Exhibit 99.1
American National Bankshares Inc. Reports Financial Results
DANVILLE, Va., July 16 /PRNewswire-FirstCall/ -- American National
Bankshares Inc. (Nasdaq: AMNB) reported second quarter 2003 net income of
$2.308 million, which represents income of $0.40 on a basic and diluted per
share basis. During the same period in 2002, the Corporation earned $0.40 on
a basic and diluted per share basis. The annualized return on average assets
(ROA) for the second quarter of 2003 was 1.49% and the annualized return on
average equity (ROE) for the quarter was 13.14%.
For the first six months of 2003, earnings were $4.642 million compared to
$4.534 million, an increase of 2.4%. Earnings per share of $0.81 basic and
$0.80 diluted increased from the same period of 2002 when both basic and
diluted earnings per share were $0.78. The annualized return on average
assets (ROA) for the first six months of 2003 was 1.52% and the annualized
return on average equity (ROE) for the same period was 13.18%.
Net interest income for the first six months ending June 30, 2003, after a
higher provision for loan losses to reflect strong loan growth, grew 5.1% or
$546,000. Non-interest income increased 8.3% for the same period, fueled by
increases in deposit service charges related to the introduction of enhanced
deposit account overdraft features in the second quarter as well as increased
mortgage banking revenue. Trust and Investment Services revenues continue to
be a strong contributor of non-interest income and represented 40.7% of that
total for the six months ending June 30, 2003. Non-interest expenses
increased by 8.7% during this period with the majority of that increase
related to personnel and benefits costs. Along with increased heath insurance
and retirement costs, the Corporation has hired additional staff in the
lending and trust/asset management areas.
At June 30, 2003 total assets were $631.3 million, up $59.9 million or
10.5% from $571.4 million at June 30, 2002. Deposit and retail repurchase
accounts increased to $536.2 million, up $50.9 million or 10.5% over $485.3
million at June 30, 2002 while loans totaled $432.6 million, up $41.5 million
or 10.6% over second quarter 2002 levels. Securities grew to $164.7 million
at June 30, 2003 compared to $153.2 million a year earlier. Loan growth for
the second quarter 2003 was $12.9 million while deposit and retail repurchase
account growth for the quarter was $18.3 million.
The Corporation's capital position remains strong with shareholders'
equity at June 30, 2003 of $70.3 million, representing 11.1% of total assets.
Asset quality continues to remain solid, as the allowance for loan losses
equaled 1.38% of total loans and the non-performing assets ratio was 0.67% of
total loans.
"We are pleased to produce another fine quarter and six months of
performance for our shareholders," stated Charles H. Majors, President and
Chief Executive Officer. "While strong asset growth did not directly lead to
a commensurate increase in earnings for the first six months of the year due
to continued pressure on our net interest margin, we are positioning the
Corporation now for the future. We continue to grow in all of our markets,
with lending and trust department professionals being added to support
additional revenue growth. We are being conservative in our pricing and the
reinvestment of assets as we anticipate interest rates will return to a more
normalized range in the next one to two years. This combination of
investments in people and positioning of our balance sheet for the future
creates short-term consequences to our earnings that we think will be more
than offset with enhanced long-term results. We continue to focus on asset
quality, growth in non-interest income, controlling expenses and building
customer relationships -- a simple formula that has served the Corporation
well over the past 94 years."
Mr. Majors also stated, "American National Bank and Trust Company, the
sole subsidiary of the Corporation, was recently named by US Banker magazine
as one of the top 200 community banks with under $1 billion dollars in assets.
We ranked 52 in the survey based on the three-year average of our return on
average shareholders' equity. The Corporation was renamed to the Russell 3000
and 2000 stock indexes, which provides additional exposure and a broader
market for our stock. And on top of this recognition, the dividend was
increased by 5.6% during the second quarter. All of these items, in
combination with our financial results, should please our shareholders."
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 seventeen 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.
Consolidated Balance Sheets
American National Bankshares Inc. and Subsidiary
(In thousands)
Unaudited
June 30
ASSETS 2003 2002
Cash and due from banks $ 12,039 $ 13,992
Interest-bearing deposits in other
banks 7,953 386
Investment securities:
Securities available for sale 140,550 124,177
Securities held to maturity 24,105 28,998
Total investment securities 164,655 153,175
Loans, held for sale 2,106 563
Loans, net of unearned income 432,647 391,145
Less allowance for loan losses (5,991) (5,477)
Net Loans 426,656 385,668
Bank premises and equipment 7,930 8,336
Core deposit intangibles 1,159 1,609
Accrued interest receivable and other
assets 8,802 7,636
Total assets $ 631,300 $ 571,365
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES:
Demand deposits -- non-interest
bearing $ 68,166 $ 62,780
Demand deposits -- interest bearing 60,943 58,277
Money market deposits 44,634 40,969
Savings deposits 81,840 70,215
Time deposits 234,588 225,241
Total deposits 490,171 457,482
Repurchase agreements 46,062 27,815
FHLB borrowings 21,500 15,050
Accrued interest payable and other
liabilities 3,269 2,881
Total liabilities 561,002 503,228
SHAREHOLDERS' EQUITY:
Common stock, $1 par, 10,000,000
shares authorized, 5,680,909 shares
outstanding at June 30, 2003 and
5,802,456 shares outstanding at
June 30, 2002 5,681 5,802
Capital in excess of par value 9,407 9,564
Retained earnings 53,396 50,834
Accumulated other comprehensive income 1,814 1,937
Total shareholders' equity 70,298 68,137
Total liabilities and
shareholders' equity $631,300 $571,365
Consolidated Statements of Income
American National Bankshares Inc. and Subsidiary
(In thousands)
Unaudited
Three Months Ended Six Months Ended
June 30 June 30
2003 2002 2003 2002
INTEREST INCOME:
Interest and fees on loans $ 6,508 $ 6,785 $13,067 $13,534
Interest on deposits in other
banks 11 31 36 113
Income on securities:
Federal agencies 511 518 1,060 945
Mortgage-backed 385 598 839 1,254
State and municipal 515 476 984 932
Other investments 305 379 651 810
Total interest income 8,235 8,787 16,637 17,588
INTEREST EXPENSE:
Interest on deposits:
Demand 61 110 129 229
Money market 125 215 264 405
Savings 212 270 437 535
Time 1,677 2,194 3,397 4,724
Interest on repurchase agreements 135 161 260 310
Interest on other borrowings 248 176 490 347
Total interest expense 2,458 3,126 4,977 6,550
NET INTEREST INCOME 5,777 5,661 11,660 11,038
PROVISION FOR LOAN LOSSES 255 236 495 419
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 5,522 5,425 11,165 10,619
NON-INTEREST INCOME:
Trust and investment services 647 666 1,253 1,332
Service charges on deposit
accounts 541 416 964 781
Other fees and commissions 210 230 438 426
Mortgage banking income 150 69 278 151
Securities gains, net 1 - 3 19
Other income 66 64 141 131
Total non-interest income 1,615 1,445 3,077 2,840
NON-INTEREST EXPENSE:
Salaries 1,754 1,661 3,475 3,214
Pension and other employee
benefits 522 396 970 771
Occupancy and equipment 640 607 1,281 1,219
Core deposit intangible
amortization 113 113 225 225
Other expenses 853 802 1,740 1,648
Total non-interest expense 3,882 3,579 7,691 7,077
INCOME BEFORE TAXES 3,255 3,291 6,551 6,382
INCOME TAX PROVISION 947 956 1,909 1,848
NET INCOME $ 2,308 $ 2,335 $ 4,642 $ 4,534
NET INCOME PER COMMON SHARE:
Basic $ 0.40 $ 0.40 $ 0.81 $ 0.78
Diluted $ 0.40 $ 0.40 $ 0.80 $ 0.78
Financial Highlights
American National Bankshares Inc. and Subsidiary
(Dollars in thousands,
except per share data)
Three Months Ended June 30
2003 2002 Change
EARNINGS
Interest income $ 8,235 $ 8,787 (6.3)%
Interest expense 2,458 3,126 (21.4)
Net interest income 5,777 5,661 2.0
Provision for loan losses 255 236 8.1
Noninterest income 1,615 1,445 11.8
Noninterest expense 3,882 3,579 8.5
Income taxes 947 956 (0.9)
Net income 2,308 2,335 (1.2)
PER COMMON SHARE
Earnings per share - basic $ 0.40 $ 0.40 0.0 %
Earnings per share - diluted 0.40 0.40 0.0
Cash dividends paid 0.19 0.18 5.6
Book value
Closing market price
FINANCIAL RATIOS
Return on average assets 1.49 % 1.64 % (15)bp
Return on average shareholders'
equity 13.14 14.16 (102)
Average equity to average assets 11.32 11.58 (26)
Net interest margin (FTE) 4.07 4.33 (26)
Efficiency ratio 50.66 48.67 199
PERIOD END BALANCES
Securities
Loans held for sale
Loans - net of unearned income
Assets
Total deposits
Repurchase agreement funding
FHLB borrowings
Shareholders' equity
AVERAGE BALANCES
Loans - net of unearned income $ 427,380 $ 387,661 10.2 %
Interest-earning assets 594,536 545,218 9.0
Assets 620,486 569,764 8.9
Interest-bearing deposits 420,804 397,096 6.0
Repurchase agreement funding 39,489 31,899 23.8
FHLB borrowings 22,426 13,755 63.0
Shareholders' equity 70,268 65,972 6.5
CAPITAL
Average shares outstanding -
basic 5,718,821 5,804,608 (1.5)
Average shares outstanding -
diluted 5,776,509 5,846,835 (1.2)
Shares repurchased 65,000 13,500
Average price of shares
repurchased $ 24.58 $ 19.62
ALLOWANCE FOR LOAN LOSSES
Beginning balance $ 5,771 $ 5,423 6.4 %
Provision for loan losses 255 236 8.1
Charge-offs (122) (207) (41.1)
Recoveries 87 25 248.0
Ending balance 5,991 5,477 9.4
COMPOSITION OF RISK ASSETS
Nonperforming loans:
90 days past due
Nonaccrual
OREO
Nonperforming assets
ASSET QUALITY RATIOS **
Nonperforming loans to total loans
Allowance for loan losses to total
loans
Allowance for loan losses
to nonperforming loans
Notes:
bp -- Change is measured as difference in basis points.
** -- Balance sheet amounts used in calculations are based on period end
balances.
Financial Highlights
American National Bankshares Inc. and Subsidiary
(Dollars in thousands,
except per share data)
Six Months Ended June 30
2003 2002 Change
EARNINGS
Interest income $ 16,637 $ 17,588 (5.4)%
Interest expense 4,977 6,550 (24.0)
Net interest income 11,660 11,038 5.6
Provision for loan losses 495 419 18.1
Noninterest income 3,077 2,840 8.3
Noninterest expense 7,691 7,077 8.7
Income taxes 1,909 1,848 3.3
Net income 4,642 4,534 2.4
PER COMMON SHARE
Earnings per share - basic $ 0.81 $ 0.78 3.8 %
Earnings per share - diluted 0.80 0.78 2.6
Cash dividends paid 0.37 0.35 5.7
Book value 12.37 11.74 5.4
Closing market price 25.96 27.39 (5.2)
FINANCIAL RATIOS
Return on average assets 1.52 % 1.60 % (8)bp
Return on average shareholders'
equity 13.18 13.74 (56)
Average equity to average assets 11.50 11.64 (14)
Net interest margin (FTE) 4.15 4.25 (10)
Efficiency ratio 50.44 49.31 113
PERIOD END BALANCES
Securities $ 164,655 $ 153,175 7.5 %
Loans held for sale 2,106 563 274.1
Loans - net of unearned income 432,647 391,145 10.6
Assets 631,300 571,365 10.5
Total deposits 490,171 457,482 7.1
Repurchase agreement funding 46,062 27,815 65.6
FHLB borrowings 21,500 15,050 42.9
Shareholders' equity 70,298 68,137 3.2
AVERAGE BALANCES
Loans - net of unearned income $ 418,970 $ 382,311 9.6
Interest-earning assets 586,046 542,332 8.1
Assets 612,118 566,778 8.0 %
Interest-bearing deposits 416,783 397,992 4.7
Repurchase agreement funding 37,065 30,993 19.6
FHLB borrowings 22,089 13,378 65.1
Shareholders' equity 70,414 65,989 6.7
CAPITAL
Average shares outstanding -
basic 5,737,354 5,812,941 (1.3)
Average shares outstanding -
diluted 5,796,728 5,849,018 (0.9)
Shares repurchased 100,000 20,100
Average price of shares
repurchased $ 24.86 $ 19.78
ALLOWANCE FOR LOAN LOSSES
Beginning balance $ 5,622 $ 5,334 5.4 %
Provision for loan losses 495 419 18.1
Charge-offs (286) (323) (11.5)
Recoveries 160 47 240.4
Ending balance 5,991 5,477 9.4
COMPOSITION OF RISK ASSETS
Nonperforming loans:
90 days past due $ 285 $ 305 (6.6)%
Nonaccrual 2,607 479 444.3
OREO 124 177 (29.9)
Nonperforming assets 3,016 961 213.8 %
ASSET QUALITY RATIOS **
Nonperforming loans to total loans 0.67 % 0.20 % 47 bp
Allowance for loan losses to total
loans 1.38 1.40 (2)
Allowance for loan losses
to nonperforming loans 2.07 X 6.99 X (492)
Notes:
bp -- Change is measured as difference in basis points.
** -- Balance sheet amounts used in calculations are based on period end
balances.
SOURCE American National Bankshares Inc.
-0- 07/16/2003
/CONTACT: Brad E. Schwartz Senior Vice President and Chief Financial
Officer of American National Bankshares Inc., +1-434-773-2242/
/Web site: http://www.amnb.com/
(AMNB)