American National Bankshares Inc. Reports First Quarter 2016 Earnings
Tweet
Share
E-mailGet Alerts AMNB Hot Sheet
Join SI Premium – FREE
DANVILLE, VA -- (Marketwired) -- 04/21/16 -- American National Bankshares Inc. ("American National") (NASDAQ: AMNB)
- Q1 2016 net income of $4.1 million
- Diluted EPS $0.48 for Q1 2016 compared to $0.40 for Q1 2015
- Net interest margin of 3.67% for Q1 2016
- Average shareholders' equity for Q1 of $199.5 million is 12.86% of average assets
- Loan growth for Q1 2016 2.9%
American National Bankshares Inc. ("American National") (NASDAQ: AMNB), parent company of American National Bank and Trust Company, today announced net income for the first quarter of 2016 of $4,128,000 compared to $3,515,000 for the first quarter of 2015, a $613,000 or 17.4% increase. Basic and diluted net income per common share was $0.48 for the first quarter of 2016 compared to $0.40 for the 2015 quarter. Net income for the first quarter of 2016 produced a return on average assets of 1.06%, a return on average equity of 8.28%, and a return on average tangible equity of 12.86%.
Financial Performance and Overview Jeffrey V. Haley, President and Chief Executive Officer, reported, "As we start 2016, we are seeing increases in business activity throughout our market areas and that is resulting in an increased demand for new credit.
"One of our primary, and favorite, missions is to accommodate the credit needs of our customers. This past year, from March 2015 to March 2016, our loan portfolio had organic growth of $68.7 million (7.1%). During the first quarter of 2016, our loan portfolio grew $29.0 million (2.9%).
"Our primary funding source for loans is deposits, especially core deposits. During the past year, from March 2015 to March 2016, our deposits grew $49.8 million (4.0%). During the first quarter of 2016, our deposits grew $29.8 million (2.4%).
"We're very encouraged by the increasing level of business activity.
"On the earnings side, our net income for the first quarter of 2016 was $4,128,000, up from $3,515,000 in the first quarter of 2015, an increase of $613,000 or 17.4%.
"Net interest income is up by $206,000 (1.7%) in the first quarter of 2016 compared to the first quarter of 2015.
"Provision for loan losses was down $550,000 in the first quarter of 2016, compared to the first quarter of 2015. Provision expense in the 2015 quarter was unusually large, and was related to the results of the quarterly review of expected cash flows from certain purchased credit impaired loans.
"Noninterest income was higher in the first quarter of 2016 by $141,000 (4.5%), compared to the first quarter of 2015. The improvement related mostly to mortgage banking, electronic banking fees and securities gains.
"Noninterest expense was decreased in the 2016 quarter by $129,000 (1.3%). The lower level of expense related mostly to nonrecurring MainStreet acquisition expenses paid in the first quarter of 2015."
Haley concluded, "We had an excellent start to 2016 on our balance sheet, as evidenced by the growth in loans and deposits. We expect the growth in earning assets will fuel increasing net interest income in coming quarters and continued high asset quality will control provision for loan losses expense. We are making concerted efforts to improve noninterest income and efficiently and effectively control noninterest expense. All things considered, we feel good about the first quarter and we are optimistic about the remainder of 2016."
Capital American National's capital ratios remain strong and exceed all regulatory requirements.
For the quarter ended March 31, 2016, average shareholders' equity was 12.86% of average assets, compared to 12.91% for the quarter ended March 31, 2015.
Book value per common share was $23.27 at March 31, 2016, compared to $22.58 at March 31, 2015.
Tangible book value per common share was $17.90 at March 31, 2016, compared to $17.09 at March 31, 2015.
Credit Quality Measurements Non-performing assets ($5,276,000 of non-performing loans and $1,493,000 of other real estate owned) represented 0.43% of total assets at March 31, 2016, compared to 0.50% at March 31, 2015.
Annualized net charge offs to average loans were minus one basis point (-0.01%), a net recovery, for the 2016 first quarter, compared to eight basis points (0.08%) for the same quarter in 2015.
Other real estate owned was $1,493,000 at March 31, 2016, compared to $2,653,000 at March 31, 2015, a decrease of $1,160,000 or 43.7%.
Acquisition related financial impact The purchase accounting adjustments related to our two recent acquisitions have had and continue to have a positive impact on net interest income and income before income tax for American National. The impact of the adjustments is summarized below (dollars in thousands):
Acquisition related financial impact March 31, 2016 March 31,2015
--------------- ---------------
Net interest income $ 1,001 $ 1,113
Income before Income taxes $ 713 $ 813
During the first quarter 2016, the Company received two substantial payoffs of purchased credit impaired loans from our 2011 acquisition that resulted in $460,000 in current quarter cash-basis accretion income. Of the $460,000, approximately $117,000 related to a consumer purpose loan. This is a relatively small segment of our loan portfolio and the additional accretion had a material and favorable impact on the segment's yield for the quarter. In addition, the 2016 quarter was negatively impacted by the amortization of a time deposit valuation adjustment related to the MainStreet acquisition of $72,000, which increased interest expense.
Net Interest Income Net interest income before the provision for loan losses increased to $12,584,000 in the first quarter of 2016 from $12,378,000 in the first quarter of 2015, an increase of $206,000 or 1.7%.
For the 2016 quarter, the net interest margin was 3.67% compared to 3.73% for the same quarter in 2015, a decrease of six basis points or 0.06%.
Provision for Loan Losses and Allowance for Loan Losses Provision expense for the first quarter of 2016 was $50,000 compared to $600,000 for the first quarter of 2015, a decrease of $550,000 or 91.7%.
The allowance for loan losses as a percentage of total loans was 1.23% at March 31, 2016 compared to 1.33% at March 31, 2015.
There was significant growth in the loans outstanding in the first quarter 2016, a net of $29.0 million or 2.9%. The need for additions to the allowance for loan losses was reduced by improvement in various qualitative factors used in the determination of the allowance, notably asset quality and local economic conditions. As noted in the Credit Quality discussion, non-performing assets, charge-offs, and other real estate owned are all improved over the past year.
Provision expense in the 2015 quarter was negatively impacted by the regular quarterly review of expected cash flows on certain purchased credit impaired loans.
Noninterest Income Noninterest income totaled $3,297,000 in the first quarter of 2016, compared with $3,156,000 in the first quarter of 2015, an increase of $141,000 or 4.5%.
Trust fees showed a decrease of $22,000 directly related to volatility in the equity markets. Other fees and commissions showed an increase of $84,000 mostly related to higher levels of VISA debit card income. Mortgage banking income showed a $70,000 increase resulting from increases in the volume of originations. Securities gains showed an increase of $56,000 related to actions resulting from asset/liability strategy decisions. We showed a $68,000 decrease in income from our investment in Small Business Investment Corporations (SBIC).
Noninterest Expense Noninterest expense totaled $9,918,000 in the first quarter of 2016, compared to $10,047,000 in the first quarter of 2015, a decrease of $129,000 or 1.3%. The first quarter of 2015 was negatively impacted by $359,000 in acquisition related expenses related to the acquisition of MainStreet.
About American National American National is a multi-state bank holding company with total assets of approximately $1.6 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 southern and central Virginia and north central North Carolina with 25 banking offices and two loan production offices. American National Bank also manages an additional $760 million of trust, investment and brokerage assets in its Trust and Investment Services Division. Additional information about the company and the bank is available on the bank's website at www.amnb.com.
Shares of American National are traded on the NASDAQ Global Select Market under the symbol "AMNB."
Forward-Looking Statements This press release contains forward-looking statements within the meaning of federal securities laws. Certain of the statements involve significant risks and uncertainties. The statements herein are based on certain assumptions and analyses by American National 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; significant changes in securities markets; and changes in technology and information security; and changes regarding acquisitions and dispositions. Consequently, all forward-looking statements made herein are qualified by these cautionary statements and the cautionary language in American National's most recent Form 10-K report and other documents filed with the Securities and Exchange Commission. American National 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.
Consolidated Balance Sheets
(Dollars in thousands, except share and per share data)
Unaudited
---------------------------------------------------------------------------
March 31
-------------------------
ASSETS 2016 2015
----------- -----------
Cash and due from banks $ 26,345 $ 23,995
Interest-bearing deposits in other banks 61,186 75,254
Federal funds sold - 13,616
Securities available for sale, at fair value 356,998 352,208
Restricted stock, at cost 5,355 4,979
Loans held for sale 785 1,936
Loans 1,034,564 965,902
Less allowance for loan losses (12,675) (12,844)
----------- -----------
Net Loans 1,021,889 953,058
----------- -----------
Premises and equipment, net 23,241 24,371
Other real estate owned, net 1,493 2,653
Goodwill 43,872 44,210
Core deposit intangibles, net 2,395 3,583
Bank owned life insurance 17,773 17,261
Accrued interest receivable and other assets 21,222 22,974
----------- -----------
Total assets $ 1,582,554 $ 1,540,098
=========== ===========
Liabilities
Demand deposits -- noninterest-bearing $ 321,599 $ 289,818
Demand deposits -- interest-bearing 231,970 229,721
Money market deposits 218,543 202,706
Savings deposits 119,286 110,104
Time deposits 401,033 410,326
----------- -----------
Total deposits 1,292,431 1,242,675
----------- -----------
Short-term borrowings:
Customer repurchase agreements 42,184 53,664
Long-term borrowings 9,963 9,941
Junior subordinated debt 27,648 27,546
Accrued interest payable and other liabilities 9,885 9,583
----------- -----------
Total liabilities 1,382,111 1,343,409
----------- -----------
Shareholders' equity
Preferred stock, $5 par, 2,000,000 shares
authorized, none outstanding - -
Common stock, $1 par, 20,000,000 shares
authorized, 8,612,658 shares outstanding at
March 31, 2016 and 8,709,935 shares
outstanding at March 31, 2015 8,575 8,710
Capital in excess of par value 74,744 77,612
Retained earnings 113,628 106,102
Accumulated other comprehensive income, net 3,496 4,265
----------- -----------
Total shareholders' equity 200,443 196,689
----------- -----------
Total liabilities and shareholders' equity $ 1,582,554 $ 1,540,098
=========== ===========
American National Bankshares Inc.
Consolidated Statements of Income
(Dollars in thousands, except share and per share data)
Unaudited
----------------------------------------------------------------------------
Three Months Ended
March 31
------------------------
2016 2015
----------- -----------
Interest and Dividend Income:
Interest and fees on loans $ 12,115 $ 11,770
Interest on federal funds sold - 4
Interest and dividends on securities:
Taxable 1,084 975
Tax-exempt 823 960
Dividends 91 82
Other interest income 58 48
----------- -----------
Total interest and dividend income 14,171 13,839
----------- -----------
Interest Expense:
Interest on deposits 1,297 1,194
Interest on short-term borrowings 1 3
Interest on long-term borrowings 81 80
Interest on junior subordinated debt 208 184
----------- -----------
Total interest expense 1,587 1,461
----------- -----------
Net Interest Income 12,584 12,378
Provision for loan losses 50 600
----------- -----------
Net Interest Income After Provision for Loan
Losses 12,534 11,778
----------- -----------
Noninterest Income:
Trust fees 930 952
Service charges on deposit accounts 492 497
Other fees and commissions 672 588
Mortgage banking income 292 222
Securities gains, net 366 310
Brokerage fees 204 215
Income from Small Business Investment Companies 166 234
Other 175 138
----------- -----------
Total noninterest income 3,297 3,156
----------- -----------
Noninterest Expense:
Salaries 4,215 4,147
Employee benefits 1,114 1,075
Occupancy and equipment 1,099 1,172
FDIC assessment 188 185
Bank franchise tax 256 235
Core deposit intangible amortization 288 301
Data processing 444 462
Software 297 283
Other real estate owned, net 104 53
Merger related expenses - 359
Other 1,913 1,775
----------- -----------
Total noninterest expense 9,918 10,047
----------- -----------
Income Before Income Taxes 5,913 4,887
Income Taxes 1,785 1,372
----------- -----------
Net Income $ 4,128 $ 3,515
=========== ===========
Net Income Per Common Share:
Basic $ 0.48 $ 0.40
Diluted $ 0.48 $ 0.40
Weighted Average Common Shares Outstanding:
Basic 8,608,728 8,723,633
Diluted 8,613,896 8,732,679
American National Bankshares Inc.
Financial Highlights
(In thousands,
except share,
ratio and
nonfinancial data,
unaudited)
1st Qtr 4th Qtr 1st Qtr YTD YTD
2016 2015 2015 2016 2015
---------- ---------- ---------- ---------- ----------
EARNINGS
Interest income $ 14,171 $ 13,951 $ 13,839 $ 14,171 $ 13,839
Interest expense 1,587 1,507 1,461 1,587 1,461
Net interest income 12,584 12,444 12,378 12,584 12,378
Provision for loan
losses 50 250 600 50 600
Noninterest income 3,297 3,818 3,156 3,297 3,156
Noninterest expense 9,918 9,466 10,047 9,918 10,047
Income taxes 1,785 1,939 1,372 1,785 1,372
Net income 4,128 4,607 3,515 4,128 3,515
PER COMMON SHARE
Net income per
share - basic $ 0.48 $ 0.53 $ 0.40 $ 0.48 $ 0.40
Net income per
share - diluted 0.48 0.53 0.40 0.48 0.40
Cash dividends paid 0.24 0.24 0.23 0.24 0.23
Book value per
share 23.27 22.95 22.58 23.17 22.58
Book value per
share - tangible
(a) 17.90 17.55 17.09 17.90 17.09
Closing market
price 25.33 25.61 22.58 25.33 22.58
FINANCIAL RATIOS
Return on average
assets 1.06% 1.20% 0.93% 1.06% 0.93%
Return on average
equity 8.28 9.32 7.17 8.28 7.17
Return on average
tangible equity
(b) 11.27 12.77 10.02 12.86 10.02
Average equity to
average assets 12.86 12.88 12.91 12.86 12.91
Tangible equity to
tangible assets
(a) 10.04 10.08 9.98 10.04 9.98
Net interest
margin, taxable
equivalent 3.67 3.68 3.73 3.67 3.73
Efficiency ratio
(c) 61.36 57.52 63.90 61.36 63.90
Effective tax rate 30.19 29.62 28.07 30.19 28.07
PERIOD-END BALANCES
Securities $ 362,353 $ 345,661 $ 357,187 $ 362,353 $ 357,187
Loans held for sale 785 3,266 1,936 785 1,936
Loans, net of
unearned income 1,034,564 1,005,525 965,902 1,034,564 965,902
Goodwill and other
intangibles 46,267 46,555 47,793 46,267 47,793
Assets 1,582,554 1,547,599 1,540,098 1,582,554 1,540,098
Assets - tangible
(a) 1,536,287 1,501,044 1,492,305 1,536,287 1,492,305
Deposits 1,292,431 1,262,660 1,242,675 1,292,431 1,242,675
Customer repurchase
agreements 42,184 40,611 53,664 42,184 53,664
Long-term
borrowings 37,611 37,580 37,487 37,611 37,487
Shareholders'
equity 200,443 197,835 196,689 200,443 196,689
Shareholders'
equity - tangible
(a) 154,176 151,280 148,896 154,176 148,896
AVERAGE BALANCES
Securities $ 347,290 $ 349,116 $ 345,800 $ 347,290 $ 345,800
Loans held for sale 2,055 3,446 939 2,055 939
Loans, net of
unearned income 1,016,696 983,725 954,882 1,016,696 954,882
Interest-earning
assets 1,424,808 1,386,256 1,382,817 1,424,808 1,382,817
Goodwill and other
intangibles 46,441 47,193 47,988 46,441 47,988
Assets 1,551,124 1,534,247 1,518,449 1,551,124 1,518,449
Assets - tangible
(a) 1,504,683 1,487,054 1,470,461 1,504,683 1,470,461
Interest-bearing
deposits 950,271 931,223 938,064 950,271 938,064
Deposits 1,260,534 1,247,612 1,221,037 1,260,534 1,221,037
Customer repurchase
agreements 44,412 42,524 53,181 44,412 53,181
Long-term
borrowings 37,593 37,561 37,469 37,593 37,469
Shareholders'
equity 199,525 197,658 196,086 199,525 196,086
Shareholders'
equity - tangible
(a) 153,084 150,465 148,098 153,084 148,098
CAPITAL
Weighted average
shares outstanding
- basic 8,608,728 8,627,414 8,723,633 8,608,728 8,723,633
Weighted average
shares outstanding
- diluted 8,613,896 8,633,778 8,732,679 8,613,896 8,732,679
ALLOWANCE FOR LOAN
LOSSES
Beginning balance $ 12,601 $ 12,611 $ 12,427 $ 12,601 $ 12,427
Provision for loan
losses 50 250 600 50 600
Charge-offs (40) (317) (309) (40) (309)
Recoveries 64 57 126 64 126
---------- ---------- ---------- ---------- ----------
Ending balance $ 12,675 $ 12,601 $ 12,844 $ 12,675 $ 12,844
LOANS
Construction and
land development $ 82,711 $ 72,968 $ 68,069 $ 82,711 $ 68,069
Commercial real
estate 424,538 430,186 436,562 424,538 436,562
Residential real
estate 225,737 220,434 211,261 225,737 211,261
Home equity 100,019 98,449 97,811 100,019 97,811
Commercial and
industrial 196,110 177,481 146,280 196,110 146,280
Consumer 5,449 6,007 5,919 5,449 5,919
---------- ---------- ---------- ---------- ----------
Total $1,034,564 $1,005,525 $ 965,902 $1,034,564 $ 965,902
NONPERFORMING ASSETS
AT PERIOD-END
Nonperforming
loans:
90 days past due
and accruing $ - $ - $ - $ - $ -
Nonaccrual 5,276 5,205 5,123 5,276 5,123
Other real estate
owned 1,493 2,184 2,653 1,493 2,653
---------- ---------- ---------- ---------- ----------
Nonperforming
assets $ 6,769 $ 7,389 $ 7,776 $ 6,769 $ 7,776
ASSET QUALITY RATIOS
Allowance for loan
losses to total
loans 1.23% 1.25% 1.33% 1.23% 1.33%
Allowance for loan
losses to
nonperforming
loans 240.24 242.09 250.71 240.24 250.71
Nonperforming
assets to total
assets 0.43 0.48 0.50 0.43 0.50
Nonperforming loans
to total loans 0.51 0.52 0.53 0.51 0.53
Annualized net
charge-offs
(recoveries) to
average loans (0.01) 0.11 0.08 (0.01) 0.08
OTHER DATA
Fiduciary assets at
period-end (d) (e)$ 491,257 $ 491,681 $ 502,779 $ 491,257 $ 502,779
Retail brokerage
assets at period-
end (d) (e) $ 268,542 $ 257,546 $ 244,725 $ 268,542 $ 244,725
Number full-time
equivalent
employees (f) 301 303 318 301 318
Number of full
service offices 25 25 27 25 25
Number of loan
production offices 2 2 2 2 2
Number of ATM's 33 33 34 33 33
Notes:
(a) - Excludes goodwill and other intangible assets.
(b) - Excludes amortization expense, net of tax, of intangible assets.
(c) - The efficiency ratio is calculated by dividing noninterest expense
excluding gains or losses on the sale of OREO by noninterest
income and net interest income including tax equivalent income on
nontaxable loans and securities and excluding (i) gains or losses on
securities and (ii) gains or losses on sale of premises and equipment.
(d) - Market value.
(e) - Assets are not owned by the Company and are not reflected in the
consolidated balance sheet.
(f) - Average for quarter.
Net Interest Income Analysis
For the Three Months Ended March 31, 2016 and 2015
(in thousands, except rates)
Interest
Average Balance Income/Expense Yield/Rate
--------------------- ----------------- ---------------
2016 2015 2016 2015 2016 2015
---------- ---------- -------- -------- ------- -------
Loans:
Commercial $ 188,275 $ 139,120 $ 1,855 $ 1,826 3.96% 5.32%
Real estate 824,970 801,373 10,090 9,719 4.89 4.85
Consumer 5,506 15,328 231 240 16.87 6.35
---------- ---------- -------- -------- ------- -------
Total loans 1,018,751 955,821 12,176 11,785 4.79 4.94
---------- ---------- -------- -------- ------- -------
Securities:
Federal agencies &
GSEs 88,283 74,850 378 245 1.71 1.31
Mortgage-backed &
CMOs 75,891 65,558 384 378 2.02 2.31
State and
municipal 166,187 190,216 1,493 1,763 3.59 3.71
Other 16,929 15,176 162 123 3.83 3.24
---------- ---------- -------- -------- ------- -------
Total securities 347,290 345,800 2,417 2,509 2.78 2.90
---------- ---------- -------- -------- ------- -------
Federal funds sold - 14,580 - 4 0.00 0.11
Deposits in other
banks 58,767 66,616 58 48 0.40 0.29
---------- ---------- -------- -------- ------- -------
Total interest-
earning assets 1,424,808 1,382,817 14,651 14,346 4.12 4.16
------- -------
Non-earning assets 126,316 135,632
---------- ----------
Total assets $1,551,124 $1,518,449
========== ==========
Deposits:
Demand $ 231,368 $ 212,673 36 18 0.06 0.03
Money market 205,274 202,935 76 71 0.15 0.14
Savings 117,650 107,683 14 12 0.05 0.05
Time 395,979 414,773 1,171 1,093 1.19 1.07
---------- ---------- -------- -------- ------- -------
Total deposits 950,271 938,064 1,297 1,194 0.55 0.52
Customer repurchase
agreements 44,412 53,181 1 3 0.01 0.02
Long-term borrowings 37,593 37,469 289 264 3.08 2.82
---------- ---------- -------- -------- ------- -------
Total interest-
bearing
liabilities 1,032,276 1,028,714 1,587 1,461 0.62 0.57
-------- -------- ------- -------
Noninterest bearing
demand deposits 310,263 282,973
Other liabilities 9,060 10,676
Shareholders' equity 199,525 196,086
---------- ----------
Total liabilities
and shareholders'
equity $1,551,124 $1,518,449
========== ==========
Interest rate spread 3.50% 3.59%
======= =======
Net interest margin 3.67% 3.73%
======= =======
Net interest income
(taxable equivalent
basis) 13,064 12,885
Less: Taxable
equivalent
adjustment 480 507
-------- --------
Net interest income $ 12,584 $ 12,378
======== ========
Source: American National Bankshares Inc.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- CoStar Group acquires Zonda for $800M, adding new home data
- Breeze Acquisition Corp. II gets Nasdaq notice for late 10-Q filings
- Ensign Group expands credit facility to $800M, extends to 2031
Create E-mail Alert Related Categories
Press ReleasesRelated Entities
Dividend, FDIC, Earnings, Definitive AgreementSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
