- --- Total noninterest income 734 2,135 --- ----- Noninterest Expense: Salaries 2,531 2,469 Employee benefits 813 747 Occupancy and equipment 971 966 FDIC assessment 217 17 Bank franchise tax 163 177 Core deposit intangible amortization 94 94 Other 1,086 979 ----- --- Total noninterest expense 5,875 5,449 ----- ----- Income Before Income Taxes 922 3,271 Income Taxes 154 966 --- --- Net Income $768 $2,305 ==== ====== Net Income Per Common Share: Basic $0.13 $0.38 Diluted $0.13 $0.38 Average Common Shares Outstanding: Basic 6,081,998 6,107,832 Diluted 6,085,457 6,121,285 American National Bankshares Inc. and Subsidiaries Financial Highlights (In thousands, except share, ratio and nonfinancial data, unaudited) 1st Qtr 4th Qtr 1st Qtr 2009 2008 2008 ---- ---- ---- EARNINGS Interest income $9,650 $10,225 $11,260 Interest expense 3,237 3,503 4,535 Net interest income 6,413 6,722 6,725 Provision for loan losses 350 600 140 Noninterest income 734 1,875 2,135 Noninterest expense 5,875 5,547 5,449 Income taxes 154 767 966 Net income 768 1,683 2,305 PER COMMON SHARE Earnings per share - basic $0.13 $0.28 $0.38 Earnings per share - diluted 0.13 0.28 0.38 Cash dividends declared 0.23 0.23 0.23 Book value per share 16.76 16.81 16.86 Book value per share - tangible (a) 12.74 12.78 12.79 Closing market price 15.60 17.00 21.26 FINANCIAL RATIOS Return on average assets 0.38% 0.86% 1.18% Return on average equity 2.99 6.53 9.01 Return on average tangible equity (b) 4.32 8.90 12.24 Average equity to average assets 12.80 13.13 13.12 Net interest margin, taxable equivalent 3.61 3.85 3.88 Efficiency ratio 68.77 62.36 60.09 Effective tax rate 16.70 31.31 29.53 PERIOD-END BALANCES Securities $174,792 $140,816 $160,675 Loans held for sale 2,782 1,764 1,681 Loans, net of unearned income 569,003 571,110 554,667 Goodwill and other intangibles 24,449 24,543 24,826 Assets 829,478 789,184 785,049 Assets - tangible (a) 805,029 764,641 760,223 Deposits 615,888 589,138 581,539 Customer repurchase agreements 60,678 51,741 58,179 Other short-term borrowings 12,440 7,850 3,225 Long-term borrowings 34,369 34,406 33,519 Shareholders' equity 101,915 102,300 102,873 Shareholders' equity - tangible (a) 77,466 77,757 78,047 AVERAGE BALANCES Securities $138,067 $137,947 $151,699 Loans held for sale 2,996 1,669 1,614 Loans, net of unearned income 570,342 571,081 553,971 Interest-earning assets 734,980 720,197 717,508 Goodwill and other intangibles 24,507 24,600 24,864 Assets 803,206 785,182 780,204 Assets - tangible (a) 778,699 760,582 755,340 Interest-bearing deposits 510,821 491,701 486,198 Deposits 604,002 590,196 583,410 Customer repurchase agreements 56,051 49,868 54,624 Other short-term borrowings 2,071 6,788 3,091 Long-term borrowings 34,398 34,436 30,779 Shareholders' equity 102,845 103,126 102,342 Shareholders' equity - tangible (a) 78,338 78,526 77,478 CAPITAL Average shares outstanding - basic 6,081,998 6,086,868 6,107,832 Average shares outstanding - diluted 6,085,457 6,090,844 6,121,285 Shares repurchased 7,600 7,100 28,800 Average price of shares repurchased $15.92 $16.40 $20.80 ALLOWANCE FOR LOAN LOSSES Beginning balance $7,824 $8,083 $7,395 Provision for loan losses 350 600 140 Charge-offs (376) (1,012) (170) Recoveries 38 153 60 -- --- -- Ending balance $7,836 $7,824 $7,425 LOANS Construction and land development $53,579 $63,361 $72,001 Commercial real estate 213,508 207,160 198,698 Residential real estate 134,510 136,480 138,384 Home equity 61,459 57,170 48,958 Commercial and industrial 97,259 98,546 87,199 Consumer 8,688 8,393 9,427 ----- ----- ----- Total $569,003 $571,110 $554,667 NONPERFORMING ASSETS AT PERIOD-END Nonperforming loans: 90 days past due $- $- $- Nonaccrual 2,821 2,845 2,772 Foreclosed real estate 3,345 4,311 550 ----- ----- --- Nonperforming assets $6,166 $7,156 $3,322 ASSET QUALITY RATIOS Annualized net chargeoffs to average loans 0.24% 0.60% 0.08% Nonperforming assets to total assets 0.74 0.91 0.42 Nonperforming loans to total loans 0.50 0.50 0.50 Allowance for loan losses to total loans 1.38 1.37 1.34 Allowance for loan losses to nonperforming loans 277.77 275.01 267.86 OTHER DATA Fiduciary assets at period-end (c) $305,129 $326,614 $386,375 Retail brokerage assets at period-end (c) $82,554 $84,348 $89,927 Number full time- time equivalent employees 258 258 258 Number of full service offices 20 20 19 Number of loan production offices 2 1 1 Number of ATM's 23 24 23 Notes: (a) - Excludes goodwill and other intangible assets (b) - Excludes amortization expense, net of tax, of intangible assets (c) - Market value Net Interest Income Analysis For the Three Months Ended March 31, 2009 and 2008 (in thousands, except rates) Interest Income/ Average Balance Expense Yield/Rate --------------- -------- ---------- 2009 2008 2009 2008 2009 2008 ---- ---- ---- ---- ---- ---- Loans: Commercial $96,097 $85,632 $1,100 $1,454 4.58% 6.79% Real estate 469,346 460,429 6,779 7,789 5.78 6.77 Consumer 7,895 9,524 178 217 9.02 9.11 ----- ----- --- --- ---- ---- Total loans 573,338 555,585 8,057 9,460 5.62 6.81 ------- ------- ----- ----- ---- ---- Securities: Federal agencies 45,767 50,064 521 597 4.55 4.77 Mortgage-backed 44,560 47,405 562 603 5.04 5.09 State and municipal 42,726 47,847 604 656 5.65 5.48 Other 5,014 6,383 33 99 2.63 6.20 ----- ----- -- -- ---- ---- Total securities 138,067 151,699 1,720 1,955 4.98 5.15 ------- ------- ----- ----- ---- ---- Deposits in other banks 23,575 10,224 88 76 1.49 2.97 ------ ------ -- -- ---- ---- Total interest earning assets 734,980 717,508 9,865 11,491 5.37 6.41 ----- ------ ---- ---- Nonearning assets 68,226 62,696 ------ ------ Total assets $803,206 $780,204 ======== ======== Deposits: Demand $112,459 $107,994 190 225 0.68 0.83 Money market 64,648 51,320 198 294 1.23 2.29 Savings 61,289 63,184 40 116 0.26 0.73 Time 272,425 263,700 2,099 2,947 3.08 4.47 ------- ------- ----- ----- ---- ---- Total deposits 510,821 486,198 2,527 3,582 1.98 2.95 Customer repurchase agreements 56,051 54,624 233 451 1.66 3.30 Other short-term borrowings 2,071 3,091 3 33 0.58 4.27 Long-term borrowings 34,398 30,779 474 469 5.51 6.10 ------ ------ --- --- ---- ---- Total interest bearing liabilities 603,341 574,692 3,237 4,535 2.15 3.16 ----- ----- ---- ---- Noninterest bearing demand deposits 93,181 97,212 Other liabilities 3,839 5,958 Shareholders' equity 102,845 102,342 ------- ------- Total liabilities and shareholders' equity $803,206 $780,204 ======== ======== Interest rate spread 3.22% 3.25% ==== ==== Net interest margin 3.61% 3.88% ==== ==== Net interest income (taxable equivalent basis) 6,628 6,956 Less: Taxable equivalent adjustment 215 231 --- --- Net interest income $6,413 $6,725 ====== ======
American National Bankshares Inc.
CONTACT: William W. Traynham, Chief Financial Officer of American
National Bankshares Inc., +1-434-773-2242, traynhamw@amnb.com
Web Site: http://www.amnb.com/
