Exhibit 99.1
American National Bankshares Inc. Reports Financial Results
DANVILLE, VA, October 22 /PRNewswire-FirstCall/ -- American National
Bankshares Inc. (NASDAQ; AMNB) reported third quarter 2003 net income of $2.405
million, which represents income of $0.42 on a basic and diluted per share
basis. During the same period in 2002, the Corporation earned $0.42 on a basic
and diluted per share basis. The annualized return on average assets (ROA) for
the third quarter of 2003 was 1.52% and the annualized return on average equity
(ROE) for the quarter was 13.86%.
For the first nine months of 2003, earnings were $7.047 million
compared to $6.995 million, an increase of 0.7%. Earnings per share of $1.23
basic and $1.22 diluted increased from the same period of 2002 when both basic
and diluted earnings per share were $1.20. The annualized return on average
assets (ROA) for the first nine months of 2003 was 1.52% and the annualized
return on average equity (ROE) for the same period was 13.39%.
Net interest income for the first nine months ending September 30, 2003
grew by 1.6% or $269,000. Non-interest income increased 14.1% for the same
period, fueled by increases in deposit service charges related to the
introduction of an enhanced deposit account overdraft program as well as
increased mortgage banking revenue. Non-interest expenses increased by 7.0%
during this period, with the majority of that increase related to personnel,
health insurance and retirement plan costs.
At September 30, 2003 total assets were $644.0 million, up $37.4
million or 6.2% from $606.6 million at September 30, 2002. Deposit and retail
repurchase accounts increased to $548.3 million, up $36.8 million or 7.2% over
$511.5 million at September 30, 2002 while loans totaled $419.9 million, up
$25.0 million or 6.3% over third quarter 2002 levels. Securities grew to $180.5
million at September 30, 2003 compared to $154.2 million a year earlier.
The Corporation's capital position remains strong with shareholders'
equity at September 30, 2003 of $71.1 million representing 11.0% of total
assets. Asset quality continues to remain solid, as the allowance for loan
losses equaled 1.44% of total loans and the non-performing assets ratio remained
below one percent at 0.71% of total loans.
"The low interest rate environment continues to affect our ability to
significantly grow net interest income," stated Charles H. Majors, President and
Chief Executive Officer. "We will continue to grow our loan and investment
portfolios in a conservative manner by focusing on rate and credit risk. By
preparing for increased interest rates in the future, we will be better
positioned to drive our earnings higher on a long-term basis, rather than
focusing on the short-term. We did achieve our best nine-month performance this
year in the growth of non-interest income. With this strategy we improved our
earnings on a basic per share basis to $1.23, which is an increase of 2.5% over
last year. We will continue to focus on asset quality, growth in non-interest
income, controlling expenses and building long-term customer relationships - a
formula that has served the Corporation well over the past 94 years."
American National Bankshares Inc. is the holding company of American
National Bank and Trust Company, a community bank with fourteen offices in
Danville, Chatham, Collinsville, Gretna, Martinsville, Henry County, and South
Boston, Virginia, and Yanceyville, North Carolina. Services are also provided
through eighteen ATMs, "AmeriLink" internet banking, and our 24-hour "Access
American" phone banking. Banking subsidiaries include ANB Mortgage Corp.
(secondary mortgage origination), ANB Investor Services (retail brokerage) and
ANB Insurance Services (full-service insurance agency). Additional information
is available on our website at www.amnb.com. The shares of American National
Bankshares Inc. are traded on the NASDAQ National Market under the symbol
"AMNB".
This press release 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.
SOURCE American National Bankshares Inc. 10-22-2003
Contact: Brad E. Schwartz - Senior Vice President/ Chief Financial Officer of
American National Bankshares Inc., 1+ 434-773-2242
Consolidated Balance Sheets
American National Bankshares Inc. and Subsidiary
(In Thousands)
Unaudited
- ------------------------------------------------------------------------------------------------------------
September 30
----------------------------
2003 2002
------------ -----------
ASSETS
Cash and due from banks.........................................................$ 17,713 $ 18,108
Interest-bearing deposits in other banks........................................ 13,574 26,278
Securities:
Securities available for sale................................................. 158,605 126,014
Securities held to maturity................................................... 21,922 28,147
----------- -----------
Total securities.............................................................. 180,527 154,161
----------- -----------
Loans held for sale............................................................. 740 1,832
Loans, net of unearned income .................................................. 419,916 394,888
Less allowance for loan losses.................................................. (6,067) (5,574)
----------- -----------
Net loans..................................................................... 413,849 389,314
----------- -----------
Bank premises and equipment..................................................... 7,725 8,235
Core deposit intangibles........................................................ 1,047 1,496
Accrued interest receivable and other assets.................................... 8,861 7,189
----------- -----------
Total assets..................................................................$ 644,036 $ 606,613
=========== ===========
LIABILITIES and SHAREHOLDERS' EQUITY
Liabilities:
Demand deposits -- non-interest bearing.......................................$ 71,624 $ 66,379
Demand deposits -- interest bearing........................................... 66,393 60,631
Money market deposits......................................................... 49,607 46,693
Savings deposits.............................................................. 82,480 71,857
Time deposits................................................................. 231,106 228,225
----------- -----------
Total deposits................................................................ 501,210 473,785
----------- -----------
Repurchase agreements......................................................... 47,091 37,730
FHLB borrowings............................................................... 21,000 22,000
Accrued interest payable and other liabilities................................ 3,672 3,334
----------- -----------
Total liabilities............................................................. 572,973 536,849
----------- -----------
Shareholders' equity:
Common stock, $1 par, 10,000,000 shares authorized,
5,667,464 shares outstanding at September 30, 2003 and
5,785,616 shares outstanding at September 30, 2002.......................... 5,667 5,786
Capital in excess of par value................................................ 9,404 9,576
Retained earnings............................................................. 54,378 51,784
Accumulated other comprehensive income........................................ 1,614 2,618
----------- -----------
Total shareholders' equity.................................................... 71,063 69,764
----------- -----------
Total liabilities and shareholders' equity....................................$ 644,036 $ 606,613
=========== ===========
Consolidated Statements of Income
American National Bankshares Inc. and Subsidiary
(In Thousands)
(Unaudited)
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Three Months Ended Nine Months Ended
September 30 September 30
------------------ ------------------
2003 2002 2003 2002
-------- -------- -------- --------
Interest Income:
Interest and fees on loans....................................................$ 6,270 $ 6,919 $ 19,337 $ 20,453
Interest on deposits in other banks........................................... 33 57 69 170
Income on securities:
Federal agencies............................................................ 560 479 1,620 1,424
Mortgage-backed............................................................. 225 576 1,064 1,830
State and municipal......................................................... 472 484 1,456 1,416
Other securities............................................................ 284 378 935 1,188
-------- ------- -------- --------
Total interest income....................................................... 7,844 8,893 24,481 26,481
-------- ------- -------- --------
Interest Expense:
Interest on deposits:
Demand...................................................................... 45 105 174 334
Money market................................................................ 110 196 374 601
Savings..................................................................... 150 268 587 803
Time........................................................................ 1,613 2,005 5,010 6,729
Interest on repurchase agreements............................................. 113 167 373 477
Interest on other borrowings.................................................. 245 231 735 578
-------- ------- -------- --------
Total interest expense...................................................... 2,276 2,972 7,253 9,522
-------- ------- -------- --------
Net Interest Income............................................................. 5,568 5,921 17,228 16,959
Provision for Loan Losses....................................................... 170 214 665 633
-------- ------- -------- --------
Net Interest Income After Provision
For Loan Losses............................................................... 5,398 5,707 16,563 16,326
-------- ------- -------- --------
Non-Interest Income:
Trust and investment services................................................. 625 606 1,878 1,938
Service charges on deposit accounts........................................... 577 451 1,541 1,232
Other fees and commissions.................................................... 241 194 679 620
Mortgage banking income....................................................... 203 112 481 263
Securities gains, net......................................................... 43 - 46 19
Other income.................................................................. 111 71 252 202
-------- ------- -------- --------
Total non-interest income................................................... 1,800 1,434 4,877 4,274
-------- ------- -------- --------
Non-Interest Expense:
Salaries...................................................................... 1,758 1,727 5,233 4,941
Pension and other employee benefits........................................... 433 389 1,403 1,160
Occupancy and equipment....................................................... 624 615 1,905 1,834
Core deposit intangible amortization ......................................... 112 112 337 337
Other......................................................................... 875 817 2,615 2,465
-------- ------- -------- --------
Total non-interest expense.................................................. 3,802 3,660 11,493 10,737
-------- ------- -------- --------
Income Before Taxes............................................................. 3,396 3,481 9,947 9,863
Income Tax Provision............................................................ 991 1,020 2,900 2,868
-------- ------- -------- --------
Net Income......................................................................$ 2,405 $ 2,461 $ 7,047 $ 6,995
======== ======= ======== ========
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Net Income Per Common Share:
Basic.........................................................................$ .42 $ .42 $ 1.23 $ 1.20
Diluted.......................................................................$ .42 $ .42 $ 1.22 $ 1.20
Financial Highlights
American National Bankshares Inc. and Subsidiary
(Dollars in thousands, except per share data)
Three Months Ended Nine Months Ended
September 30 September 30
------------------------ ------------------------
2003 2002 Change 2003 2002 Change
----------- ----------- -------- ----------- ----------- --------
EARNINGS
Interest income $ 7,844 $ 8,893 (11.8)% $ 24,481 $ 26,481 (7.6)%
Interest expense 2,276 2,972 (23.4) 7,253 9,522 (23.8)
Net interest income 5,568 5,921 (6.0) 17,228 16,959 1.6
Provision for loan losses 170 214 (20.6) 665 633 5.1
Noninterest income 1,800 1,434 25.5 4,877 4,274 14.1
Noninterest expense 3,802 3,660 3.9 11,493 10,737 7.0
Income taxes 991 1,020 (2.8) 2,900 2,868 1.1
Net income 2,405 2,461 (2.3) 7,047 6,995 .7
PER COMMON SHARE
Earnings per share - basic $ .42 $ .42 - % $ 1.23 $ 1.20 2.5 %
Earnings per share - diluted .42 .42 - 1.22 1.20 1.7
Cash dividends paid .19 .18 5.6 .56 .53 5.7
Book value 12.54 12.06 4.0
Closing market price 24.97 27.46 (9.1)
FINANCIAL RATIOS
Return on average assets 1.52 % 1.67 % (15)bp 1.52 % 1.62 % (10)bp
Return on average shareholders' equity 13.86 14.34 (48) 13.39 13.94 (55)
Average equity to average assets 10.99 11.66 (67) 11.34 11.65 (31)
Net interest margin (FTE) 3.84 4.40 (56) 4.05 4.30 (25)
Efficiency ratio 50.19 48.06 213 50.35 48.87 148
PERIOD END BALANCES
Securities $ 180,527 $ 154,161 17.1 %
Loans held for sale 740 1,832 (59.6)
Loans - net of unearned income 419,916 394,888 6.3
Assets 644,036 606,613 6.2
Total deposits 501,210 473,785 5.8
Repurchase agreement funding 47,091 37,730 24.8
FHLB borrowings 21,000 22,000 (4.5)
Shareholders' equity 71,063 69,764 1.9
AVERAGE BALANCES
Loans - net of unearned income $ 426,146 $ 398,814 6.9 % $ 421,397 $ 387,933 8.6 %
Interest-earning assets 605,672 561,268 7.9 592,256 548,775 7.9
Assets 631,441 588,299 7.3 618,762 574,061 7.8
Interest-bearing deposits 426,902 401,311 6.4 420,393 399,110 5.3
Repurchase agreement funding 42,024 35,224 19.3 38,736 32,419 19.5
FHLB borrowings 21,152 20,210 4.7 21,773 15,682 38.8
Shareholders' equity 69,399 68,623 1.1 70,197 66,904 4.9
CAPITAL
Average shares outstanding - basic 5,674,259 5,794,241 (2.1) 5,716,092 5,806,639 (1.6)
Average shares outstanding - diluted 5,738,622 5,855,760 (2.0) 5,777,156 5,852,431 (1.3)
Shares repurchased 15,000 20,000 115,000 40,100
Average price of shares repurchased $ 25.72 $ 26.05 $ 24.98 $ 22.91
ALLOWANCE FOR LOAN LOSSES
Beginning balance $ 5,991 $ 5,477 9.4 % $ 5,622 $ 5,334 5.4 %
Provision for loan losses 170 214 (20.6) 665 633 5.1
Charge-offs (131) (176) (25.6) (417) (499) (16.4)
Recoveries 37 59 (37.3) 197 106 85.8
Ending balance $ 6,067 $ 5,574 8.8 $ 6,067 $ 5,574 8.8
Financial Highlights
American National Bankshares Inc. and Subsidiary
(Dollars in thousands, except per share data)
Three Months Ended Nine Months Ended
September 30 September 30
------------------------ ------------------------
2003 2002 Change 2003 2002 Change
----------- ----------- -------- ----------- ----------- --------
COMPOSITION OF RISK ASSETS
Nonperforming loans:
90 days past due $ 362 $ 256 41.4
Nonaccrual 2,612 383 582.0
OREO 146 30 386.7
Nonperforming assets $ 3,120 $ 669 366.4
ASSET QUALITY RATIOS **
Nonperforming loans to total loans .71 % .16 % 55 bp
Allowance for loan losses to total loans 1.44 1.41 3
Allowance for loan losses
to nonperforming loans 2.04 X 8.72 X (668)
Notes:
bp - Change is measured as difference in basis points.
** - Balance sheet amounts used in calculations are based on period end balances.