American National Bankshares 8K Regulation FD Disclosure | AMNB 8 May 07

Scott & Stringfellow, Inc.

Presentation

May 8, 2007

Charles H. Majors

President and Chief Executive Officer

628 Main Street

Danville, VA 24541

Phone: 434-773-2219

E-mail: majorsc@amnb.com

Neal A. Petrovich

Senior Vice President and

Chief Financial Officer

103 Tower Drive

Danville, VA 24540

Phone: 434-773-2242

E-mail: petrovichn@amnb.com

Please visit us on the web at www.amnb.com

Contact Information

This presentation 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 Corporation 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 Corporation'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 Profile

Founded in 1909

Headquartered in Danville, VA

Commercial and Retail Banking

Trust and Investment Services

Insurance

–

Title Insurance

–

Personal and business lines

Eighteen branch locations

Three loan production offices

Geographical Information

Danville Region

–

7 offices in City of Danville and

1 office in Yanceyville, NC

Southside Region

–

1 office each in Martinsville,

Collinsville, Ridgeway, South
Boston, Chatham, Gretna, and
a Loan Production Office in
Greensboro, NC

Lynchburg Region

–

3 offices in Lynchburg and 1

in Lovingston

–

Loan production office in

Lynchburg

–

New loan production office at Smith Mountain Lake (opened May 1, 2007 in temporary space)

Branch application and

permanent site selection in
process

Acquisition of Community First

Financial Corporation

Parent company of Community First Bank

Date Closed – April 1, 2006

Approximately $140 million in loans and deposits each

Growth market

Four excellent locations

Accretive to earnings per share

14% increase

Net Income (thousands)

Earnings Per Share

Balance Sheet Highlights – 3/31/07

$788 million in assets

$97 million in shareholders’ equity

$545 million in loans

$651 million in deposits and repurchase agreements

Deposits

Loans

3/31/07

Deposit and Loan Distribution

New Loan Volume Q1 2007

In thousands

Up 12.4%

Net Income

No Change

Earnings Per Share

Up 32%

In thousands

Loans

(quarterly averages)

Loan Composition 3/31/07

In thousands

Nonperforming Assets

Up 19%

In thousands

Deposits and Repurchase Agreements

(quarterly averages)

Deposit Composition 3/31/07

Up 16%

In thousands

Noninterest Income

	Q1 2007	Q1 2006	Change
Trust fees	$879	$755	16%
Service charges	622	571	9%
Mortgage banking fees	190	133	43%
Retail brokerage	89	125	-29%
Other	432	317	36%
TOTAL	$2,212	$1,901	16%

In thousands

Noninterest Income

In thousands

Up 9.2%

Trust and Investment Services

Peer average 82/18

Net interest income is after loan loss provision

Revenue Components

Q1 2007

Up 18%

In thousands

Noninterest Expense

	Q1 2007	Q1 2006	Change
Salaries	$2,390	$1,984	20%
Benefits	$648	$649	0%
Occupancy and equipment	$829	$646	28%
Amortization	$94	$39	141%
Other	$1,209	$1,065	14%
Total	$5,170	$4,383	18%

In thousands

Noninterest Expense

Key Financial Ratios – Q1 2007

Return on average assets: 1.39%

–

Scott & Stringfellow peer group average: 1.06%*

Return on average equity: 11.35%

–

Scott & Stringfellow peer group average: 11.52%*

Return on average tangible equity: 15.81%

* Selected community banks and thrifts with market cap less than $1 billion.

Common Stock Information

Market: Nasdaq Global Select Market

Symbol: AMNB

Shares outstanding: 6.1 million

52 week range through 5/1/07: $21.75 - $24.41

Closing price, 5/1/07: $22.24

Avg daily volume (3 mo): 3,324 shares

Market cap: $136 million

Dividends

Dividend: $.22 per share quarterly

Dividend yield: 3.96% (at $22.24 per share)

Common Stock Ratios

Price to earnings (ttm): 12

–

Scott & Stringfellow peer group average: 17 *

Price to book: 1.5

–

Scott & Stringfellow peer group average: 1.8 *

* Selected community banks and thrifts with market cap less than $1 billion.

Going Forward

Priorities:

–

Profitable growth

Higher growth in Lynchburg region

Maintain market share in Danville and Southside regions

Stable credit in older markets permits more aggressive underwriting in new markets

–

Look for opportunities in new markets with higher growth potential

–

Consider other acquisition opportunities

–

Relationship banking / exceptional customer service

–

Continue to control expenses

–

Maintain attractive dividend

Thank you!

American National Bankshares (AMNB) 8-KRegulation FD Disclosure