Back to AMNB
UPDATE: American National Bankshares Inc. Reports First Quarter 2012 Earnings

DANVILLE, VA -- (Marketwire) -- 04/27/12 -- American National Bankshares Inc. (NASDAQ: AMNB)

  • Completed third quarter of operations post-merger with MidCarolina
  • Software conversion completed
  • Q1 net income of $4.2 million and diluted EPS of $0.53
  • Net interest margin 4.65% for 2012 quarter
  • Average shareholders' equity of $155 million is 11.79% of average assets

American National Bankshares Inc. (NASDAQ: AMNB), parent company of American National Bank and Trust Company, today announced first quarter 2012 net income of $4,175,000 compared to $1,778,000 for the first quarter of 2011, a $2,397,000 or 135% increase. Earnings per share, basic and diluted, were $0.53 for the 2012 quarter compared to $0.29 for the 2011 quarter. This quarterly net income produced for 2012 a return on average assets of 1.27%, a return on average equity of 10.80%, and a return on average tangible equity of 16.70%.

Earnings for the first quarter of 2012 were favorably impacted by the mid 2011 merger between American National and MidCarolina Financial Corporation ("MidCarolina"). Unless otherwise noted, most of the material changes between periods are related to the merger.

Financial Performance and Overview
Charles H. Majors, Chairman and Chief Executive Officer, reported, "As we begin 2012, American National is continuing to adjust to its larger size and complexity after the 2011 merger with MidCarolina. In addition, during this quarter, we made major changes to the bank's management information systems, a computer software conversion, in an effort to lay the foundation for a 21st century community bank. As one would expect, it was a large and complex project, and ultimately vital to the long range well-being of our bank by insuring our ability to take care of our customers' banking needs.

"As we begin the second quarter of 2012, we believe the merger related transition and the computer and management information system transition have been successful.

"Earnings for the quarter were very good. Our net income was $4,175,000 for 2012, compared to $1,778,000 for the prior year quarter, an increase of 135%. On a diluted EPS basis we earned $0.53 compared to $0.29 a year earlier.

"Much of the increase was driven by the merger with MidCarolina. Approximately $2,300,000 of our 2012 quarter pretax income was directly related to various categorical fair value adjustments, the majority of which results from the loan portfolio purchase discount. In fact, of this income, over $900,000 related to early pay offs of loans in the purchased credit impaired loan portfolio.

"We are always reviewing and assessing the overall credit risk in the loan portfolio for the Virginia side of the bank and for the acquired loans in North Carolina. As we recognize accretion income on the acquired loans, we are aware of the rapid reduction in the credit portion of the fair value purchase discount, also known as the mark. The mark is reducing at a faster velocity than the related loan balances, because of loan structure, and this has implications for our loan loss methodology. Consequently, during the first quarter, in addition to our normally determined provision expense, our analysis determined we needed to provide an additional $400,000.

Majors concluded, "There is a lot going on in our industry and with our community bank. This is a truly an exciting time for American National. We invite our customers and shareholders to help us build and grow a community bank for the new century."

Capital
American National's capital ratios remain strong and exceed all regulatory requirements. For the quarter ended March 31, 2012, average shareholders' equity was 11.79% of average assets and average tangible equity was 16.70% of average assets.

Book value per common share was $19.80 at March 31, 2012, compared to $17.77 for the same date in 2011.

Tangible book value per common share was $14.00 at March 31, 2012, compared to $13.92 for the same date in 2011.

Credit Quality Measurements
Nonperforming assets ($13.3 million of non-performing loans and $6.4 million of foreclosed real estate) represented 1.49% of total assets at March 31, 2012, compared to 0.82% at March 31, 2011.

Annualized net charge offs to average loans were -21 basis points (-0.21%, a net recovery position) for the 2012 first quarter, compared to 39 basis points (0.39%) for the same quarter in 2011. The 2012 quarter was impacted by a large recovery of approximately $600,000 related to a loan charged off by MidCarolina prior to the merger.

The allowance for loan losses as a percentage of total loans was 1.43% at March 31, 2012 compared to 1.60% the prior year. The loans acquired in connection with the MidCarolina merger, all valued at the merger date at fair value, whereby loan losses are implicit in the valuation, have had a significant impact on this ratio. The allowance for loan losses as a percentage of total loans, net of fair value loans, a non-GAAP measurement, was 2.13% at March 31, 2012.

Net Interest Income
Net interest income before provision for loan losses increased to $13,172,000 in the first quarter of 2012 from $6,605,000 in first quarter of 2011, an increase of $6,567,000 or 99.4%.

For the 2012 quarter, the net interest margin increased 99 basis points (0.99%) to 4.65% compared to the same period in 2011.

Noninterest Income
Noninterest income totaled $3,234,000 in the first quarter of 2012, compared with $1,971,000 in the first quarter of 2011, an increase of $1,263,000 or 64.1%. The 2012 quarter included a $495,000 gain on sale of bank owned real estate (a former bank branch site). Service charge related income and mortgage banking income have been favorably impacted by the merger.

Noninterest Expense
Noninterest expense totaled $9,927,000 in the first quarter of 2012, compared to $5,779,000 in the first quarter of 2011, an increase of $4,148,000 or 71.8%. Expenses for the quarter were negatively impacted by costs associated with the software conversion of approximately $190,000 and costs associated with the merger of $251,000.

About American National
American National Bankshares Inc. is a multi-state bank holding company with total assets of approximately $1.3 billion following the July 1, 2011, completion of the MidCarolina merger. 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 southern and central Virginia and north central North Carolina with 25 banking offices and two loan production offices. American National Bank and Trust Company also manages an additional $577 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.

Shares of American National are traded on the NASDAQ Global Select Market under the symbol "AMNB."

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; 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 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                                               2012          2011
                                                 ------------  ------------

Cash and due from banks                          $     28,197  $     14,248
Interest-bearing deposits in other banks               26,649        25,397

Securities available for sale, at fair value          337,376       226,171
Securities held to maturity                                 -         3,146
                                                 ------------  ------------
    Total securities                                  337,376       229,317
                                                 ------------  ------------

Restricted stock, at cost                               6,019         4,062
Loans held for sale                                     3,774         1,309

Loans                                                 816,471       516,629
  Less allowance for loan losses                      (11,691)       (8,257)
                                                 ------------  ------------
    Net Loans                                         804,780       508,372
                                                 ------------  ------------

Premises and equipment, net                            25,833        19,308
Other real estate owned, net                            6,369         3,532
Goodwill                                               39,352        22,468
Core deposit intangibles, net                           6,048         1,226
Bank owned life insurance                              13,165         4,137
Accrued interest receivable and other assets           25,698        11,862
                                                 ------------  ------------

    Total assets                                 $  1,323,260  $    845,238
                                                 ============  ============

LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities:
  Demand deposits -- noninterest-bearing         $    199,066  $    117,260
  Demand deposits -- interest-bearing                 168,757        96,686
  Money market deposits                               174,110        57,530
  Savings deposits                                     78,650        63,236
  Time deposits                                       454,147       328,771
                                                 ------------  ------------
    Total deposits                                  1,074,730       663,483
                                                 ------------  ------------

  Short-term borrowings:
    Customer repurchase agreements                     48,651        43,871
    Other short-term borrowings                             -             -
Long-term borrowings                                   10,175         4,450
Trust preferred capital notes                          27,237        20,619
Accrued interest payable and other liabilities          7,443         3,443
                                                 ------------  ------------
    Total liabilities                               1,168,236       735,866
                                                 ------------  ------------

Shareholders' equity:
  Preferred stock, $5 par, 2,000,000 shares
   authorized, none outstanding                             -             -
  Common stock, $1 par, 10,000,000 shares
   authorized, 7,830,247 shares outstanding at
   March 31, 2012 and 6,153,433 shares
   outstanding at March 31, 2011                        7,830         6,153
  Capital in excess of par value                       56,633        27,541
  Retained earnings                                    84,171        75,214
  Accumulated other comprehensive income, net           6,390           464
                                                 ------------  ------------
    Total shareholders' equity                        155,024       109,372
                                                 ------------  ------------

    Total liabilities and shareholders' equity   $  1,323,260  $    845,238
                                                 ============  ============



             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
                                                 ---------------------------
                                                     2012           2011
                                                 ------------  -------------
Interest and Dividend Income:
  Interest and fees on loans                     $     13,120  $       6,679
  Interest and dividends on securities:
    Taxable                                             1,079          1,169
    Tax-exempt                                          1,082            716
    Dividends                                              51             27
  Other interest income                                    10             70
                                                 ------------  -------------
    Total interest and dividend income                 15,342          8,661
                                                 ------------  -------------

Interest Expense:
  Interest on deposits                                  1,837          1,580
  Interest on short-term borrowings                        43             80
  Interest on long-term borrowings                         84             53
  Interest on trust preferred capital notes               206            343
                                                 ------------  -------------
    Total interest expense                              2,170          2,056
                                                 ------------  -------------

Net Interest Income                                    13,172          6,605
  Provision for loan losses                               733            337
                                                 ------------  -------------

Net Interest Income After Provision for Loan
 Losses                                                12,439          6,268
                                                 ------------  -------------

Noninterest Income:
  Trust fees                                              882            928
  Service charges on deposit accounts                     488            421
  Other fees and commissions                              457            316
  Mortgage banking income                                 531            147
  Securities gains, net                                     -              1
  Other                                                   876            158
                                                 ------------  -------------
    Total noninterest income                            3,234          1,971
                                                 ------------  -------------

Noninterest Expense:
  Salaries                                              4,111          2,485
  Employee benefits                                     1,078            541
  Occupancy and equipment                                 965            699
  FDIC assessment                                         233            205
  Bank franchise tax                                      183            175
  Core deposit intangible amortization                    547             94
  Foreclosed real estate, net                            (243)            22
  Merger related expenses                                 251            309
  Other                                                 2,802          1,249
                                                 ------------  -------------
    Total noninterest expense                           9,927          5,779
                                                 ------------  -------------

Income Before Income Taxes                              5,746          2,460
Income Taxes                                            1,571            682
                                                 ------------  -------------
Net Income                                       $      4,175  $       1,778
                                                 ============  =============

Net Income Per Common Share:
  Basic                                          $       0.53  $        0.29
  Diluted                                        $       0.53  $        0.29
Average Common Shares Outstanding:
  Basic                                             7,822,228      6,143,602
  Diluted                                           7,833,061      6,152,738



American National Bankshares Inc. and Subsidiaries
Financial Highlights

(In thousands,
 except share,
 ratio and
 nonfinancial
 data, unaudited)  1st Qtr     4th Qtr     1st Qtr       YTD         YTD
                     2012       2011        2011        2012        2011
                 ----------- ----------  ----------  ----------  ----------
EARNINGS
 Interest income $    15,342 $   17,177  $    8,661  $   15,342  $    8,661
 Interest expense      2,170      2,317       2,056       2,170       2,056
 Net interest
  income              13,172     14,860       6,605      13,172       6,605
 Provision for
  loan losses            733      1,972         337         733         337
 Noninterest
  income               3,234      2,587       1,971       3,234       1,971
 Noninterest
  expense              9,927      8,629       5,779       9,927       5,779
 Income taxes          1,571      2,194         682       1,571         682
 Net income            4,175      4,652       1,778       4,175       1,778

PER COMMON SHARE
 Earnings per
  share - basic  $      0.53 $     0.59  $     0.29  $     0.53  $     0.29
 Earnings per
  share - diluted       0.53       0.59        0.29        0.53        0.29
 Cash dividends
  declared              0.23       0.23        0.23        0.23        0.23
 Book value per
  share                19.80      19.58       17.77       19.80       17.77
 Book value per
  share -
  tangible (a)         14.00      13.86       13.92       14.00       13.92
 Closing market
  price                21.30      19.49       22.51       21.30       22.51

FINANCIAL RATIOS
 Return on
  average assets        1.27%      1.42%       0.85%       1.27%       0.85%
 Return on
  average equity       10.80      12.28        6.51       10.80        6.51
 Return on
  average
  tangible equity
  (b)                  16.70      18.77        8.64       16.70        8.64
 Average equity
  to average
  assets               11.79      11.59       13.03       11.79       13.03
 Net interest
  margin, taxable
  equivalent            4.65       5.27        3.66        4.65        3.66
 Efficiency ratio      61.65      49.57       64.16       61.65       64.16
 Effective tax
  rate                 27.34      32.05       27.72       27.34       27.72

PERIOD-END
 BALANCES
 Securities      $   343,395 $  339,385  $  233,379  $  343,395  $  233,379
 Loans held for
  sale                 3,774      6,330       1,309       3,774       1,309
 Loans, net of
  unearned income    816,471    824,758     516,629     816,471     516,629
 Goodwill and
  other
  intangibles         45,400     44,640      23,694      45,400      23,694
 Assets            1,323,260  1,304,522     845,238   1,323,260     845,238
 Assets -
  tangible (a)     1,277,860  1,259,882     821,544   1,277,860     821,544
 Deposits          1,074,730  1,058,754     663,483   1,074,730     663,483
 Customer
  repurchase
  agreements          48,651     45,575      43,871      48,651      43,871
 Other short-term
  borrowings               -      3,000           -           -           -
 Long-term
  borrowings          37,412     37,418      25,069      37,412      25,069
 Shareholders'
  equity             155,024    152,829     109,372     155,024     109,372
 Shareholders'
  equity -
  tangible (a)       109,624    108,189      85,678     109,624      85,678

AVERAGE BALANCES
 Securities      $   333,951 $  322,018  $  226,595  $  333,951  $  226,595
 Loans held for
  sale                 5,500      5,989       1,508       5,500       1,508
 Loans, net of
  unearned income    819,044    819,688     516,610     819,044     516,610
 Interest-earning
  assets               1,190  1,172,965     765,291       1,190     765,291
 Goodwill and
  other
  intangibles         45,400     44,455      23,750      45,400      23,750
 Assets            1,311,794  1,306,699     838,151   1,311,794     838,151
 Assets -
  tangible (a)     1,266,394  1,262,244     814,401   1,266,394     814,401
 Interest-bearing
  deposits           834,972    886,551     542,104     834,972     542,104
 Deposits          1,018,253  1,060,013     652,922   1,018,253     652,922
 Customer
  repurchase
  agreements          47,229     49,257      43,762      47,229      43,762
 Other short-term
  borrowings             115        130         136         115         136
 Long-term
  borrowings          37,421     37,434      27,855      37,421      27,855
 Shareholders'
  equity             154,685    151,496     109,224     154,685     109,224
 Shareholders'
  equity -
  tangible (a)       109,285    107,041      85,474     109,285      85,474

CAPITAL
 Average shares
  outstanding -
  basic            7,822,228  7,804,245   6,143,602   7,822,228   6,143,602
 Average shares
  outstanding -
  diluted          7,833,061  7,811,243   6,152,738   7,833,061   6,152,738

ALLOWANCE FOR
 LOAN LOSSES
 Beginning
  balance        $    10,529 $    9,086  $    8,420  $   10,529  $    8,420
 Provision for
  loan losses            733      1,972         337         733         337
 Charge-offs           (340)      (906)       (571)       (340)       (571)
 Recoveries              769        377          71         769          71
                 ----------- ----------  ----------  ----------  ----------
 Ending balance  $    11,691 $   10,529  $    8,257  $   11,691  $    8,257

LOANS
 Construction and
  land
  development    $    52,446 $   54,433  $   36,516  $   52,446  $   36,516
 Commercial real
  estate             347,815    351,961     207,502     347,815     207,502
 Residential real
  estate             182,010    179,812     118,603     182,010     118,603
 Home equity          95,071     96,195      61,674      95,071      61,674
 Commercial and
  industrial         131,711    134,166      84,702     131,711      84,702
 Consumer              7,418      8,191       7,632       7,418       7,632
                 ----------- ----------  ----------  ----------  ----------
 Total           $   816,471 $  824,758  $  516,629  $  816,471  $  516,629

NONPERFORMING
 ASSETS AT
 PERIOD-END
 Nonperforming
  loans:
  90 days past
   due           $       183 $      197  $        -  $      183  $        -
  Nonaccrual          13,154     13,523       3,417      13,154       3,417
 Foreclosed real
  estate               6,369      5,353       3,532       6,369       3,532
                 ----------- ----------  ----------  ----------  ----------
 Nonperforming
  assets         $    19,706 $   19,073  $    6,949  $   19,706  $    6,949

ASSET QUALITY
 RATIOS
 Annualized net
  chargeoffs to
  average loans     (0.21) %       0.26%       0.39%     (0.21)%       0.39%
 Nonperforming
  assets to total
  assets                1.49       1.46        0.82        1.49        0.82
 Nonperforming
  loans to total
  loans                 1.63       1.66        0.66        1.63        0.66
 Allowance for
  loan losses to
  total loans           1.43       1.28        1.60        1.43        1.60
 Allowance for
  loan losses to
  total loans net
  or fair value
  loans (e)             2.13       1.96        1.60        2.13        1.60
 Allowance for
  loan losses to
 nonperforming
  loans                87.66      76.74      241.64       87.66      241.64

OTHER DATA
 Fiduciary assets
  at period-end
  (c)            $   385,660 $  355,202  $  380,259  $  385,660  $  380,259
 Retail brokerage
  assets at
  period-end (c) $   191,446 $  176,636  $   50,175  $  191,446  $   50,175
 Number full-time
  equivalent
  employees (d)          316        315         242         316         242
 Number of full
  service offices         25         25          18          25          18
 Number of loan
  production
  offices                  2          1           1           2           1
 Number of ATM's          31         31          26          31          26


Notes:

  (a) - Excludes goodwill and other intangible assets
  (b) - Excludes amortization expense, net of tax, of intangible assets
  (c) - Market value
  (d) - Average for quarter
  (e) - Excludes acquired loans measured at fair value



                                    Net Interest Income Analysis
                         For the Three Months Ended March 31, 2012 and 2011
                                    (in thousands, except rates)

                                                  Interest
                          Average Balance      Income/Expense    Yield/Rate
                       -------------------- ------------------- -----------

                           2012      2011     2012      2011     2012  2011
                       ----------- -------- -------- ---------- ----- -----
Loans:
  Commercial           $   132,100 $ 77,925 $  1,811 $      880  5.50% 4.52%
  Real estate              673,876  432,688   11,118      5,695  6.60  5.26
  Consumer                  13,068    7,505      227        136  6.97  7.25
                       ----------- -------- -------- ---------- ----- -----
    Total loans            819,044  518,118   13,156      6,711  6.43  5.18
                       ----------- -------- -------- ---------- ----- -----

Securities:
  Federal agencies &
   GSE                      40,551   43,345      162        323  1.60  2.98
  Mortgage-backed &
   CMOs                     99,714   59,297      529        490  2.12  3.31
  State and municipal      185,331  117,916    1,976      1,408  4.26  4.78
  Other                      8,355    6,037       94         58  4.50  3.84
                       ----------- -------- -------- ---------- ----- -----
    Total securities       333,951  226,595    2,761      2,279  3.31  4.02
                       ----------- -------- -------- ---------- ----- -----

Deposits in other
 banks                      31,619   20,578       10         70  0.13  1.36
                       ----------- -------- -------- ---------- ----- -----

  Total interest-
   earning assets        1,184,614  765,291   15,927      9,060  5.38  4.74
                                            -------- ---------- ----- -----

Non-earning assets         127,180   72,860
                       ----------- --------

    Total assets       $ 1,311,794 $838,151
                       =========== ========

Deposits:
  Demand               $   170,481 $ 96,698       56         18  0.13  0.07
  Money market             140,622   63,125      161         83  0.46  0.53
  Savings                   76,505   62,505       29         21  0.15  0.13
  Time                     448,934  319,776    1,591      1,458  1.42  1.82
                       ----------- -------- -------- ---------- ----- -----
    Total deposits         836,542  542,104    1,837      1,580  0.88  1.17

Customer repurchase
 agreements                 47,229   43,762       43         80  0.37  0.73
Other short-term
 borrowings                    115      136        0          0  0.35  0.47
Long-term borrowings        37,421   27,855      290        396  3.10  5.69
                       ----------- -------- -------- ---------- ----- -----
    Total interest-
     bearing
     liabilities           921,307  613,857    2,170      2,056  0.94  1.34
                                            -------- ---------- ----- -----

Noninterest bearing
 demand deposits           183,575  110,818
Other liabilities           52,227    4,252
Shareholders' equity       154,685  109,224
                       ----------- --------
    Total liabilities
     and shareholders'
     equity            $ 1,311,794 $838,151
                       =========== ========

Interest rate spread                                             4.44% 3.40%
                                                                ===== =====
Net interest margin                                              4.65% 3.66%
                                                                ===== =====

Net interest income (taxable
 equivalent basis)                            13,757      7,004
Less: Taxable
 equivalent adjustment                           585        399
                                            -------- ----------
Net interest income                         $ 13,172 $    6,605
                                            ======== ==========


Back to AMNB
Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki