AMNB American National Bankshares Inc

American National Bankshares Inc. (Nasdaq: AMNB) (“American National” or the “Company”) today reported third quarter 2023 earnings of $5.8 million, or $0.54 per diluted common share. These results compare to earnings of $9.3 million, or $0.87 per diluted common share, during the same quarter in the prior year, and earnings of $7.1 million, or $0.67 per diluted common share, for the second quarter of 2023. Earnings for the nine months ended September 30, 2023 were $22.1 million, or $2.08 per diluted common share, compared to $26.4 million, or $2.47 per diluted common share, for the same period of 2022.

President and Chief Executive Officer, Jeffrey V. Haley, commented, “The third quarter was a historic one for American National as we announced our agreement to merge with Atlantic Union Bankshares Corporation subject to shareholder and regulatory approvals. We continue to believe this partnership will provide the combined company with a stronger platform for growth and create enhanced value for our shareholders, customers and employees. I have been so pleased with the level of collaboration from both companies since announcement as we work through our various regulatory approvals and early integration planning.”

“We had a solid third quarter from an operating perspective, with revenues and earnings (adjusting for merger expenses) in line with our expectations for the quarter. Strengths included loan growth, continued favorable credit trends, expense management, reduced margin compression from higher rates and growth in fee income over the previous quarter.”

Third quarter 2023 highlights include:

• Average loans held for investment grew $30.8 million, or 5.6% annualized, during the third quarter as compared to the previous quarter.

• Average deposits increased by $51.5 million, or 8.0% annualized, during the quarter, while period-end deposits declined $80.7 million, or 12.2% annualized.

• Fully taxable equivalent (“FTE”) net interest margin was 2.76% for the quarter, down 12 basis points from 2.88% in the second quarter of 2023 and down 44 basis points from 3.20% in the third quarter of the prior year (non-GAAP).

• Noninterest revenues increased $419 thousand, or 9.6%, when compared to the previous quarter, and increased $14 thousand, or 0.3%, compared to the same quarter in the prior year.

• Noninterest expense increased $2.2 million, or 13.4%, when compared to the previous quarter, and increased $1.9 million, or 11.5%, when compared to the same quarter in the prior year. Excluding non-recurring merger related expenses of $1.7 million recorded during the quarter, increases relative to the prior quarter and same quarter of 2022 were 2.8% and 1.2%, respectively.

• The Company recognized a recovery of credit losses on loans in the third quarter of 2023 of $538 thousand compared to provisions of $268 thousand in the second quarter of 2023 and $615 thousand in the third quarter of the previous year.

• Annualized net recoveries as a percentage of average loans outstanding were (0.06%) for the third quarter of 2023, compared to (0.05%) in the previous quarter and (0.01%) in the same quarter in the prior year.

• Nonperforming assets as a percentage of total assets were 0.12% at September 30, 2023, up from 0.04% at June 30, 2023 and 0.05% at September 30, 2022.

NET INTEREST INCOME

Net interest income for the third quarter of 2023 decreased by $485 thousand, or 2.3%, to $20.7 million compared to $21.1 million for the previous quarter. The third quarter of 2023 compared to the same quarter of 2022 reflected a decrease of $3.3 million, or 13.9%. The FTE net interest margin for the third quarter of 2023 was 2.76%, down from 2.88% in the prior quarter and 3.20% in the same quarter a year ago (non-GAAP). The margin contraction relative to the previous quarter resulted from funding costs increasing more than earning asset yields. The yield on average earning assets increased 15 basis points quarter-over-quarter, while the cost of average interest-bearing liabilities rose 37 basis points due to higher rates paid on interest-bearing deposits and the continued migration of the deposit composition from demand deposits to higher cost money market and time deposits. Similarly, the 82-basis point increase in average earning asset yields was more than offset by the 195-basis point increase in the cost of average interest-bearing liabilities when comparing the third quarter of 2023 to the same quarter of 2022. The cost of interest-bearing deposits increased to 2.04% in the third quarter, compared to 1.59% in the previous quarter and 0.17% in the same quarter of the prior year.

ASSET QUALITY

Nonperforming assets (“NPAs”) totaled $3.7 million as of September 30, 2023, up from $1.1 million at June 30, 2023 and $1.4 million at September 30, 2022. NPAs as a percentage of total assets were 0.12% at September 30, 2023, compared to 0.04% at June 30, 2023 and 0.05% at September 30, 2022. The Company recorded a recovery of credit losses for the third quarter of 2023 of $538 thousand compared to provisions of $268 thousand in the previous quarter and $615 thousand in the third quarter of the previous year. The negative provision for the third quarter of 2023 was principally the result of net loan recoveries of $315 thousand and a slight reduction in the quantitative expected loan loss rates partially offset by net loan growth during the quarter.

The allowance for credit losses – loans was $25.1 million at September 30, 2023, compared to $25.3 million at June 30, 2023 and $19.2 million at September 30, 2022. Annualized net recoveries as a percentage of average loans outstanding were 0.06% for the third quarter of 2023 compared to 0.05% in the previous quarter and 0.01% in the same quarter in the prior year. The allowance for credit losses as a percentage of loans held for investment was 1.11% at September 30, 2023, compared to 1.13% at June 30, 2023, and 0.91% at September 30, 2022.

NONINTEREST INCOME

Noninterest income in the third quarter of 2023 increased by $419 thousand, or 9.6%, compared to the prior quarter and increased $14 thousand, or 0.3%, from the same quarter in the prior year. Noninterest income totaled $4.8 million for each of the quarters ended September 30, 2023 and September 30, 2022 compared to $4.4 million for the quarter ended June 30, 2023.

The increase in the third quarter compared to the previous quarter was attributable to higher income from small business investment companies of $345 thousand and growth in mortgage banking income of $96 thousand.

The third quarter of 2023 compared to the same quarter of 2022 reflected increases in interchange fees of $149 thousand and wealth management income of $133 thousand, partially offset by lower income from service charges on deposit accounts of $116 thousand and mortgage banking income of $95 thousand.

NONINTEREST EXPENSE

Noninterest expense for the third quarter of 2023 amounted to $18.3 million, up $2.2 million, or 13.4%, when compared to $16.2 million for the previous quarter and up $1.9 million, or 11.5%, from $16.4 million during the same quarter in the previous year. The increase in the third quarter compared to the previous quarter was driven by merger related expenses totaling $1.7 million and increased incentive accruals of $1.0 million included in salaries and employee benefits.

The third quarter 2023 increase compared to the same quarter of 2022 was principally attributable to merger related expenses of $1.7 million and an increase in FDIC assessments of $127 thousand.

INCOME TAXES

The effective tax rate for the three months ended September 30, 2023 was 24.16%, compared to 21.13% for the prior quarter and 20.92% for the same quarter in the prior year. The increase in the effective tax rate in the third quarter of 2023 was primarily the result of certain non-deductible merger related expenses.

BALANCE SHEET

Total assets at September 30, 2023 were $3.1 billion, a decline of $21.9 million, or 0.7% from June 30, 2023, and an increase of $41.9 million, or 1.4%, from September 30, 2022.

At September 30, 2023, loans held for investment (net of deferred fees and costs) were $2.3 billion, an increase of $29.0 million, or 5.2% annualized, from June 30, 2023. Loans held for investment (net of deferred fees and costs) increased $154.0 million, or 7.3%, from September 30, 2022.

Investment securities available for sale amounted to $543.9 million at September 30, 2023, a decrease of $16.8 million, or 3.0%, from June 30, 2023 and a decrease of $98.0 million, or 15.3%, compared to September 30, 2022. The unrealized loss on available for sale securities was $75.1 million at September 30, 2023 compared to $69.7 million at June 30, 2023 and $73.6 million at September 30, 2022. The increase in unrealized losses relative to the prior quarter was the result of increases in market yields for investment securities. At September 30, 2023, 54% of the market value of the securities portfolio was unencumbered and could be used to provide additional liquidity, if needed.

Deposits amounted to $2.6 billion at September 30, 2023, representing declines of $80.7 million, or 12.2% annualized, from June 30, 2023 and $119.6 million, or 4.4%, compared to September 30, 2022.

Borrowings from the Federal Home Loan Bank of Atlanta (“FHLB”) totaled $85.0 million at September 30, 2023 compared to $25.0 million at June 30, 2023. The Company had no FHLB borrowings at September 30, 2022. The Company’s remaining credit availability from the FHLB was $677.6 million as of September 30, 2023, $446.5 million of which could be accessed without pledging additional collateral.

The Company continues to be well-capitalized as defined by regulators, with tangible common equity to tangible assets of 7.98% at September 30, 2023 compared to 7.94% at June 30, 2023 and compared to 7.59% at September 30, 2022 (non-GAAP). The Company’s preliminary common equity Tier 1, Tier 1, total, and Tier 1 leverage capital ratios were 11.77%, 12.89%, 13.91% and 10.61%, respectively, at September 30, 2023.

ABOUT AMERICAN NATIONAL

American National is a multi-state bank holding company with total assets of approximately $3.1 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 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

Certain statements in this release may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, statements regarding anticipated changes in the interest rate environment, future economic conditions and the impacts of current economic uncertainties, and projections, predictions, expectations, or beliefs about future events or results, or otherwise are not statements of historical fact. Such forward-looking statements are based on certain assumptions as of the time they are made, and are inherently subject to known and unknown risks and uncertainties, some of which cannot be predicted or quantified, that may cause actual results, performance or achievements to be materially different from those expressed or implied by such forward-looking statements. Such statements are often characterized by the use of qualified words (and their derivatives) such as “expect,” “believe,” “estimate,” “plan,” “project,” “anticipate,” “intend,” “will,” “may,” “view,” “seek to,” “opportunity,” “potential,” “continue,” “confidence” or words of similar meaning, or other statements concerning opinions or judgment of our management about future events. Although we believe that our expectations with respect to forward-looking statements are based upon reasonable assumptions within the bounds of our existing knowledge of our business and operations, there can be no assurance that actual future results, performance, or achievements of, or trends affecting, us will not differ materially from any projected future results, performance, achievements or trends expressed or implied by such forward-looking statements. Actual future results, performance, achievements or trends may differ materially from historical results or those anticipated depending on a variety of factors, including, but not limited to, the following: the businesses of American National and Atlantic Union Bankshares Corporation (“Atlantic Union”) may not be combined successfully, or such combination may take longer, be more difficult, time-consuming or costly to accomplish than expected; the expected growth opportunities or cost savings from the merger with Atlantic Union may not be fully realized or may take longer to realize than expected; deposit attrition, operating costs, customer losses and business disruption prior to and following the merger with Atlantic Union, including adverse effects on relationships with employees and customers, may be greater than expected; the regulatory and shareholder approvals required for the merger with Atlantic Union may not be obtained; the level of inflation; financial market volatility including the level of interest rates, could affect the values of financial instruments and the amount of net interest income earned; the ability to maintain adequate liquidity by retaining deposit customers and secondary funding sources, especially if the Company's or banking industry's reputation becomes damaged; the adequacy of the level of the Company’s allowance for credit losses, the amount of credit loss provisions required in future periods, and the failure of assumptions underlying the allowance for credit losses; general economic or business conditions, either nationally or in the market areas in which the Company does business, may be less favorable than expected, resulting in deteriorating credit quality, reduced demand for credit, or a weakened ability to generate deposits; competition among financial institutions may increase, and competitors may have greater financial resources and develop products and technology that enable those competitors to compete more successfully than the Company; businesses that the Company is engaged in may be adversely affected by legislative or regulatory changes, including changes in accounting standards and tax laws; the ability to recruit and retain key personnel; cybersecurity threats or attacks, the implementation of new technologies, and the ability to develop and maintain reliable and secure electronic systems; the effects of climate change, natural disasters, and extreme weather events; geopolitical conditions, including acts or threats of terrorism and/or military conflicts, or actions taken by the U.S. or other governments in response to acts of threats or terrorism and/or military conflicts, negatively impacting business and economic conditions in the U.S. and abroad; the impact of health emergencies, epidemics or pandemics; risks related to environmental, social and governance practices; risks associated with mergers, acquisitions, and other expansion activities; and other factors described from time to time in the Company’s reports (such as our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K) filed with the Securities and Exchange Commission. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. The Company does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions which may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

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

American National Bankshares Inc.
Consolidated Balance Sheets
(Dollars in thousands, except per share data)
Unaudited
	September 30
		2023				2022
Assets
Cash and due from banks	$	34,646			$	35,437
Interest-bearing deposits in other banks		40,622				59,541
Securities available for sale, at fair value		543,915				641,884
Restricted stock, at cost		12,936				8,383
Loans held for sale		1,981				2,852
Loans, net of deferred fees and costs		2,273,455				2,119,415
Less allowance for credit losses - loans		(25,124	)			(19,189	)
Net Loans		2,248,331				2,100,226
Premises and equipment, net		32,167				34,686
Assets held-for-sale		1,131				-
Other real estate owned, net		-				143
Goodwill		85,048				85,048
Core deposit intangibles, net		2,550				3,667
Bank owned life insurance		30,197				29,480
Other assets		57,734				47,973
Total assets	$	3,091,258			$	3,049,320
Liabilities
Demand deposits -- noninterest-bearing	$	848,017			$	1,044,803
Demand deposits -- interest-bearing		484,511				509,017
Money market deposits		659,899				612,600
Savings deposits		214,955				282,093
Time deposits		363,862				242,357
Total deposits		2,571,244				2,690,870
Customer repurchase agreements		60,035				625
Other short-term borrowings		85,000				-
Long-term borrowings		28,410				28,308
Other liabilities		19,291				16,127
Total liabilities		2,763,980				2,735,930
Shareholders' equity
Preferred stock, $5 par value, 2,000,000 shares authorized,
none outstanding		-				-
Common stock, $1 par value, 20,000,000 shares authorized,
10,629,111 shares outstanding at September 30, 2023 and
10,608,750 shares outstanding at September 30, 2022		10,544				10,533
Capital in excess of par value		142,392				141,694
Retained earnings		231,962				218,814
Accumulated other comprehensive loss, net		(57,620	)			(57,651	)
Total shareholders' equity		327,278				313,390
Total liabilities and shareholders' equity	$	3,091,258			$	3,049,320

American National Bankshares Inc.
Consolidated Statements of Income
(Dollars in thousands, except per share data)
Unaudited
	For the Three Months Ended												For the Nine Months Ended
	9/30/23				6/30/23				9/30/22				9/30/23				9/30/22
Interest and Dividend Income:
Interest and fees on loans	$	27,512			$	26,052			$	21,160			$	78,476			$	59,024
Interest and dividends on securities:
Taxable		2,564				2,607				2,664				7,855				7,344
Tax-exempt		24				26				110				115				297
Dividends		163				196				118				529				347
Other interest income		797				550				1,099				1,818				2,076
Total interest and dividend income		31,060				29,431				25,151				88,793				69,088
Interest Expense:
Interest on deposits		9,057				6,607				741				19,149				1,956
Interest on short-term borrowings		938				1,282				11				3,427				26
Interest on long-term borrowings		402				394				392				1,183				1,156
Total interest expense		10,397				8,283				1,144				23,759				3,138
Net Interest Income		20,663				21,148				24,007				65,034				65,950
Provision for (recovery of) credit losses		(538	)			268				615				59				438
Net Interest Income After Provision for
(Recovery of) Credit Losses		21,201				20,880				23,392				64,975				65,512
Noninterest Income:
Wealth management income		1,736				1,726				1,603				5,030				4,999
Service charges on deposit accounts		565				564				681				1,685				2,079
Interchange fees		1,162				1,187				1,013				3,458				2,990
Other fees and commissions		169				158				233				493				699
Mortgage banking income		293				197				388				634				1,490
Securities losses, net		-				-				-				(68	)			-
Income from Small Business Investment Companies		453				108				501				888				1,672
Income from insurance investments		128				120				100				594				644
Losses on premises and equipment, net		-				(8	)			(2	)			(113	)			(82	)
Other		268				303				243				900				706
Total noninterest income		4,774				4,355				4,760				13,501				15,197
Noninterest Expense:
Salaries and employee benefits		9,229				8,300				9,618				26,701				26,936
Occupancy and equipment		1,601				1,631				1,514				4,676				4,576
FDIC assessment		354				492				227				1,053				694
Bank franchise tax		520				520				488				1,550				1,452
Core deposit intangible amortization		262				272				310				817				960
Data processing		821				939				818				2,611				2,446
Software		470				476				362				1,391				1,088
Other real estate owned, net		(10	)			-				3				(10	)			4
Merger related expenses		1,702				-				-				1,702				-
Other		3,394				3,552				3,108				9,683				9,096
Total noninterest expense		18,343				16,182				16,448				50,174				47,252
Income Before Income Taxes		7,632				9,053				11,704				28,303				33,457
Income Taxes		1,844				1,913				2,448				6,218				7,062
Net Income	$	5,788			$	7,140			$	9,256			$	22,085			$	26,395
Net Income Per Common Share:
Basic	$	0.54			$	0.67			$	0.87			$	2.08			$	2.47
Diluted	$	0.54			$	0.67			$	0.87			$	2.08			$	2.47
Weighted Average Common Shares Outstanding:
Basic		10,625,709				10,623,571				10,640,952				10,626,599				10,694,096
Diluted		10,625,709				10,624,859				10,643,073				10,627,732				10,696,409

American National Bankshares Inc.
Financial Highlights
Unaudited
	(Dollars in thousands, except per share data)															At or for the Nine Months
				3rd Qtr				2nd Qtr				3rd Qtr				Ended September 30,
					2023				2023				2022				2023				2022
EARNINGS
Interest income				$	31,060			$	29,431			$	25,151			$	88,793			$	69,088
Interest expense					10,397				8,283				1,144				23,759				3,138
Net interest income					20,663				21,148				24,007				65,034				65,950
Provision for (recovery of) credit losses					(538	)			268				615				59				438
Noninterest income					4,774				4,355				4,760				13,501				15,197
Noninterest expense					18,343				16,182				16,448				50,174				47,252
Income taxes					1,844				1,913				2,448				6,218				7,062
Net income					5,788				7,140				9,256				22,085				26,395
PER COMMON SHARE
Net income per share - basic				$	0.54			$	0.67			$	0.87			$	2.08			$	2.47
Net income per share - diluted					0.54				0.67				0.87				2.08				2.47
Cash dividends paid					0.30				0.30				0.28				0.90				0.84
Book value per share					30.79				30.88				29.54				30.79				29.54
Book value per share - tangible (a)					22.55				22.61				21.18				22.55				21.18
Closing market price					37.94				28.98				31.95				37.94				31.95
FINANCIAL RATIOS
Return on average assets					0.75	%			0.93	%			1.17	%			0.96	%			1.08	%
Return on average common equity					7.02				8.61				11.21				8.97				10.42
Return on average tangible common equity (a)					9.91				12.07				15.74				12.61				14.57
Average common equity to average assets					10.68				10.82				10.42				10.70				10.35
Tangible common equity to tangible assets (a)					7.98				7.94				7.59				7.98				7.59
Net interest margin, taxable equivalent					2.76				2.88				3.20				2.94				2.86
Efficiency ratio (a)					64.31				62.24				55.98				60.43				56.87
Effective tax rate					24.16				21.13				20.92				21.97				21.11
PERIOD-END BALANCES
Securities				$	556,851			$	570,039			$	650,267			$	556,851			$	650,267
Loans held for sale					1,981				4,048				2,852				1,981				2,852
Loans, net					2,273,455				2,244,464				2,119,415				2,273,455				2,119,415
Goodwill and other intangibles					87,598				87,860				88,715				87,598				88,715
Assets					3,091,258				3,113,163				3,049,320				3,091,258				3,049,320
Assets - tangible (a)					3,003,660				3,025,303				2,960,605				3,003,660				2,960,605
Interest-bearing deposits					1,723,227				1,767,258				1,646,067				1,723,227				1,646,067
Noninterest bearing demand deposits					848,017				884,658				1,044,803				848,017				1,044,803
Customer repurchase agreements					60,035				62,886				625				60,035				625
Other short-term borrowings					85,000				25,000				-				85,000				-
Long-term borrowings					28,410				28,384				28,308				28,410				28,308
Shareholders' equity					327,278				328,090				313,390				327,278				313,390
Shareholders' equity - tangible (a)					239,680				240,230				224,675				239,680				224,675
AVERAGE BALANCES
Securities (b)				$	634,313			$	652,439			$	728,535			$	654,737			$	722,025
Loans held for sale					2,488				1,984				3,915				1,701				3,998
Loans, net					2,248,675				2,217,859				2,064,088				2,217,898				2,012,905
Interest-earning assets					2,939,234				2,912,623				3,005,292				2,920,781				3,083,815
Goodwill and other intangibles					87,758				88,036				88,886				88,033				89,202
Assets					3,088,231				3,065,449				3,170,328				3,070,314				3,260,636
Assets - tangible (a)					3,000,473				2,977,413				3,081,442				2,982,281				3,171,434
Interest-bearing deposits					1,758,994				1,669,076				1,723,931				1,681,311				1,817,581
Noninterest bearing demand deposits					872,488				910,911				1,051,585				917,113				1,027,942
Customer repurchase agreements					65,550				62,419				18,719				45,071				31,858
Other short-term borrowings					12,935				45,934				-				52,142				-
Subordinated debt					28,393				28,368				28,293				28,368				28,268
Shareholders' equity					329,812				331,821				330,318				328,400				337,633
Shareholders' equity - tangible (a)					242,054				243,785				241,432				240,367				248,431
American National Bankshares Inc.
Financial Highlights
Unaudited
	(Dollars in thousands, except per share data)															At or for the Nine Months
				3rd Qtr				2nd Qtr				3rd Qtr				Ended September 30,
					2023				2023				2022				2023				2022
CAPITAL
Weighted average shares outstanding - basic					10,625,709				10,623,571				10,640,952				10,626,599				10,694,096
Weighted average shares outstanding - diluted					10,625,709				10,624,859				10,643,073				10,627,732				10,696,409
COMMON STOCK REPURCHASE PROGRAM
Total shares of common stock repurchased					-				13,688				60,104				34,131				203,709
Average price paid per share of common stock				$	-			$	26.99			$	34.26				30.58				36.26
ALLOWANCE FOR CREDIT LOSSES - LOANS
Beginning balance				$	25,342			$	24,861			$	18,505			$	19,555			$	18,678
Day 1 Impact of CECL adoption					-				-				-				5,192				-
Provision for (recovery of) credit losses					(533	)			219				615				15				438
Charge-offs					(19	)			(15	)			(31	)			(429	)			(185	)
Recoveries					334				277				100				791				258
Ending balance				$	25,124			$	25,342			$	19,189			$	25,124			$	19,189
LOANS
Construction and land development				$	269,840			$	240,934			$	210,500			$	269,840			$	210,500
Commercial real estate - owner occupied					413,151				416,397				423,678				413,151				423,678
Commercial real estate - non-owner occupied					803,440				833,084				764,963				803,440				764,963
Residential real estate					366,557				351,855				324,468				366,557				324,468
Home equity					91,393				93,594				93,659				91,393				93,659
Commercial and industrial					322,209				301,778				295,541				322,209				295,541
Consumer					6,865				6,822				6,606				6,865				6,606
Total				$	2,273,455			$	2,244,464			$	2,119,415			$	2,273,455			$	2,119,415
NONPERFORMING ASSETS AT PERIOD-END
Nonperforming loans:
90 days past due and accruing				$	-			$	-			$	18			$	-			$	18
Nonaccrual					3,740				1,024				1,171				3,740				1,171
Other real estate owned and repossessions					-				80				196				-				196
Nonperforming assets				$	3,740			$	1,104			$	1,385			$	3,740			$	1,385
ASSET QUALITY RATIOS
Allowance for credit losses - loans to total loans					1.11	%			1.13	%			0.91	%			1.11	%			0.91	%
Allowance for credit losses - loans to
nonperforming loans					671.76				2,474.80				1,613.88				671.76				1,613.88
Nonperforming assets to total assets					0.12				0.04				0.05				0.12				0.05
Nonperforming loans to total loans					0.16				0.05				0.06				0.16				0.06
Annualized net charge-offs (recoveries) to average loans					(0.06	)			(0.05	)			(0.01	)			(0.02	)			0.00
to average loans
OTHER DATA
Fiduciary assets at period-end (c) (d)				$	774,126			$	782,659			$	693,153			$	774,126				693,153
Retail brokerage assets at period-end (c) (d)				$	413,956			$	426,565			$	376,891			$	413,956				376,891
Number full-time equivalent employees (e)					358				365				363				358				363
Number of full service offices					26				26				26				26				26
Number of loan production offices					1				1				1				1				1
Number of ATMs					34				34				34				34				34
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 September 30, 2023 and 2022
			(Dollars in thousands)
			Unaudited
													Interest
					Average Balance								Income/Expense (a)							Yield/Rate
					2023				2022				2023				2022				2023				2022
Assets:
Total loans (b)				$	2,251,163			$	2,068,003			$	27,559			$	21,191				4.81	%			4.09	%
Securities:
	Taxable				630,034				708,076				2,727				2,782				1.73				1.56
	Tax exempt				4,279				20,459				30				138				2.85				2.70
		Total securities			634,313				728,535				2,757				2,920				1.74				1.60
Deposits in other banks					53,758				208,754				797				1,099				5.88				2.09
	Total interest-earning assets				2,939,234				3,005,292				31,113				25,210				4.17				3.35
Non-earning assets					148,997				165,036
		Total assets		$	3,088,231			$	3,170,328
Liabilities and Stockholders' Equity:
Deposits:
	Demand			$	489,126			$	522,021				983				34				0.80				0.03
	Savings and money market				923,732				950,339				5,448				368				2.34				0.15
	Time				346,136				251,571				2,626				339				3.00				0.53
		Total deposits			1,758,994				1,723,931				9,057				741				2.04				0.17
Customer repurchase agreements					65,550				18,719				759				11				4.60				0.23
Other short-term borrowings					12,935				-				179				-				5.42				-
Long-term borrowings					28,393				28,293				402				392				5.55				5.54
	Total interest-bearing
		liabilities			1,865,872				1,770,943				10,397				1,144				2.21				0.26
Noninterest bearing demand deposits					872,488				1,051,585
Other liabilities					20,059				17,482
Shareholders' equity					329,812				330,318
		Total liabilities and
			shareholders' equity	$	3,088,231			$	3,170,328
Interest rate spread																					1.96	%			3.09	%
Net interest margin																					2.76	%			3.20	%
Net interest income (taxable equivalent basis)													20,716				24,066
Less: Taxable equivalent adjustment (c)													53				59
Net interest income												$	20,663			$	24,007
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 and loans held for sale 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.
			Net Interest Income Analysis
			For the Nine Months Ended September 30, 2023 and 2022
			(Dollars in thousands)
			Unaudited
													Interest
					Average Balance								Income/Expense (a)							Yield/Rate
					2023				2022				2023				2022				2023				2022
Assets:
Total loans (b)				$	2,219,599			$	2,016,903			$	78,612			$	59,122				4.68	%			3.91	%
Securities:
	Taxable				647,688				703,048				8,384				7,691				1.73				1.46
	Tax exempt				7,049				18,977				146				375				2.76				2.64
		Total securities			654,737				722,025				8,530				8,066				1.74				1.49
Deposits in other banks					46,445				344,887				1,818				2,076				5.23				0.80
	Total interest-earning assets				2,920,781				3,083,815				88,960				69,264				4.03				3.00
Non-earning assets					149,533				176,821
		Total assets		$	3,070,314			$	3,260,636
Liabilities and Stockholders' Equity:
Deposits:
	Demand			$	480,422			$	531,301				1,815				107				0.51				0.03
	Savings and money market				891,035				995,555				11,841				708				1.78				0.10
	Time				309,854				290,725				5,493				1,141				2.37				0.52
		Total deposits			1,681,311				1,817,581				19,149				1,956				1.52				0.14
Customer repurchase agreements					45,071				31,858				1,519				26				4.50				0.11
Other short-term borrowings					52,142				-				1,908				-				4.83				-
Long-term borrowings					28,368				28,268				1,183				1,156				5.50				5.45
	Total interest-bearing
		liabilities			1,806,892				1,877,707				23,759				3,138				1.75				0.22
Noninterest bearing demand deposits					917,113				1,027,942
Other liabilities					17,909				17,354
Shareholders' equity					328,400				337,633
		Total liabilities and
			shareholders' equity	$	3,070,314			$	3,260,636
Interest rate spread																					2.28	%			2.78	%
Net interest margin																					2.94	%			2.86	%
Net interest income (taxable equivalent basis)													65,201				66,126
Less: Taxable equivalent adjustment (c)													167				176
Net interest income												$	65,034			$	65,950
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 and loans held for sale 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)															At or for the Nine Months
				3rd Qtr				2nd Qtr				3rd Qtr				Ended September 30,
					2023				2023				2022				2023				2022
EFFICIENCY RATIO
Noninterest expense				$	18,343			$	16,182			$	16,448			$	50,174			$	47,252
Add: loss on sale of OREO					13				-				-				13				-
Subtract: core deposit intangible amortization					(262	)			(272	)			(310	)			(817	)			(960	)
Subtract: merger related expenses					(1,702	)			-				-				(1,702	)			-
				$	16,392			$	15,910			$	16,138			$	47,668			$	46,292
Net interest income				$	20,663			$	21,148			$	24,007			$	65,034			$	65,950
Tax equivalent adjustment					53				51				59				167				176
Noninterest income					4,774				4,355				4,760				13,501				15,197
Add: loss on securities					-				-				-				68				-
Add: loss on premises and equipment					-				8				2				113				82
				$	25,490			$	25,562			$	28,828			$	78,883			$	81,405
Efficiency ratio					64.31	%			62.24	%			55.98	%			60.43	%			56.87	%
TAX EQUIVALENT NET INTEREST INCOME
Non-GAAP measures:
Interest income - loans				$	27,559			$	26,096			$	21,191			$	78,612			$	59,122
Interest income - investments and other					3,554				3,386				4,019				10,348				10,142
Interest expense - deposits					(9,057	)			(6,607	)			(741	)			(19,149	)			(1,956	)
Interest expense - customer repurchase
agreements					(759	)			(694	)			(11	)			(1,519	)			(26	)
Interest expense - other short-term borrowings					(179	)			(588	)			-				(1,908	)			-
Interest expense - long-term borrowings					(402	)			(394	)			(392	)			(1,183	)			(1,156	)
Total net interest income				$	20,716			$	21,199			$	24,066			$	65,201			$	66,126
Less non-GAAP measures:
Tax benefit on nontaxable interest - loans					(47	)			(44	)			(31	)			(136	)			(98	)
Tax benefit on nontaxable interest - securities					(6	)			(7	)			(28	)			(31	)			(78	)
GAAP measures				$	20,663			$	21,148			$	24,007			$	65,034			$	65,950
NET INTEREST MARGIN
Net interest margin (FTE) (non-GAAP)					2.76	%			2.88	%			3.20	%			2.94	%			2.86	%
Net interest margin (GAAP)					2.75	%			2.87	%			3.19	%			2.92	%			2.84	%
RETURN ON AVERAGE TANGIBLE EQUITY
Return on average equity (GAAP basis)					7.02	%			8.61	%			11.21	%			8.97	%			10.42	%
Impact of excluding average goodwill
and other intangibles					2.89				3.46				4.53				3.64				4.15
Return on average tangible equity
(non-GAAP)					9.91	%			12.07	%			15.74	%			12.61	%			14.57	%
TANGIBLE EQUITY TO TANGIBLE ASSETS
Equity to assets ratio (GAAP basis)					10.59	%			10.54	%			10.28	%			10.59	%			10.28	%
Impact of excluding goodwill and
other intangibles					(2.61	)			(2.60	)			(2.69	)			(2.61	)			(2.69	)
Tangible equity to tangible assets ratio
(non-GAAP)					7.98	%			7.94	%			7.59	%			7.98	%			7.59	%
TANGIBLE BOOK VALUE
Book value per share (GAAP basis)				$	30.79			$	30.88			$	29.54			$	30.79			$	29.54
Impact of excluding goodwill and
other intangibles					(8.24	)			(8.27	)			(8.36	)			(8.24	)			(8.36	)
Tangible book value per share
(non-GAAP)				$	22.55			$	22.61			$	21.18			$	22.55			$	21.18