American National Bankshares (AMNB) 8-K American National Bankshares Inc. Reports Fourth Quarter and Year End 2013 Earnings

American National Bankshares Inc. and Subsidiaries
Consolidated Balance Sheets
(Dollars in thousands, except share and per share data)
Unaudited
	December 31
ASSETS	2013			2012
Cash and due from banks	$	19,808		$	20,435
Interest-bearing deposits in other banks		47,873			27,007
Securities available for sale, at fair value		346,124			335,246
Restricted stock, at cost		4,889			5,287
Loans held for sale		2,760			13,852
Loans		794,671			788,705
Less allowance for loan losses		(12,600	)		(12,118	)
Net Loans		782,071			776,587
Premises and equipment, net		23,674			24,543
Other real estate owned, net		3,422			6,193
Goodwill		39,043			39,043
Core deposit intangibles, net		3,159			4,660
Bank owned life insurance		14,746			14,289
Accrued interest receivable and other assets		19,943			16,545
Total assets	$	1,307,512		$	1,283,687
Liabilities
Demand deposits -- noninterest-bearing	$	229,347		$	217,275
Demand deposits -- interest-bearing		167,736			153,578
Money market deposits		185,270			166,111
Savings deposits		85,724			81,135
Time deposits		389,598			409,568
Total deposits		1,057,675			1,027,667
Short-term borrowings:
Customer repurchase agreements		39,478			49,942
Other short-term borrowings		-			-
Long-term borrowings		9,951			10,079
Trust preferred capital notes		27,419			27,317
Accrued interest payable and other liabilities		5,438			5,436
Total liabilities		1,139,961			1,120,441
Shareholders' equity
Preferred stock, $5 par, 2,000,000 shares authorized,
none outstanding		-			-
Common stock, $1 par, 20,000,000 shares authorized,
7,890,697 shares outstanding at December 31, 2013 and
7,846,912 shares outstanding at December 31, 2012 and		7,891			7,847
Capital in excess of par value		58,050			57,211
Retained earnings		99,090			90,591
Accumulated other comprehensive income, net		2,520			7,597
Total shareholders' equity		167,551			163,246
Total liabilities and shareholders' equity	$	1,307,512		$	1,283,687

American National Bankshares Inc. and Subsidiaries
Consolidated Statements of Income
(Dollars in thousands, except share and per share data
Unaudited
	Three Months Ended						Twelve Months Ended
	December 31						December 31
	2013			2012			2013		2012
Interest and Dividend Income:
Interest and fees on loans	$	10,964		$	11,965		$	44,817	$	49,189
Interest and dividends on securities:
Taxable		956			914			3,530		4,044
Tax-exempt		1,060			1,062			4,213		4,280
Dividends		69			58			245		213
Other interest income		45			33			151		80
Total interest and dividend income		13,094			14,032			52,956		57,806
Interest Expense:
Interest on deposits		1,317			1,552			5,460		6,843
Interest on short-term borrowings		2			23			40		150
Interest on long-term borrowings		83			83			329		335
Interest on trust preferred capital notes		187			197			754		813
Total interest expense		1,589			1,855			6,583		8,141
Net Interest Income		11,505			12,177			46,373		49,665
Provision for loan losses		-			334			294		2,133
Net Interest Income After Provision
for Loan Losses		11,505			11,843			46,079		47,532
Noninterest Income:
Trust fees		1,080			929			3,689		3,703
Service charges on deposit accounts		460			442			1,750		1,757
Other fees and commissions		471			445			1,864		1,768
Mortgage banking income		295			569			2,008		2,234
Securities gains (losses), net		(11	)		(2	)		192		158
Other		309			303			1,324		1,790
Total noninterest income		2,604			2,686			10,827		11,410
Noninterest Expense:
Salaries		3,507			3,932			14,059		15,785
Employee benefits		1,226			947			3,848		3,604
Occupancy and equipment		893			1,009			3,614		3,951
FDIC assessment		162			162			647		692
Bank franchise tax		186			152			745		690
Core deposit intangible amortization		330			421			1,501		1,935
Foreclosed real estate, net		842			98			1,523		528
Other		2,758			2,282			9,168		9,458
Total noninterest expense		9,904			9,003			35,105		36,643
Income Before Income Taxes		4,205			5,526			21,801		22,299
Income Taxes		1,062			1,608			6,054		6,293
Net Income	$	3,143		$	3,918		$	15,747	$	16,006
Net Income Per Common Share:
Basic	$	0.40		$	0.50		$	2.00	$	2.04
Diluted	$	0.40		$	0.50		$	2.00	$	2.04
Average Common Shares Outstanding:
Basic		7,887,811			7,844,545			7,872,870		7,834,351
Diluted		7,901,198			7,854,083			7,884,561		7,845,652

Net Interest Income Analysis
For the Three Months Ended December 31, 2013 and 2012
(in thousands, except rates)
					Interest
	Average Balance				Income/Expense				Yield/Rate
	2013		2012		2013		2012		2013			2012
Loans:
Commercial	$	118,431	$	122,697	$	1,376	$	1,506		4.61	%		4.87	%
Real estate		670,720		671,180		9,498		10,368		5.66			6.18
Consumer		5,525		6,269		87		120		6.25			7.59
Total loans		794,676		800,146		10,961		11,994		5.51			5.99
Securities:
Federal agencies		66,613		35,728		164		110		0.98			1.23
Mortgage-backed & CMO's		70,821		85,623		402		419		2.27			1.96
State and municipal		196,643		187,545		1,946		1,945		3.96			4.15
Other		16,897		11,822		124		103		2.94			3.49
Total securities		350,974		320,718		2,636		2,577		3.00			3.21
Deposits in other banks		60,408		46,342		45		33		0.30			0.28
Total interest-earning assets		1,206,058		1,167,206		13,642		14,604		4.52			5.00
Non-earning assets		116,184		129,503
Total assets	$	1,322,242	$	1,296,709
Deposits:
Demand	$	163,809	$	145,539		26		36		0.06			0.10
Money market		186,391		169,647		84		107		0.18			0.25
Savings		85,061		79,492		17		23		0.08			0.11
Time		394,492		426,608		1,190		1,386		1.20			1.29
Total deposits		829,753		821,286		1,317		1,552		0.63			0.75
Customer repurchase agreements		47,220		45,510		2		23		0.02			0.20
Long-term borrowings		37,380		37,406		270		280		2.89			2.99
Total interest-bearing
liabilities		914,355		904,204		1,589		1,855		0.69			0.81
Noninterest bearing
demand deposits		234,167		221,906
Other liabilities		6,175		7,215
Shareholders' equity		167,545		163,384
Total liabilities and
shareholders' equity	$	1,322,242	$	1,296,709
Interest rate spread										3.83	%		4.19	%
Net interest margin										4.00	%		4.37	%
Net interest income (taxable equivalent basis)						12,053		12,749
Less: Taxable equivalent adjustment						548		572
Net interest income					$	11,505	$	12,177

Net Interest Income Analysis
For the Years Ended December 31, 2013 and 2012
(in thousands, except yields and rates)
					Interest
	Average Balance				Income/Expense				Yield/Rate
	2013		2012		2013		2012		2013			2012
Loans:
Commercial	$	125,283	$	128,031	$	6,082	$	6,642		4.85	%		5.19	%
Real estate		663,224		677,314		38,425		42,088		5.79			6.21
Consumer		5,847		8,359		403		605		6.89			7.24
Total loans		794,354		813,704		44,910		49,335		5.65			6.06
Securities:
Federal agencies		55,435		36,066		532		545		0.96			1.51
Mortgage-backed & CMO's		74,909		94,183		1,442		1,906		1.93			2.02
State and municipal		193,254		182,939		7,750		7,829		4.01			4.28
Other		15,007		11,654		430		435		2.87			3.73
Total securities		338,605		324,842		10,154		10,715		3.00			3.30
Deposits in other banks		53,857		32,080		151		80		0.28			0.25
Total interest-earning assets		1,186,816		1,170,626		55,215		60,130		4.65			5.14
Non-earning assets		120,338		132,455
Total assets	$	1,307,154	$	1,303,081
Deposits:
Demand	$	161,602	$	142,296		111		190		0.07			0.13
Money market		178,235		174,027		338		521		0.19			0.30
Savings		84,162		78,358		71		111		0.08			0.14
Time		405,213		443,549		4,940		6,021		1.22			1.36
Total deposits		829,212		838,230		5,460		6,843		0.66			0.82
Customer repurchase agreements		47,816		46,939		40		148		0.08			0.32
Other short-term borrowings		1		496		0		2		0.40			0.42
Long-term borrowings		37,437		37,415		1,083		1,148		2.89			3.07
Total interest-bearing
liabilities		914,466		923,080		6,583		8,141		0.72			0.88
Noninterest bearing
demand deposits		220,980		213,129
Other liabilities		6,370		8,025
Shareholders' equity		165,338		158,847
Total liabilities and
shareholders' equity	$	1,307,154	$	1,303,081
Interest rate spread										3.93	%		4.26	%
Net interest margin										4.10	%		4.44	%
Net interest income (taxable equivalent basis)						48,632		51,989
Less: Taxable equivalent adjustment						2,259		2,324
Net interest income					$	46,373	$	49,665

American National Bankshares Inc. and Subsidiaries
Financial Highlights
(In thousands, except share, ratio and
nonfinancial data, unaudited)	4th Qtr			3rd Qtr			4th Qtr			YTD			YTD
	2013			2013			2012			2013			2012
EARNINGS
Interest income	$	13,094		$	13,106		$	14,032		$	52,956		$	57,806
Interest expense		1,589			1,613			1,855			6,583			8,141
Net interest income		11,505			11,493			12,177			46,373			49,665
Provision for loan losses		-			-			334			294			2,133
Noninterest income		2,604			2,767			2,686			10,827			11,410
Noninterest expense		9,904			8,455			9,003			35,105			36,643
Income taxes		1,062			1,562			1,608			6,054			6,293
Net income		3,143			4,243			3,918			15,747			16,006
PER COMMON SHARE
Earnings per share - basic	$	0.40		$	0.54		$	0.50		$	2.00		$	2.04
Earnings per share - diluted		0.40			0.54			0.50			2.00			2.04
Cash dividends paid		0.23			0.23			0.23			0.92			0.92
Book value per share		21.23			21.03			20.80			21.23			20.80
Book value per share - tangible (a)		15.89			15.63			15.23			15.89			15.23
Closing market price		26.25			23.20			20.19			26.25			20.19
FINANCIAL RATIOS
Return on average assets		0.95	%		1.30	%		1.21	%		1.20	%		1.23	%
Return on average equity		7.50			10.40			9.59			9.52			10.08
Return on average tangible equity (b)		10.86			14.90			14.12			13.75			15.25
Average equity to average assets		12.67			12.48			12.60			12.65			12.19
Tangible equity to tangible assets (a)		9.91			9.62			9.64			9.91			9.64
Net interest margin, taxable equivalent		4.00			4.06			4.37			4.10			4.44
Efficiency ratio		72.76			57.43			58.36			57.57			58.23
Effective tax rate		22.77			26.91			29.10			28.22			28.22
PERIOD-END BALANCES
Securities	$	351,013		$	352,502		$	340,533		$	351,013		$	340,533
Loans held for sale		2,760			3,919			13,852			2,760			13,852
Loans, net of unearned income		794,671			798,996			788,705			794,671			788,705
Goodwill and other intangibles		42,202			42,532			43,703			42,202			43,703
Assets		1,307,512			1,324,185			1,283,687			1,307,512			1,283,687
Assets - tangible (a)		1,265,310			1,281,653			1,239,984			1,265,310			1,239,984
Deposits		1,057,675			1,071,083			1,027,667			1,057,675			1,027,667
Customer repurchase agreements		39,478			44,026			49,942			39,478			49,942
Long-term borrowings		37,370			37,377			37,396			37,370			37,396
Shareholders' equity		167,551			165,826			163,246			167,551			163,246
Shareholders' equity - tangible (a)		125,349			123,294			119,543			125,349			119,543
AVERAGE BALANCES
Securities	$	350,974		$	339,582		$	320,718		$	338,605		$	324,842
Loans held for sale		1,669			5,109			10,535			4,948			7,533
Loans, net of unearned income		793,007			790,846			789,611			789,406			806,171
Interest-earning assets		1,206,058			1,189,844			1,167,206			1,186,816			1,170,626
Goodwill and other intangibles		42,404			42,731			43,970			42,949			44,762
Assets		1,322,242			1,307,347			1,296,709			1,307,154			1,303,081
Assets - tangible (a)		1,279,838			1,264,616			1,252,739			1,264,205			1,258,319
Interest-bearing deposits		829,753			834,305			821,286			829,212			838,230
Deposits		1,063,920			1,053,124			1,043,192			1,050,192			1,051,359
Customer repurchase agreements		47,220			46,712			45,510			37,437			46,939
Other short-term borrowings		-			-			2			1			496
Long-term borrowings		37,380			37,388			37,406			37,437			37,415
Shareholders' equity		167,545			163,130			163,384			165,338			158,847
Shareholders' equity - tangible (a)		125,141			120,399			119,414			122,389			114,085

American National Bankshares Inc. and Subsidiaries
Financial Highlights
(In thousands, except share, ratio and
nonfinancial data, unaudited)	4th Qtr			3rd Qtr			4th Qtr			YTD			YTD
	2013			2013			2012			2013			2012
CAPITAL
Average shares outstanding - basic		7,887,811			7,877,901			7,844,545			7,872,870			7,834,351
Average shares outstanding - diluted		7,901,198			7,892,015			7,854,083			7,884,561			7,845,652
ALLOWANCE FOR LOAN LOSSES
Beginning balance	$	12,684		$	12,676		$	11,998		$	12,118		$	10,529
Provision for loan losses		0			-			334			294			2,133
Charge-offs		(208	)		(162	)		(404	)		(837	)		(2,086	)
Recoveries		124			170			190			1,025			1,542
Ending balance	$	12,600		$	12,684		$	12,118		$	12,600		$	12,118
LOANS
Construction and land development	$	41,822		$	43,386		$	48,812		$	41,822		$	48,812
Commercial real estate		364,616			361,968			355,433			364,616			355,433
Residential real estate		171,917			173,695			161,033			171,917			161,033
Home equity		87,797			89,154			91,313			87,797			91,313
Commercial and industrial		122,553			124,504			126,192			122,553			126,192
Consumer		5,966			6,289			5,922			5,966			5,922
Total	$	794,671		$	798,996		$	788,705		$	794,671		$	788,705
NONPERFORMING ASSETS AT PERIOD-END
Nonperforming loans:
90 days past due and accruing	$	-		$	-		$	-		$	-		$	-
Nonaccrual		5,071			4,647			5,316			5,071			5,316
Foreclosed real estate		3,422			4,215			6,193			3,422			6,193
Nonperforming assets	$	8,493		$	8,862		$	11,509		$	8,493		$	11,509
ASSET QUALITY RATIOS
Allowance for loan losses to total loans		1.59			1.59			1.54			1.59			1.54
Allowance for loan losses to
nonperforming loans		248.47			272.95			227.95			248.47			227.95
Nonperforming assets to total assets		0.65			0.67			0.90			0.65			0.90
Nonperforming loans to total loans		0.64			0.58			0.67			0.64			0.67
Annualized net charge-offs (recoveries)
to average loans		0.04	%		0.00	%		0.11	%		(0.02	) %		0.07	%
OTHER DATA
Fiduciary assets at period-end (c)	$	442,583		$	430,853		$	386,210		$	442,583		$	386,210
Retail brokerage assets at period-end (c)	$	185,810		$	175,856		$	155,079		$	186		$	155,079
Number full-time equivalent employees (d)		290			290			307			290			307
Number of full service offices		25			25			25			25			25
Number of loan production offices		2			2			2			2			2
Number of ATM's		31			31			31			31			31
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) - The efficiency ratio is calculated by dividing noninterest expense excluding gains           or losses on the sale of OREO by net interest income including tax equivalent income on           nontaxable loans and securities and excludin(a) gains or losses on securities and (b)           gains or losses on sale of premises and equipment.