American National Bankshares Inc.
Annual Report 2014

Plain-text annual report

TAKE ANOTHER LOOK 2 0 14 S U M M A R Y A N N U A L R E P O R T G E N E R A L C O R P O R A T E I N F O R M A T I O N Annual Meeting The 2015 Annual Meeting of Shareholders of American National Bankshares Inc. will be held on Tuesday, May 19, 2015, at 9 a.m. (EDT) at The Wednesday Club, 1002 Main Street, Danville, Va. Stock Listing The common stock of American National Bankshares Inc. (the “Company”) is traded on the NASDAQ Global Select Market under the symbol “AMNB.” American National Bankshares Inc. Stock Price and Dividends The following represent the intra-day high and low sales prices of the Company’s common stock as traded on the NASDAQ Global Select Market, as well as the quarterly cash dividends declared by the Company’s Board of Directors each quarter for the years 2014 and 2013. High Low Dividend Per Share 2014 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 2013 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter $26.08 24.06 23.53 25.00 $22.00 23.46 25.90 27.74 $21.54 20.65 20.90 21.69 $19.57 19.60 20.77 21.16 $0.23 0.23 0.23 0.23 $0.92 $0.23 0.23 0.23 0.23 $0.92 Shareholder Information Shareholders needing information on stock transfer requirements, lost certificates, dividends, the dividend retirement plan and other shareholder matters may contact: Computershare Inc. PO Box 30170 College Station, TX 77842 800.368.5948 Independent Auditors Yount, Hyde & Barbour PC 50 South Cameron Street Winchester, VA 22601 Regulatory and Securities Counsel LeClairRyan 951 East Byrd Street Eighth Floor Richmond, VA 23219 Equal Opportunity Employer American National, a wholly owned subsidiary of American National Bankshares Inc., is an equal opportunity employer. All matters regarding recruiting, hiring, training, compensation, benefits, promotions, transfers and all other personnel policies will remain free from discriminatory practices. This Report The American National Bankshares Inc. 2014 Summary Annual Report is presented in a summary format to provide information regarding the performance of the Company in a manner that is meaningful and useful to the widest range of readers. The audited consolidated financial statements of the Company and other more detailed analytical information regarding the Company are contained in the 2014 Annual Report on Form 10-K filed with the Securities and Exchange Commission. Investor Relations & Financial Statements A copy of the Company’s annual reports on Form 10-K and quarterly reports on Form 10-Q, as filed with the Securities and Exchange Commission, are available without charge to shareholders upon written request and are also available on our website, amnb.com. Those with requests for this or other financial information about American National Bankshares Inc. should contact: American National Bankshares Inc. Investor Relations PO Box 191 Danville, VA 24543 800.240.8190 Corporate Headquarters American National Bankshares Inc. 628 Main Street Danville, VA 24541 434.792.5111 Banking Offices VIRGINIA NORTH CAROLINA Bedford Chatham Collinsville Danville (5) Gretna Hardy* Lovingston Lynchburg (3) Martinsville Ridgeway Rocky Mount* South Boston Union Hall* Burlington (3) Graham Greensboro (2) Mebane Yanceyville Forward-Looking Statements This Summary Annual Report may contain “forward-looking statements” within the meaning of federal securities laws that involve significant risks and uncertainties. Statements herein are based on certain assumptions and analyses by the Company and are factors it believes are appropriate in 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; changes in the economic scenario; changes in regulatory requirements; and changes in securities markets. Consequently, all forward-looking statements made herein are qualified by these cautionary statements and the cautionary language in the Company's most recent Form 10-K report and other documents filed with the Securities and Exchange Commission. American National Bankshares Inc. does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made. 2 *Franklin Community Bank, a division of American National, banking offices will become American National banking offices during second quarter 2015. TA B L E O F C O N T E N T S General Corporate Information . . . . . . . . . . . . . . . . . . . . . . . 2 Letter from the Chairman of the Board . . . . . . . . . . . . . . . . . 4 Letter from the President & Chief Executive Officer. . . . . . . 5 Take Another Look . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Financial Highlights. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Performance Graphs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Consolidated Balance Sheets . . . . . . . . . . . . . . . . . . . . . . . . 12 Consolidated Statements of Income . . . . . . . . . . . . . . . . . . . 13 Management/Board of Directors . . . . . . . . . . . . . . . . . . . . . 14 Advisory Boards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 About American National American National Bankshares Inc. is a bank holding company with assets of $1.5 billion. Headquartered in Danville, Va., it is the holding company of American National Bank and Trust Company (the “Bank”), a community bank serving the piedmont of Virginia and North Carolina through 27 banking offices. In addition, the Bank manages $661 million through its Trust & Investment Services division. The Bank provides a full array of financial products and services, including personal and business banking, trust and investment services, and mortgage and insurance services. Electronic banking solutions range from a convenient Automated Teller Machine (ATM) network and debit cards to real-time Online Banking, Online Bill Pay, Mobile Banking, Mobile Deposit and Telephone Banking. Chartered in 1909, American National is entering its 107th year of operation. It has grown from a single office on Main Street in Danville to a progressive multi-state, regional financial institution. The focus on building relationships through quality financial services with exceptional customer service has remained constant. The Bank operates under a strong community bank philosophy as a leader in charitable and civic support. Many Bank employees serve on the boards of civic organizations throughout the Bank’s market area. 3 L E T T E R F R O M T H E C H A I R M A N O F T H E B OA R D March 23, 2015 To Our Shareholders: I am pleased to report to you that 2014 was another successful year for American National. Our earnings continue to be strong and we acquired MainStreet BankShares, Inc., and its banking subsidiary, Franklin Community Bank, effective January 1, 2015. Net income for 2014 was $12.7 million, a decline from 2013 due to the expected reduction in accretion income from the MidCarolina merger and merger-related costs for the pending MainStreet acquisition. I reminded you last year that our “accretion income” would decrease in 2014. However, our core earnings (without the fair value adjustments from MidCarolina and the expenses related to the MainStreet transaction) were stronger this year. Our capital ratios remain strong and continue to exceed all regulatory minimums for “well capitalized” banking organizations. At December 31, 2014, average shareholders’ equity for the year was 13.1 percent of average assets, up from 12.65 percent at December 31, 2013. Our book value per common share was $22.07 at year end, compared to $21.23 at the end of 2013. As earlier reported, I retired as an employee on December 31, 2014. I now serve as non-executive Chairman of the Board. When I joined the Bank as President in 1993, I quickly realized that “change” was going to be a necessary and ongoing ingredient for future success. As I reflect on my 22 years as an employee, there have been many changes, challenges and opportunities in the banking world and here at American National. We have been through many economic cycles, the most difficult of which was the recent “great recession.” Our strategic focus of strong capital, consistent credit underwriting, prudent risk management and a high dividend kept us in good stead through all cycles, good and bad. However, the biggest change in my tenure has been in the technology area. In 1993, there were no personal computers – just terminals that gave basic account information on “green screens.” Today, of course, we have PCs, smartphones and iPads. We not only use telephone conference calls, we hold multi-office meetings through the use of video conferencing. Our customers have access to their accounts by telephone and online banking. Not only can they withdraw money from the ATM, they can deposit money at the ATM and move money from one account to another by phone, PC or ATM. And who, in 1993, would have believed that they would today have a smartphone and could use it for mobile banking. However, we still have the personal touch and interaction for customers who want to meet or talk with one of us (and not an out-sourced 800 number). Technology will continue to change and it will change the way we all do business – banking and otherwise. Throughout all this change, I have enjoyed my opportunity to lead the Company. I know the future is very bright under the strong leadership of Jeff Haley. I wish to recognize two retiring directors and one new director. Les Hudson retired as a regular director last May pursuant to our directors’ retirement policy. He is serving this year as a Director Emeritus. I appreciate his long and valuable service as a director. Bob Ward was a director of MidCarolina Financial Corporation and joined our Board upon the consummation of that merger in July 2011. He is retiring at the annual meeting of shareholders in May, pursuant to the retirement policy. We appreciate very much his service and contributions to the combined organization, and we are pleased that he will continue as a Director Emeritus during the next year. Joel Shepherd, the previous chairman of the board for MainStreet BankShares, Inc., joined our Board on January 1, 2015, with the consummation of the merger. We welcome Joel and look forward to working with him. The Company and the Bank are fortunate to have a strong and effective Board of Directors. They do an outstanding job of representing the shareholders by providing strategic policy leadership and management oversight. You should be proud of them. I am proud to work with them. Your investment in our Company is critically important to our continued success. We appreciate your support and your patronage. We work hard to manage the Company prudently and appropriately. Very truly yours, Charles H. Majors Chairman of the Board American National Bankshares Inc. American National Bank and Trust Company 4 L E T T E R F R O M T H E P R E S I D E N T & C H I E F E X E C U T I V E O F F I C E R March 23, 2015 To Our Shareholders: As Charley noted in his letter, I am pleased to report that 2014 was another successful year for American National. It also was a year of growth for us in several ways. I am extremely happy with the 2014 growth in our loan portfolio. At the end of the year, American National had $840 million in loans, an increase of $46 million or 5.8 percent. This increase is the largest organic growth rate we’ve experienced in the past five years. As part of our commitment to provide 21st century solutions to meet the needs of today’s customers, we introduced several technology enhancements. • We opened our first test site (Mebane, N.C.) for a new retail banking office model where one-to-one service is practiced in conjunction with high technology for an enhanced customer experience. • We launched a new service, Card Watch debit card text and email alerts, for enhanced account monitoring and fraud detection. • We introduced a new and improved Mobile Banking app with more functionality and a fresh look. We also experienced growth of our footprint. On January 1, 2015, American National acquired MainStreet BankShares, Inc., the parent company for subsidiary Franklin Community Bank, located in Franklin County, Va. With the closing of the acquisition, our total assets now stand at approximately $1.5 billion, total branches amount to 27, and we manage $661 million of trust, investment and brokerage assets in our Trust and Investment Services division. We are excited about the opportunities this merger presents—especially the entry into the Roanoke metropolitan statistical area and the addition of a talented group of employees. As we enter our 107th year of operation, we look forward to achieving more high quality organic growth while preparing American National for the next appropriate strategic acquisition opportunity that may arise. Please allow me to express my thanks to you for your support and patronage as an investor. I also appreciate the productivity, leadership and collaboration of our Board of Directors, our management group and all of our employees, and I feel fortunate to serve alongside them as the Company’s President and Chief Executive Officer. Finally, in closing, I would like to recognize the man who has led much of our growth, Charley Majors. Since Charley joined American National in 1993 as the President of both the Company and Bank, American National’s assets have grown from approximately $240 million to about $1.5 billion and from six branches in Danville, Va., to 27 branches across 18 communities. Charley also witnessed an extraordinary evolution of technology within the banking industry. Thank you, Charley! I have thoroughly enjoyed your mentorship, and I appreciate your continued guidance. Sincerely, Jeffrey V. Haley President & Chief Executive Officer American National Bankshares Inc. American National Bank and Trust Company As we enter our 107th year of operation, we look forward to achieving more high quality organic growth while preparing American National for the next appropriate strategic acquisition opportunity that may arise. 5 T A K E A N O T H E R L O O K 6 Each business day, the staff at American National performs a balancing act. While not as perilous as walking a tightrope without a net, the price that hangs in the balance is high: a customer relationship. Or more than one. Perhaps, a lot of them. This struggle for balance is between being in the business of providing personal, one-to-one service in a comfortable, traditional branch setting and extending our services to customers who connect and manage their account relationships with us through desktop computers, laptops, tablets and smartphones. Perhaps these customers never enter a branch. Maybe they never meet any of us in person. If that is how some customers want to bank, we need to be in that business, too. And we are. T A K E A N O T H E R L O O K With more than a century of experience behind us, we are committed to offering a high standard of personal service through our branch network. For many customers, it is why they came to us in the first place – to form a relationship with a local bank, with people who know them and know the place they call home. Some customers came to us with piggy banks filled with change and opened their first accounts, because their parents banked here. Some because their grandparents did. Perhaps even great-grandparents. These personal relationships run deep. Just as much, we are committed to continuing to give people reasons to bank with us, because the products and services we offer are what they need today. While relationships will always be important, the day-to- day lives of our customers have changed and will continue to change. As technology provides solutions for getting things done more quickly and efficiently, the mandate falls to us to make those services available to our customers. And we do. 7 Technology-driven products and services at American National include: Mobile Banking and Mobile Deposit These services allow customers to bank and make deposits from their smartphones. From wherever they are with just a few clicks, balances can be checked, bills paid, deposits made and more. Online Mortgage Applications Quickly and easily from anywhere, customers can get the process started for new mortgage loans. They’ll simply go to amnb.com, click on Mortgage Loans and “Apply Now” and it is as easy as 1-2-3. They can even come back to the application if the process is interrupted. Instant Issue Debit Cards Gone are the days where customers waited to receive their debit cards in the mail and new PINs under separate cover. They can walk into an American National office and walk out with a new or replacement card in hand today, ready to do business. Rapid Deposit ATMs Many of our ATMs are now “Rapid Deposit ATMs.” With no envelope and no deposit slip, customers can deposit multiple checks and cash, and the ATM will total the deposit and provide a receipt. It’s “in the bank,” as we like to say. Card Watch Debit Card Alerts To help manage and protect their checking account with us, customers download and use our Card Watch app to set balance and usage alerts for quick, easy notification if there is a change to or a transaction on their account that is outside of their established comfort zone. And more. 8 Future plans call for American National to launch these products: Apple Pay® Customers can make purchases with this leading-edge mobile payment service . . . your digital wallet provided by Apple and American National. Europay, MasterCard® and Visa® Customers can enjoy chip and pin technology for their credit and debit cards, making it safer and easier to use with “no signature required.” Online Deposit Account Opening Open and fund new accounts with us from the comfort of home or from anywhere in the world. Customers will be able to establish a first relationship with us, add a new account, or take advantage of a special interest rate or another opportunity. And we’re not finished. That’s what we’re doing. Now, this is what we ask of you . . . TAKE ANOTHER LOOK at American National. What we offer. Who we are. What we have accomplished. How we serve the community. If you are looking for a bank that has exactly what you need today, don’t look any further. The future is so much bigger than the past. Tim Berners-Lee Inventor, the World Wide Web 9 F I N A N C I A L H I G H L I G H T S (Amounts in thousands, except per share information and ratios) Results of Operations: Interest income Interest expense Net interest income Provision for loan losses Noninterest income Noninterest expense Income before income tax provision Income tax provision Net income Financial Condition: Assets Loans, net of unearned income Securities Deposits Shareholders’ equity Shareholders’ equity, tangible Per Share Information: Earnings per share, basic Earnings per share, diluted Cash dividends paid Book value Book value, tangible 2014 2013 December 31, 2012 2011 2010 $ $ 47,455 5,730 41,725 400 11,176 34,558 17,943 5,202 12,741 $ 1,346,492 840,925 349,250 1,075,837 173,780 132,692 $ 1.62 1.62 0.92 22.07 16.86 $ $ 52,956 6,583 46,373 294 10,827 35,105 21,801 6,054 15,747 $ 1,307,512 794,671 351,013 1,057,675 167,551 125,349 $ 2.00 2.00 0.92 21.23 15.89 $ $ 57,806 8,141 49,665 2,133 11,410 36,643 22,299 6,293 16,006 $ 1,283,687 788,705 340,533 1,027,667 163,246 119,543 $ 2.04 2.04 0.92 20.80 15.23 $ $ 49,187 8,780 40,407 3,170 9,244 30,000 16,481 4,910 11,571 $ 1,304,706 824,758 339,385 1,058,754 152,829 107,335 $ 1.64 1.64 0.92 19.58 13.75 $ $ $ $ 35,933 8,719 27,214 1,490 9,114 23,379 11,459 3,181 8,278 833,664 520,781 235,691 640,098 108,087 84,299 1.35 1.35 0.92 17.64 13.76 Weighted average shares outstanding, basic Weighted average shares outstanding, diluted 7,867,198 7,877,576 7,872,870 7,884,561 7,834,351 7,845,652 6,982,524 6,989,877 6,123,870 6,131,650 Selected Ratios: Return on average assets Return on average equity1 Return on average tangible equity2 Dividend payout ratio Efficiency ratio3 Net interest margin Asset Quality Ratios: Allowance for loan losses to period-end loans Allowance for loan losses to period-end non-performing loans Non-performing assets to total assets Net charge-offs to average loans Capital Ratios: Total risk-based capital ratio Tier 1 risk-based capital ratio Tier 1 leverage ratio Tangible equity to tangible assets ratio4 0.97% 7.40% 10.31% 56.80% 63.41% 3.66% 1.20% 9.52% 13.75% 46.03% 57.57% 4.10% 1.23% 10.08% 15.25% 45.06% 58.23% 4.44% 1.48% 1.59% 1.54% 302.21% 0.46% 0.07% 17.86% 16.59% 12.16% 10.00% 248.47% 0.65% (0.02)% 18.14% 16.88% 11.81% 9.91% 227.95% 0.90% 0.07% 17.00% 15.75% 11.27% 9.64% 1.07% 8.88% 12.97% 55.50% 58.48% 4.35% 1.28% 76.76% 1.46% 0.16% 15.55% 14.36% 10.32% 8.52% 1.00% 7.59% 10.05% 68.08% 61.53% 3.78% 1.62% 324.22% 0.76% 0.24% 19.64% 18.38% 12.74% 10.41% 1 Return on average common equity is calculated by dividing net income available to common shareholders by average common equity. 2 Return on average tangible common equity is calculated by dividing net income available to common shareholders plus amortization of intangibles tax effected by average common equity less average intangibles. 3 The efficiency ratio is calculated by dividing noninterest expense excluding gains or losses on the sale of other real estate owned by net interest income including tax equivalent income on nontaxable loans and securities and excluding (a) gains or losses on securities and (b) gains or losses on sale of premises and equipment. 4 Tangible equity to tangible assets ratio is calculated by dividing period-end common equity less period-end intangibles by period-end assets less period-end intangibles. 10 P E R F O R M A N C E G R A P H S Total Deposits (in millions) Total Loans (in millions) $1,500 $1,400 $1,300 $1,200 $1,100 $1,000 $900 $800 $700 $600 $500 $640 $1,500 $1,400 $1,300 $1,200 $1,059 $1,058 $1,028 $1,076 $1,100 $825 $789 $795 $841 $1,000 $900 $800 $700 $600 $500 $521 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 Total Assets (in millions) $1,305 $1,284 $1,308 $1,347 $1,500 $1,400 $1,300 $1,200 $1,100 $1,000 $900 $800 $700 $600 $500 $834 2010 2011 2012 2013 2014 11 C O N S O L I DAT E D B A L A N C E S H E E T S (Dollars in thousands, except per share data) ASSETS Cash and due from banks Interest-bearing deposits in other banks Securities available for sale, at fair value Restricted stock, at cost Loans held for sale Loans, net of unearned income Less allowance for loan losses Net loans Premises and equipment, net Other real estate owned, net of valuation allowance of $2,971 in 2014 and $3,340 in 2013 Goodwill Core deposit intangibles, net Bank owned life insurance Accrued interest receivable and other assets Total assets LIABILITIES and SHAREHOLDERS’ EQUITY Liabilities: Demand deposits—noninterest bearing Demand deposits—interest bearing Money market deposits Savings deposits Time deposits Total deposits Customer repurchase agreements Long-term borrowings Trust preferred capital notes Accrued interest payable and other liabilities Total liabilities Shareholders’ equity: Preferred stock, $5 par, 2,000,000 shares authorized, none outstanding Common stock, $1 par, 20,000,000 shares authorized, 7,873,474 shares outstanding at December 31, 2014, and 7,890,697 shares outstanding at December 31, 2013 Capital in excess of par value Retained earnings Accumulated other comprehensive income, net Total shareholders’ equity Total liabilities and shareholders’ equity 12 December 31, 2014 2013 $ 29,272 38,031 $ 19,808 47,873 344,716 4,534 616 840,925 (12,427) 828,498 346,124 4,889 2,760 794,671 (12,600) 782,071 23,025 23,674 2,119 39,043 2,045 15,193 19,400 $ 1,346,492 3,422 39,043 3,159 14,746 19,943 $ 1,307,512 $ 254,458 193,432 174,000 90,130 363,817 1,075,837 53,480 9,935 27,521 5,939 1,172,712 $ 229,347 167,736 185,270 85,724 389,598 1,057,675 39,478 9,951 27,419 5,438 1,139,961 – – 7,872 57,650 104,594 3,664 173,780 $ 1,346,492 7,891 58,050 99,090 2,520 167,551 $ 1,307,512 C O N S O L I DAT E D S TA T E M E N T S O F I N C O M E (Dollars in thousands, except per share data) For the Years Ended December 31, 2013 2012 2014 Interest and Dividend Income: Interest and fees on loans Interest and dividends on securities: Taxable Tax-exempt Dividends Other interest income Total interest and dividend income Interest Expense: Interest on deposits Interest on short-term borrowings Interest on long-term borrowings Interest on trust preferred capital notes Total interest expense Net Interest Income Provision for Loan Losses Net Interest Income after Provision for Loan Losses Noninterest Income: Trust fees Service charges on deposit accounts Other fees and commissions Mortgage banking income Securities gains, net Other Total noninterest income Noninterest Expense: Salaries Employee benefits Occupancy and equipment FDIC assessment Bank franchise tax Core deposit intangible amortization Data processing Software Foreclosed real estate, net Merger-related expenses Other Total noninterest expense Income before income taxes Income taxes Net Income Net Income Per Common Share: Basic Diluted $ 39,257 $ 44,817 $ 49,189 3,775 3,971 296 156 47,455 4,654 9 325 742 5,730 41,725 400 41,325 4,196 1,735 1,903 1,126 505 1,711 11,176 14,688 2,988 3,727 647 901 1,114 1,448 1,019 240 780 7,006 34,558 17,943 5,202 12,741 1.62 1.62 $ $ $ 3,530 4,213 245 151 52,956 5,460 40 329 754 6,583 46,373 294 46,079 3,689 1,750 1,864 2,008 192 1,324 10,827 14,059 3,848 3,614 647 745 1,501 1,248 923 1,523 - 6,997 35,105 21,801 6,054 15,747 2.00 2.00 $ $ $ 4,044 4,280 213 80 57,806 6,843 150 335 813 8,141 49,665 2,133 47,532 3,703 1,757 1,768 2,234 158 1,790 11,410 15,785 3,604 3,951 692 690 1,935 512 1,028 528 19 7,899 36,643 22,299 6,293 16,006 2.04 2.04 $ $ $ Average Common Shares Outstanding: Basic Diluted 7,867,198 7,877,576 7,872,870 7,884,561 7,834,351 7,845,652 13 M A N AG E M E N T A N D B OA R D O F D I R E C T O R S (as of January 1, 2015) MANAGEMENT Jeffrey V. Haley President Chief Executive Officer R. Helm Dobbins Executive Vice President Chief Credit Officer Dabney T.P. Gilliam Jr. Executive Vice President Chief Administrative Officer H. Gregg Strader Executive Vice President Chief Banking Officer William W. Traynham Executive Vice President Chief Financial Officer BOARD OF DIRECTORS American National Bankshares Inc. and American National Bank and Trust Company Director Emeritus Lester A. Hudson Jr., Ph.D. Board of Directors Fred A. Blair President Blair Construction Inc. Gretna, VA Director since 1992 Committees 1, 5, 6 Frank C. Crist Jr., D.D.S. President Brady & Crist Dentists Inc. Lynchburg, VA Director since 2006 Committees 3, 5, 6 Ben J. Davenport Jr. Chairman First Piedmont Corporation Davenport Energy Inc. Chatham, VA Director since 1992 Committees 2, 4, 6 Jeffrey V. Haley President & Chief Executive Officer American National Bankshares Inc. American National Bank and Trust Company Danville, VA Director since 2010 Committee 7 14 Michael P. Haley Advisor Fenway Partners New York, NY Director since 2002 Committees 1, 2, 4, 6, 8 Charles S. Harris Executive Vice President Averett University Danville, VA Director since 2008 Committees 5, 6 F. D. Hornaday III President & Chief Executive Officer Knit Wear Fabrics Inc. Burlington, NC Director since 2011 Committees 3, 6, 7 John H. Love President & Chief Executive Officer W. E. Love & Associates Inc. Burlington, NC Director since 2011 Committees 4, 5, 6 Franklin W. Maddux, M.D. Chief Medical Officer Executive Vice President for Clinical & Scientific Affairs Fresenius Medical Care North America Waltham, MA Director since 2002 Committees 1, 3, 6 Charles H. Majors Chairman of the Board American National Bankshares Inc. American National Bank and Trust Company Danville, VA Director since 1981 Committee 7 Claude B. Owen Jr. Retired Chairman & Chief Executive Officer DIMON Inc. Danville, VA Director since 1984 Committees 2, 3, 6, 7, 8 Dan M. Pleasant Chief Operating Officer The Dewberry Companies Inc. Fairfax, VA Director since 2011 Committees 4, 6, 8 Joel R. Shepherd President Virginia Home Furnishings Inc. 220 Self Storage Inc. Roanoke, VA Director since 2015 Robert A. Ward Retired Executive Vice President & Chief Financial Officer Unifi Inc. Greensboro, NC Director since 2011 Committees 1, 6, 8 Committees 1. Audit 2. Chief Executive Officer’s Advisory 3. Corporate Governance and Nominating 4. Human Resources and Compensation 5. Risk and Compliance 6. Stock Grant and Option 7. Trust 8. Capital Management A DV I S O RY B OA R D S (as of January 1, 2015) NORTH CAROLINA Dexter R. Barbee Sr. President Barbee Holdings Inc. H. Thomas Bobo Retired Chairman Fairystone Fabrics Thomas E. Chandler Sr. Chairman Chandler Concrete Company Inc. Dawn S. Chaney President Chaney Properties Paul E. Cobb Jr. Retired Managing Partner Cobb, Ezekiel, Loy and Company P.A. James B. Crouch Jr. Vice President Harris, Crouch, Long, Scott & Miller Inc. J. Nathan Duggins III Partner Tuggle, Duggins & Meschan P.A. Anthony E. Foriest Retired Xerox Corporation J. Pat Harman Chairman & Chief Executive Officer North State Telecommunications Corporation John A. Holt Sr. President & Chief Financial Officer DynaYarn USA LLC Herman C. Johnson President Burlington Mechanical Contractors Inc. Teena M. Koury Owner Carolina Hosiery Mills John B. Leath Chief Executive Officer Acucote Inc. Phillip J. Nahser Jr., M.D. Cardiologist Cone Health Gary A. Rogers Vice President D.H. Griffin Construction Diane M. Rumley, CPA Partner Leeper, Kean & Rumley LLP James H. Smith Jr. President Villane Inc. VIRGINIA Kim E. Adkins Mayor City of Martinsville President KEA Consulting Services Jay E. Barker President JEB International Tobacco Company James E. Barkhouser President Barkhouser Motors Inc. J. Brian Burton President J.E. Burton Construction Company Thomas C. Capps President Capps Shoe Company Inc. Timothy J. Clark Vice President Blair Construction Inc. James D. Coleman Jr. President Rives Brown Realty S. Cabell Dudley Jr. Retired Executive American National Bank and Trust Company Tiffany M. Franks, Ph.D. President Averett University Harold E. Green Jr. President Distinct Impressions Inc. Wanda B. Jeffress Owner Jeffress Funeral Home Earnest C. Jordan Retired Senior Vice President American National Bank and Trust Company Brian J. Kelleher Vice President Atlantic Precision Resources Inc. Chris A. Lumsden Chief Executive Officer Halifax Regional Hospital Martha W. Medley Partner Daniel, Medley & Kirby P.C. Chris F. Mohr Chairman & Chief Executive Officer Ameristaff Inc. James K. Muehleck, D.D.S Dentist Martinsville Thomas S. Stump President & Chief Executive Officer First Piedmont Corporation Michael A. Thornton President Progress Printing William C. Vaughn Vice President J & R Management Inc. Lewis E. Wall Jr. President Davenport Energy FRANKLIN COUNTY, VA Dr. Al Angle II Owner Drs. Saxon, Angle and Assoc. P.C. W. Kelvin Bowles President Eastern Communications Associates Inc. Charles L. Dalton Vice President & General Manager Dalton Insurance Agency John Mac Deekens Retired General Manager Stuart Forest Products Danny M. Perdue Vice President Perdue Properties Inc. Michael A. Turner Chief Executive Officer Turner’s Building Inc. 15 PO Box 191 Danville, VA 24543 amnb.com 

Continue reading text version or see original annual report in PDF format above