# EDGAR Filing Document

**Accession Number:** 0000741516
**File Stem:** 0001437749-23-001289
**Filing Date:** 2023-1
**Character Count:** 47781
**Document Hash:** 87fb68c842a8571d3d1fc26898178d12
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001437749-23-001289.hdr.sgml**: 20230119

**ACCESSION NUMBER**: 0001437749-23-001289

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 14

**CONFORMED PERIOD OF REPORT**: 20230119

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230119

**DATE AS OF CHANGE**: 20230119

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** AMERICAN NATIONAL BANKSHARES INC.
- **CENTRAL INDEX KEY:** 0000741516
- **STANDARD INDUSTRIAL CLASSIFICATION:** NATIONAL COMMERCIAL BANKS [6021]
- **IRS NUMBER:** 541284688
- **STATE OF INCORPORATION:** VA
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 000-12820
- **FILM NUMBER:** 23536147

**BUSINESS ADDRESS:**
- **STREET 1:** 628 MAIN ST
- **CITY:** DANVILLE
- **STATE:** VA
- **ZIP:** 24541
- **BUSINESS PHONE:** 4347925111

**MAIL ADDRESS:**
- **STREET 1:** 628 MAIN STREET
- **STREET 2:** P O BOX 191
- **CITY:** DANVILLE
- **STATE:** VA
- **ZIP:** 24543

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** AMERICAN NATIONAL BANKSHARES INC
- **DATE OF NAME CHANGE:** 19920703

americannb20221004_8k.htm

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| |
|:---|
| **UNITED STATES**<br> **SECURITIES AND EXCHANGE COMMISSION**<br> **Washington, D.C. 20549** |
| **FORM **8-K** |
| **CURRENT REPORT** |
| **Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934** |

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Date of Report (Date of earliest event reported)**January 19, 2023**<br>

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| |
|:---|
| **AMERICAN NATIONAL BANKSHARES INC.** |
| (Exact name of registrant as specified in its charter) |

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| | | |
|:---|:---|:---|
| **Virginia** | **0-12820** | **54-1284688** |
| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
| **628 Main Street, **Danville**, **VA 24541** | **628 Main Street, **Danville**, **VA 24541** | **628 Main Street, **Danville**, **VA 24541** |
| (Address of principal executive offices) (Zip Code) | (Address of principal executive offices) (Zip Code) | (Address of principal executive offices) (Zip Code) |

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Registrant's telephone number, including area code: **434-**792-5111**<br>

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| |
|:---|
| Not Applicable |
| (Former name or former address, if changed since last report.) |

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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:<br>

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13a-4(c))

Securities registered pursuant to Section 12(b) of the Act:

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| | |
|:---|:---|
| <u>Title of each class</u> | <u>Name of each exchange on which registered</u> |
| Common Stock, $1.00 par value<br> AMNB | Nasdaq Global Select Market |

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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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**Item 2.02 Results of Operations and Financial Condition**

On January 19, 2023, American National Bankshares Inc. ("the Company") reports earnings for fourth quarter and full year 2022.

**Item 9.01 Financial Statements and Exhibits**

(d) Exhibits:

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| | |
|:---|:---|
| **<u>Exhibit No.</u>** | <u>**Description**</u> |
| 99.1 | [Press release, dated January 19, 2023.](ex_429218.htm) |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |

---

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**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

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| | | | |
|:---|:---|:---|:---|
|  |  |  | **American National Bankshares Inc.** |
|  |  |  | (Registrant) |
| Date: | January 19, 2023 | By: | <u>/s/ Jeffrey W. Farrar</u> |
|  |  |  | Jeffrey W. Farrar |
|  |  |  | Executive Vice President, |
|  |  |  | Chief Financial Officer, and Chief Operating Officer |

---

## Exhibit 99.1

**Exhibit 99.1**

FOR IMMEDIATE RELEASE

***Contact:***

***Jeffrey W. Farrar***

***Executive Vice President,** **COO &** **CFO***

***(434)** **773** **-** **2274***

***farrarj@amnb** **.** **com***

**AMERICAN NATIONAL BANKSHARES** 

**REPORTS FOURTH QUARTER AND FULL YEAR 2022 EARNINGS**

Danville, VA, January 19, 2023 – American National Bankshares Inc. (NASDAQ: AMNB) ("American National" or the "Company") today reported fourth quarter 2022 earnings of $8.0 million, or $0.76 per diluted common share. Those results compare to $11.3 million, or $1.05 per diluted common share, during the same quarter in the prior year, and earnings of $9.3 million, or $0.87 per diluted common share, for the third quarter of 2022. Earnings for the twelve months ended December 31, 2022 were $34.4 million, or $3.23 per diluted common share, compared to $43.5 million, or $4.00 per diluted common share, for the same period of 2021.

President and Chief Executive Officer Jeffrey V. Haley commented, "American National finished 2022 on a positive note with strong earnings for the fourth quarter and the full year. Loan growth was again exceptional, and while we experienced deposit outflows during the period consistent with industry trends, we are pleased with balance sheet trends overall. While there has been some slowing, business activity and our local economies remain fairly stable in spite of factors associated with elevated inflation and rising rates."

"I am so proud and appreciative of the efforts of our employees, the support of our customers and our shareholders over the past year. In October, American National was named one of the "Best Banks to Work For" by American Banker for the third consecutive year. This achievement is a testament to our efforts to provide a great place to work for a great team. We had a very successful year financially and achieved many other nonfinancial initiatives during the year as we prepare the Company for future growth and success."

Fourth quarter 2022 highlights include:

● Earnings produced a return on average tangible common equity of 14.50% for the fourth quarter of 2022, compared to 15.74% in the previous quarter and 17.63% for the same quarter in the prior year (non-GAAP).

● Net interest income increased $281 thousand, or 1.2%, when compared to the previous quarter, and increased $1.2 million, or 5.1%, when compared to the same quarter in 2021.

● Fully taxable equivalent ("FTE") net interest margin was 3.33% for the quarter, up from 3.20% in the third quarter of 2022 and up from 2.93% in the same quarter of the prior year (non-GAAP).

● Noninterest revenues decreased $1.2 million, or 24.2%, when compared to the previous quarter, and decreased $1.2 million , or 25.5%, compared to the same quarter in the prior year.

● Noninterest expense increased $386 thousand, or 2.3%, when compared to the previous quarter, and increased $1.4 million, or 8.9%, when compared to the same quarter in the prior year.

● Average loans held for investment excluding U.S. Small Business Administration Paycheck Protection Program ("PPP") loans grew $104.6 million, or 20.3% annualized, during the fourth quarter compared to $57.2 million, or 11.4% annualized, growth in the third quarter of this year and $69.0 million, or 14.9% annualized, growth in the fourth quarter of the prior year.

● The Company recognized a provision for loan losses in the fourth quarter of 2022 of $1.2 million compared to $615 thousand in the third quarter of 2022 and a negative provision of $2.0 million in the fourth quarter of 2021. Annualized net charge-offs (recoveries) as a percentage of average loans outstanding were 0.15% for the fourth quarter of 2022 compared to (0.01%) in the previous quarter and (0.00%) in the same quarter of 2021.

● Nonperforming assets as a percentage of total assets were 0.05% at December 31, 2022 and September 30, 2022, down from 0.07% at December 31, 2021.

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**NET INTEREST INCOME**

Net interest income for the fourth quarter of 2022 increased by $281 thousand, or 1.2%, to $24.3 million compared to $24.0 million for the third quarter of 2022. The fourth quarter of 2022 compared to the same quarter of 2021 reflected an increase of $1.2 million, or 5.1%. The FTE net interest margin for the quarter was 3.33%, up from 3.20% in the prior quarter and 2.93% in the same quarter a year ago (non-GAAP). The margin expansion relative to the previous quarter was primarily due to a 34-basis point increase in yield on average earning assets partially offset by a 36-basis point increase in the cost of interest-bearing liabilities. The higher yield resulted from a shift in the earning assets mix caused by excess deposits in other banks being deployed into the loan portfolio as well as increased yields on loans, securities, and deposits in other banks due to the rise in interest rates. The higher interest cost on liabilities was also a result of higher interest rates and some additional borrowing costs associated with short term FHLB advances during the period. The increase in margin from fourth quarter 2021 was also attributable to the higher rate environment and asset mix changes partially offset by substantially more PPP related income in 2021.

The Company's FTE net interest margin includes the impact of acquisition accounting fair value adjustments. During the fourth quarter of 2022, net accretion related to acquisition accounting amounted to $253 thousand compared to $454 thousand in the prior quarter and $2.1 million for the same quarter in 2021. Estimated remaining net accretion from acquisitions for the periods indicated is as follows (dollars in thousands):

For the years ending December 31, (estimated):

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| | |
|:---|:---|
| 2023 | $744 |
| 2024 | 457 |
| 2025 | 324 |
| 2026 | 252 |
| 2027 | 116 |
| Thereafter | 112 |

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**ASSET QUALITY**

Nonperforming assets ("NPAs") totaled $1.4 million as of December 31, 2022 and as of September 30, 2022, down substantially from $2.4 million at December 31, 2021. NPAs as a percentage of total assets were 0.05% at December 31, 2022 and September 30, 2022, and 0.07% at December 31, 2021. The Company recorded a provision for loan losses for the fourth quarter of 2022 of $1.2 million compared to $615 thousand in the previous quarter and a negative provision of $2.0 million in the fourth quarter of the previous year. The provision expense increase for the fourth quarter as compared to third quarter of 2022 was a function of continued loan growth coupled with charge-off activity during the period. The negative provision in the fourth quarter of 2021 was the result of continued improvement in economic conditions, ongoing low charge-off and delinquency rates, and overall strong asset quality metrics.

The allowance for loan losses was $19.6 million at December 31, 2022, compared to $19.2 million at September 30, 2022 and $18.7 million at December 31, 2021. Annualized net charge-offs (recoveries) as a percentage of average loans outstanding were 0.15% for the fourth quarter of 2022 compared to (0.01%) and (0.00%) in the third quarter of 2022 and fourth quarter of 2021, respectively. The allowance as a percentage of loans held for investment was 0.89% at December 31, 2022, compared to 0.91% at September 30, 2022, and 0.96% at December 31, 2021.

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**NONINTEREST INCOME**

Noninterest income decreased $1.2 million, or 24.2%, to $3.6 million for the quarter ended December 31, 2022 from the prior quarter and $1.2 million, or 25.5%, from $4.8 million in the same quarter in the prior year. The decrease in the fourth quarter of 2022 compared to the third quarter was primarily due to a reduction in equity income from investments in small business investment companies. During the fourth quarter of 2022, investments in these entities resulted in losses recorded of $263 thousand, compared to earnings of $501 thousand in the prior quarter and $462 thousand in the same quarter of the prior year. In addition, an impairment charge of $146 thousand was recorded during the fourth quarter of 2022 on an acquired real estate property from a previous acquisition. Mortgage income also decreased $212 thousand in the fourth quarter of 2022 as demand continues to slow due to higher mortgage rates. The decrease for the fourth quarter of 2022 as compared to the same quarter in the prior year can also be attributed to the aforementioned small business investment company losses and from mortgage revenue contraction associated with lower volumes due to higher mortgage rates. Mortgage banking income decreased by $570 thousand, or 76.4%, compared to the same quarter of 2021.

**NONINTEREST EXPENSE**

Noninterest expense for the fourth quarter of 2022 amounted to $16.8 million, up $386 thousand, or 2.3%, when compared to $16.4 million for the previous quarter and up $1.4 million, or 8.9%, from $15.5 million for the same quarter in the previous year. The increase in the fourth quarter compared to the third quarter of 2022 was primarily from increased charitable contributions and data processing and technology costs. The increase from the same quarter of 2021 was the result of higher compensation associated with a lower staffing vacancy rate and increased incentive accruals.

**INCOME TAXES**

The effective tax rate for the three months ended December 31, 2022 was 18.90%, compared to 20.92% for the prior quarter and 21.79% for the same quarter in the prior year. The Company recognized a tax benefit in the fourth quarter of 2022 resulting from adjustments from investment partnership income tax returns. The effective tax rate fluctuations are attributable to changes in pre-tax earnings and the levels of permanent tax differences.

**BALANCE SHEET**

Total assets at December 31, 2022 were $3.1 billion, an increase of $16.6 million from September 30, 2022 and a decrease of $268.7 million from December 31, 2021. The increase from the previous quarter is due to an increase in loans, net, partially offset by lower interest-bearing deposits in other banks resulting from a decrease in deposits and a decrease in the investment portfolio for maturities during the period.

At December 31, 2022, loans held for investment (net of deferred fees and costs) were $2.2 billion, an increase of $67.0 million, or 12.7% annualized, from September 30, 2022. Loans held for investment (net of deferred fees and costs) increased $239.9 million, or 12.3%, from December 31, 2021.

Investment securities available for sale amounted to $608.1 million at December 31, 2022, a decrease of $33.8 million, or 5.3%, compared to September 30, 2022, and a decrease of $84.4 million, or 12.2%, compared to December 31, 2021.

Deposits amounted to $2.6 billion at December 31, 2022, a decrease of $94.5 million, or 14.1% annualized, from September 30, 2022 and a decrease of $294.0 million, or 10.2%, compared to December 31, 2021.

The Company continues to be well-capitalized as defined by regulators, with tangible common equity to tangible assets of 7.82% at December 31, 2022 compared to 7.59% at September 30, 2022 and compared to 8.17% at December 31, 2021 (non-GAAP). The Company's common equity Tier 1, Tier 1, total, and Tier 1 leverage capital ratios were 11.69%, 12.84%, 13.65% and 10.35%, respectively, at December 31, 2022.

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**ABOUT AMERICAN NATIONAL**

American National is a multi-state bank holding company with total assets of approximately $3.0 billion. Headquartered in Danville, Virginia, American National is the parent company of American National Bank and Trust Company. American National Bank is a community bank serving Virginia and North Carolina with 26 banking offices. American National Bank also manages an additional $1.2 billion of trust, investment and brokerage assets in its Wealth Division. Additional information about American National and American National Bank is available on American National's website at <u>www.amnb.com</u>.

**NON-GAAP FINANCIAL MEASURES**

This release contains financial information determined by methods other than in accordance with generally accepted accounting principles in the United States ("GAAP"). American National's management uses these non-GAAP financial measures in its analysis of American National's performance. These measures typically adjust GAAP performance measures to exclude the effects of the amortization of intangibles and include the tax benefit associated with revenue items that are tax-exempt, as well as adjust income available to common shareholders for certain significant activities or transactions that are infrequent in nature. Management believes presentations of these non-GAAP financial measures provide useful supplemental information that is essential to a proper understanding of the operating results of American National's core businesses. These non-GAAP disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. For a reconciliation of non-GAAP financial measures, see "Reconciliation of Non-GAAP Financial Measures" at the end of this release.

**FORWARD-LOOKING STATEMENTS**

Statements made in this release, other than those concerning historical financial information, may be considered forward-looking statements, which speak only as of the date of this release and are based on current expectations and involve a number of assumptions. American National intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and is including this statement for purposes of these safe harbor provisions. American National's ability to predict results, or the actual effect of future plans or strategies, is inherently uncertain. Factors that could have a material effect on the operations and future prospects of American National include but are not limited to: (1) the impacts of the ongoing COVID-19 pandemic and the associated efforts to limit the spread of the virus; (2) expected revenue synergies and cost savings from acquisitions and depositions; (3) changes in interest rates, general economic conditions, legislation and regulation, and monetary and fiscal policies of the U.S. government, including policies of the U.S. Treasury, Office of the Comptroller of the Currency and the Board of Governors of the Federal Reserve System; (4) the quality and composition of the loan and securities portfolios, demand for loan products, deposit flows, competition, and demand for financial services in American National's market areas; (5) the adequacy of the level of the allowance for loan losses, the amount of loan loss provisions required in future quarters, and the failure of assumptions underlying the allowance for loan losses; (6) cybersecurity threats or attacks, the implementation of new technologies, and the ability to develop and maintain secure and reliable electronic systems; (7) accounting principles, policies, and guidelines; and (8) other risk factors detailed from time to time in filings made by American National with the Securities and Exchange Commission. American National undertakes no obligation to update or clarify these forward-looking statements, whether as a result of new information, future events or otherwise.

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|:---|
| **American National Bankshares Inc.**  |
| **Consolidated Balance Sheets**  |
| (Dollars in thousands, except per share data) |
| Unaudited |

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| | | |
|:---|:---|:---|
|  | December 31, | December 31, |
|  | 2022 | 2021 |
| **Assets** |  |  |
| Cash and due from banks | $32207 | $23095 |
| Interest-bearing deposits in other banks | 41133 | 487773 |
| Securities available for sale, at fair value | 608062 | 692467 |
| Restricted stock, at cost | 12651 | 8056 |
| Loans held for sale | 1061 | 8481 |
| Loans, net of deferred fees and costs | 2186449 | 1946580 |
| &nbsp;&nbsp;&nbsp; Less allowance for loan losses | (19555) | (18678) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net Loans | 2166894 | 1927902 |
| Premises and equipment, net | 32900 | 35564 |
| Assets held-for-sale | 1382 |  |
| Other real estate owned, net | 27 | 143 |
| Goodwill | 85048 | 85048 |
| Core deposit intangibles, net | 3367 | 4627 |
| Bank owned life insurance | 29692 | 29107 |
| Other assets | 51478 | 32334 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total assets | $3065902 | $3334597 |
| **Liabilities** |  |  |
| &nbsp;&nbsp;&nbsp; Demand deposits -- noninterest-bearing | $1010602 | $1009081 |
| &nbsp;&nbsp;&nbsp; Demand deposits -- interest-bearing | 484037 | 547878 |
| &nbsp;&nbsp;&nbsp; Money market deposits | 574330 | 719498 |
| &nbsp;&nbsp;&nbsp; Savings deposits | 269426 | 259193 |
| &nbsp;&nbsp;&nbsp; Time deposits | 257933 | 354703 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total deposits | 2596328 | 2890353 |
| &nbsp;&nbsp;&nbsp; Customer repurchase agreements | 370 | 41128 |
| &nbsp;&nbsp;&nbsp; Other short-term borrowings | 100531 |  |
| &nbsp;&nbsp;&nbsp; Long-term borrowings | 28334 | 28232 |
| &nbsp;&nbsp;&nbsp; Other liabilities | 19165 | 20092 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total liabilities | 2744728 | 2979805 |
| **Shareholders' equity** |  |  |
| &nbsp;&nbsp;&nbsp; Preferred stock, $5 par value, 2,000,000 shares authorized, none outstanding |  |  |
| &nbsp;&nbsp;&nbsp; Common stock, $1 par value, 20,000,000 shares authorized, 10,608,781 shares outstanding at December 31, 2022 and 10,766,967 shares outstanding at December 31, 2021 | 10538 | 10710 |
| &nbsp;&nbsp;&nbsp; Capital in excess of par value | 141948 | 147777 |
| &nbsp;&nbsp;&nbsp; Retained earnings | 223664 | 201380 |
| &nbsp;&nbsp;&nbsp; Accumulated other comprehensive (loss), net | (54976) | (5075) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total shareholders' equity | 321174 | 354792 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total liabilities and shareholders' equity | $3065902 | $3334597 |

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| |
|:---|
| **American National Bankshares Inc.**  |
| **Consolidated Statements of Income** |
| (Dollars in thousands, except per share data) |
| Unaudited |

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | For the Three Months Ended | For the Three Months Ended | For the Three Months Ended | For the Twelve Months Ended | For the Twelve Months Ended |
|  | 12/31/22 | 9/30/22 | 12/31/21 | 12/31/22 | 12/31/21 |
| **Interest and Dividend Income:** |  |  |  |  |  |
| Interest and fees on loans | $23544 | $21160 | $21706 | $82568 | $87040 |
| Interest and dividends on securities: |  |  |  |  |  |
| Taxable | 2721 | 2664 | 2012 | 10065 | 7309 |
| Tax-exempt | 110 | 110 | 92 | 407 | 385 |
| Dividends | 126 | 118 | 115 | 473 | 464 |
| Other interest income | 415 | 1099 | 223 | 2491 | 598 |
| Total interest and dividend income | 26916 | 25151 | 24148 | 96004 | 95796 |
| **Interest Expense:** |  |  |  |  |  |
| Interest on deposits | 1597 | 741 | 655 | 3553 | 3645 |
| Interest on short-term borrowings | 633 | 11 | 3 | 659 | 22 |
| Interest on long-term borrowings | 398 | 392 | 386 | 1554 | 1738 |
| Total interest expense | 2628 | 1144 | 1044 | 5766 | 5405 |
| **Net Interest Income** | 24288 | 24007 | 23104 | 90238 | 90391 |
| Provision for (recovery of) for loan losses | 1159 | 615 | (1955) | 1597 | (2825) |
| **Net Interest Income After Provision for (recovery of) Loan Losses** | 23129 | 23392 | 25059 | 88641 | 93216 |
| **Noninterest Income:** |  |  |  |  |  |
| Trust and brokerage fees | 1522 | 1603 | 1529 | 6521 | 6019 |
| Service charges on deposit accounts | 597 | 681 | 695 | 2676 | 2611 |
| Interchange fees | 1117 | 1013 | 1127 | 4107 | 4152 |
| Other fees and commissions | 207 | 233 | 182 | 906 | 801 |
| Mortgage banking income | 176 | 388 | 746 | 1666 | 4195 |
| Securities gains, net |  |  | 35 |  | 35 |
| Income (loss) from Small Business Investment Companies | (263) | 501 | 462 | 1409 | 1972 |
| Income from insurance investments | 103 | 100 | 137 | 747 | 1199 |
| Losses on premises and equipment, net | (146) | (2) | (297) | (228) | (885) |
| Other | 297 | 243 | 228 | 1003 | 932 |
| Total noninterest income | 3610 | 4760 | 4844 | 18807 | 21031 |
| **Noninterest Expense:** |  |  |  |  |  |
| Salaries and employee benefits | 9446 | 9618 | 8461 | 36382 | 32342 |
| Occupancy and equipment | 1499 | 1514 | 1484 | 6075 | 6032 |
| FDIC assessment | 209 | 227 | 220 | 903 | 864 |
| Bank franchise tax | 501 | 488 | 446 | 1953 | 1767 |
| Core deposit intangible amortization | 300 | 310 | 351 | 1260 | 1464 |
| Data processing | 864 | 818 | 734 | 3310 | 2958 |
| Software | 417 | 362 | 357 | 1505 | 1368 |
| Other real estate owned, net | (1) | 3 | (17) | 3 | 131 |
| Other | 3599 | 3108 | 3427 | 12695 | 12082 |
| Total noninterest expense | 16834 | 16448 | 15463 | 64086 | 59008 |
| Income Before Income Taxes | 9905 | 11704 | 14440 | 43362 | 55239 |
| Income Taxes | 1872 | 2448 | 3147 | 8934 | 11713 |
| **Net Income** | $8033 | $9256 | $11293 | $34428 | $43526 |
| **Net Income Per Common Share:** |  |  |  |  |  |
| Basic | $0.76 | $0.87 | $1.05 | $3.23 | $4.00 |
| Diluted | $0.76 | $0.87 | $1.05 | $3.23 | $4.00 |
| **Weighted Average Common Shares Outstanding:** |  |  |  |  |  |
| Basic | 10607678 | 10640952 | 10774268 | 10672314 | 10873817 |
| Diluted | 10609937 | 10643073 | 10776970 | 10674613 | 10877231 |

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| |
|:---|
| **American National Bankshares Inc.** |
| **Financial Highlights** |
| Unaudited |

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (Dollars in thousands, except per share data) |  |  |  | **At or for the Twelve Months** | **At or for the Twelve Months** |
|  | **4th Qtr** | 3rd Qtr | 4th Qtr | **Ended December 31,** | **Ended December 31,** |
|  | **2022** | 2022 | 2021 | **2022** | 2021 |
| **EARNINGS** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Interest income | $**26916** | $25151 | $24148 | $**96004** | $95796 |
| &nbsp;&nbsp;&nbsp; Interest expense | **2628** | 1144 | 1044 | **5766** | 5405 |
| &nbsp;&nbsp;&nbsp; Net interest income | **24288** | 24007 | 23104 | **90238** | 90391 |
| &nbsp;&nbsp;&nbsp; Provision for (recovery of) loan losses | **1159** | 615 | (1955) | **1597** | (2825) |
| &nbsp;&nbsp;&nbsp; Noninterest income | **3610** | 4760 | 4844 | **18807** | 21031 |
| &nbsp;&nbsp;&nbsp; Noninterest expense | **16834** | 16448 | 15463 | **64086** | 59008 |
| &nbsp;&nbsp;&nbsp; Income taxes | **1872** | 2448 | 3147 | **8934** | 11713 |
| &nbsp;&nbsp;&nbsp; Net income | **8033** | 9256 | 11293 | **34428** | 43526 |
| **PER COMMON SHARE** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Net income per share - basic | $**0.76** | $0.87 | $1.05 | $**3.23** | $4.00 |
| &nbsp;&nbsp;&nbsp; Net income per share - diluted | **0.76** | 0.87 | 1.05 | **3.23** | 4.00 |
| &nbsp;&nbsp;&nbsp; Cash dividends paid | **0.30** | 0.28 | 0.28 | **1.14** | 1.09 |
| &nbsp;&nbsp;&nbsp; Book value per share | **30.27** | 29.54 | 32.95 | **30.27** | 32.95 |
| &nbsp;&nbsp;&nbsp; Book value per share - tangible (a) | **21.94** | 21.18 | 24.62 | **21.94** | 24.62 |
| &nbsp;&nbsp;&nbsp; Closing market price | **36.93** | 31.95 | 37.68 | **36.93** | 37.68 |
| **FINANCIAL RATIOS** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Return on average assets | **1.05%** | 1.17% | 1.35% | **1.43%** | 1.37% |
| &nbsp;&nbsp;&nbsp; Return on average common equity | **10.15** | 11.21 | 12.82 | **13.81** | 12.50 |
| &nbsp;&nbsp;&nbsp; Return on average tangible common equity (a) | **14.50** | 15.74 | 17.63 | **19.41** | 17.34 |
| &nbsp;&nbsp;&nbsp; Average common equity to average assets | **10.33** | 10.42 | 10.50 | **10.35** | 10.96 |
| &nbsp;&nbsp;&nbsp; Tangible common equity to tangible assets (a) | **7.82** | 7.59 | 8.17 | **7.82** | 8.17 |
| &nbsp;&nbsp;&nbsp; Net interest margin, taxable equivalent (a) | **3.33** | 3.20 | 2.93 | **2.97** | 3.05 |
| &nbsp;&nbsp;&nbsp; Efficiency ratio (a) | **58.82** | 55.98 | 53.45 | **57.37** | 51.05 |
| &nbsp;&nbsp;&nbsp; Effective tax rate | **18.90** | 20.92 | 21.79 | **20.60** | 21.20 |
| **PERIOD-END BALANCES** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Securities | $**620713** | $650267 | $700523 | $**620713** | $700523 |
| &nbsp;&nbsp;&nbsp; Loans held for sale | **1061** | 2852 | 8481 | **1061** | 8481 |
| &nbsp;&nbsp;&nbsp; Loans, net | **2186449** | 2119415 | 1946580 | **2186449** | 1946580 |
| &nbsp;&nbsp;&nbsp; Goodwill and other intangibles | **88415** | 88715 | 89675 | **88415** | 89675 |
| &nbsp;&nbsp;&nbsp; Assets | **3065902** | 3049320 | 3334597 | **3065902** | 3334597 |
| &nbsp;&nbsp;&nbsp; Assets - tangible (a) | **2977487** | 2960605 | 3244922 | **2977487** | 3244922 |
| &nbsp;&nbsp;&nbsp; Deposits | **2596328** | 2690870 | 2890353 | **2596328** | 2890353 |
| &nbsp;&nbsp;&nbsp; Customer repurchase agreements | **370** | 625 | 41128 | **370** | 41128 |
| &nbsp;&nbsp;&nbsp; Long-term borrowings | **28334** | 28308 | 28232 | **28334** | 28232 |
| &nbsp;&nbsp;&nbsp; Shareholders' equity | **321174** | 313390 | 354792 | **321174** | 354792 |
| &nbsp;&nbsp;&nbsp; Shareholders' equity - tangible (a) | **232759** | 224675 | 265117 | **232759** | 265117 |
| **AVERAGE BALANCES** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Securities (b) | $**713996** | $728535 | $654595 | $**720001** | $549554 |
| &nbsp;&nbsp;&nbsp; Loans held for sale | **972** | 3915 | 8121 | **3235** | 11257 |
| &nbsp;&nbsp;&nbsp; Loans, net | **2168636** | 2064088 | 1943238 | **2052158** | 1953121 |
| &nbsp;&nbsp;&nbsp; Interest-earning assets | **2920992** | 3005292 | 3154730 | **3042775** | 2967799 |
| &nbsp;&nbsp;&nbsp; Goodwill and other intangibles | **88593** | 88886 | 89855 | **89048** | 90413 |
| &nbsp;&nbsp;&nbsp; Assets | **3066362** | 3170328 | 3357223 | **3211668** | 3176564 |
| &nbsp;&nbsp;&nbsp; Assets - tangible (a) | **2977769** | 3081442 | 3267368 | **3122620** | 3086151 |
| &nbsp;&nbsp;&nbsp; Interest-bearing deposits | **1609503** | 1723931 | 1868695 | **1765134** | 1797385 |
| &nbsp;&nbsp;&nbsp; Deposits | **2641133** | 2775516 | 2914381 | **2794005** | 2736571 |
| &nbsp;&nbsp;&nbsp; Customer repurchase agreements | **704** | 18719 | 39645 | **24005** | 37632 |
| &nbsp;&nbsp;&nbsp; Long-term borrowings | **28318** | 28293 | 28218 | **28280** | 31878 |
| &nbsp;&nbsp;&nbsp; Shareholders' equity | **316697** | 330318 | 352395 | **332356** | 348158 |
| &nbsp;&nbsp;&nbsp; Shareholders' equity - tangible (a) | **228104** | 241432 | 262540 | **243308** | 257745 |

---

------

---

| |
|:---|
| **American National Bankshares Inc.** |
| **Financial Highlights** |
| Unaudited |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (Dollars in thousands, except per share data) |  |  |  | **At or for the Twelve Months** | **At or for the Twelve Months** |
|  | **4th Qtr** | 3rd Qtr | 4th Qtr | **Ended December 31,** | **Ended December 31,** |
|  | **2022** | 2022 | 2021 | **2022** | 2021 |
| **CAPITAL** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Weighted average shares outstanding - basic | **10607678** | 10640952 | 10774268 | **10672314** | 10873817 |
| &nbsp;&nbsp;&nbsp; Weighted average shares outstanding - diluted | **10609937** | 10643073 | 10776970 | **10674613** | 10877231 |
| **COMMON STOCK REPURCHASE PROGRAM** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Total shares of common stock repurchased | **3269** | 60104 | 16580 | **206978** | 264579 |
| &nbsp;&nbsp;&nbsp; Average price paid per share of common stock | $**36.44** | $34.26 | $37.12 | $**36.26** | $33.10 |
| **ALLOWANCE FOR LOAN LOSSES** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Beginning balance | $**19189** | $18505 | $20630 | $**18678** | $21403 |
| &nbsp;&nbsp;&nbsp; Provision for (recovery of) loan losses | **1159** | 615 | (1955) | **1597** | (2825) |
| &nbsp;&nbsp;&nbsp; Charge-offs | **(834)** | (31) | (76) | **(1019)** | (146) |
| &nbsp;&nbsp;&nbsp; Recoveries | **41** | 100 | 79 | **299** | 246 |
| &nbsp;&nbsp;&nbsp; Ending balance | $**19555** | $19189 | $18678 | $**19555** | $18678 |
| **LOANS** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Construction and land development | $**197525** | $210500 | $134221 | $**197525** | $134221 |
| &nbsp;&nbsp;&nbsp; Commercial real estate - owner occupied | **418462** | 423678 | 391517 | **418462** | 391517 |
| &nbsp;&nbsp;&nbsp; Commercial real estate - non-owner occupied | **827728** | 764963 | 731034 | **827728** | 731034 |
| &nbsp;&nbsp;&nbsp; Residential real estate | **338132** | 324468 | 289757 | **338132** | 289757 |
| &nbsp;&nbsp;&nbsp; Home equity | **93740** | 93659 | 93203 | **93740** | 93203 |
| &nbsp;&nbsp;&nbsp; Commercial and industrial | **304247** | 295541 | 299773 | **304247** | 299773 |
| &nbsp;&nbsp;&nbsp; Consumer | **6615** | 6606 | 7075 | **6615** | 7075 |
| &nbsp;&nbsp;&nbsp; Total | $**2186449** | $2119415 | $1946580 | $**2186449** | $1946580 |
| **NONPERFORMING ASSETS AT PERIOD-END** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Nonperforming loans: |  |  |  |  |  |
| 90 days past due and accruing | $**16** | $18 | $216 | $**16** | $216 |
| Nonaccrual | **1307** | 1171 | 2006 | **1307** | 2006 |
| &nbsp;&nbsp;&nbsp; Other real estate owned and repossessions | **80** | 196 | 143 | **80** | 143 |
| &nbsp;&nbsp;&nbsp; Nonperforming assets | $**1403** | $1385 | $2365 | $**1403** | $2365 |
| **ASSET QUALITY RATIOS** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Allowance for loan losses to total loans | **0.89%** | 0.91% | 0.96% | **0.89%** | 0.96% |
| &nbsp;&nbsp;&nbsp; Allowance for loan losses to nonperforming loans | **1478.08** | 1613.88 | 840.59 | **1478.08** | 840.59 |
| &nbsp;&nbsp;&nbsp; Nonperforming assets to total assets | **0.05** | 0.05 | 0.07 | **0.05** | 0.07 |
| &nbsp;&nbsp;&nbsp; Nonperforming loans to total loans | **0.06** | 0.06 | 0.11 | **0.06** | 0.11 |
| &nbsp;&nbsp;&nbsp; Annualized net (recoveries) charge-offs to average loans | **0.15** | (0.01) | (0.00) | **0.05** | (0.01) |
| **OTHER DATA** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Fiduciary assets at period-end (c) (d) | $**736121** | $693153 | $752410 | $**736121** | $752410 |
| &nbsp;&nbsp;&nbsp; Retail brokerage assets at period-end (c) (d) | $**413235** | $376891 | $418850 | $**413235** | $418850 |
| &nbsp;&nbsp;&nbsp; Number full-time equivalent employees (e) | **359** | 363 | 346 | **359** | 346 |
| &nbsp;&nbsp;&nbsp; Number of full service offices | **26** | 26 | 26 | **26** | 26 |
| &nbsp;&nbsp;&nbsp; Number of loan production offices | **1** | 1 | 1 | **1** | 1 |
| &nbsp;&nbsp;&nbsp; Number of ATMs | **34** | 34 | 36 | **34** | 36 |

---

---

| |
|:---|
| Notes: |
| (a) - This financial measure is not calculated in accordance with GAAP. For a reconciliation of non-GAAP financial measures, see "Reconciliation of Non-GAAP Financial Measures" at the end of this release. |
| (b) - Average does not include unrealized gains and losses. |
| (c) - Market value. |
| (d) - Assets are not owned by American National and are not reflected in the consolidated balance sheet. |
| (e) - Average for period. |

---

------

---

| |
|:---|
| **Net Interest Income Analysis** |
| For the Three Months Ended December 31, 2022 and 2021 |
| (Dollars in thousands) |
| Unaudited |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  |  |  | Interest | Interest |  |  |
|  | Average Balance | Average Balance | Income/Expense (a) | Income/Expense (a) | Yield/Rate | Yield/Rate |
|  | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 |
| Loans: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Commercial | $304303 | $310175 | $3464 | $3386 | 4.52% | 4.33% |
| &nbsp;&nbsp;&nbsp; Real estate | 1858591 | 1634660 | 20014 | 18244 | 4.31 | 4.46 |
| &nbsp;&nbsp;&nbsp; Consumer | 6714 | 6524 | 107 | 112 | 6.32 | 6.81 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total loans (b) | 2169608 | 1951359 | 23585 | 21742 | 4.34 | 4.45 |
| Securities: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; U.S. Treasury | 152082 | 116629 | 351 | 242 | 0.92 | 0.83 |
| &nbsp;&nbsp;&nbsp; Federal agencies & GSEs | 105119 | 93042 | 364 | 265 | 1.39 | 1.14 |
| &nbsp;&nbsp;&nbsp; Mortgage-backed & CMOs | 345217 | 355492 | 1498 | 1117 | 1.74 | 1.26 |
| &nbsp;&nbsp;&nbsp; State and municipal | 69451 | 63148 | 361 | 314 | 2.08 | 1.99 |
| &nbsp;&nbsp;&nbsp; Other | 42127 | 26284 | 410 | 305 | 3.89 | 4.64 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total securities | 713996 | 654595 | 2984 | 2243 | 1.67 | 1.37 |
| Deposits in other banks | 37388 | 548776 | 415 | 223 | 4.40 | 0.16 |
| &nbsp;&nbsp;&nbsp; Total interest-earning assets | 2920992 | 3154730 | 26984 | 24208 | 3.69 | 3.07 |
| Non-earning assets | 145370 | 202493 |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total assets | $3066362 | $3357223 |  |  |  |  |
| Deposits: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Demand | $494572 | $505528 | 95 | 37 | 0.08 | 0.03 |
| &nbsp;&nbsp;&nbsp; Money market | 590509 | 743354 | 974 | 101 | 0.65 | 0.05 |
| &nbsp;&nbsp;&nbsp; Savings | 273580 | 257289 | 67 | 6 | 0.10 | 0.01 |
| &nbsp;&nbsp;&nbsp; Time | 250842 | 362524 | 461 | 511 | 0.73 | 0.56 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total deposits | 1609503 | 1868695 | 1597 | 655 | 0.39 | 0.14 |
| Customer repurchase agreements | 704 | 39645 |  | 3 |  | 0.03 |
| Other short-term borrowings | 62004 |  | 633 |  | 4.08 |  |
| Long-term borrowings | 28318 | 28218 | 398 | 386 | 5.62 | 5.47 |
| &nbsp;&nbsp;&nbsp; Total interest-bearing liabilities | 1700529 | 1936558 | 2628 | 1044 | 0.62 | 0.21 |
| Noninterest bearing demand deposits | 1031630 | 1045686 |  |  |  |  |
| Other liabilities | 17506 | 22584 |  |  |  |  |
| Shareholders' equity | 316697 | 352395 |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total liabilities and shareholders' equity | $3066362 | $3357223 |  |  |  |  |
| Interest rate spread |  |  |  |  | 3.07% | 2.86% |
| Net interest margin |  |  |  |  | 3.33% | 2.93% |
| Net interest income (taxable equivalent basis) |  |  | 24356 | 23164 |  |  |
| Less: Taxable equivalent adjustment (c) |  |  | 68 | 60 |  |  |
| Net interest income |  |  | $24288 | $23104 |  |  |

---

---

| |
|:---|
| Notes: |
| (a) - Interest income includes net accretion/amortization of acquired loan fair value adjustments and the net accretion/amortization of deferred loan fees and costs. |
| (b) - Nonaccrual loans are included in the average balances. |
| (c) - A tax rate of 21% was used in adjusting interest on tax-exempt assets to a fully taxable equivalent basis. |

---

------

---

| |
|:---|
| **Net Interest Income Analysis** |
| For the Twelve Months Ended December 31, 2022 and 2021 |
| (Dollars in thousands) |
| Unaudited |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  |  |  | Interest | Interest |  |  |
|  | Average Balance | Average Balance | Income/Expense (a) | Income/Expense (a) | Yield/Rate | Yield/Rate |
|  | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 |
| Loans: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Commercial | $292833 | $372538 | $11448 | $18819 | 3.91% | 5.05% |
| &nbsp;&nbsp;&nbsp; Real estate | 1755982 | 1584856 | 70837 | 67887 | 4.03 | 4.28 |
| &nbsp;&nbsp;&nbsp; Consumer | 6578 | 6984 | 423 | 475 | 6.43 | 6.80 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total loans (b) | 2055393 | 1964378 | 82708 | 87181 | 4.02 | 4.44 |
| Securities: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; U.S. Treasury | 150886 | 57048 | 1372 | 507 | 0.91 | 0.89 |
| &nbsp;&nbsp;&nbsp; Federal agencies & GSEs | 107311 | 97943 | 1348 | 1132 | 1.26 | 1.16 |
| &nbsp;&nbsp;&nbsp; Mortgage-backed & CMOs | 355331 | 308158 | 5420 | 4142 | 1.53 | 1.34 |
| &nbsp;&nbsp;&nbsp; State and municipal | 68928 | 61698 | 1399 | 1272 | 2.03 | 2.06 |
| &nbsp;&nbsp;&nbsp; Other | 37545 | 24707 | 1510 | 1205 | 4.02 | 4.88 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total securities | 720001 | 549554 | 11049 | 8258 | 1.53 | 1.50 |
| Deposits in other banks | 267381 | 453867 | 2491 | 598 | 0.93 | 0.13 |
| &nbsp;&nbsp;&nbsp; Total interest-earning assets | 3042775 | 2967799 | 96248 | 96037 | 3.16 | 3.24 |
| Non-earning assets | 168893 | 208765 |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total assets | $3211668 | $3176564 |  |  |  |  |
| Deposits: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Demand | $522043 | $476710 | 202 | 152 | 0.04 | 0.03 |
| &nbsp;&nbsp;&nbsp; Money market | 688631 | 710948 | 1648 | 758 | 0.24 | 0.11 |
| &nbsp;&nbsp;&nbsp; Savings | 273788 | 243123 | 102 | 26 | 0.04 | 0.01 |
| &nbsp;&nbsp;&nbsp; Time | 280672 | 366604 | 1601 | 2709 | 0.57 | 0.74 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total deposits | 1765134 | 1797385 | 3553 | 3645 | 0.20 | 0.20 |
| Customer repurchase agreements | 24005 | 37632 | 26 | 22 | 0.11 | 0.06 |
| Other short-term borrowings | 15629 |  | 633 |  | 4.05 |  |
| Long-term borrowings | 28280 | 31878 | 1554 | 1738 | 5.50 | 5.45 |
| Total interest-bearing liabilities | 1833048 | 1866895 | 5766 | 5405 | 0.31 | 0.29 |
| Noninterest bearing demand deposits | 1028871 | 939186 |  |  |  |  |
| Other liabilities | 17393 | 22325 |  |  |  |  |
| Shareholders' equity | 332356 | 348158 |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total liabilities and shareholders' equity | $3211668 | $3176564 |  |  |  |  |
| Interest rate spread |  |  |  |  | 2.85% | 2.95% |
| Net interest margin |  |  |  |  | 2.97% | 3.05% |
| Net interest income (taxable equivalent basis) |  |  | 90482 | 90632 |  |  |
| Less: Taxable equivalent adjustment (c) |  |  | 244 | 241 |  |  |
| Net interest income |  |  | $90238 | $90391 |  |  |

---

---

| |
|:---|
| Notes: |
| (a) - Interest income includes net accretion/amortization of acquired loan fair value adjustments and the net accretion/amortization of deferred loan fees and costs. |
| (b) - Nonaccrual loans are included in the average balances. |
| (c) - A tax rate of 21% was used in adjusting interest on tax-exempt assets to a fully taxable equivalent basis. |

---

------

---

| |
|:---|
| **American National Bankshares Inc.** |
| **Reconciliation of Non-GAAP Financial Measures** |
| Unaudited |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| (Dollars in thousands, except per share data) |  |  |  | **At or for the Twelve Months** | **At or for the Twelve Months** |
|  | **4th Qtr** | 3rd Qtr | 4th Qtr | **Ended December 31,** | **Ended December 31,** |
|  | **2022** | 2022 | 2021 | **2022** | 2021 |
| **EFFICIENCY RATIO** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Noninterest expense | $**16834** | $16448 | $15463 | $**64086** | $59008 |
| &nbsp;&nbsp;&nbsp; Subtract: loss (gain) on sale of OREO | **2** |  |  | **2** | (111) |
| &nbsp;&nbsp;&nbsp; Subtract: core deposit intangible amortization | **(300)** | (310) | (351) | **(1260)** | (1464) |
|  | $**16536** | $16138 | $15112 | $**62828** | $57433 |
| &nbsp;&nbsp;&nbsp; Net interest income | $**24288** | $24007 | $23104 | $**90238** | $90391 |
| &nbsp;&nbsp;&nbsp; Tax equivalent adjustment | **68** | 59 | 60 | **244** | 241 |
| &nbsp;&nbsp;&nbsp; Noninterest income | **3610** | 4760 | 4844 | **18807** | 21031 |
| &nbsp;&nbsp;&nbsp; Subtract: gain on securities | **-** |  | (35) | **-** | (35) |
| &nbsp;&nbsp;&nbsp; Add: loss on fixed assets | **146** | 2 | 297 | **228** | 885 |
|  | $**28112** | $28828 | $28270 | $**109517** | $112513 |
| &nbsp;&nbsp;&nbsp; Efficiency ratio | **58.82%** | 55.98% | 53.46% | **57.37%** | 51.05% |
| **TAX EQUIVALENT NET INTEREST INCOME** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Non-GAAP measures: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Interest income - loans | $**23585** | $21191 | $21742 | $**82708** | $87181 |
| &nbsp;&nbsp;&nbsp; Interest income - investments and other | **3399** | 4019 | 2466 | **13540** | 8856 |
| &nbsp;&nbsp;&nbsp; Interest expense - deposits | **(1597)** | (741) | (655) | **(3553)** | (3645) |
| &nbsp;&nbsp;&nbsp; Interest expense - customer repurchase agreements | **-** | (11) | (3) | **(26)** | (22) |
| &nbsp;&nbsp;&nbsp; Interest expense - other short-term borrowings | (633) |  |  | (633) |  |
| &nbsp;&nbsp;&nbsp; Interest expense - long-term borrowings | **(398)** | (392) | (386) | **(1554)** | (1738) |
| &nbsp;&nbsp;&nbsp; Total net interest income | $**24356** | $24066 | $23164 | $**90482** | $90632 |
| &nbsp;&nbsp;&nbsp; Less non-GAAP measures: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Tax benefit on nontaxable interest - loans | **(41)** | (31) | (36) | **(139)** | (141) |
| &nbsp;&nbsp;&nbsp; Tax benefit on nontaxable interest - securities | **(27)** | (28) | (24) | **(105)** | (100) |
| &nbsp;&nbsp;&nbsp; GAAP measures | $**24288** | $24007 | $23104 | $**90238** | $90391 |
| **NET INTEREST MARGIN** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Net interest margin (FTE) (non-GAAP) | **3.33%** | 3.20% | 2.93% | **2.97%** | 3.05% |
| &nbsp;&nbsp;&nbsp; Net interest margin (GAAP) | **3.32%** | 3.19% | 2.93% | **2.97%** | 3.05% |
| **RETURN ON AVERAGE TANGIBLE EQUITY** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Return on average equity (GAAP basis) | **10.15%** | 11.21% | 12.82% | **13.81%** | 12.50% |
| &nbsp;&nbsp;&nbsp; Impact of excluding average goodwill and other intangibles | **4.35** | 4.53 | 4.81 | **5.60** | 4.84 |
| &nbsp;&nbsp;&nbsp; Return on average tangible equity (non-GAAP) | **14.50%** | 15.74% | 17.63% | **19.41%** | 17.34% |
| **TANGIBLE EQUITY TO TANGIBLE ASSETS** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Equity to assets ratio (GAAP basis) | **10.48%** | 10.28% | 10.64% | **10.48%** | 10.64% |
| &nbsp;&nbsp;&nbsp; Impact of excluding goodwill and other intangibles | **(2.66)** | (2.69) | (2.47) | **(2.66)** | (2.47) |
| &nbsp;&nbsp;&nbsp; Tangible equity to tangible assets ratio (non-GAAP) | **7.82%** | 7.59% | 8.17% | **7.82%** | 8.17% |
| **TANGIBLE BOOK VALUE** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Book value per share (GAAP basis) | $**30.27** | $29.54 | $32.95 | $**30.27** | $32.95 |
| &nbsp;&nbsp;&nbsp; Impact of excluding goodwill and other intangibles | **(8.33)** | (8.36) | (8.33) | **(8.33)** | (8.33) |
| &nbsp;&nbsp;&nbsp; Tangible book value per share (non-GAAP) | $**21.94** | $21.18 | $24.62 | $**21.94** | $24.62 |
| **ADJUSTED LOAN LOSS ALLOWANCE** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Allowance for loan losses | $**19555** | $19189 | $18678 | $**19555** | $18678 |
| &nbsp;&nbsp;&nbsp; Credit discount on purchased loans | **3068** | 3477 | 4474 | **3068** | 4474 |
| &nbsp;&nbsp;&nbsp; Adjusted loan loss allowance | $**22623** | $22666 | $23152 | $**22623** | $23152 |
| &nbsp;&nbsp;&nbsp; Total loans, net | $**2186449** | $2119415 | $1946580 | $**2186449** | $1946580 |
| &nbsp;&nbsp;&nbsp; Subtract: PPP loans, net | **(74)** | (95) | (12239) | **(74)** | (12239) |
| &nbsp;&nbsp;&nbsp; Total loans less PPP loans, net | $**2186375** | $2119320 | $1934341 | $**2186375** | $1934341 |
| &nbsp;&nbsp;&nbsp; Adjusted loan loss allowance to total loans less PPP loans, net | **1.03%** | 1.07% | 1.20% | **1.03%** | 1.20% |
| &nbsp;&nbsp;&nbsp; Allowance for loan losses to total loans less PPP loans, net | **0.89%** | 0.91% | 0.97% | **0.89%** | 0.97% |

---