American National Bankshares (AMNB) 8-K American National Bankshares Inc. Reports First Quarter 2012 Earnings

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 (losses), 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

American National Bankshares Inc. and Subsidiaries
Financial Highlights (continued)
(In thousands, except share, ratio and nonfinancial data, unaudited)
	1st Qtr			4th Qtr			1st Qtr			YTD			YTD
	2012			2011			2011			2012			2011
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			0.83
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		-		-		0.35			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