American National Bankshares Inc. and Subsidiaries
Consolidated Balance Sheets
(Dollars in thousands, except share and per share data)
Unaudited
	March 31
ASSETS	2010			2009
Cash and due from banks	$	11,059		$	13,632
Interest-bearing deposits in other banks		25,531			18,188
Securities available for sale, at fair value		190,949			163,846
Securities held to maturity		5,802			6,811
Total securities		196,751			170,657
Restricted stock, at cost		4,362			4,135
Loans held for sale		2,208			2,782
Loans		515,366			569,003
Less allowance for loan losses		(8,112	)		(7,836	)
Net Loans		507,254			561,167
Premises and equipment, net		19,145			18,018
Other real estate owned, net		3,815			3,345
Goodwill		22,468			22,468
Core deposit intangibles, net		1,603			1,981
Accrued interest receivable and other assets		16,458			13,105
Total assets	$	810,654		$	829,478
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Demand deposits -- noninterest-bearing	$	101,190		$	98,926
Demand deposits -- interest-bearing		98,968			94,505
Money market deposits		79,225			72,085
Savings deposits		64,721			63,553
Time deposits		265,517			286,819
Total deposits		609,621			615,888
Short-term borrowings:
Customer repurchase agreements		60,372			60,768
Other short-term borrowings		-			12,440
Long-term borrowings		8,600			13,750
Trust preferred capital notes		20,619			20,619
Accrued interest payable and other liabilities		4,260			4,098
Total liabilities		703,472			727,563
Shareholders' equity:
Common stock, $1 par, 10,000,000 shares authorized,
6,123,275 shares outstanding at March 31, 2010 and
6,079,161 shares outstanding at March 31, 2009		6,123			6,079
Capital in excess of par value		27,063			26,488
Retained earnings		72,985			70,379
Accumulated other comprehensive income (loss), net		1,011			(1,031	)
Total shareholders' equity		107,182			101,915
Total liabilities and shareholders' equity	$	810,654		$	829,478

American National Bankshares Inc. and Subsidiaries
Consolidated Statements of Income
(Dollars in thousands, except share and per share data)
Unaudited
	Three Months Ended
	March 31
	2010			2009
Interest and Dividend Income:
Interest and fees on loans	$	7,155		$	8,034
Interest and dividends on securities:
Taxable		1,316			1,120
Tax-exempt		466			386
Dividends		23			22
Other interest income		91			88
Total interest and dividend income		9,051			9,650
Interest Expense:
Interest on deposits		1,635			2,527
Interest on short-term borrowings		105			236
Interest on long-term borrowings		64			131
Interest on customer repurchase agreements
Interest on trust preferred capital notes		343			343
Total interest expense		2,147			3,237
Net Interest Income		6,904			6,413
Provision for loan losses		285			350
Net Interest Income After Provision
for Loan Losses		6,619			6,063
Noninterest Income:
Trust fees		812			758
Service charges on deposit accounts		479			502
Other fees and commissions		278			242
Mortgage banking income		246			286
Brokerage fees		21			57
Securities gains (losses), net		(29	)		-
Impairment of securities		-			-
Net loss on foreclosed real estate		(3	)		(1,179	)
Other		117			68
Total noninterest income		1,921			734
Noninterest Expense:
Salaries		2,398			2,531
Employee benefits		640			813
Occupancy and equipment		779			740
FDIC assessment		195			217
Bank franchise tax		167			163
Core deposit intangible amortization		94			94
Other		1,224			1,317
Total noninterest expense		5,497			5,875
Income Before Income Taxes		3,043			922
Income Taxes		858			154
Net Income	$	2,185		$	768
Net Income Per Common Share:
Basic	$	0.36		$	0.13
Diluted	$	0.36		$	0.13
Average Common Shares Outstanding:
Basic		6,119,415			6,081,998
Diluted		6,124,306			6,085,457

American National Bankshares Inc. and Subsidiaries
Financial Highlights
(In thousands, except share, ratio and
nonfinancial data, unaudited)	1st Qtr			4th Qtr			1st Qtr			YTD			YTD
	2010			2009			2009			2010			2009
EARNINGS
Interest income	$	9,051		$	9,257		$	9,650		$	9,051		$	9,650
Interest expense		2,147			2,307			3,237			2,147			3,237
Net interest income		6,904			6,950			6,413			6,904			6,413
Provision for loan losses		285			328			350			285			350
Noninterest income		1,921			1,937			734			1,921			734
Noninterest expense		5,497			5,524			5,875			5,497			5,875
Income taxes		858			866			154			858			154
Net income		2,185			2,169			768			2,185			768
PER COMMON SHARE
Earnings per share - basic	$	0.36		$	0.36		$	0.13		$	0.36		$	0.13
Earnings per share - diluted		0.36			0.35			0.13			0.36			0.13
Cash dividends declared		0.23			0.23			0.23			0.23			0.23
Book value per share		17.50			17.41			16.76			17.50			16.76
Book value per share - tangible (a)		13.57			13.46			12.74			13.57			12.74
Closing market price		20.15			21.90			15.60			20.15			15.60
FINANCIAL RATIOS
Return on average assets		1.08	%		1.07	%		0.38	%		1.08	%		0.38	%
Return on average equity		8.14			8.24			2.99			8.14			2.99
Return on average tangible equity (b)		10.83			11.03			4.32			10.83			4.32
Average equity to average assets		13.24			12.93			12.80			13.24			12.80
Net interest margin, taxable equivalent		3.90			3.88			3.61			3.90			3.61
Efficiency ratio		60.22			58.79			68.77			60.22			68.77
Effective tax rate		28.20			28.53			16.70			28.20			16.70
PERIOD-END BALANCES
Securities	$	201,113		$	199,686		$	174,792		$	201,113		$	174,792
Loans held for sale		2,208			2,490			2,782			2,208			2,782
Loans, net of unearned income		515,366			527,991			569,003			515,366			569,003
Goodwill and other intangibles		24,071			24,166			24,449			24,071			24,449
Assets		810,654			808,973			829,478			810,654			829,478
Assets - tangible (a)		786,583			784,807			805,029			786,583			805,029
Deposits		609,621			604,273			615,888			609,621			615,888
Customer repurchase agreements		60,372			65,929			60,678			60,372			60,678
Other short-term borrowings		-			-			12,440			-			12,440
Long-term borrowings		29,219			29,257			34,369			29,219			34,369
Shareholders' equity		107,182			106,389			101,915			107,182			101,915
Shareholders' equity - tangible (a)		83,111			82,223			77,466			83,111			77,466
AVERAGE BALANCES
Securities	$	184,696		$	167,546		$	138,067		$	184,696		$	138,067
Loans held for sale		2,444			4,394			2,996			2,444			2,996
Loans, net of unearned income		518,403			540,103			570,342			520,847			570,342
Interest-earning assets		736,183			744,007			734,980			736,183			734,980
Goodwill and other intangibles		24,125			24,217			24,507			24,125			24,507
Assets		810,620			814,232			803,206			810,620			803,206
Assets - tangible (a)		786,495			790,015			778,699			786,495			778,699
Interest-bearing deposits		507,209			499,725			510,821			507,209			510,821
Deposits		606,085			604,506			604,002			606,085			604,002
Customer repurchase agreements		63,947			70,014			56,051			63,947			56,051
Other short-term borrowings		-			91			2,071			-			2,071
Long-term borrowings		29,248			29,287			34,398			29,248			34,398
Shareholders' equity		107,336			105,302			102,845			107,336			102,845
Shareholders' equity - tangible (a)		83,211			81,085			78,338			83,211			78,338
CAPITAL
Average shares outstanding - basic		6,119,415			6,108,340			6,081,998			6,119,415			6,081,998
Average shares outstanding - diluted		6,124,306			6,116,800			6,085,457			6,124,306			6,085,457
Shares repurchased		-			-			7,600			-			7,600
Average price of shares repurchased	$	-		$	-		$	15.92		$	-		$	15.92

American National Bankshares Inc. and Subsidiaries
Financial Highlights
(In thousands, except share, ratio and
nonfinancial data, unaudited)		1st Qtr			4th Qtr			1st Qtr			YTD			YTD
		2010			2009			2009			2010			2009
ALLOWANCE FOR LOAN LOSSES
Beginning balance	$	8,166		$	8,260		$	7,824		$	8,166		$	7,824
Provision for loan losses		285			328			350			285			350
Charge-offs		(427	)		(485	)		(376	)		(427	)		(376	)
Recoveries		88			63			38			88			38
Ending balance	$	8,112		$	8,166		$	7,836		$	8,112		$	7,836
LOANS
Construction and land development	$	39,421		$	40,371		$	53,579		$	39,421		$	53,579
Commercial real estate		205,642			208,066			213,508			205,642			213,508
Residential real estate		119,776			121,639			134,510			119,776			134,510
Home equity		63,302			64,678			61,459			63,302			61,459
Commercial and industrial		80,331			86,312			97,259			80,331			97,259
Consumer		6,894			6,925			8,688			6,894			8,688
Total	$	515,366		$	527,991		$	569,003		$	515,366		$	569,003
NONPERFORMING ASSETS AT PERIOD-END
Nonperforming loans:
90 days past due	$	-		$	-		$	-		$	-		$	-
Nonaccrual		3,436			3,642			2,821			3,436			2,821
Foreclosed real estate		3,815			3,414			3,345			3,815			3,345
Nonperforming assets	$	7,251		$	7,056		$	6,166		$	7,251		$	6,166
ASSET QUALITY RATIOS
Annualized net chargeoffs to average loans		0.26	%		0.31	%		0.24	%		0.26	%		0.24	%
Nonperforming assets to total assets		0.89			0.87			0.74			0.89			0.74
Nonperforming loans to total loans		0.67			0.69			0.50			0.67			0.50
Allowance for loan losses to total loans		1.57			1.55			1.38			1.57			1.38
Allowance for loan losses to
nonperforming loans		236.09			224.22			277.77			236.09			277.77
OTHER DATA
Fiduciary assets at period-end (c)	$	363,205		$	358,124		$	305,129		$	363,205		$	305,129
Retail brokerage assets at period-end (c)	$	51,848		$	54,696		$	82,554		$	51,848		$	82,554
Number full-time equivalent employees (d)		235			238			258			235			258
Number of full service offices		18			18			20			18			20
Number of loan production offices		1			2			2			1			2
Number of ATM's		26			24			23			26			23
Notes:
(a) - Excludes goodwill and other intangible assets
(b) - Excludes amortization expense, net of tax, of intangible assets
(c) - Market value
(d) - Average for quarter
N/A - Percentage change is not applicable or not meaningful

American National Bankshares Inc. and Subsidiaries
Net Interest Income Analysis
For the Three Months Ended March 31, 2010 and 2009
(in thousands, except rates)
					Interest
	Average Balance				Income/Expense				Yield/Rate
	2010		2009		2010		2009		2010			2009
Loans:
Commercial	$	79,279	$	96,097	$	953	$	1,100		4.81	%		4.58	%
Real estate		434,795		469,346		6,095		6,779		5.61			5.78
Consumer		6,773		7,895		134		178		7.91			9.02
Total loans		520,847		573,338		7,182		8,057		5.52			5.62
Securities:
Federal agencies		65,751		45,767		551		521		3.35			4.55
Mortgage-backed		43,783		44,560		501		562		4.58			5.04
State and municipal		67,538		42,726		927		604		5.49			5.65
Other		7,624		5,014		69		33		3.62			2.63
Total securities		184,696		138,067		2,048		1,720		4.44			4.98
Deposits in other banks		30,640		23,575		91		88		1.19			1.49
Total interest earning assets		736,183		734,980		9,321		9,865		5.06			5.37
Nonearning assets		74,437		68,226
Total assets	$	810,620	$	803,206
Deposits:
Demand	$	97,062	$	112,459		21		190		0.09			0.68
Money market		80,809		64,648		90		198		0.45			1.23
Savings		62,801		61,289		22		40		0.14			0.26
Time		266,537		272,425		1,502		2,099		2.25			3.08
Total deposits		507,209		510,821		1,635		2,527		1.29			1.98
Customer repurchase agreements		63,947		56,051		105		233		0.66			1.66
Other short-term borrowings		-		2,071		-		3		-			0.58
Long-term borrowings		29,248		34,398		407		474		5.57			5.51
Total interest bearing liabilities		600,404		603,341		2,147		3,237		1.43			2.15
Noninterest bearing
demand deposits		98,876		93,181
Other liabilities		4,004		3,839
Shareholders' equity		107,336		102,845
Total liabilities and
shareholders' equity	$	810,620	$	803,206
Interest rate spread										3.63	%		3.22	%
Net interest margin										3.90	%		3.61	%
Net interest income (taxable equivalent basis)						7,174		6,628
Less: Taxable equivalent adjustment						270		215
Net interest income					$	6,904	$	6,413