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 THIRD QUARTER EARNINGS

Danville, VA, October 20, 2022 – American National Bankshares Inc. (NASDAQ: AMNB) (“American National” or the “Company”) today reported third quarter 2022 earnings of $9.3 million, or $0.87 per diluted common share. Those results compare to earnings of $10.2 million, or $0.94 per diluted common share, during the same quarter in the prior year, and earnings of $8.1 million, or $0.76 per diluted common share, for the second quarter of 2022. Earnings for the nine months ended September 30, 2022 were $26.4 million, or $2.47 per diluted common share, compared to $32.2 million, or $2.95 diluted common share, for the same period of 2021.

President and Chief Executive Officer, Jeffrey V. Haley, commented, “American National delivered another solid quarter of earnings performance with meaningful growth in top-line revenue and margins. Our continued growth in our loan portfolio and improved asset mix coupled with the continued rising rate environment drove double-digit growth in net interest income. Asset quality remains strong, and our local business markets continue to be healthy in spite of the geopolitical headwinds and some signs of a slowing economy nationally.”

Third quarter 2022 highlights include:

● Earnings produced a return on average tangible common equity of 15.74% for the third quarter of 2022, compared to 13.87% in the previous quarter and 16.01% for the same quarter in the prior year (non-GAAP).

● Net interest income increased $2.5 million, or 11.7%, when compared to the previous quarter, and increased $914 thousand, or 4.0%, when compared to the same quarter in 2021.

● Fully taxable equivalent (“FTE”) net interest margin was 3.20% for the quarter, up from 2.76% in the second quarter of 2022 and up from 3.09% in the same quarter of the prior year (non-GAAP).

● Noninterest revenues decreased $77 thousand, or 1.6%, when compared to the previous quarter, and decreased $363 thousand, or 7.1%, compared to the same quarter in the prior year.

● Noninterest expense increased $993 thousand, or 6.4%, when compared to the previous quarter, and increased $1.6 million, or 10.8%, 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 $57.2 million, or 11.4% annualized, during the third quarter as compared to the previous quarter of $44.5 million, or 9.1% annualized.

● The Company recognized a provision for loan losses in the third quarter of 2022 of $615 thousand compared to $581 thousand in the second quarter of 2022 and $482 thousand in the third quarter of 2021. Annualized net charge-offs (recoveries) as a percentage of average loans outstanding were (0.01%) for the third quarter of 2022 compared to 0.01% in the previous quarter and (0.01%) in the same quarter of 2021.

● Nonperforming assets as a percentage of total assets were 0.05% at September 30, 2022 and June 30, 2022, down from 0.06% at September 30, 2021.

NET INTEREST INCOME

Net interest income for the third quarter of 2022 increased by $2.5 million, or 11.7%, to $24.0 million compared to $21.5 million for the second quarter of 2022. The third quarter of 2022 compared to the same quarter of 2021 reflected an increase of $914 thousand, or 4.0%. The FTE net interest margin for the quarter was 3.20%, up from 2.76% in the prior quarter and 3.09% in the same quarter a year ago (non-GAAP). The margin expansion relative to the previous quarter was primarily due to a 45-basis point increase in yield on average earning assets. 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 increase in margin from third 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 third quarter of 2022, net accretion related to acquisition accounting amounted to $454 thousand compared to $336 thousand in the prior quarter and $1.3 million for the same quarter in 2021. The third quarter of 2021 reflected additional accretion income from the early payoff of acquired loans. Estimated remaining net accretion from acquisitions for the periods indicated is as follows (dollars in thousands):

For the years ending December 31, (estimated):
2022	$ 208
2023	745
2024	454
2025	320
2026	215
Thereafter	275

ASSET QUALITY

Nonperforming assets (“NPAs”) totaled $1.4 million as of September 30, 2022, down from $1.6 million at June 30, 2022, and down substantially from $2.1 million at September 30, 2021. NPAs as a percentage of total assets were 0.05% at September 30, 2022 and June 30, 2022, and 0.06% at September 30, 2021. The Company recorded a provision for loan losses for the third quarter of 2022 of $615 thousand compared to $581 thousand in the previous quarter and $482 thousand in the third quarter of the previous year. The provision expense for the third and second quarters of 2022 was a function of continued loan growth during the periods. The provision expense in the third quarter of 2021 was the net of the provision for loan growth offset by positive adjustments in qualitative factors for improved economic conditions.

The allowance for loan losses was $19.2 million at September 30, 2022, compared to $18.5 million at June 30, 2022 and $20.6 million at September 30, 2021. Annualized net charge-offs (recoveries) as a percentage of average loans outstanding were (0.01%) for the third quarter of 2022 and the third quarter of 2021, compared to 0.01% in the second quarter of 2022. The allowance as a percentage of loans held for investment was 0.91% at September 30, 2022 and June 30, 2022, compared to 1.06% at September 30, 2021. Excluding PPP loans, the allowance as a percentage of loans was 0.91% at September 30, 2022 and June 30, 2022, compared to 1.08% at September 30, 2021.

NONINTEREST INCOME

Noninterest income decreased $77 thousand, or 1.6%, to $4.8 million for the quarter ended September 30, 2022 from the prior quarter and $363 thousand, or 7.1%, from $5.1 million in the same quarter in the prior year. The largest decrease in the third quarter of 2022 compared to the second quarter was income from small business investment companies. This income is generated by distributions based on ownership percentages and is highly unpredictable. The decrease for the third quarter of 2022 as compared to same quarter in the prior year is primarily attributable to mortgage revenue contraction associated with higher mortgage rates, with mortgage banking income decreasing by $601 thousand, or 60.8%, compared to the same quarter of 2021.

NONINTEREST EXPENSE

Noninterest expense for the third quarter of 2022 amounted to $16.4 million, up $993 thousand, or 6.4%, when compared to $15.5 million for the previous quarter and up $1.6 million, or 10.8%, from $14.8 million during the same quarter in the previous year. The increase in the third quarter compared to the second quarter of 2022 and the same quarter of 2021 was primarily the result of compensation associated with a lower staffing vacancy rate, and increased incentive accruals.

INCOME TAXES

The effective tax rate for the three months ended September 30, 2022 was 20.92%, compared to 20.90% for the prior quarter and 21.05% for the same quarter in the prior year. 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 September 30, 2022 were $3.0 billion, a decrease of $184.4 million from June 30, 2022 and a decrease of $239.7 million from September 30, 2021. The decrease from the previous quarter is due to lower interest-bearing deposits in other banks resulting from a decrease in deposits, partially offset by an increase in loans, net during the period.

At September 30, 2022, loans held for investment (net of deferred fees and costs) were $2.1 billion, an increase of $88.6 million, or 17.5% annualized, from June 30, 2022. Loans held for investment, excluding PPP loans, increased $216.2 million, or 11.4%, from September 30, 2021.

Investment securities available for sale amounted to $641.9 million at September 30, 2022, a decrease of $26.9 million, or 4.0%, compared to June 30, 2022, and a decrease of $2.1 million, or less than 1% compared to September 30, 2021.

Deposits amounted to $2.7 billion at September 30, 2022, a decrease of $139.5 million, or 19.7% annualized, from June 30, 2022 and a decrease of $171.2 million, or 6.0%, compared to September 30, 2021. Noninterest- bearing deposits increased $63.9 million, or 6.5%, compared to September 30, 2021.

The Company continues to be well-capitalized as defined by regulators, with tangible common equity to tangible assets of 7.59% at September 30, 2022 compared to 7.58% at June 30, 2022 and compared to 8.14% at September 30, 2021 (non-GAAP). The Company’s common equity Tier 1, Tier 1, total, and Tier 1 leverage capital ratios were 11.80%, 12.98%, 13.80% and 9.92%, respectively, at September 30, 2022.

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 $1.1 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 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 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.

American National Bankshares Inc.

Consolidated Balance Sheets

(Dollars in thousands, except per share data)

Unaudited

	September 30,
ASSETS	2022			2021
Cash and due from banks	$	35,437		$	38,349
Interest-bearing deposits in other banks		59,541			480,052
Securities available for sale, at fair value		641,884			643,949
Restricted stock, at cost		8,383			8,046
Loans held for sale		2,852			9,518
Loans, net of deferred fees and costs		2,119,415			1,940,332
Less allowance for loan losses		(19,189	)		(20,630	)
Net Loans		2,100,226			1,919,702
Premises and equipment, net		34,686			37,021
Other real estate owned, net		143			213
Goodwill		85,048			85,048
Core deposit intangibles, net		3,667			4,978
Bank owned life insurance		29,480			28,950
Other assets		47,973			33,237
Total assets	$	3,049,320		$	3,289,063
Liabilities
Demand deposits -- noninterest-bearing	$	1,044,803		$	980,985
Demand deposits -- interest-bearing		509,017			524,328
Money market deposits		612,600			733,515
Savings deposits		282,093			254,456
Time deposits		242,357			368,797
Total deposits		2,690,870			2,862,081
Customer repurchase agreements		625			26,595
Long-term borrowings		28,308			28,207
Other liabilities		16,127			21,793
Total liabilities		2,735,930			2,938,676
Shareholders' equity
Preferred stock, $5 par, 2,000,000 shares authorized, none outstanding		—			—
Common stock, $1 par, 20,000,000 shares authorized, 10,608,750 shares outstanding at September 30, 2022 and 10,778,562 shares outstanding at September 30, 2021		10,533			10,715
Capital in excess of par value		141,694			148,069
Retained earnings		218,814			193,107
Accumulated other comprehensive loss, net		(57,651	)		(1,504	)
Total shareholders' equity		313,390			350,387
Total liabilities and shareholders' equity	$	3,049,320		$	3,289,063

American National Bankshares Inc.

Consolidated Statements of Income

(Dollars in thousands, except per share data)

Unaudited

	For the Three Months Ended									For the Nine Months Ended
	9/30/22			6/30/22			9/30/21			9/30/22			9/30/21
Interest and Dividend Income:
Interest and fees on loans	$	21,160		$	19,076		$	21,974		$	59,024		$	65,334
Interest and dividends on securities:
Taxable		2,664			2,441			1,896			7,344			5,297
Tax-exempt		110			97			94			297			293
Dividends		118			116			112			347			349
Other interest income		1,099			800			201			2,076			375
Total interest and dividend income		25,151			22,530			24,277			69,088			71,648
Interest Expense:
Interest on deposits		741			646			781			1,956			2,990
Interest on short-term borrowings		11			9			3			26			19
Interest on long-term borrowings		392			385			400			1,156			1,352
Total interest expense		1,144			1,040			1,184			3,138			4,361
Net Interest Income		24,007			21,490			23,093			65,950			67,287
Provision for (recovery of) loan losses		615			581			482			438			(870	)
Net Interest Income After Provision for (Recovery of) Loan Losses		23,392			20,909			22,611			65,512			68,157
Noninterest Income:
Trust and brokerage fees		1,603			1,587			1,576			4,999			3,757
Service charges on deposit accounts		681			709			664			2,079			1,916
Interchange fees		1,013			996			958			2,990			3,025
Other fees and commissions		233			200			189			699			619
Mortgage banking income		388			429			989			1,490			3,449
Securities gains, net		—			—			—			—			733
Income from Small Business Investment Companies		501			678			491			1,672			1,510
Income from insurance investments		100			97			132			644			1,062
Losses on premises and equipment, net		(2	)		(84	)		(107	)		(82	)		(588	)
Other		243			225			231			706			704
Total noninterest income		4,760			4,837			5,123			15,197			16,187
Noninterest Expense:
Salaries and employee benefits		9,618			8,720			8,185			26,936			23,881
Occupancy and equipment		1,514			1,520			1,513			4,576			4,548
FDIC assessment		227			228			194			694			644
Bank franchise tax		488			488			440			1,452			1,321
Core deposit intangible amortization		310			320			361			960			1,113
Data processing		818			781			748			2,446			2,224
Software		362			363			344			1,088			1,011
Other real estate owned, net		3			2			21			4			148
Other		3,108			3,033			3,037			9,096			8,655
Total noninterest expense		16,448			15,455			14,843			47,252			43,545
Income Before Income Taxes		11,704			10,291			12,891			33,457			40,799
Income Taxes		2,448			2,151			2,713			7,062			8,566
Net Income	$	9,256		$	8,140		$	10,178		$	26,395		$	32,233
Net Income Per Common Share:
Basic	$	0.87		$	0.76		$	0.94		$	2.47		$	2.96
Diluted	$	0.87		$	0.76		$	0.94		$	2.47		$	2.95
Weighted Average Common Shares Outstanding:
Basic		10,640,952			10,688,294			10,833,875			10,694,096			10,907,721
Diluted		10,643,073			10,690,496			10,836,293			10,696,409			10,911,372

American National Bankshares Inc.

Financial Highlights

Unaudited

(Dollars in thousands, except per share data)

	3rd Qtr			2nd Qtr			3rd Qtr			At or for the Nine Months Ended September 30,
	2022			2022			2021			2022			2021
EARNINGS
Interest income	$	25,151		$	22,530		$	24,277		$	69,088		$	71,648
Interest expense		1,144			1,040			1,184			3,138			4,361
Net interest income		24,007			21,490			23,093			65,950			67,287
Provision for (recovery of) loan losses		615			581			482			438			(870	)
Noninterest income		4,760			4,837			5,123			15,197			16,187
Noninterest expense		16,448			15,455			14,843			47,252			43,545
Income taxes		2,448			2,151			2,713			7,062			8,566
Net income		9,256			8,140			10,178			26,395			32,233
PER COMMON SHARE
Net income per share - basic	$	0.87		$	0.76		$	0.94		$	2.47		$	2.96
Net income per share - diluted		0.87			0.76			0.94			2.47			2.95
Cash dividends paid		0.28			0.28			0.27			0.84			0.81
Book value per share		29.54			30.71			32.51			29.54			32.51
Book value per share - tangible (a)		21.18			22.36			24.16			21.18			24.16
Closing market price		31.95			34.61			33.04			31.95			33.04
FINANCIAL RATIOS
Return on average assets		1.17	%		0.99	%		1.27	%		1.08	%		1.38	%
Return on average common equity		11.21			9.83			11.58			10.42			12.40
Return on average tangible common equity (a)		15.74			13.87			16.01			14.57			17.24
Average common equity to average assets		10.42			10.06			10.99			10.35			11.13
Tangible common equity to tangible assets (a)		7.59			7.58			8.14			7.59			8.14
Net interest margin, taxable equivalent		3.20			2.76			3.09			2.86			3.10
Efficiency ratio (a)		55.98			57.18			51.02			56.87			50.24
Effective tax rate		20.92			20.90			21.05			21.11			21.00
PERIOD-END BALANCES
Securities	$	650,267		$	677,260		$	651,995		$	650,267		$	651,995
Loans held for sale		2,852			5,227			9,518			2,852			9,518
Loans, net		2,119,415			2,030,818			1,940,332			2,119,415			1,940,332
Goodwill and other intangibles		88,715			89,025			90,026			88,715			90,026
Assets		3,049,320			3,233,728			3,289,063			3,049,320			3,289,063
Assets - tangible (a)		2,960,605			3,144,703			3,199,037			2,960,605			3,199,037
Deposits		2,690,870			2,830,347			2,862,081			2,690,870			2,862,081
Customer repurchase agreements		625			32,038			26,595			625			26,595
Long-term borrowings		28,308			28,283			28,207			28,308			28,207
Shareholders' equity		313,390			327,431			350,387			313,390			350,387
Shareholders' equity - tangible (a)		224,675			238,406			260,361			224,675			260,361

American National Bankshares Inc.

Financial Highlights

Unaudited

(Dollars in thousands, except per share data)

	3rd Qtr			2nd Qtr			3rd Qtr			At or for the Nine Months Ended September 30,
	2022			2022			2021			2022			2021
AVERAGE BALANCES
Securities (b)	$	728,535		$	726,472		$	569,508		$	722,025		$	514,156
Loans held for sale		3,915			3,759			15,883			3,998			12,313
Loans, net		2,064,088			2,006,970			1,907,398			2,012,905			1,956,452
Interest-earning assets		3,005,292			3,120,925			2,989,661			3,083,815			2,905,032
Goodwill and other intangibles		88,886			89,200			90,257			89,202			90,600
Assets		3,170,328			3,292,913			3,199,514			3,260,636			3,115,683
Assets - tangible (a)		3,081,442			3,203,713			3,109,257			3,171,434			3,025,083
Interest-bearing deposits		1,723,931			1,849,664			1,817,595			1,817,581			1,773,354
Deposits		2,775,516			2,881,318			2,768,268			2,845,523			2,676,650
Customer repurchase agreements		18,719			35,766			29,681			31,858			36,954
Long-term borrowings		28,293			28,268			28,192			28,268			33,111
Shareholders' equity		330,318			331,276			351,646			337,633			346,730
Shareholders' equity - tangible (a)		241,432			242,076			261,389			248,431			256,130
CAPITAL
Weighted average shares outstanding - basic		10,640,952			10,688,294			10,833,875			10,694,096			10,907,721
Weighted average shares outstanding - diluted		10,643,073			10,690,496			10,836,293			10,696,409			10,911,372
COMMON STOCK REPURCHASE PROGRAM
Total shares of common stock repurchased		60,104			54,676			100,764			203,709			247,999
Average price paid per share of common stock	$	34.26		$	35.32		$	32.87		$	36.26		$	32.84
ALLOWANCE FOR LOAN LOSSES
Beginning balance	$	18,505		$	17,988		$	20,097		$	18,678		$	21,403
Provision for (recovery of) loan losses		615			581			482			438			(870	)
Charge-offs		(31	)		(117	)		(19	)		(185	)		(70	)
Recoveries		100			53			70			258			167
Ending balance	$	19,189		$	18,505		$	20,630		$	19,189		$	20,630
LOANS
Construction and land development	$	210,500		$	174,361		$	120,193		$	210,500		$	120,193
Commercial real estate - owner occupied		423,678			403,478			404,029			423,678			404,029
Commercial real estate - non-owner occupied		764,963			749,174			713,339			764,963			713,339
Residential real estate		324,468			310,110			280,351			324,468			280,351
Home equity		93,659			95,352			95,317			93,659			95,317
Commercial and industrial		295,541			291,445			320,278			295,541			320,278
Consumer		6,606			6,898			6,825			6,606			6,825
Total	$	2,119,415		$	2,030,818		$	1,940,332		$	2,119,415		$	1,940,332

American National Bankshares Inc.

Financial Highlights

Unaudited

(Dollars in thousands, except per share data)

	3rd Qtr			2nd Qtr			3rd Qtr			At or for the Nine Months Ended September 30,
	2022			2022			2021			2022			2021
NONPERFORMING ASSETS AT PERIOD-END
Nonperforming loans:
90 days past due and accruing	$	18		$	90		$	—		$	18		$	—
Nonaccrual		1,171			1,385			1,903			1,171			1,903
Other real estate owned and repossessions		196			143			213			196			213
Nonperforming assets	$	1,385		$	1,618		$	2,116		$	1,385		$	2,116
ASSET QUALITY RATIOS
Allowance for loan losses to total loans		0.91	%		0.91	%		1.06	%		0.91	%		1.06	%
Allowance for loan losses to nonperforming loans		1,613.88			1,254.58			1,084.08			1,613.88			1,084.08
Nonperforming assets to total assets		0.05			0.05			0.06			0.05			0.06
Nonperforming loans to total loans		0.06			0.07			0.10			0.06			0.10
Annualized net (recoveries) charge-offs to average loans		(0.01	)		0.01			(0.01	)		0.00			(0.01	)
OTHER DATA
Fiduciary assets at period-end (c) (d)	$	693,153		$	709,264		$	697,546		$	693,153		$	697,546
Retail brokerage assets at period-end (c) (d)	$	376,891		$	370,493		$	406,408		$	376,891		$	406,408
Number full-time equivalent employees (e)		363			345			345			363			345
Number of full service offices		26			26			26			26			26
Number of loan production offices		1			1			1			1			1
Number of ATMs		34			36			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 quarter.

American National Bankshares Inc.

Net Interest Income Analysis

For the Three Months Ended September 30, 2022 and 2021

(Dollars in thousands)

Unaudited

					Interest
	Average Balance				Income/Expense (a)				Yield/Rate
	2022		2021		2022		2021		2022			2021
Loans:
Commercial	$	287,785	$	325,692	$	2,877	$	5,185		3.97	%		6.32	%
Real estate		1,773,694		1,590,858		18,207		16,702		4.11			4.20
Consumer		6,524		6,731		107		125		6.51			7.37
Total loans (b)		2,068,003		1,923,281		21,191		22,012		4.09			4.57
Securities:
U.S. Treasury		152,158		53,347		350		139		0.92			1.04
Federal agencies & GSEs		111,804		90,876		369		265		1.32			1.17
Mortgage-backed & CMOs		354,296		335,940		1,435		1,091		1.62			1.30
State and municipal		70,528		62,883		365		320		2.07			2.04
Other		39,749		26,462		401		311		4.04			4.70
Total securities		728,535		569,508		2,920		2,126		1.60			1.49
Deposits in other banks		208,754		496,872		1,099		201		2.09			0.16
Total interest-earning assets		3,005,292		2,989,661		25,210		24,339		3.35			3.25
Non-earning assets		165,036		209,853
Total assets	$	3,170,328	$	3,199,514
Deposits:
Demand	$	522,021	$	481,032		34		38		0.03			0.03
Money market		668,970		713,846		348		166		0.21			0.09
Savings		281,369		247,536		20		6		0.03			0.01
Time		251,571		375,181		339		571		0.53			0.60
Total deposits		1,723,931		1,817,595		741		781		0.17			0.17
Customer repurchase agreements		18,719		29,681		11		3		0.23			0.04
Long-term borrowings		28,293		28,192		392		400		5.54			5.68
Total interest-bearing liabilities		1,770,943		1,875,468		1,144		1,184		0.26			0.25
Noninterest bearing demand deposits		1,051,585		950,673
Other liabilities		17,482		21,727
Shareholders' equity		330,318		351,646
Total liabilities and shareholders' equity	$	3,170,328	$	3,199,514
Interest rate spread										3.09	%		3.00	%
Net interest margin										3.20	%		3.09	%
Net interest income (taxable equivalent basis)						24,066		23,155
Less: Taxable equivalent adjustment (c)						59		62
Net interest income					$	24,007	$	23,093

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.

Net Interest Income Analysis

For the Nine Months Ended September 30, 2022 and 2021

(Dollars in thousands)

Unaudited

					Interest
	Average Balance				Income/Expense (a)				Yield/Rate
	2022		2021		2022		2021		2022			2021
Loans:
Commercial	$	288,968	$	393,571	$	7,982	$	15,433		3.69	%		5.24	%
Real estate		1,721,403		1,568,055		50,823		49,642		3.94			4.22
Consumer		6,532		7,139		317		364		6.49			6.82
Total loans (b)		2,016,903		1,968,765		59,122		65,439		3.91			4.43
Securities:
U.S. Treasury		150,483		36,969		1021		265		0.90			0.96
Federal agencies & GSEs		108,050		99,595		985		867		1.22			1.16
Mortgage-backed & CMOs		358,739		292,207		3,922		3,025		1.46			1.38
State and municipal		68,752		61,210		1038		958		2.01			2.09
Other		36,001		24,175		1100		900		4.07			4.96
Total securities		722,025		514,156		8,066		6,015		1.49			1.56
Deposits in other banks		344,887		422,111		2,076		375		0.80			0.12
Total interest-earning assets		3,083,815		2,905,032		69,264		71,829		3.00			3.30
Non-earning assets		176,821		210,651
Total assets	$	3,260,636	$	3,115,683
Deposits:
Demand	$	531,301	$	466,999		107		116		0.03			0.03
Money market		721,697		700,027		673		657		0.12			0.13
Savings		273,858		238,349		35		19		0.02			0.01
Time		290,725		367,979		1,141		2,198		0.52			0.80
Total deposits		1,817,581		1,773,354		1,956		2,990		0.14			0.23
Customer repurchase agreements		31,858		36,954		26		19		0.11			0.07
Long-term borrowings		28,268		33,111		1,156		1,352		5.45			5.44
Total interest-bearing liabilities		1,877,707		1,843,419		3,138		4,361		0.22			0.32
Noninterest bearing demand deposits		1,027,942		903,296
Other liabilities		17,354		22,238
Shareholders' equity		337,633		346,730
Total liabilities and shareholders' equity	$	3,260,636	$	3,115,683
Interest rate spread										2.78	%		2.98	%
Net interest margin										2.86	%		3.10	%
Net interest income (taxable equivalent basis)						66,126		67,468
Less: Taxable equivalent adjustment (c)						176		181
Net interest income					$	65,950	$	67,287

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)

	3rd Qtr			2nd Qtr			3rd Qtr			At or for the Nine Months Ended September 30,
	2022			2022			2021			2022			2021
EFFICIENCY RATIO
Noninterest expense	$	16,448		$	15,455		$	14,843		$	47,252		$	43,545
Subtract: loss on sale of OREO		—			—			—			—			(111	)
Subtract: core deposit intangible amortization		(310	)		(320	)		(361	)		(960	)		(1,113	)
	$	16,138		$	15,135		$	14,482		$	46,292		$	42,321
Net interest income	$	24,007		$	21,490		$	23,093		$	65,950		$	67,287
Tax equivalent adjustment		59			58			62			176			181
Noninterest income		4,760			4,837			5,123			15,197			16,187
Add: loss on fixed assets		2			84			107			82			588
	$	28,828		$	26,469		$	28,385		$	81,405		$	84,243
Efficiency ratio		55.98	%		57.18	%		51.02	%		56.87	%		50.24	%
TAX EQUIVALENT NET INTEREST INCOME
Non-GAAP measures:
Interest income - loans	$	21,191		$	19,109		$	22,012		$	59,122		$	65,439
Interest income - investments and other		4,019			3,479			2,327			10,142			6,390
Interest expense - deposits		(741	)		(646	)		(781	)		(1,956	)		(2,990	)
Interest expense - customer repurchase agreements		(11	)		(9	)		(3	)		(26	)		(19	)
Interest expense - long-term borrowings		(392	)		(385	)		(400	)		(1,156	)		(1,352	)
Total net interest income	$	24,066		$	21,548		$	23,155		$	66,126		$	67,468
Less non-GAAP measures:
Tax benefit on nontaxable interest - loans		(31	)		(34	)		(38	)		(98	)		(105	)
Tax benefit on nontaxable interest - securities		(28	)		(24	)		(24	)		(78	)		(76	)
GAAP measures	$	24,007		$	21,490		$	23,093		$	65,950		$	67,287
RETURN ON AVERAGE TANGIBLE EQUITY
Return on average equity (GAAP basis)		11.21	%		9.83	%		11.58	%		10.42	%		12.40	%
Impact of excluding average goodwill and other intangibles		4.53			4.04			4.43			4.15			4.84
Return on average tangible equity (non-GAAP)		15.74	%		13.87	%		16.01	%		14.57	%		17.24	%
TANGIBLE EQUITY TO TANGIBLE ASSETS
Equity to assets ratio (GAAP basis)		10.28	%		10.13	%		10.65	%		10.28	%		10.65	%
Impact of excluding goodwill and other intangibles		(2.69	)		(2.55	)		(2.51	)		(2.69	)		(2.51	)
Tangible equity to tangible assets ratio (non-GAAP)		7.59	%		7.58	%		8.14	%		7.59	%		8.14	%
TANGIBLE BOOK VALUE
Book value per share (GAAP basis)	$	29.54		$	30.71		$	32.51		$	29.54		$	32.51
Impact of excluding goodwill and other intangibles		(8.36	)		(8.35	)		(8.35	)		(8.36	)		(8.35	)
Tangible book value per share (non-GAAP)	$	21.18		$	22.36		$	24.16		$	21.18		$	24.16
ADJUSTED LOAN LOSS ALLOWANCE
Allowance for loan losses	$	19,189		$	18,505		$	20,630		$	19,189		$	20,630
Credit discount on purchased loans		3,477			3,741			5,258			3,477			5,258
Adjusted loan loss allowance	$	22,666		$	22,246		$	25,888		$	22,666		$	25,888
Total loans, net	$	2,119,415		$	2,030,818		$	1,940,332		$	2,119,415		$	1,940,332
Subtract: PPP loans, net		(95	)		(116	)		(37,199	)		(95	)		(37,199	)
Total loans less PPP loans, net	$	2,119,320		$	2,030,702		$	1,903,133		$	2,119,320		$	1,903,133
Adjusted loan loss allowance to total loans less PPP loans, net		1.07	%		1.10	%		1.36	%		1.07	%		1.36	%
Allowance for loan losses to total loans less PPP loans, net		0.91	%		0.91	%		1.08	%		0.91	%		1.08	%