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 2020 EARNINGS

Danville, VA, January 21, 2021 – American National Bankshares Inc. (NASDAQ: AMNB) (“American National” or the “Company”) today reported fourth quarter 2020 earnings of $8.8 million, or $0.80 per diluted common share. Those results compare to $7.4 million, or $0.67 per diluted common share, during the same quarter in the prior year, and net income of $7.2 million, or $0.66 per diluted common share, recognized for the third quarter of 2020. Earnings for the twelve months ended December 31, 2020 were $30.0 million, or $2.73 per diluted common share, compared to $20.9 million, or $1.98 per diluted common share for the same period of 2019. Earnings for the twelve months ended December 31, 2019 were impacted by $11.8 million in merger related expenses.

President and Chief Executive Officer Jeffrey V. Haley commented, “Despite the significant economic impact of COVID-19, we ended 2020 on a positive note, with earnings of $8.8 million or $0.80 per share for the fourth quarter, representing an increase of $1.4 million, or 18.2%, as compared to same quarter in 2019. Annual revenues were just over $100 million or 9% growth as compared to 2019. For the year, we generated earnings of $30.0 million or 43.7% growth as compared to 2019 despite increasing our allowance for loan losses by $8.3 million as a result of the pandemic. Tangible book value increased to $22.47 per share, reflecting growth of $1.83 per share, or 8.9%, as compared to 2019. Capital and liquidity levels remain very strong.”

“We are excited about 2021 and our plans to improve our digital capabilities and deepen our customer relationships. I want to again express my appreciation to our employees and customers, who continue to adapt to the many challenges of the pandemic. It has been inspirational to witness our team’s ability to meet our customer and community needs during these challenging times.”

Fourth quarter 2020 highlights include:

● Earnings produced a return on average tangible common equity of 14.90% for the fourth quarter of 2020, compared to 12.66% in the previous quarter and 13.71% for the same quarter in the prior year (non-GAAP).

● Average deposits grew 4.2% during the quarter and 22.7% over the same quarter of 2019; the cost of deposits decreased to 0.43% in the fourth quarter, compared to 0.52% in the previous quarter and 0.95% in the same quarter of the prior year.

● Net interest margin was 3.22% for the quarter, down from 3.26% in the third quarter of 2020 and from 3.62% in the same quarter of the prior year (non-GAAP).

● Noninterest revenues decreased $71 thousand, or 1.7%, when compared to the previous quarter, and increased $355 thousand, or 9.2%, compared to the same quarter in the prior year.

● Noninterest expense increased $519 thousand, or 3.7%, when compared to the previous quarter, and decreased $378 thousand, or 2.5%, when compared to the same quarter in the prior year.  

● The fourth quarter provision for loan losses totaled $585 thousand, which compares to a provision of $2.6 million for the previous quarter, and a provision of $462 thousand in the same quarter in the prior year. The allowance for loan losses as a percentage of loans held for investment increased to 1.06% at period end. Excluding Paycheck Protection Program (“PPP”) loans, the allowance as a percentage of loans increased to 1.19% at period end.

● Nonperforming assets as a percentage of total assets were 0.12% at December 31, 2020, down from 0.16% at September 30, 2020 and 0.15% at December 31, 2019.

● Annualized net charge-offs were 0.05% for the fourth quarter of 2020, up from 0.02% for the corresponding quarter in the prior year and 0.01% for the third quarter of 2020. 

● As a result of the Company’s participation in the Small Business Administration’s PPP under the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, it had outstanding net PPP loans of $211.3 million at December 31, 2020, which compares to $266.0 million at September 30, 2020. The Company had net unamortized PPP loan origination fees with a balance of $4.4 million at December 31, 2020, which compares to $6.8 million at September 30, 2020. 

NET INTEREST INCOME

Net interest income for the fourth quarter of 2020 was $22.1 million, an increase of $651 thousand, or 3.0%, from the prior quarter and an increase of $1.7 million, or 8.3%, from the fourth quarter of 2019. The fully taxable equivalent (“FTE”) net interest margin for the quarter was 3.22%, down from 3.26% in the prior quarter and down from 3.62% in the same period a year ago (non-GAAP). The fourth quarter of 2020 benefited from the recognition of the remaining net fees on PPP loans that were repaid during the quarter. Total PPP fees recognized in net interest income during the quarter was $2.4 million, an increase of $1.3 million as compared to the prior quarter as a result of the forgiveness of $56.4 million of PPP loans. The increase in net interest income from the same quarter in the prior year was attributable to the PPP program and core deposit growth partially offset by a significantly lower rate environment.

The Company’s FTE net interest margin includes the impact of acquisition accounting fair value adjustments. During the fourth quarter of 2020, net accretion related to acquisition accounting amounted to $1.2 million compared to $1.1 million for the same period in 2019 and $1.7 million in the prior quarter. The third quarter of 2020 included an $800,000 cash basis accretion collection from a loan charged off prior to an American National acquisition. Net accretion for the twelve months ended December 31, 2020 amounted to $3.8 million, compared to $3.4 million for the same period in 2019. Estimated remaining net accretion from acquisitions for the periods indicated is as follows (dollars in thousands):

2021	$1,830
2022	1,146
2023	646
2024	388
2025	281
Thereafter	956

ASSET QUALITY

Nonperforming assets (“NPAs”) totaled $3.7 million as of December 31, 2020, down from $4.6 million at September 30, 2020, and up slightly from $3.6 million at December 31, 2019. NPAs as a percentage of total assets were 0.12% at December 31, 2020, compared to 0.16% at September 30, 2020 and 0.15% at December 31, 2019.

The provision for loan losses was $585 thousand for the fourth quarter of 2020, as compared to $2.6 million for the previous quarter and $462 thousand for the same period in the previous year. The fourth quarter of 2020 warranted a significantly lower provision than third quarter based on the economic outlook, ongoing low charge-off and delinquency rates, and overall strong asset quality metrics. The allowance for loan losses was $21.4 million at December 31, 2020, compared to $21.1 million at September 30, 2020 and $13.2 million at December 31, 2019. Annualized net charge-offs as a percentage of average loans outstanding was 0.05% for the fourth quarter of 2020, compared to 0.01% in the previous quarter and 0.02% for the same period in the prior year. The allowance as a percentage of loans held for investment was 1.06% at December 31, 2020, compared to 1.01% at September 30, 2020, and 0.72% at December 31, 2019. Excluding PPP loans, the allowance as a percentage of loans increased to 1.19% at December 31, 2020, compared to 1.16% at September 30, 2020 and 0.72% at December 31, 2019.

American National continues to utilize a Disaster Assistance Program for borrowers in accordance with Section 4013 of the CARES Act. At December 31, 2020, American National had interest only and payment deferrals to customers with outstanding balances amounting to $30.0 million, representing 1.5% of total loans held for investment, which compares to $135.2 million, or 6.5% of outstanding loans held for investment, at September 30, 2020. At December 31, 2020, $18.2 million of the $30.0 million in total deferrals were the result of second and third payment or interest deferrals, representing less than 1% of total loans held for investment.

NONINTEREST INCOME

Noninterest income decreased $71 thousand, or 1.7%, to $4.2 million for the quarter ended December 31, 2020 from $4.3 million in the prior quarter and increased $355 thousand, or 9.2%, from the same period in the prior year. The largest increase in the quarter was the increase in income from small business investment companies (“SBICs”) which was up $138 thousand, or 140.8%, over the previous quarter. The primary decrease in the quarter related to reduced earnings in other investments of the Company. Comparing the fourth quarter of 2020 to the fourth quarter of 2019, the increase was reflective of increased mortgage banking income, income from SBICs and reduced losses on premises and equipment.  Other noninterest income for the fourth quarter of 2020 was reduced by a loss on the sale of repossessed assets of $139 thousand.

NONINTEREST EXPENSE

Noninterest expense for the fourth quarter of 2020 amounted to $14.7 million, up $519 thousand, or 3.7%, when compared to the $14.1 million for the previous quarter and down $378 thousand, or 2.5%, from $15.0 million during the same period in the previous year. The increase from the third quarter of 2020 was primarily attributable to increased pension and salary expenses resulting from voluntary early retirement package costs. The fourth quarter of 2019 included $460,000 of merger related expenses.

INCOME TAXES

The effective tax rate for the three months ended December 31, 2020 was 20.9%, compared to 20.0% for the prior quarter and 15.6% for the same period in the prior year.

BALANCE SHEET

Total assets at December 31, 2020 were $3.1 billion, an increase of $146.7 million from September 30, 2020 and $571.5 million from the same quarter one year ago. The growth over the previous quarter was attributable to core deposit growth and related growth in cash and investments. The growth over the same period a year ago is primarily due to loan and deposit growth associated with the PPP program and growth in core deposits during the period.

At December 31, 2020, loans held for investment (net of deferred fees and costs) were $2.0 billion, a decrease of $71.0 million, or 13.6%, annualized from September 30, 2020. Of this decrease, approximately $56.4 million was associated with PPP loan forgiveness. Loans held for investment increased $184.2 million, or 10.1%, from December 31, 2019. Excluding PPP loans, loans held for investment were slightly lower year over year.

Deposits amounted to $2.6 billion at December 31, 2020, with growth of $140.6 million, or 22.8%, annualized from September 30, 2020 and $550.8 million, or 26.7%, compared to the same quarter of 2019.  The growth over the prior quarter and prior period of 2019 is a result of continued higher than average cash balances being maintained by customers as the uncertainty of the pandemic continues. This pattern has been prevalent through the second, third and fourth quarters of 2020 and is consistent with trends for all commercial banks.

The Company continues to be well-capitalized as defined by regulators, with tangible common equity to tangible assets of 8.34% at December 31, 2020 as compared to 8.55% at September 30, 2020 and 9.57% at December 31, 2019.

ABOUT AMERICAN NATIONAL

American National is a multi-state bank holding company with total assets of approximately $3.1 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 $976 million 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 www.amnb.com.

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; (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 implementation of new technologies, and the ability to develop and maintain secure and reliable electronic systems; (6) accounting principles, policies, and guidelines; and (7) 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.

American National Bankshares Inc.
Consolidated Balance Sheets
(Dollars in thousands, except per share data)
Unaudited
	December 31
	2020			2019
Assets
Cash and due from banks	$	30,767		$	32,505
Interest-bearing deposits in other banks		343,603			47,077
Securities available for sale, at fair value		466,091			379,195
Restricted stock, at cost		8,715			8,630
Loans held for sale		15,591			2,027
Loans, net of deferred fees and costs		2,015,056			1,830,815
Less allowance for loan losses		(21,403	)		(13,152	)
Net Loans		1,993,653			1,817,663
Premises and equipment, net		39,723			39,848
Other real estate owned, net		958			1,308
Goodwill		85,048			84,002
Core deposit intangibles, net		6,091			7,728
Bank owned life insurance		28,482			27,817
Other assets		31,288			30,750
Total assets	$	3,050,010		$	2,478,550
Liabilities
Demand deposits -- noninterest-bearing	$	830,094		$	578,606
Demand deposits -- interest-bearing		501,283			328,015
Money market deposits		666,122			504,651
Savings deposits		217,405			177,505
Time deposits		396,426			471,770
Total deposits		2,611,330			2,060,547
Customer repurchase agreements		42,551			40,475
Long-term borrowings		35,630			35,546
Other liabilities		22,605			21,724
Total liabilities		2,712,116			2,158,292
Shareholders' equity
Preferred stock, $5 par value, 2,000,000 shares authorized,
none outstanding		-			-
Common stock, $1 par value, 20,000,000 shares authorized,
10,982,367 shares outstanding at December 31, 2020 and
11,071,540 shares outstanding at December 31, 2019		10,926			11,019
Capital in excess of par value		154,850			158,244
Retained earnings		169,681			151,478
Accumulated other comprehensive income (loss), net		2,437			(483	)
Total shareholders' equity		337,894			320,258
Total liabilities and shareholders' equity	$	3,050,010		$	2,478,550

American National Bankshares Inc.
Consolidated Statements of Income
(Dollars in thousands, except per share data)
Unaudited
	Three Months Ended						Twelve Months Ended
	December 31						December 31
	2020			2019			2020			2019
Interest and Dividend Income:
Interest and fees on loans	$	22,654		$	21,947		$	87,700		$	82,684
Interest and dividends on securities:
Taxable		1,536			1,991			6,764			7,682
Tax-exempt		103			117			433			777
Dividends		121			127			503			451
Other interest income		84			408			440			1,261
Total interest and dividend income		24,498			24,590			95,840			92,855
Interest Expense:
Interest on deposits		1,821			3,496			9,729			13,143
Interest on short-term borrowings		22			134			259			650
Interest on long-term borrowings		509			512			2,032			1,935
Total interest expense		2,352			4,142			12,020			15,728
Net Interest Income		22,146			20,448			83,820			77,127
Provision for loan losses		585			462			8,916			456
Net Interest Income After Provision
for Loan Losses		21,561			19,986			74,904			76,671
Noninterest Income:
Trust fees		1,025			1,021			4,044			3,847
Service charges on deposit accounts		677			765			2,557			2,866
Other fees and commissions		1,037			967			3,925			3,693
Mortgage banking income		1,042			737			3,514			2,439
Securities gains, net		-			32			814			607
Brokerage fees		192			205			745			721
Income from Small Business Investment Companies		236			37			270			211
Losses on premises and equipment, net		(13	)		(338	)		(110	)		(427	)
Other		25			440			1,084			1,213
Total noninterest income		4,221			3,866			16,843			15,170
Noninterest Expense:
Salaries and employee benefits		8,225			7,986			29,765			30,015
Occupancy and equipment		1,470			1,454			5,586			5,417
FDIC assessment		206			-			639			119
Bank franchise tax		425			531			1,702			1,644
Core deposit intangible amortization		391			437			1,637			1,398
Data processing		764			729			3,017			2,567
Software		342			363			1,454			1,295
Other real estate owned, net		26			15			60			31
Merger related expenses		-			460			-			11,782
Other		2,810			3,062			10,705			11,806
Total noninterest expense		14,659			15,037			54,565			66,074
Income Before Income Taxes		11,123			8,815			37,182			25,767
Income Taxes		2,329			1,374			7,137			4,861
Net Income	$	8,794		$	7,441		$	30,045		$	20,906
Net Income Per Common Share:
Basic	$	0.80		$	0.67		$	2.74		$	1.99
Diluted	$	0.80		$	0.67		$	2.73		$	1.98
Weighted Average Common Shares Outstanding:
Basic		10,975,349			11,094,346			10,981,623			10,531,572
Diluted		10,978,931			11,103,905			10,985,790			10,541,337

American National Bankshares Inc.
Financial Highlights
Unaudited
(Dollars in thousands, except per share data)										At or for the Year Ended
	4th Qtr			3rd Qtr			4th Qtr			December 31,
	2020			2020			2019			2020			2019
EARNINGS
Interest income	$	24,498		$	24,179		$	24,590		$	95,840		$	92,855
Interest expense		2,352			2,684			4,142			12,020			15,728
Net interest income		22,146			21,495			20,448			83,820			77,127
Provision for loan losses		585			2,619			462			8,916			456
Noninterest income		4,221			4,292			3,866			16,843			15,170
Noninterest expense		14,659			14,140			15,037			54,565			66,074
Income taxes		2,329			1,801			1,374			7,137			4,861
Net income		8,794			7,227			7,441			30,045			20,906
PER COMMON SHARE
Net income per share - basic	$	0.80		$	0.66		$	0.67		$	2.74		$	1.99
Net income per share - diluted		0.80			0.66			0.67			2.73			1.98
Cash dividends paid		0.27			0.27			0.27			1.08			1.04
Book value per share		30.77			30.26			28.93			30.77			28.93
Book value per share - tangible (a)		22.47			21.92			20.64			22.47			20.64
Closing market price		26.21			20.92			39.57			26.21			39.57
FINANCIAL RATIOS
Return on average assets		1.18	%		1.01	%		1.20	%		1.08	%		0.91	%
Return on average equity		10.48			8.76			9.31			9.12			7.16
Return on average tangible equity (a)		14.90			12.66			13.71			13.19			10.43
Average equity to average assets		11.30			11.50			12.88			11.88			12.68
Tangible equity to tangible assets (a)		8.34			8.55			9.57			8.34			9.57
Net interest margin, taxable equivalent		3.22			3.26			3.62			3.30			3.68
Efficiency ratio (a)		53.92			53.00			57.24			52.80			57.25
Effective tax rate		20.94			19.95			15.59			19.19			18.87
PERIOD-END BALANCES
Securities	$	474,806		$	367,200		$	387,825		$	474,806		$	387,825
Loans held for sale		15,591			6,789			2,027			15,591			2,027
Loans, net		2,015,056			2,086,094			1,830,815			2,015,056			1,830,815
Goodwill and other intangibles		91,139			91,530			91,730			91,139			91,730
Assets		3,050,010			2,903,304			2,478,550			3,050,010			2,478,550
Assets - tangible (a)		2,958,871			2,811,774			2,386,820			2,958,871			2,386,820
Deposits		2,611,330			2,470,700			2,060,547			2,611,330			2,060,547
Customer repurchase agreements		42,551			41,906			40,475			42,551			40,475
Long-term borrowings		35,630			35,609			35,546			35,630			35,546
Shareholders' equity		337,894			331,981			320,258			337,894			320,258
Shareholders' equity - tangible (a)		246,755			240,451			228,528			246,755			228,528
AVERAGE BALANCES
Securities (b)	$	372,529		$	333,778		$	347,502		$	347,952		$	342,219
Loans held for sale		8,601			9,943			4,991			6,578			3,419
Loans, net		2,063,397			2,092,412			1,810,744			2,008,683			1,700,880
Interest-earning assets		2,754,455			2,648,990			2,264,687			2,551,913			2,107,169
Goodwill and other intangibles		91,358			91,749			92,607			91,751			81,049
Assets		2,971,505			2,870,213			2,482,502			2,773,007			2,303,624
Assets - tangible (a)		2,880,147			2,778,464			2,389,895			2,681,256			2,222,575
Interest-bearing deposits		1,701,395			1,619,960			1,466,116			1,595,694			1,377,422
Deposits		2,536,363			2,434,645			2,066,435			2,342,353			1,915,197
Customer repurchase agreements		40,819			45,689			38,742			42,937			39,134
Other short-term borrowings		-			-			-			1			2,694
Long-term borrowings		35,617			35,597			35,537			35,586			33,644
Shareholders' equity		335,671			330,038			319,851			329,353			292,022
Shareholders' equity - tangible (a)		244,313			238,289			227,244			237,602			210,973

American National Bankshares Inc.
Financial Highlights
Unaudited
(Dollars in thousands, except per share data)										At or for the Year Ended
	4th Qtr			3rd Qtr			4th Qtr			December 31,
	2020			2020			2019			2020			2019
CAPITAL
Weighted average shares outstanding - basic		10,975,349			10,966,645			11,094,346			10,981,623			10,531,572
Weighted average shares outstanding - diluted		10,978,931			10,969,901			11,103,905			10,985,790			10,541,337
ALLOWANCE FOR LOAN LOSSES
Beginning balance	$	21,088		$	18,507		$	12,758		$	13,152		$	12,805
Provision for loan losses		585			2,619			462			8,916			456
Charge-offs		(331	)		(126	)		(144	)		(1,006	)		(333	)
Recoveries		61			88			76			341			224
Ending balance	$	21,403		$	21,088		$	13,152		$	21,403		$	13,152
LOANS
Construction and land development	$	140,071		$	151,613		$	137,920		$	140,071		$	137,920
Commercial real estate - owner occupied		373,680			382,121			360,991			373,680			360,991
Commercial real estate - non-owner occupied		627,569			608,954			538,208			627,569			538,208
Residential real estate		269,137			279,815			324,315			269,137			324,315
Home equity		104,881			111,448			119,423			104,881			119,423
Commercial and industrial		491,256			543,746			339,077			491,256			339,077
Consumer		8,462			8,397			10,881			8,462			10,881
Total	$	2,015,056		$	2,086,094		$	1,830,815		$	2,015,056		$	1,830,815
NONPERFORMING ASSETS AT PERIOD-END
Nonperforming loans:
90 days past due and accruing	$	262		$	285		$	361		$	262		$	361
Nonaccrual		2,434			3,088			1,944			2,434			1,944
Other real estate owned and repossessions		958			1,210			1,308			958			1,308
Nonperforming assets	$	3,654		$	4,583		$	3,613		$	3,654		$	3,613
ASSET QUALITY RATIOS
Allowance for loan losses to total loans		1.06	%		1.01	%		0.72	%		1.06	%		0.72	%
Allowance for loan losses to
nonperforming loans		793.88			625.20			570.59			793.88			570.59
Nonperforming assets to total assets		0.12			0.16			0.15			0.12			0.15
Nonperforming loans to total loans		0.13			0.16			0.13			0.13			0.13
Annualized net charge-offs
to average loans		0.05			0.01			0.02			0.03			0.01
OTHER DATA
Fiduciary assets at period-end (c) (d)	$	614,016		$	569,095		$	560,776		$	614,016		$	560,776
Retail brokerage assets at period-end (c) (d)	$	362,022		$	314,809		$	317,262		$	362,022		$	317,262
Number full-time equivalent employees (e)		342			341			355			342			355
Number of full service offices		26			25			26			26			26
Number of loan production offices		1			1			1			1			1
Number of ATMs		37			37			38			37			38
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 quarter.

	Net Interest Income Analysis
	For the Three Months Ended December 31, 2020 and 2019
	(Dollars in thousands)
	Unaudited
						Interest
		Average Balance				Income/Expense (a)				Yield/Rate
		2020		2019		2020		2019		2020			2019
Loans:
Commercial		$	507,750	$	315,902	$	5,354	$	3,516		4.19	%		4.42	%
Real estate			1,556,192		1,488,577		17,206		18,268		4.42			4.91
Consumer			8,056		11,256		137		209		6.77			7.37
Total loans (b)			2,071,998		1,815,735		22,697		21,993		4.38			4.84
Securities:
U.S. Treasury			14,126		-		4		-		0.11			-
Federal agencies & GSEs			76,606		123,950		276		716		1.44			2.31
Mortgage-backed & CMOs			206,817		164,727		916		996		1.77			2.42
State and municipal			53,257		41,109		304		303		2.28			2.95
Other			21,723		17,716		286		250		5.27			5.64
Total securities			372,529		347,502		1,786		2,265		1.92			2.61
Deposits in other banks			309,928		101,450		84		408		0.11			1.60
Total interest-earning assets			2,754,455		2,264,687		24,567		24,666		3.56			4.35
Non-earning assets			217,050		217,815
Total assets		$	2,971,505	$	2,482,502
Deposits:
Demand		$	433,356	$	329,759		50		126		0.05			0.15
Money market			647,320		482,671		380		1,283		0.23			1.05
Savings			215,233		176,686		16		83		0.03			0.19
Time			405,486		477,000		1,375		2,004		1.35			1.67
Total deposits			1,701,395		1,466,116		1,821		3,496		0.43			0.95
Customer repurchase agreements			40,819		38,742		22		134		0.21			1.37
Long-term borrowings			35,617		35,537		509		512		5.72			5.76
Total interest-bearing
liabilities			1,777,831		1,540,395		2,352		4,142		0.53			1.07
Noninterest bearing demand deposits			834,968		600,319
Other liabilities			23,035		21,937
Shareholders' equity			335,671		319,851
Total liabilities and
	shareholders' equity	$	2,971,505	$	2,482,502
Interest rate spread											3.03	%		3.28	%
Net interest margin											3.22	%		3.62	%
Net interest income (taxable equivalent basis)							22,215		20,524
Less: Taxable equivalent adjustment (c)							69		76
Net interest income						$	22,146	$	20,448
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 Years Ended December 31, 2020 and 2019
	(Dollars in thousands)
	Unaudited
						Interest
		Average Balance				Income/Expense (a)				Yield/Rate
		2020		2019		2020		2019		2020			2019
Loans:
Commercial		$	475,068	$	306,065	$	17,768	$	14,125		3.74	%		4.62	%
Real estate			1,531,195		1,388,188		69,525		68,050		4.54			4.90
Consumer			8,998		10,046		588		694		6.53			6.91
Total loans (b)			2,015,261		1,704,299		87,881		82,869		4.36			4.86
Securities:
U.S. Treasury			9,010		-		51		-		0.57			-
Federal agencies & GSEs			72,112		132,916		1,423		3,191		1.97			2.40
Mortgage-backed & CMOs			200,612		134,458		4,060		3,350		2.02			2.49
State and municipal			45,836		58,293		1,175		1,650		2.56			2.83
Other			20,382		16,552		1,098		903		5.39			5.46
Total securities			347,952		342,219		7,807		9,094		2.24			2.66
Deposits in other banks			188,700		60,651		440		1,261		0.23			2.08
Total interest-earning assets			2,551,913		2,107,169		96,128		93,224		3.77			4.42
Non-earning assets			221,094		196,455
Total assets		$	2,773,007	$	2,303,624
Deposits:
Demand		$	386,790	$	307,329		344		370		0.09			0.12
Money market			574,510		445,505		2,634		5,246		0.46			1.18
Savings			198,313		166,842		117		284		0.06			0.17
Time			436,081		457,746		6,634		7,243		1.52			1.58
Total deposits			1,595,694		1,377,422		9,729		13,143		0.61			0.95
Customer repurchase agreements			42,937		39,134		259		596		0.60			1.52
Other short-term borrowings			1		2,694		-		54		0.55			2.00
Long-term borrowings			35,586		33,644		2,032		1,935		5.71			5.75
Total interest-bearing
liabilities			1,674,218		1,452,894		12,020		15,728		0.72			1.08
Noninterest bearing demand deposits			746,659		537,775
Other liabilities			22,777		20,933
Shareholders' equity			329,353		292,022
Total liabilities and
	shareholders' equity	$	2,773,007	$	2,303,624
Interest rate spread											3.05	%		3.34	%
Net interest margin											3.30	%		3.68	%
Net interest income (taxable equivalent basis)							84,108		77,496
Less: Taxable equivalent adjustment (c)							288		369
Net interest income						$	83,820	$	77,127
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 Year Ended
	4th Qtr			3rd Qtr			4th Qtr			December 31,
	2020			2020			2019			2020			2019
EFFICIENCY RATIO
Noninterest expense	$	14,659		$	14,140		$	15,037		$	54,565		$	66,074
Add/subtract: gain/loss on sale of OREO		(8	)		(23	)		(3	)		4			52
Subtract: core deposit intangible amortization		(391	)		(402	)		(437	)		(1,637	)		(1,398	)
Subtract: merger related expenses		-			-			(460	)		-			(11,782	)
	$	14,260		$	13,715		$	14,137		$	52,932		$	52,946
Net interest income	$	22,146		$	21,495		$	20,448		$	83,820		$	77,127
Tax equivalent adjustment		69			75			76			288			369
Noninterest income		4,221			4,292			3,866			16,843			15,170
Subtract: gain on securities		-			-			(32	)		(814	)		(607	)
Add: loss on fixed assets		13			15			338			110			427
	$	26,449		$	25,877		$	24,696		$	100,247		$	92,486
Efficiency ratio		53.92	%		53.00	%		57.24	%		52.80	%		57.25	%
TAX EQUIVALENT NET INTEREST INCOME
Non-GAAP measures:
Interest income - loans	$	22,697		$	22,394		$	21,993		$	87,881		$	82,869
Interest income - investments and other		1,870			1,860			2,673			8,247			10,355
Interest expense - deposits		(1,821	)		(2,118	)		(3,496	)		(9,729	)		(13,143	)
Interest expense - customer repurchase
agreements		(22	)		(42	)		(134	)		(259	)		(596	)
Interest expense - other short-term borrowings		-			-			-			-			(54	)
Interest expense - long-term borrowings		(509	)		(524	)		(512	)		(2,032	)		(1,935	)
Total net interest income	$	22,215		$	21,570		$	20,524		$	84,108		$	77,496
Less non-GAAP measures:
Tax benefit on nontaxable interest - loans		(43	)		(48	)		(46	)		(181	)		(185	)
Tax benefit on nontaxable interest - securities		(26	)		(27	)		(30	)		(107	)		(184	)
GAAP measures	$	22,146		$	21,495		$	20,448		$	83,820		$	77,127
RETURN ON AVERAGE TANGIBLE EQUITY
Return on average equity (GAAP basis)		10.48	%		8.76	%		9.31	%		9.12	%		7.16	%
Impact of excluding average goodwill
and other intangibles		4.42			3.90			4.40			4.07			3.27
Return on average tangible equity
(non-GAAP)		14.90	%		12.66	%		13.71	%		13.19	%		10.43	%
TANGIBLE EQUITY TO TANGIBLE ASSETS
Equity to assets ratio (GAAP basis)		11.08	%		11.43	%		12.92	%		11.08	%		12.92	%
Impact of excluding goodwill and
other intangibles		(2.74	)		(2.88	)		(3.35	)		(2.74	)		(3.35	)
Tangible equity to tangible assets ratio
(non-GAAP)		8.34	%		8.55	%		9.57	%		8.34	%		9.57	%
TANGIBLE BOOK VALUE
Book value per share (GAAP basis)	$	30.77		$	30.26		$	28.93		$	30.77		$	28.93
Impact of excluding goodwill and
other intangibles		(8.30	)		(8.34	)		(8.29	)		(8.30	)		(8.29	)
Tangible book value per share
(non-GAAP)	$	22.47		$	21.92		$	20.64		$	22.47		$	20.64
ADJUSTED LOAN LOSS ALLOWANCE
Allowance for loan losses	$	21,403		$	21,088		$	13,152		$	21,403		$	13,152
Credit discount on purchased loans		7,255			7,896			12,214			7,255			12,214
Adjusted loan loss allowance	$	28,658		$	28,984		$	25,366		$	28,658		$	25,366
Total loans, net	$	2,015,056		$	2,086,094		$	1,830,815		$	2,015,056		$	1,830,815
Subtract: PPP loans, net		(211,275	)		(265,941	)		-			(211,275	)		-
Total loans less PPP loans, net	$	1,803,781		$	1,820,153		$	1,830,815		$	1,803,781		$	1,830,815
Adjusted loan loss allowance to
total loans less PPP loans, net		1.59	%		1.59	%		1.39	%		1.59	%		1.39	%