American National Bankshares (AMNB) 8-K American National Bankshares Inc. Reports Fourth Quarter 2015 Earnings

American National Bankshares Inc.
Consolidated Balance Sheets
(Dollars in thousands, except share and per share data)
Unaudited
	December 31
ASSETS	2015			2014
Cash and due from banks	$	19,352		$	29,272
Interest-bearing deposits in other banks	75,985			38,031
Securities available for sale, at fair value	340,349			344,716
Restricted stock, at cost	5,312			4,367
Loans held for sale	3,266			616
Loans	1,005,525			840,925
Less allowance for loan losses	(12,601		)	(12,427		)
Net Loans	992,924			828,498
Premises and equipment, net	23,567			23,025
Other real estate owned, net	2,184			2,119
Goodwill	43,872			39,043
Core deposit intangibles, net	2,683			2,045
Bank owned life insurance	17,658			15,193
Accrued interest receivable and other assets	19,737			19,567
Total assets	$	1,546,889		$	1,346,492
Liabilities
Demand deposits -- noninterest-bearing	$	322,442		$	254,458
Demand deposits -- interest-bearing	227,030			193,432
Money market deposits	200,495			174,000
Savings deposits	115,383			90,130
Time deposits	397,310			363,817
Total deposits	1,262,660			1,075,837
Customer repurchase agreements	40,611			53,480
Long-term borrowings	9,958			9,935
Junior subordinated debt	27,622			27,521
Accrued interest payable and other liabilities	8,203			5,939
Total liabilities	1,349,054			1,172,712
Shareholders' equity
Preferred stock, $5 par, 2,000,000 shares authorized,
none outstanding	—			—

Common stock, $1 par, 20,000,000 shares authorized,
8,622,007 shares outstanding at December 31, 2015 and
7,873,474 shares outstanding at December 31, 2014	8,605		7,872
Capital in excess of par value	75,375		57,650
Retained earnings	111,565		104,594
Accumulated other comprehensive income, net	2,290		3,664
Total shareholders' equity	197,835		173,780
Total liabilities and shareholders' equity	$	1,546,889	$	1,346,492

American National Bankshares Inc.
Consolidated Statements of Income
(Dollars in thousands, except share and per share data)
Unaudited
	Three Months Ended				Twelve Months Ended
	December 31				December 31
	2015		2014		2015		2014
Interest and Dividend Income:
Interest and fees on loans	$	11,849	$	9,859	$	46,860	$	39,257
Interest on federal funds sold	—		—		6		—
Interest and dividends on securities:
Taxable	1,051		925		4,072		3,775
Tax-exempt	882		954		3,681		3,971
Dividends	88		75		346		296
Other interest income	81		56		204		156
Total interest and dividend income	13,951		11,869		55,169		47,455
Interest Expense:
Interest on deposits	1,228		1,144		4,811		4,654
Interest on short-term borrowings	2		1		9		9
Interest on long-term borrowings	81		82		324		325
Interest on junior subordinated debt	196		187		760		742
Total interest expense	1,507		1,414		5,904		5,730
Net Interest Income	12,444		10,455		49,265		41,725
Provision for loan losses	250		250		950		400
Net Interest Income After Provision
for Loan Losses	12,194		10,205		48,315		41,325
Noninterest Income:
Trust fees	972		1,065		3,935		4,196
Service charges on deposit accounts	523		450		2,066		1,735
Other fees and commissions	590		487		2,377		1,903
Mortgage banking income	333		246		1,320		1,126
Securities gains (losses), net	314		1		867		505
Other	1,086		543		2,722		1,711
Total noninterest income	3,818		2,792		13,287		11,176
Noninterest Expense:
Salaries	3,920		3,798		16,554		14,688
Employee benefits	1,096		367		4,311		2,988
Occupancy and equipment	1,135		948		4,425		3,727
FDIC assessment	185		161		750		647

Bank franchise tax	223		232		898		901
Core deposit intangible amortization	300		226		1,201		1,114
Data processing	414		394		1,725		1,448
Software	308		274		1,158		1,019
Other real estate owned, net	39		92		99		240
Merger related expenses	50		512		1,998		780
Other	1,796		1,939		7,424		7,006
Total noninterest expense	9,466		8,943		40,543		34,558
Income Before Income Taxes	6,546		4,054		21,059		17,943
Income Taxes	1,939		1,164		6,020		5,202
Net Income	$	4,607	$	2,890	$	15,039	$	12,741
Net Income Per Common Share:
Basic	$	0.53	$	0.37	$	1.73	$	1.62
Diluted	$	0.53	$	0.37	$	1.73	$	1.62
Weighted Average Common Shares Outstanding:
Basic	8,627,414		7,855,872		8,680,502		7,867,198
Diluted	8,634,570		7,866,111		8,688,648		7,877,576

American National Bankshares Inc.
Financial Highlights
(In thousands, except share, ratio and
nonfinancial data, unaudited)		4th Qtr			3rd Qtr			4th Qtr			YTD			YTD
		2015			2015			2014			2015			2014
EARNINGS
Interest income		$	13,951		$	13,542		$	11,869		$	55,169		$	47,455
Interest expense		1,507			1,481			1,414			5,904			5,730
Net interest income		12,444			12,061			10,455			49,265			41,725
Provision for loan losses		250			—			250			950			400
Noninterest income		3,818			3,055			2,792			13,287			11,176
Noninterest expense		9,466			9,388			8,943			40,543			34,558
Income taxes		1,939			1,691			1,164			6,020			5,202
Net income		4,607			4,037			2,890			15,039			12,741
PER COMMON SHARE
Net income per share - basic		$	0.53		$	0.47		$	0.37		$	1.73		$	1.62
Net income per share - diluted		0.53			0.47			0.37			1.73			1.62
Cash dividends paid		0.24			0.23			0.23			0.93			0.92
Book value per share (a)		22.95			22.81			22.07			22.95			22.07
Book value per share - tangible (a) (b)		17.55			17.32			16.86			17.55			16.86
Closing market price		25.61			23.45			24.81			25.61			24.81
FINANCIAL RATIOS
Return on average assets		1.20		%	1.07		%	0.86		%	0.99		%	0.97		%
Return on average equity		9.32			8.25			6.63			7.65			7.40
Return on average tangible equity (c)		12.77			11.42			9.12			10.62			10.31
Average equity to average assets		12.88			12.95			13.04			12.90			13.12
	Tangible equity to tangible assets (b)	10.08			10.18			10.16			10.08			10.16
Net interest margin, taxable equivalent		3.68			3.64			3.59			3.70			3.66
Efficiency ratio (d)		57.52			61.25			64.60			63.81			63.41
Effective tax rate		29.62			29.52			28.71			28.59			28.99
PERIOD-END BALANCES
Securities		$	345,661		$	363,614		$	349,250		$	345,661		$	349,083
Loans held for sale		3,266			2,998			616			3,266			616
Loans, net of unearned income		1,005,525			980,984			840,925			1,005,525			840,925
Goodwill and other intangibles		46,555			47,316			41,088			46,555			41,088
Assets		1,546,894			1,512,437			1,346,492			1,546,894			1,346,492
Assets - tangible (b)		1,500,339			1,465,121			1,305,404			1,500,339			1,305,404
Deposits		1,262,660			1,226,521			1,075,837			1,262,660			1,075,837
Customer repurchase agreements		40,611			43,579			53,480			40,611			53,480
Long-term borrowings		37,580			37,549			37,456			37,580			37,456
Shareholders' equity		197,835			196,451			173,780			197,835			173,780
Shareholders' equity - tangible (b)		151,280			149,135			132,692			151,280			132,692

AVERAGE BALANCES
Securities	$	349,116			$	357,427			$	331,785			$	349,116			$	338,468
Loans held for sale	3,446				2,873				982				2,531				1,672
Loans, net of unearned income	983,725				982,212				815,271				973,329				803,187
Interest-earning assets	1,386,256				1,380,576				1,220,818				1,391,486				1,196,095
Goodwill and other intangibles	47,193				47,446				41,222				47,575				41,620
Assets	1,534,247				1,511,464				1,338,240				1,523,766				1,312,472
Assets - tangible (b)	1,487,054				1,464,018				1,297,018				1,476,191				1,270,852
Interest-bearing deposits	931,223				923,840				816,965				934,716				818,381
Deposits	1,247,612				1,223,328				1,069,995				1,232,199				1,052,530
Customer repurchase agreements	42,524				45,444				50,493				48,105				43,724
Long-term borrowings	37,561				37,531				37,438				37,515				37,398
Shareholders' equity	197,658				195,660				174,453				196,518				172,207
Shareholders' equity - tangible (b)	150,465				148,214				133,231				148,943				130,587
CAPITAL
Weighted average shares outstanding - basic	8,627,414				8,668,618				7,855,872				8,680,502				7,867,198
Weighted average shares outstanding - diluted	8,634,570				8,676,571				7,866,111				8,688,648				7,877,576
ALLOWANCE FOR LOAN LOSSES
Beginning balance	$	12,611			$	12,793			$	12,620			$	12,427			$	12,600
Provision for loan losses	250				—				250				950				400
Charge-offs	(317		)		(253		)		(566		)		(1,200		)		(964		)
Recoveries	57				71				123				424				391
Ending balance	$	12,601			$	12,611			$	12,427			$	12,601			$	12,427
LOANS
Construction and land development	$	72,968			$	68,692			$	50,863			$	72,968			$	50,863
Commercial real estate	428,932				424,404				391,472				428,932				391,472
Residential real estate	221,688				219,415				175,293				221,688				175,293
Home equity	98,449				98,249				91,075				98,449				91,075
Commercial and industrial	177,481				164,025				126,981				177,481				126,981
Consumer	6,007				6,199				5,241				6,007				5,241
Total	$	1,005,525			$	980,984			$	840,925			$	1,005,525			$	840,925
NONPERFORMING ASSETS AT PERIOD-END
Nonperforming loans:
90 days past due and accruing	—				—				—				—				—
Nonaccrual	5,205				5,360				4,112				5,205				4,112
Other real estate owned	2,184				1,333				2,119				2,184				2,119
Nonperforming assets	$	7,389			$	6,693			$	6,231			$	7,389			$	6,231
ASSET QUALITY RATIOS
Allowance for loan losses to total loans	1.25			%	1.29			%	1.48			%	1.25			%	1.48			%
Allowance for loan losses to

nonperforming loans	242.09		235.28		302.21		242.09		302.21
Nonperforming assets to total assets	0.48		0.44		0.46		0.48		0.46
Nonperforming loans to total loans	0.52		0.55		0.49		0.52		0.49
Annualized net charge-offs (recoveries)
to average loans	0.11		0.07		0.22		0.08		0.07
OTHER DATA
Fiduciary assets at period-end (e) (f)	$	491,681	$	486,173	$	450,498	$	491,681	$	450,498
Retail brokerage assets at period-end (e) (f)	$	257,546	$	247,258	$	210,265	$	257,546	$	210,265
Number full-time equivalent employees (g)	303		310		284		303		284
Number of full service offices	25		25		24		25		24
Number of loan production offices	2		2		2		2		2
Number of ATM's	33		34		31		33		31
Notes:
(a) - Unvested restricted stock of 16,649 shares are not included in the calculation at 12-31-15.
(b) - Excludes goodwill and other intangible assets.
(c) - Excludes amortization expense, net of tax, of intangible assets.
(d) - 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 excluding (i) gains or losses
on securities and (ii) gains or losses on sale of premises and equipment.
(e) - Market value.
(f) - Assets are not owned by the Company and are not reflected in the consolidated balance sheet.
(g) - Average for quarter.

			Net Interest Income Analysis
			For the Three Months Ended December 31, 2015 and 2014
			(in thousands, except rates)
								Interest
				Average Balance				Income/Expense				Yield/Rate
				2015		2014		2015		2014		2015		2014
Loans:
	Commercial			$	166,771	$	122,414	$	1,506	$	1,340	3.58	%	4.34	%
	Real estate			814,502		689,167		10,245		8,436		5.03		4.90
	Consumer			5,898		4,672		135		93		9.08		7.90
		Total loans		987,171		816,253		11,886		9,869		4.81		4.83
Securities:
	Federal agencies			88,255		77,015		364		235		1.65		1.22
	Mortgage-backed & CMO's			62,652		58,281		352		337		2.25		2.31
	State and municipal			176,148		182,501		1,613		1,759		3.66		3.86
	Other			16,970		13,988		144		115		3.39		3.29
		Total securities		344,025		331,785		2,473		2,446		2.88		2.95
Deposits in other banks				74,449		72,780		81		56		0.43		0.31
	Total interest-earning assets			1,405,645		1,220,818		14,440		12,371		4.11		4.05
Non-earning assets				128,602		117,422
		Total assets		$	1,534,247	$	1,338,240
Deposits:
	Demand			$	223,724	$	192,757	22		15		0.04		0.03
	Money market			197,230		176,353		65		56		0.13		0.13
	Savings			111,742		89,648		14		12		0.05		0.05
	Time			398,527		358,207		1,127		1,061		1.12		1.18
		Total deposits		931,223		816,965		1,228		1,144		0.52		0.56
Customer repurchase agreements				42,524		50,493		2		1		0.02		0.01
Long-term borrowings				37,561		37,438		277		269		2.95		2.87
	Total interest-bearing
		liabilities		1,011,308		904,896		1,507		1,414		0.59		0.62
Noninterest bearing
	demand deposits			316,389		253,030
Other liabilities				8,892		5,861
Shareholders' equity				197,658		174,453
		Total liabilities and
			shareholders' equity	$	1,534,247	$	1,338,240

Interest rate spread					3.52	%	3.43	%
Net interest margin					3.68	%	3.59	%
Net interest income (taxable equivalent basis)	12,933		10,957
Less: Taxable equivalent adjustment	489		502
Net interest income	$	12,444	$	10,455

			Net Interest Income Analysis
			For the Years Ended December 31, 2015 and 2014
			(in thousands, except yields and rates)
								Interest
				Average Balance				Income/Expense				Yield/Rate
				2015		2014		2015		2014		2015		2014
Loans:
	Commercial			$	156,646	$	122,434	$	6,893	$	5,436	4.40	%	4.44	%
	Real estate			809,545		677,633		39,362		33,508		4.86		4.94
	Consumer			9,669		4,792		730		354		7.55		7.39
		Total loans		975,860		804,859		46,985		39,298		4.81		4.88
Securities:
	Federal agencies			88,384		74,390		1,364		852		1.54		1.15
	Mortgage-backed & CMO's			61,741		61,377		1,346		1,453		2.18		2.37
	State and municipal			183,208		187,595		6,746		7,307		3.68		3.90
	Other			15,783		15,106		532		477		3.37		3.16
		Total securities		349,116		338,468		9,988		10,089		2.86		2.98
Federal funds sold				5,230		—		6		—		0.11		—
Deposits in other banks				61,280		52,768		204		156		0.33		0.30
	Total interest-earning assets			1,391,486		1,196,095		57,183		49,543		4.11		4.14
Non-earning assets				132,280		116,377
		Total assets		$	1,523,766	$	1,312,472
Deposits:
	Demand			$	223,825	$	183,994	82		71		0.04		0.04
	Money market			196,828		177,046		260		232		0.13		0.13
	Savings			109,697		88,629		53		47		0.05		0.05
	Time			404,366		368,712		4,416		4,304		1.09		1.17
		Total deposits		934,716		818,381		4,811		4,654		0.51		0.57
Customer repurchase agreements				48,105		43,724		9		7		0.02		0.02
Other short-term borrowings				14		701		—		2		0.36		0.29
Long-term borrowings				37,515		37,398		1,084		1,067		2.89		2.85
	Total interest-bearing
		liabilities		1,020,350		900,204		5,904		5,730		0.58		0.64
Noninterest bearing
	demand deposits			297,483		234,149
Other liabilities				9,415		5,912
Shareholders' equity				196,518		172,207

	Total liabilities and
		shareholders' equity	$	1,523,766	$	1,312,472
Interest rate spread											3.53	%	3.50	%
Net interest margin											3.69	%	3.66	%
Net interest income (taxable equivalent basis)							51,279		43,813
Less: Taxable equivalent adjustment							2,014		2,088
Net interest income							$	49,265	$	41,725