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EXPERIENCE AND
SOLUTIONS
A Century of Experience and
21st Century Banking Solutions
Certain statements in this presentation may constitute “forward-looking statements” within the
meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are
statements that include projections, predictions, expectations or beliefs about future events or results
or otherwise and are not statements of historical fact. Such statements are often characterized by the
use of qualified words (and their derivatives) such as “expect,” “believe,” “estimate,” “plan,”
“project,” “anticipate” or other statements concerning opinions or judgments of American National
and its management about future events. The forward-looking statements herein are based on certain
assumptions and analyses by American National and are factors it believes are appropriate under 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 regarding
acquisitions and dispositions. Consequently, all forward-looking statements made herein are qualified
by these cautionary statements. 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.
FORWARD-LOOKING STATEMENTS
3
1. Introduction to American National Bankshares Inc.
2. Recent quarter performance and accomplishments
3. Financial performance
4. Capital management
5. Why invest in American National?
AGENDA
4
INTRODUCTION TO
AMERICAN NATIONAL
5
VISION
We will be the best provider of relationship-
based financial services in the communities
we serve, resulting in enhanced shareholder
value, customer loyalty and employee
satisfaction
GUIDING
PRINCIPLES
1. Operate a sound, efficient, growing and highly profitable
company.
2. Identify and respond to our internal and external
customers’ needs and expectations in an ever-changing
financial environment.
3. Provide our customers 21st century financial solutions that
are designed to meet their current and future needs.
4. Provide an attractive return for our shareholders.
5. Furnish positive leadership for the well-being of all the
communities we serve.
6. Continuously develop a challenging and rewarding work
environment for our employees that focuses on working as
a team.
7. Conduct our work with integrity and professionalism.
AMERICAN NATIONAL
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• $1.7 billion in assets
• Loans: $1.2 billion
• Deposits: $1.4 billion
• Additional $781 million in Trust
& Investment assets
• Stock symbol “AMNB”
• NASDAQ Global Select
• Russell 3000 Index
• Market cap: $315 million
• Based in Danville, VA;
26 offices in VA and NC
NOTE: Loans, deposits, Trust & Investment assets ,
and market cap as of 2/28/17
• Growing
– Greensboro/Winston
Salem
– Roanoke
• Consistent
– 108 years of tradition
– Deep management team
– Strong, experienced
board of directors
– Ability to execute
• Conservative
– Stringent underwriting
– Strong capital
• Shareholder focused
– Exceptional dividend
– Prudent growth
– Good stewards
of capital
WE ARE…
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• Fortress-like
balance sheet
– Exceptional asset quality
– Low-risk investment
portfolio
– High liquidity
– Capital strength
• Disciplined growth
– Organic
– External
• Strong earnings stream
• Imagination
OUR PRIORITIES
9
SEASONED MANAGEMENT
10
EXECUTIVES
NAME POSITION AGE
YEARS OF
EXPERIENCE
YEARS
W/AMNB
Jeffrey V. Haley President & CEO 57 20 20
William W. Traynham Chief Financial Officer 61 28 8
Ramsey K. Hamadi. Chief Administrative Officer 48 25 1
R. Helm Dobbins
Edward C. Martin
Chief Credit Officer
64
44
41
22
13
1
H. Gregg Strader Chief Banking Officer 59 35 4
John H. Settle President of Trust and Investments 59 36 1
AVERAGE: 55 28 6
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GROWTH STRATEGY
• Organic growth 2016 – 16%
• Leverage core market position in Danville
• 31% deposit market share
• North Carolina CAGR since 2012
• All markets – 15%
• Greensboro – 30%
• Team lift outs Winston-Salem, NC & Roanoke, VA
• Succession for Chief Credit Officer
• 7 commercial bankers
• 2 small business bankers
• Mortgage Originator
• 4 retail bankers
• 5 support/credit staff
• Grow into adjacent markets
• Charlottesville, VA
• Richmond, VA
• Blacksburg, VA
• Durham-Chapel Hill, NC
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Source: SNL Financial
Note: Legacy markets include Charlottesville, VA MSA; Danville, VA MSA; Lynchburg, VA MSA; Martinsville, VA MSA; Caswell, NC county and Halifax, VA county
723,407
2,624,909
159,929
316,013
760,830
664,730
Legacy Burlington, NC Roanoke, VA Greensboro-High
Point, NC
Winston-Salem, NC Total Markets
28,485
101,873
5,360
13,288
31,518
23,222
Legacy Burlington, NC Roanoke, VA Greensboro-High
Point, NC
Winston-Salem, NC Total Markets
0.47%
4.73%
2.70%
4.38%
3.76%
Legacy Burlington, NC Roanoke, VA Greensboro-High Point,
NC
Winston-Salem, NC
Increased Total Population Access 3.6x
Increased Access to Small Businesses 3.6x
Projected Population Change (2017-2022)
(4.4%)
0.8%
5.8%
19.6%
15.8%
2012
2013
2014
2015
2016
Annual Growth in Loans HFI
GROWTH STRATEGY
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DIVERSE REVENUE STREAM
Noninterest Income
• Trust & Investment Services
• Brokerage
• Secondary Mortgage
• Title Insurance
• Bankers Insurance
Trust and Investment Services
• Organized in 1927
• Offices in Danville, Martinsville, Lynchburg
• Assets: $781 million
• Customers: individuals, businesses, foundations
and non-profits
• Serve clients locally and abroad
• Priorities:
– Trust administration
– Investment management
– Estate settlement
– Retail brokerage
• Excellent equity performance
Trust Assets ($ in millions)
$417
$531 $541
$628
$661
$749
$781
2010 2011 2012 2013 2014 2015 2016
14
SUPERIOR ASSET QUALITY
Net Charge-offs / Avg. Loans (%) NPAs / Loans + OREO (%)
Source: SNL Financial
Note: Peers include major exchange traded banks headquartered in NC and VA with total assets between $1.0 billion and $5.0 billion
Note: NPAs include nonaccrual loans, accruing TDRs and OREO
AMNB Peers
• Exceptional performance through cycle
• Decreased NPA levels
0.07%
(0.02%)
0.07% 0.08%
0.00%
0.71%
0.53%
0.26%
0.10% 0.14%
(0.25%)
0.25%
0.75%
1.25%
2012 2013 2014 2015 2016
1.61%
1.17%
0.86% 0.91%
0.54%
4.22%
2.80%
2.53%
2.13%
1.37%
0.00%
1.50%
3.00%
4.50%
6.00%
2012 2013 2014 2015 Q4 '16
LOAN PORTFOLIO
• Granular portfolio
• Highly diversified
• Top 10 relationships combine for $156 million or
13% of total loans
December 31, 2016 – $1.2 billion
Source: SNL Financial and Company filings
December 31, 2016 – CRE
• Average commercial credit size of $250,428
• The sweet spot: $500,000 - $1 million
Commercial
R.E.
44%
Construction
10%
Consumer &
Other
10%
Commercial &
Industrial
18%
Residential R.E.
18%
15
16.9%
21.1% 21.7% 23.7%
25.5% 27.6%
17.9%
14.9% 15.9%
18.0%
18.0% 15.3%
24.2% 24.1%
25.6%
24.6%
25.0% 29.5%
15.9% 15.6%
14.1%
13.0% 11.9%
9.8%
25.1% 24.3% 22.8%
20.9% 19.5% 17.8%
0%
25%
50%
75%
100%
2011 2012 2013 2014 2015 2016
Demand Deposits NOW & Other Trans Accts
MMDA & Savings Retail Certificates of Deposit
Jumbo Certificates of Deposit
DEPOSIT PORTFOLIO
Deposit Migration History Cost of Deposits
Source: SNL Financial and Company filings
Note: Peers include major exchange traded banks headquartered in NC and VA with total assets between $1.0 billion and $5.0 billion
• Legacy markets provide a stable source of low-cost core deposits
AMNB Peers
16
0.65
0.52
0.44
0.39
0.36
0.80
0.57
0.47
0.42
0.45
2012 2013 2014 2015 MRQ
SECURITIES PORTFOLIO
Source: SNL Financial and Company filings
• Minimal credit risk; minimal duration risk
• High quality
– $351.4 million AFS securities portfolio
– All above investment grade
– Municipal portfolio with very high credit quality
and wide geographic dispersion
– No investments are classified
• Strong source of liquidity
Portfolio Highlights9/30/2016 Securities Portfolio
Federal
agencies and
GSEs
27.6%
Mortgage-
backed and
CMOs
23.0%
State and
municipal
46.3%
Corporate
2.5%
Equity
0.5%
17
Q4 PERFORMANCE
& RECENT
ACCOMPLISHMENTS
18
Q4 2016 HIGHLIGHTS
19
• Diluted EPS: $0.48 (FY2016 $1.89)
• NPAs to Total Assets:
0.38% vs. 0.42% in Q3 2016
• Annualized net charge-offs: 0.00%
• Dividend: $0.24 paid in Q4
– Paid $0.96 full year for 2016
FINANCIAL
PERFORMANCE AND
PEER COMPARISON
20
TOTAL RETURN
AMNB Return Relative to the NASDAQ Bank Index and Peers
Source: Factset Research Systems; Market data as of 2/28/2017
Note: AMNB total return assumes reinvestment of dividends
Note: Peers include major exchange traded banks headquartered in NC and VA with total assets between $1.0 billion and $5.0 billion
AMNB NASDAQ Bank Peer Median
170.9%
33.2%
45.8%
27.4%
108.8%
27.2%
0.0%
50.0%
100.0%
150.0%
200.0%
Since 2008 Since Election
21
3 Year CAGR (%) 5 Year CAGR (%)
Source: SNL Financial
(1) Includes major exchange traded banks nationwide with total assets between $1 billion and $3 billion, excluding merger targets and MHCs
(2) Includes all major exchange traded banks nationwide, excluding merger targets and MHCs
8.7%
9.7% 9.4%
0.0%
4.0%
8.0%
12.0%
16.0%
AMNB Nationwide Peers - $1bn
to $3bn in Assets
Nationwide Banks
(1)
(2)
5.2%
9.0%
8.3%
0.0%
4.0%
8.0%
12.0%
16.0%
AMNB Nationwide Peers - $1bn
to $3bn in Assets
Nationwide Banks
(1)
(2)
10 Year CAGR (%)
8.0% 7.6% 7.4%
0.0%
4.0%
8.0%
12.0%
16.0%
AMNB Nationwide Peers - $1bn
to $3bn in Assets
Nationwide Banks
(1)
(2)
OPPORTUNISTIC ASSET GROWTH
22
Price / TBV (x) Price / LTM EPS (x)
Source: SNL Financial; Market data as of 2/28/2017
(1) Includes major exchange traded banks nationwide with total assets between $1 billion and $3 billion, excluding merger targets and MHCs
(2) Includes all major exchange traded banks nationwide, excluding merger targets and MHCs
2.02x
1.69x
1.83x
1.20x
1.40x
1.60x
1.80x
2.00x
2.20x
AMNB Nationwide Peers - $1bn
to $3bn in Assets
Nationwide Banks
(1)
(2)
19.3x
18.3x
19.2x
10.0x
12.0x
14.0x
16.0x
18.0x
20.0x
AMNB Nationwide Peers - $1bn
to $3bn in Assets
Nationwide Banks
(1)
(2)
Price / 2017 Est. EPS (x) Price / 2018 Est. EPS (x)
18.8x
17.6x 17.9x
10.0x
12.0x
14.0x
16.0x
18.0x
20.0x
AMNB Nationwide Peers - $1bn
to $3bn in Assets
Nationwide Banks
(1)
(2)
15.8x
15.2x 15.5x
10.0x
12.0x
14.0x
16.0x
18.0x
20.0x
AMNB Nationwide Peers - $1bn
to $3bn in Assets
Nationwide Banks
(1)
(2)
TRADING MULTIPLES ANALYSIS
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0.00%
0.40%
0.80%
1.20%
1.60%
2009 2010 2011 2012 2013 2014 2015 2016
HISTORICAL PEER COMPARISON
ROAA (%)
Source: SNL Financial
Note: Peers include major exchange traded banks headquartered in NC and VA with total assets between $1.0 billion and $5.0 billion
Efficiency Ratio (%) Net Interest Margin (%)
1.02%
0.95%
35.0%
45.0%
55.0%
65.0%
75.0%
2009 2010 2011 2012 2013 2014 2015 2016
3.00%
3.50%
4.00%
4.50%
5.00%
2009 2010 2011 2012 2013 2014 2015 2016
59.8%
65.2 %
3.52%
3.54%
AMNB
Peers
24
ROAA (%) NIM (%) Efficiency Ratio
(%)
NPAs/ Loans +
OREO (%)
NCOs/Avg. Loans
(%)
TCE/TA (%) Total Capital (%) Div Yield (%)
NATIONWIDE MRQ COMPARISON
Source: SNL Financial; Market data as of 2/28/2017
Note: Peers include major exchange traded banks headquartered in NC and VA with total assets between $1.0 billion and $5.0 billion
75th Percentile
50th Percentile
25th Percentile
Nationwide Public Banks and Thrifts
AMNB (3.45%)
AMNB (0.54%)
AMNB (14.8%)
AMNB (2.6%)
Peers (3.54%)
Peers (1.37%)
Peers (9.5%)
Peers (14.0%)
Peers (1.0%)
Performance Asset Quality Capital Returns
AMNB (0.00%)
Peers (0.14%)
25
AMNB (0.98%)
Peers (0.93%)
AMNB (61.1%)
Peers (63.8%)
AMNB (9.5%)
CAPITAL
MANAGEMENT
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• Past:
− Historically strong capital levels funded 2 transactions in past
6 years during economic crisis
• Future:
• Maintain more capital than most to:
− Satisfy changing regulatory requirements
− Flexibility to support opportunistic M&A transactions
− Shareholder expectations
• Appropriate balance to fund:
− Organic growth
− Acceptable deals
− Pay strong dividend
− Stock repurchase program
CAPITAL MANAGEMENT
27
28
CAPITAL RATIO TRENDS
Source: BHCPR as of 12/31/16
Note: Peers include national peers with total assets between $1.0 billion and $3.0 billion
Note: See addendum for Capital definitions
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DIVIDENDS
Dividend Yield (%)
AMNB Dividend Payout Trend
OPPORTUNISTIC ACQUISITION STRATEGY
• Fair value accounting changed the game
• Capital is necessary to be a player
• Focused on growth markets in NC and VA
• Characteristics of targets:
– $250 million-$750 million size
– Practical assimilation
– Manageable credit issues
– Compatible cultures
– EPS accretion
– Maintenance of strong capital levels
– Identifiable synergies for savings
• Our credit culture will be maintained
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We are a community bank known for…
WHY INVEST
IN AMERICAN NATIONAL?
31
Strong
earnings
Attractive
dividend
Consistently
outperforming
peers
Opportunistic,
disciplined
growth
Balance sheet
positioned for
rising rate
environment
Capital to
support
growth
Strong board
and
management
INDUSTRIES IN AMNB MARKETS
32
COLLEGES AND UNIVERSITIES IN AMNB MARKETS
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34
QUESTIONS?
Total Risk Based Capital
Total Risk Based Capital (total equity less AOCI less
goodwill and CDI plus TPS and Allowance)/Total Risk-
Weighted Assets
Tier I Risk Based Capital
Tier I Capital (total equity less AOCI less goodwill and CDI
plus TPS)/Total Risk-Weighted Assets
Common Equity Tier I Capital
Common Equity Tier I Capital (total equity less AOCI less
goodwill and CDI)/Total Risk-Weighted Assets
Tier I Leverage
Tier I Capital (total equity less AOCI less goodwill and CDI
plus TPS)/Average Assets less goodwill and CDI
Tangible Common Equity
Tangible Common Equity (total equity less goodwill and
CDI)/Tangible Assets (total assets less goodwill and CDI)
ADDENDUM
35