EXHIBIT 99.1
Contact: Neal A. Petrovich - (434) 773-2242
Senior Vice President and Chief Financial Officer
Distribute: PR Newswire, Virginia state/local news lines
Date: April 26, 2005
Traded: NASDAQ National Market Symbol: AMNB
AMERICAN NATIONAL BANKSHARES INC. ANNOUNCES FIRST QUARTER EARNINGS
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FOR IMMEDIATE RELEASE (Danville, Virginia) -- American National Bankshares
Inc. (NASDAQ: AMNB) reported first quarter net income of $2,583,000, a 4.6%
increase over the first quarter of 2004. Basic earnings per share increased
6.8%, from $.44 in the first quarter of 2004 to $.47 in 2005; diluted earnings
per share increased from $.43 to $.46, an increase of 7.0%.
Net interest income, the Corporation's largest source of revenue, increased
4.1% over the first quarter of 2004, due largely to a higher interest rate
spread.
Noninterest income increased $214,000, or 11.5% from the first quarter of
2004 to 2005, due primarily to $320,000 in income from the sale of a debit card
and ATM processor, of which the Bank was a member. Excluding this item and gains
on sales of securities, noninterest income declined $46,000, due in large part
to a decline in residential mortgage loan volume. Noninterest expense increased
$190,000, or 5.0% from the first quarter of 2004 to the first quarter of 2005.
As announced previously, the Bank began an expansion into the Lynchburg,
Virginia market with the hiring of experienced commercial bankers to open a loan
production office. The office will be located at 18321 Forest Road, Route 221,
Lynchburg, Virginia. "We are excited about expanding into the Lynchburg market,"
commented Charles H. Majors, President and Chief Executive Officer. "Although
this expansion will have a short-term, negative impact on net income, it
provides us with excellent opportunities for growth and long-term earnings." The
Bank intends to promptly file an application with the Comptroller of the
Currency to open a retail branch at the Forest Road location. "We are also
considering additional branch sites within the Lynchburg market," stated Majors.
American National Bankshares Inc. is the holding company of American
National Bank and Trust Company, a community bank with thirteen full service
offices in Danville, Chatham, Collinsville, Gretna, Martinsville, Henry County,
and South Boston, Virginia; a loan production office in Lynchburg, Virginia; one
office in Yanceyville, North Carolina; and a loan production office in
Greensboro, North Carolina. American National Bank and Trust Company provides a
full array of financial products and services, including commercial, mortgage,
and consumer banking; trust and investment services; and insurance. Services are
also provided through eighteen ATMs, "AmeriLink" Internet banking, and our
24-hour "Access American" phone banking. 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.
American National Bankshares Inc. and Subsidiary
Consolidated Balance Sheets
(Dollars in thousands, except share data)
Unaudited
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March 31
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2005 2004
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ASSETS
Cash and due from banks.........................................................$ 16,848 $ 12,755
Interest-bearing deposits in other banks........................................ 327 7,250
Securities:
Securities available for sale, at fair value.................................. 160,816 186,969
Securities held to maturity................................................... 19,776 20,194
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Total securities.............................................................. 180,592 207,163
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Loans held for sale............................................................. 885 1,753
Loans, net of unearned income .................................................. 416,276 404,988
Less allowance for loan losses.................................................. (8,127) (5,323)
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Net loans..................................................................... 408,149 399,665
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Bank premises and equipment, net................................................ 7,522 7,864
Core deposit intangibles, net................................................... 372 822
Accrued interest receivable and other assets.................................... 10,985 8,626
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Total assets..................................................................$ 625,680 $ 645,898
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LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES:
Demand deposits - noninterest-bearing.........................................$ 82,509 $ 80,683
Demand deposits - interest-bearing............................................ 78,603 72,092
Money market deposits......................................................... 51,318 53,111
Savings deposits.............................................................. 84,405 84,064
Time deposits................................................................. 192,463 212,537
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Total deposits................................................................ 489,298 502,487
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Repurchase agreements......................................................... 40,969 46,040
FHLB borrowings............................................................... 20,900 21,000
Accrued interest payable and other liabilities................................ 3,778 3,283
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Total liabilities............................................................. 554,945 572,810
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SHAREHOLDERS' EQUITY:
Common stock, $1 par, 10,000,000 shares authorized,
5,491,682 shares outstanding at March 31, 2005 and
5,663,172 shares outstanding at March 31, 2004.............................. 5,492 5,633
Capital in excess of par value................................................ 9,434 9,472
Retained earnings............................................................. 56,592 56,210
Accumulated other comprehensive income, net................................... (783) 1,773
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Total shareholders' equity.................................................... 70,735 73,088
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Total liabilities and shareholders' equity....................................$ 625,680 $ 645,898
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American National Bankshares Inc. and Subsidiary
Consolidated Statements of Income
(Dollars in thousands, except per share data)
Unaudited
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Three Months Ended
March 31
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2005 2004
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Interest Income:
Interest and fees on loans......................................................$ 6,032 $ 5,741
Interest and dividends on securities:
Taxable....................................................................... 1,119 1,267
Tax-exempt.................................................................... 527 491
Dividends..................................................................... 46 51
Other interest income........................................................... 42 31
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Total interest income......................................................... 7,766 7,581
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Interest Expense:
Interest on deposits............................................................ 1,520 1,597
Interest on repurchase agreements............................................... 153 127
Interest on other borrowings.................................................... 244 241
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Total interest expense........................................................ 1,917 1,965
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Net Interest Income............................................................. 5,849 5,616
Provision for Loan Losses....................................................... 300 215
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Net Interest Income after Provision
for Loan Losses............................................................... 5,549 5,401
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Noninterest Income:
Trust and investment services................................................... 720 728
Service charges on deposit accounts............................................. 559 574
Other fees and commissions...................................................... 251 246
Mortgage banking income......................................................... 100 133
Securities gains, net........................................................... 45 105
Other........................................................................... 392 67
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Total noninterest income...................................................... 2,067 1,853
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Noninterest Expense:
Salaries........................................................................ 1,872 1,768
Pension and other employee benefits............................................. 468 422
Occupancy and equipment......................................................... 601 617
Bank franchise tax.............................................................. 138 140
Core deposit intangible amortization............................................ 112 112
Other........................................................................... 800 742
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Total noninterest expense..................................................... 3,991 3,801
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Income Before Income Tax Provision.............................................. 3,625 3,453
Income Tax Provision............................................................ 1,042 983
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Net Income......................................................................$ 2,583 $ 2,470
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Net Income Per Common Share:
Basic.........................................................................$ .47 $ .44
Diluted.......................................................................$ .46 $ .43
Average Common Shares Outstanding:
Basic.........................................................................5,510,614 5,648,278
Diluted.......................................................................5,558,625 5,705,869
Financial Highlights
American National Bankshares Inc. and Subsidiary
(Dollars in thousands, except per share data, unaudited)
Three Months Ended
March 31
------------------------
2005 2004 Change
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EARNINGS
Interest income $ 7,766 $ 7,581 2.4 %
Interest expense 1,917 1,965 (2.4)
Net interest income 5,849 5,616 4.1
Provision for loan losses 300 215 39.5
Noninterest income 2,067 1,853 11.5
Noninterest expense 3,991 3,801 5.0
Income taxes 1,042 983 6.0
Net income 2,583 2,470 4.6
PER COMMON SHARE
Earnings per share - basic $ .47 $ .44 6.8 %
Earnings per share - diluted .46 .43 7.0
Cash dividends paid .20 .19 5.3
Book value 12.88 12.97 (.7)
Closing market price 24.03 24.41 (1.6)
FINANCIAL RATIOS
Return on average assets 1.66 % 1.54 % 12 bp
Return on average shareholders' equity 14.51 13.62 89
Average equity to average assets 11.46 11.32 14
Net interest margin (FTE) 4.10 3.84 26
Efficiency ratio 48.76 49.69 (93)
PERIOD END BALANCES
Securities $ 180,592 $ 207,163 (12.8)%
Loans held for sale 885 1,753 (49.5)
Loans, net of unearned income 416,276 404,988 2.8
Assets 625,680 645,898 (3.1)
Deposits 489,298 502,487 (2.6)
Repurchase agreements 40,969 46,040 (11.0)
FHLB borrowings 20,900 21,000 (.5)
Shareholders' equity 70,735 73,088 (3.2)
AVERAGE BALANCES
Securities $ 180,852 $ 192,567 (6.1)%
Total loans 410,399 407,911 .6
Interest-earning assets 598,103 614,311 (2.6)
Assets 621,141 640,869 (3.1)
Interest-bearing deposits 408,178 423,615 (3.6)
Deposits 486,618 494,242 (1.5)
Repurchase agreements 39,326 49,277 (20.2)
FHLB borrowings 21,294 21,416 (.6)
Shareholders' equity 71,178 72,531 (1.9)
CAPITAL
Average shares outstanding - basic 5,510,614 5,648,278 (2.4)%
Average shares outstanding - diluted 5,558,625 5,705,869 (2.6)
Shares repurchased 30,400 32,200
Average price of shares repurchased $ 24.78 $ 25.23
Financial Highlights
American National Bankshares Inc. and Subsidiary
(Dollars in thousands, except per share data, unaudited)
Three Months Ended
March 31
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2005 2004 Change
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ALLOWANCE FOR LOAN LOSSES
Beginning balance $ 7,982 $ 5,292 50.8 %
Provision for loan losses 300 215 39.5
Charge-offs (233) (223) 4.5
Recoveries 78 39 100.0
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Ending balance $ 8,127 $ 5,323 52.7
NONPERFORMING ASSETS
Nonperforming loans:
90 days past due $ - $ 15 (100.0)%
Nonaccrual 8,050 3,828 110.3
OREO 183 360 (49.2)
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Nonperforming assets $ 8,233 $ 4,203 95.9
ASSET QUALITY RATIOS **
Nonperforming assets to total assets 1.32 % .65 % 67 bp
Nonperforming loans to total loans 1.93 .95 98
Net chargeoffs to average loans .15 .18 (3)
Allowance for loan losses to total loans 1.95 1.31 64
Allowance for loan losses
to nonperforming loans 1.01 X 1.39 X (38)
Notes:
bp - Change is measured as difference in basis points
** - Balance sheet amounts used in calculations are based on period end balances