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

American National Bankshares Inc. and Subsidiaries
Consolidated Balance Sheets
(Dollars in thousands, except share and per share data)
Unaudited
	June 30
ASSETS	2012			2011
Cash and due from banks	$	18,529		$	15,873
Interest-bearing deposits in other banks		10,380			23,310
Securities available for sale, at fair value		334,523			231,393
Securities held to maturity		-			2,381
Total securities		334,523			233,774
Restricted stock, at cost		6,268			3,666
Loans held for sale		9,215			2,087
Loans		808,069			514,081
Less allowance for loan losses		(12,099	)		(8,744	)
Net Loans		795,970			505,337
Premises and equipment, net		25,314			19,129
Other real estate owned, net		4,731			3,513
Goodwill		39,352			22,468
Core deposit intangibles, net		5,502			1,132
Bank owned life insurance		13,273			4,171
Accrued interest receivable and other assets		27,835			11,556
Total assets	$	1,290,892		$	846,016
Liabilities
Demand deposits -- noninterest-bearing	$	196,727		$	115,329
Demand deposits -- interest-bearing		149,229			95,453
Money market deposits		170,505			67,273
Savings deposits		78,842			63,632
Time deposits		447,182			317,263
Total deposits		1,042,485			658,950
Short-term borrowings:
Customer repurchase agreements		46,113			50,329
Long-term borrowings		10,142			413
Trust preferred capital notes		27,267			20,619
Accrued interest payable and other liabilities		6,461			4,515
Total liabilities		1,132,468			734,826
Shareholders' equity
Preferred stock, $5 par, 2,000,000 shares authorized,
none outstanding		-			-
Common stock, $1 par, 20,000,000 shares authorized,
7,836,056 shares outstanding at June 30, 2012 and
6,156,563 shares outstanding at June 30, 2011		7,836			6,157
Capital in excess of par value		56,825			27,670
Retained earnings		86,642			74,810
Accumulated other comprehensive income, net		7,121			2,553
Total shareholders' equity		158,424			111,190
Total liabilities and shareholders' equity	$	1,290,892		$	846,016

American National Bankshares Inc. and Subsidiaries
Consolidated Statements of Income
(Dollars in thousands, except share and per share data)
Unaudited
	Three Months Ended						Six Months Ended
	June 30						June 30
	2012			2011			2012		2011
Interest and Dividend Income:
Interest and fees on loans	$	12,683		$	6,618		$	25,803	$	13,297
Interest and dividends on securities:
Taxable		1,056			1,085			2,135		2,254
Tax-exempt		1,077			827			2,159		1,543
Dividends		52			26			103		53
Other interest income		18			14			28		84
Total interest and dividend income		14,886			8,570			30,228		17,231
Interest Expense:
Interest on deposits		1,729			1,587			3,566		3,167
Interest on short-term borrowings		51			82			94		162
Interest on long-term borrowings		84			5			168		58
Interest on customer repurchase agreements		-			-
Interest on trust preferred capital notes		206			297			412		640
Total interest expense		2,070			1,971			4,240		4,027
Net Interest Income		12,816			6,599			25,988		13,204
Provision for loan losses		733			336			1,466		673
Net Interest Income After Provision
for Loan Losses		12,083			6,263			24,522		12,531
Noninterest Income:
Trust fees		966			878			1,848		1,806
Service charges on deposit accounts		413			400			901		821
Other fees and commissions		445			338			902		654
Mortgage banking income		519			271			1,050		418
Securities gains (losses), net		160			(19	)		160		(18	)
Impairment of securities		-			-			-		-
Other		297			120			1,173		278
Total noninterest income		2,800			1,988			6,034		3,959
Noninterest Expense:
Salaries		3,809			2,546			7,920		5,031
Employee benefits		799			624			1,877		1,165
Occupancy and equipment		1,048			696			2,013		1,395
FDIC assessment		213			197			446		402
Bank franchise tax		182			176			365		351
Core deposit intangible amortization		546			95			1,093		189
Foreclosed real estate, net		171			456			18		522
Merger related expenses		(202	)		835			49		1,144
Other		2,267			1,403			4,979		2,608
Total noninterest expense		8,833			7,028			18,760		12,807
Income Before Income Taxes		6,050			1,223			11,796		3,683
Income Taxes		1,776			211			3,347		893
Net Income		4,274			1,012			8,449		2,790
Dividends on preferred stock		-			-			-		-
Net income available to common shareholders	$	4,274		$	1,012		$	8,449	$	2,790
Net Income Per Common Share:
Basic	$	0.55		$	0.16		$	1.08	$	0.45
Diluted	$	0.54		$	0.16		$	1.08	$	0.45
Average Common Shares Outstanding:
Basic		7,832,162			6,154,396			7,827,195		6,149,029
Diluted		7,849,142			6,161,265			7,839,364		6,157,032

American National Bankshares Inc. and Subsidiaries
Financial Highlights
(In thousands, except share, ratio and nonfinancial data, unaudited)
	2nd Qtr			1st Qtr			2nd Qtr			YTD			YTD
	2012			2012			2011			2012			2011
EARNINGS
Interest income	$	14,886		$	15,342		$	8,570		$	30,228		$	17,231
Interest expense		2,070			2,170			1,971			4,240			4,027
Net interest income		12,816			13,172			6,599			25,988			13,204
Provision for loan losses		733			733			336			1,466			673
Noninterest income		2,800			3,234			1,988			6,034			3,959
Noninterest expense		8,833			9,927			7,028			18,760			12,807
Income taxes		1,776			1,571			211			3,347			893
Net income		4,274			4,175			1,012			8,449			2,790
PER COMMON SHARE
Earnings per share - basic	$	0.55		$	0.53		$	0.16		$	1.08		$	0.45
Earnings per share - diluted		0.54			0.53			0.16			1.08			0.45
Cash dividends declared		0.23			0.23			0.23			0.46			0.46
Book value per share		20.22			19.80			18.06			20.22			18.06
Book value per share - tangible (a)		14.49			14.00			14.23			14.49			14.23
Closing market price		23.56			21.30			18.39			23.56			18.39
FINANCIAL RATIOS
Return on average assets		1.31	%		1.27	%		0.48	%		1.29	%		0.66	%
Return on average equity		10.86			10.80			3.65			10.83			5.07
Return on average tangible equity (b)		16.62			16.70			5.00			16.67			6.79
Average equity to average assets		12.03			11.79			13.06			11.91			13.06
Net interest margin, taxable equivalent		4.57			4.55			3.65			4.63			3.65
Efficiency ratio		55.56			61.65			73.00			58.15			68.59
Effective tax rate		29.36			27.34			17.25			28.38			24.25
PERIOD-END BALANCES
Securities	$	340,791		$	343,395		$	237,440		$	340,791		$	237,440
Loans held for sale		9,215			3,774			2,087			9,215			2,087
Loans, net of unearned income		808,069			816,471			514,081			808,069			514,081
Goodwill and other intangibles		44,854			45,400			23,600			44,854			23,600
Assets		1,290,892			1,323,260			846,016			1,290,892			846,016
Assets - tangible (a)		1,246,038			1,277,860			822,416			1,246,038			822,416
Deposits		1,042,485			1,074,730			658,950			1,042,485			658,950
Customer repurchase agreements		46,113			48,651			50,329			46,113			50,329
Other short-term borrowings		-			-			-			-			-
Long-term borrowings		37,409			37,412			21,032			37,409			21,032
Shareholders' equity		158,424			155,024			111,190			158,424			111,190
Shareholders' equity - tangible (a)		113,570			109,624			87,590			113,570			87,590
AVERAGE BALANCES
Securities	$	335,996		$	319,159		$	235,725		$	327,578		$	231,185
Loans held for sale		5,819			5,500			1,984			5,659			1,747
Loans, net of unearned income		814,042			813,544			515,161			816,543			515,882
Interest-earning assets		1,173,487			1,169,822			773,750			1,174,404			769,544
Goodwill and other intangibles		45,214			45,400			23,651			45,263			23,700
Assets		1,308,384			1,311,794			848,783			1,310,353			842,882
Assets - tangible (a)		1,263,170			1,266,394			825,132			1,265,090			819,182
Interest-bearing deposits		854,673			880,270			549,397			867,471			545,771
Deposits		1,054,427			1,065,415			666,325			1,058,988			659,661
Customer repurchase agreements		48,742			47,229			47,220			47,986			45,500
Other short-term borrowings		1,878			115			-			997			-
Long-term borrowings		37,419			37,421			21,062			37,420			24,439
Shareholders' equity		157,390			154,685			110,859			156,037			110,046
Shareholders' equity - tangible (a)		112,176			109,285			87,208			110,774			86,346

American National Bankshares Inc. and Subsidiaries
Financial Highlights
(In thousands, except share, ratio and nonfinancial data, unaudited)
	2nd Qtr			1st Qtr			2nd Qtr			YTD			YTD
	2012			2012			2011			2012			2011
CAPITAL
Average shares outstanding - basic		7,832,162			7,822,228			6,154,396			7,827,195			6,149,029
Average shares outstanding - diluted		7,849,142			7,833,061			6,161,265			7,839,364			6,157,032
ALLOWANCE FOR LOAN LOSSES
Beginning balance	$	11,691		$	10,529		$	8,257		$	10,529		$	8,420
Provision for loan losses		733			733			336			1,466			673
Charge-offs		(728	)		(340	)		(134	)		(1,068	)		(705	)
Recoveries		403			769			285			1,172			356
Ending balance	$	12,099		$	11,691		$	8,744		$	12,099		$	8,744
LOANS
Construction and land development	$	50,913		$	52,446		$	35,756		$	50,913		$	35,756
Commercial real estate		354,441			347,815			208,685			354,441			208,685
Residential real estate		170,893			182,010			114,510			170,893			114,510
Home equity		95,522			95,071			61,218			95,522			61,218
Commercial and industrial		128,847			131,711			87,449			128,847			87,449
Consumer		7,454			7,418			6,463			7,454			6,463
Total	$	808,069		$	816,471		$	514,081		$	808,069		$	514,081
NONPERFORMING ASSETS AT PERIOD-END
Nonperforming loans:
90 days past due	$	-		$	183		$	-		$	-		$	-
Nonaccrual		7,995			13,337			3,464			7,995			3,464
Foreclosed real estate		4,731			6,369			3,513			4,731			3,513
Nonperforming assets	$	12,726		$	19,889		$	6,977		$	12,726		$	6,977
ASSET QUALITY RATIOS
Annualized net chargeoffs to average loans		0.16	%		(0.21	) %		(0.12	) %		(0.03	) %		0.14	%
Nonperforming assets to total assets		0.99			1.50			0.82			0.99			0.82
Nonperforming loans to total loans		0.99			1.66			0.67			0.99			0.67
Allowance for loan losses to total loans		1.50			1.43			1.70			1.50			1.70
Allowance for loan losses to
nonperforming loans		151.33			86.47			252.42			151.33			252.42
OTHER DATA
Fiduciary assets at period-end (c)	$	374,562		$	385,660		$	368,579		$	374,562		$	368,579
Retail brokerage assets at period-end (c)	$	191,577		$	191,446		$	49,636		$	191,577		$	49,636
Number full-time equivalent employees (d)		315			316			244			315			244
Number of full service offices		25			25			18			25			18
Number of loan production offices		2			2			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

Net Interest Income Analysis
For the Three Months Ended June 30, 2012 and 2011
(in thousands, except rates)
					Interest
	Average Balance				Income/Expense				Yield/Rate
	2012		2011		2012		2011		2012			2011
Loans:
Commercial	$	130,697	$	79,595	$	1,727	$	909		5.30	%		4.58	%
Real estate		681,870		430,872		10,859		5,620		6.37			5.22
Consumer		7,294		6,678		139		120		7.64			7.21
Total loans		819,861		517,145		12,725		6,649		6.21			5.15
Securities:
Federal agencies		41,517		35,919		155		256		1.49			2.85
Mortgage-backed & CMOs		99,391		56,133		486		466		1.96			3.32
State and municipal		182,499		137,843		1,975		1,585		4.33			4.60
Other		12,589		5,830		117		57		3.72			3.91
Total securities		335,996		235,725		2,733		2,364		3.25			4.01
Deposits in other banks		17,630		20,880		18		14		0.41			0.27
Total interest-earning assets		1,173,487		773,750		15,476		9,027		5.28			4.67
Non-earning assets		134,897		75,033
Total assets	$	1,308,384	$	848,783
Deposits:
Demand	$	155,550	$	98,224		54		17		0.14			0.07
Money market		172,439		61,714		127		67		0.30			0.44
Savings		78,608		63,716		30		22		0.15			0.14
Time		448,076		325,743		1,518		1,481		1.36			1.82
Total deposits		854,673		549,397		1,729		1,587		0.81			1.16
Customer repurchase agreements		48,742		47,220		49		82		0.40			0.70
Other short-term borrowings		1,878		-		2		-		0.43			-
Long-term borrowings		37,419		21,062		290		302		3.10			5.74
Total interest-bearing
liabilities		942,712		617,679		2,070		1,971		0.88			1.28
Noninterest bearing
demand deposits		199,754		116,928
Other liabilities		8,528		3,317
Shareholders' equity		157,390		110,859
Total liabilities and
shareholders' equity	$	1,308,384	$	848,783
Interest rate spread										4.40	%		3.39	%
Net interest margin										4.57	%		3.65	%
Net interest income (taxable equivalent basis)						13,406		7,056
Less: Taxable equivalent adjustment						590		457
Net interest income					$	12,816	$	6,599

Net Interest Income Analysis
For the Six Months Ended June 30, 2012 and 2011
(in thousands, except rates)
					Interest
	Average Balance				Income/Expense				Yield/Rate
	2012		2011		2012		2011		2012			2011
Loans:
Commercial	$	137,057	$	78,765	$	3,538	$	1,789		5.18	%		4.58	%
Real estate		674,964		431,775		21,977		11,315		6.51			5.24
Consumer		10,181		7,089		366		256		7.21			7.28
Total loans		822,202		517,629		25,881		13,360		6.30			5.17
Securities:
Federal agencies		36,178		39,612		317		579		1.75			2.92
Mortgage-backed & CMOs		99,255		57,706		1,015		956		2.05			3.31
State and municipal		181,683		127,934		3,951		2,993		4.35			4.68
Other		10,462		5,933		211		115		4.03			3.88
Total securities		327,578		231,185		5,494		4,643		3.35			4.02
Deposits in other banks		24,624		20,730		28		84		0.23			0.82
Total interest-earning assets		1,174,404		769,544		31,403		18,087		5.35			4.71
Non-earning assets		135,949		73,338
Total assets	$	1,310,353	$	842,882
Deposits:
Demand	$	163,014	$	97,465		110		35		0.14			0.07
Money market		179,180		62,416		288		150		0.32			0.48
Savings		77,557		63,114		59		43		0.15			0.14
Time		447,720		322,776		3,109		2,939		1.39			1.84
Total deposits		867,471		545,771		3,566		3,167		0.82			1.17
Customer repurchase agreements		47,986		45,500		92		162		0.38			0.72
Other short-term borrowings		997		68		2		-		0.47			0.47
Long-term borrowings		37,420		24,439		580		698		3.10			5.71
Total interest-bearing
liabilities		953,874		615,778		4,240		4,027		0.89			1.32
Noninterest bearing
demand deposits		191,517		113,890
Other liabilities		8,925		3,168
Shareholders' equity		156,037		110,046
Total liabilities and
shareholders' equity	$	1,310,353	$	842,882
Interest rate spread										4.46	%		3.39	%
Net interest margin										4.63	%		3.65	%
Net interest income (taxable equivalent basis)						27,163		14,060
Less: Taxable equivalent adjustment						1,175		856
Net interest income					$	25,988	$	13,204