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 FIRST QUARTER EARNINGS

Danville, VA, April 22, 2021 – American National Bankshares Inc. (NASDAQ: AMNB) (“American National” or the “Company”) today reported first quarter 2021 earnings of $11.3 million, or $1.03 per diluted common share. Those results compare to net income of $8.5 million, or $0.77 per diluted common share, during the same quarter in the prior year, and net income of $8.8 million, or $0.80 per diluted common share, recognized for the fourth quarter of 2020.

President and Chief Executive Officer Jeffrey V. Haley commented, “We are certainly pleased with our first quarter results, with growth noted in revenues and in particular our noninterest lines of business. We are encouraged by the optimism surrounding the potential end of the pandemic and prospects for the economy with continued stimulus support.

“We were very active in the Paycheck Protection Program (“PPP”) during the quarter, with this program continuing to support our customers, while providing a meaningful contribution to both revenues and earnings. We continued to see excellent credit quality during the quarter, resulting in no additional allowance requirement or provision expense for the period. Noninterest revenues were strong for the quarter, with solid growth in our wealth, mortgage and insurance revenues. Operating expenses adjusted for the impacts of PPP were in line with expectations. Low interest rates, excess liquidity and light loan demand were headwinds during the quarter, but we saw some notable improvement in loan activity toward the end of the quarter and as we enter the second quarter.

“We have begun to return to the Bank and fully opened our lobbies to our customers with prudent safety protocols. We remain focused on supporting and protecting our employees, customers and communities while creating shareholder value.”

First quarter 2021 highlights include:

SMALL BUSINESS ADMINISTRATION’s (“SBA’s”) PPP

The Company continued to participate in the SBA’s PPP under the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act in the first quarter of 2021. There were 805 loans processed for approximately $80.7 million from the second round of the program. In addition to the new loans, $105.1 million of first round loans from 2020 were forgiven in first quarter 2021 compared to $56.4 million in the fourth quarter of 2020. Total outstanding net PPP loans were $183.8 million at March 31, 2021 down from $211.3 at December 31, 2020. Total PPP fees recognized in net interest income during the quarter were $2.9 million compared to the prior quarter’s $2.4 million as a result of the forgiveness. The interest income from the total PPP portfolio generated $526,000 in revenues for the first quarter compared to $639,000 in the previous quarter.

NET INTEREST INCOME

Net interest income for the first quarter of 2021 was $22.4 million, an increase of $277 thousand, or 1.3%, from the prior quarter and an increase of $2.5 million, or 12.6%, from the first quarter of 2020. The FTE net interest margin for the quarter was 3.20%, down from 3.22% in the prior quarter and down from 3.52% in the same period a year ago (non-GAAP). The first quarter of 2021 benefited from the recognition of a higher level of remaining net fees on PPP loans that were forgiven during the quarter. The increase in net interest income from the same quarter in the prior year was attributable to the PPP program and reduced deposit costs from a significantly lower rate environment. 

The Company’s FTE net interest margin includes the impact of acquisition accounting fair value adjustments. During the first quarter of 2021, net accretion related to acquisition accounting amounted to $948 thousand compared to $1.2 million in the prior quarter and $957 thousand for the same period in 2020. Estimated remaining net accretion from acquisitions for the periods indicated is as follows (dollars in thousands):

ASSET QUALITY

Nonperforming assets (“NPAs”) totaled $2.9 million as of March 31, 2021 down from $3.7 million at December 31, 2020, and down from $4.0 million at March 31, 2020. NPAs as a percentage of total assets were 0.10% at March 31, 2021, compared to 0.12% at December 31, 2020 and 0.16% at March 31, 2020.  

There was no provision expense for the first quarter of 2021, as compared to $585 thousand for the previous quarter and $953 thousand for the same period in the previous year. The first quarter of 2021 warranted a significantly lower provision than the fourth quarter of 2020 based on loan activity, an improving economy, ongoing low charge-off and delinquency rates, and overall strong asset quality metrics. However, risk levels in general remain elevated particularly in certain industry segments. The allowance for loan losses was $21.4 million at March 31, 2021 and December 31, 2020 and $14.1 million at March 31, 2020. Annualized net charge-offs as a percentage of average loans outstanding were 0.00% for the first quarter of 2021, compared to 0.05% in the previous quarter and 0.01% for the same period in the prior year. The allowance as a percentage of loans held for investment was 1.08% at March 31, 2021 compared to 1.06% at December 31, 2020 and 0.76% at March 31, 2020. Excluding PPP loans, the allowance as a percentage of loans was 1.19% at both March 31, 2021 and December 31, 2020.

American National continues to utilize a Disaster Assistance Program for borrowers in accordance with Section 4013 of the CARES Act. At March 31, 2021, American National had interest only deferrals to customers with outstanding balances amounting to $19.3 million, representing less than 1.0% of total loans held for investment, which compares to $30.0 million, or 1.5%, of total loans held for investment, at December 31, 2020. At March 31, 2021 $16.4 million of the $19.3 million was the result of second and third interest deferrals.

NONINTEREST INCOME

Noninterest income increased $1.7 million, or 40.3%, to $5.9 million for the quarter ended March 31, 2021 from $4.2 million in the prior quarter and increased $1.4 million, or 31.7%, from the same period in the prior year. The largest increases for the first quarter over the previous quarter were in income from mortgage banking, up $276 thousand or 26.5%; income from small business investment companies, up $192 thousand or 81.4%; and income from insurance investments, up $846 thousand or over 100%, respectively. Comparing the first quarter of 2021 to the first quarter of 2020, increases were noted in all categories except for service charges on deposit accounts, securities gains, net, and losses on premises and equipment, net.

NONINTEREST EXPENSE

Noninterest expense for the first quarter of 2021 amounted to $14.1 million, down $594 thousand, or 4.1%, when compared to the $14.7 million for the previous quarter and up $731 thousand, or 5.5%, from $13.3 million during the same period in the previous year. The first quarter of 2021 reflects a reduction in salaries and benefits expense associated with the deferral of $604 thousand in costs associated with the origination of PPP loans during the quarter. The fourth quarter of 2020 included $650 thousand in pension and salary expenses resulting from a voluntary early retirement package recognized as one-time costs. The increase from the first quarter of 2020 was attributable primarily to increases in salaries and benefits and occupancy expense reflecting normal growth, and the benefit of small bank credits in the FDIC assessment line item for 2020 that reduced expenses.

INCOME TAXES

The effective tax rate for the three months ended March 31, 2021 and December 31, 2020 was 20.9%. This compares to 15.7% for the same period in the prior year. In the quarter ended March 31, 2020, the Company benefited from a provision of the CARES Act which allowed it to recognize a tax benefit for the net operating loss (NOL) five-year carryback of the NOL acquired in the acquisition of HomeTown Bankshares Corporation in 2019. An income tax benefit was realized on the NOL for the difference between the 21% corporate tax rate and the higher rate of 35% in effect prior to 2018.

BALANCE SHEET

Total assets at March 31, 2021 and December 31, 2020 were $3.1 billion and increased $578.4 million from the first quarter of 2020. The balance sheet at March 31, 2021 reflected a slight shift in the mix of assets from the previous quarter but primarily remained constant. 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 March 31, 2021, loans held for investment (net of deferred fees and costs) were $2.0 billion, a decrease of $36.4 million, or 7.2% annualized, from December 31, 2020. The change was primarily a result of the changes discussed previously from the PPP. Excluding PPP loans, loans held for investment were slightly lower, contracting $8.9 million or 0.5% from year-end 2020. 

Investment securities amounted to $482.1 million at March 31, 2021, with growth of $16.1 million, or 3.4%, compared to December 31, 2020, and growth of $139.4 million, or 40.7%, compared to March 31, 2020.

Deposits amounted to $2.6 billion at March 31, 2021 and December 31, 2020, with growth of $561.9 million, or 27.1%, compared to the first quarter of 2020. The growth over the previous quarter and the prior period of 2020 is a result of continued higher than average cash balances being maintained by customers as elevated savings rates and liquidity patterns continue. This pattern has been prevalent since the second quarter of 2020 and is consistent with trends with other commercial banks.

The Company continues to be well-capitalized as defined by regulators, with tangible common equity to tangible assets of 8.42% at March 31, 2021 as compared to 8.34% at December 31, 2020 and 9.61% at March 31, 2020. The Company’s common equity Tier 1, Tier 1, total, and Tier 1 leverage capital ratios were 12.74%, 14.16%, 15.56% and 9.56%, respectively at March 31, 2021.

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 $1.0 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; (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.