American National Bankshares Inc. Annual Report 2016

FY2016 Annual Report · American National Bankshares Inc.

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ON COURSE FOR THE

~_ -~~

AMERICAN NATIONAL

BANKSHARES INC.

AMERICAN NATIONAL
American National Bankshares Inc. is a bank holding company with assets of $1.7 billion. Headquartered in
Danville, Va., it is the holding company of American National Bank and Trust Company (the "Bank"), a community
bank serving Virginia and North Carolina through 26 banking offices. Iv addition, the Bank manages $781 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 (AT11~ network and debit cards to
real-time Online Banking with Bill Pay, Mobile Banking with Mobile Deposit, mobile Debit Card alerts and Telephone
Banking. Chartered in 1909, the Bank is entering its 109th 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 and is a leader in charitable and civic support in all its markets. Many Bank

employees serve on the boards of civic organizations throughout the Bank's market area.

•r „

April 3, 2017

TO OUR SHAREHOLDERS:

r~ J

I am pleased to make this report to you. 2016 was yet

another exciting year with significant growth in earnings,

loans and deposits, as well as the entrance into two new

market areas. Net income was up 8.4%, loan growth

We also 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

was 15.8%, and deposits grew 8.6%. In September, we

am proud to work with them.

announced that we were entering the Roanoke, Virginia,

and Winston-Salem, North Carolina, markets.

Our net income for the year was $16.3 million compared

to $15 million for 2015 net income. Basic and per

common share was $1.89 for the 2016 period compared

to $1.73 for 2015.

I wish to recognize one director who will be retiring
at the annual meeting of shareholders in May. Ben
Davenport has been a director since 1992 and will be
retiring pursuant to our directors' retirement policy.
While we will miss his long and valuable service as
a director, we are pleased that he will continue as a

Director Emeritus during the next yeaz.

Our capital ratios remain strong and continue to exceed

all regulatory minimums. In 2016, we worked to deploy

our capital more effectively and efficiently to maximize

We know the importance of your investment in
our company, and we appreciate your support. We

shareholder return while maintaining capital ratios

work hard to manage the company prudently and

that are well above regulatory requirements. For the

appropriately.

year ended December 31, 2016, average shareholders'

equity to average assets was 12.64%. Our book value
per common share was $23.37 compared to $22.95 on

December 31, 2015.

We are pleased that the market price of our stock closed

Very truly yours,

on December 31, 2016, at $34.80, compared to the

Charles H. Majors

December 31, 2015, closing price of $25.61. While the

Chairman of the Board

stock market was up generally at year end, we believe

our stock price was impacted significantly by the growth

American National Bankshares Inc.
American National Bank and Trust Company

discussed above and by the excellent work by our great

team of employees, led by Jeff Haley and his talented

executive group.

Apri13, 2017

TO OUR SHAREHOLDERS:

The year 2016 proved to be very positive and productive

While new growth is exciting, the steady growth of legacy

for American National, both financially and strategically.

markets is also important. We were pleased to see the

Charley Majors outlined our financial success in his letter

de novo markets in Roanoke and Winston-Salem start

to you, so I will focus my comments on our strategic

strong and are equally happy to report that our legacy

accomplishments following the conclusion of our 108th

markets grew both loans and deposits as well.

year of community banking.

An additional strategic priority is our commitment to the

Our bank has athree-year strategic plan that guides our
efforts and focal points, and each year we fine-tune that

communities we serve. The "Course for the Future" theme

is our commitment to community-style banking. It is at the

plan based on changes that occur in our industry and
our markets. One of our key strategic goals is growth.
In September, we announced that we were entering the

heart of our organization, and I see many members of our

staff bringing this theme to life in significant ways.

Roanoke, Virginia, and Winston-Salem, North Carolina,

We have a mix of homegrown talent and newly infused

markets. Each of these mazkets represents areas where our

expertise through recently hired team members. We

commitment to community banking values, local decision-
making and strong leadership will bring energy and growth

believe this staffing combination brings energy and vitality

and ensures that organizational knowledge about how we

to our company.

We are excited to have strong teams in place in both

Roanoke and Winston-Salem. Early results for these

operations are very encouraging. Both of these new
markets are conriguous to our existing footprints, and
we believe they will provide us with strong growth

opportunities in both the short and long term.

$34.80

$25.61

$24.81

THREE -YEAR STOCK (~z~i! Closing Price)

- $23,308

- $21,059

$17,943

TOTAL REVENUE (fin millions, befinr in7errst and taxes)

` ` I BELIEVE 2017 WILL BRING
NEW OPPORTUNITIES THAT
WILL AFFIRM WE ARE `ON
COURSE FOR THE FUTURE."'

..~.

3.52%

footprint brings sustainable and consistent opportunity

' 3.69%

to positively impact the financial lives of our clients and
strengthen the communities in which we serve.

NET INTEREST MARGIN

3.66%

14.81

16.34%

17.86%

RISK-BASED CAPITAL RATIO

do community banking continues and evolves. Our team
is second to none and a key element of our success.

In addition to planning for growth and committing to ow
communities, we also focus a significant amount of time
on strategic succession planning. To that end, in December
our chief credit officer, Helm Dobbins, announced his
retirement effecrive March 30, 2017. Through his long
tenure at the bank, Helm wrote an important chapter in the
book of American National Bank history by developing a
credit infrastructure that served us very well through the
recent economic downturn. I would like to thank Helm for
the work he did for our company; but more importantly, I
would like to thank him for his friendship.

As progress continues to keep us "On Course for
the Future" in 2017, the year ahead is indeed bright
and full of opportunity. Leveraging our connected

Our team is composed of people from all walks of life
that come together for a common purpose which is
to serve our customers. That service takes the shape
of community leadership roles, exceptional customer
service, and community involvement. With each passing
year, it becomes more apparent that our most important

asset is our people. We have employees who have been
with us many years and then we have new employees
who have joined us during 2016. They are dedicated,
experienced and professional and they performed again
at a high level to produce these strong results for you. I
commend all of our employees for their work and their
loyalty to this organization, and I believe 2017 will bring
new opportunities that will affirm we are "On Course for

the Future."

Very truly yours,

~ C

Jeffrey V. Haley
President and Chief Executive Officer
American National Bankshares Inc.
American National Bank and Trust Company

FINANCIAL HIGHLIGHTS As of December 31. (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 talc 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

2016

2015

2014

2013

2012

$ 56,170
6,316
49,854
250
13,505
39,801
23,308
7,007
16,301

$ 55,169
5,904
49,265
950
13,287
40,543
21,059
6,020
$ 15,039

$ 47,455
5 ,730
41,725
400
11,176
34,558
17,943
5,202
$ 12,741

$ 52,956
6,583
46,373
294
10,827
35,105
21,801
6,054
$ 15,747

$ 57,806
8,141
49,665
2,133
11,410
36,643
22,299
6,293
$ 16,006

$ 1,678,638
1,164,821
352,726
1,370,644
201,380
155,789

$ 1,547 ,599
1,005,525
345,661
1,262,660
197,835
151,280

$ 1,346,492
840,925
349,250
1,075,837
173,780
132,692

$ 1,307,512
794,671
351,013
1,057,675
167,551
125,349

$ 1,283,687
788,705
340,533
1,027,667
163,246
119,543

$ 1.89
1.89
0.96
23.37
18.08

$ 1.73
1.73
0.93
22.95
17.55

$ 1.62
1.62
0.92
22.07
16.86

$ 2.00
2.00
0.92
21.23
15.89

$ 2.04
2.04
0.92
20.80
15.23

Weighted average shares outstanding, basic
Weighted average shares outstanding, diluted

8,611,507
8,621,241

8,680,502
8,688,450

7,867,198
7,877,576

7,872,870
7,884,561

7,834,351
7,845,652

Selected Ratios:
Return on average assets
Return on average equity'
Retum 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-perfomvng loans

Non-performing assets to total assets
Net charge-offs to average loans

Capital Ratios:
Total risk-based capital ratio
Common equity tier 1 capital ratio
Tier 1 risk-based capital ratio
Tier 1 leverage ratio
Tangible equity to tangible assets ratio°

1.02%
8.07%
10.85%
50.71%
61.47%
3.52%

0.99%
7.65%
10.62%
53.65%
63.81%
3.69%

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%

1.10%

1.25%

1.48%

1.59%

1.54%

360.39%
0.29%
0.00%

242.09%
0.48°Io
0.08%

302.21%
0.46%
0.07%

248.47%
0.65%
(0.02)%

227.95%
0.90%
0.07%

14.81%
11.77%
13.83°10
11.67%
9.54%

16.34%
12.88%
15.23%
12.05%
10.08%

17.86%
n/a
16.59%
12.16%
10.00%

18.14%
n/a
16.88%
11.81%
9.91%

17.00%
n/a
15.75%
11.27%
9.64%

Rerun on average equi[y is calculated by dividing net income available to common shareholders by average common equity.

2 Return on average tangible equity is calwlated by dividing net income available to common shareholders plus amortization of intangibles tax effuted by avernge common equity less average intangibles.
3 The efficiency mtio is calculated by dividing ~roninterest 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~nd common equity less period-end intangibles by period-end assets less periodcnd intangibles.

TOTAL ASSETS ,,,~ m,,~,~~,~.~,

X2014

The charts say it all...

progress forward and

increased assets, deposits

and loans PLUS an increase

in total households. Our

current legacy markets are

producing, and our new

opportunity markets are

producing, too!

$1,679

$1,548

$1,346

$1,308

$1,284

TOTAL DEPOSITS ,r,,,,~,~r,,,,~.,,

TOTAL LOANS din mifliorccl

2014

n X1,371

$1,263

201

$1,076

$1,058

$1,028

x1,165

$1,006

$841

$795

$789

CONSOLIDA TED BALANCE SHEETS ,rooe~e,~.3,.,~~la..s;n,,~us~ds.eX~ePro..s,~.~~o,

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 $192 in 2016 and $329 in 2015

Goodwill
Core deposit intangibles, net
Bank owned life insurance
Accrued interest receivable and other assets

Total assets

I,i~►bilities and Shareholders' Equity:
Liabilities:

Demand deposits-noninterest bearing
Demand deposits-interest bearing
Money market deposits
Savings deposits
Time deposits

Total deposits

Short-term borrowings:

Customer repurchase agreements
Other short-term borrowings

Long-term borrowings
Junior subordinated debt
Accrued interest payable and other liabilities

Total liabilities

Commitments and Contingencies

Shareholders' equity:

2016

$ 20,268
32,939

346,502
6,224
5,996

1,164,821

(12,801)
1,152,020

25,439

1,328
43,872
1,719
18,163
24,168
$ 1,678,638

$ 378,600
209,430
283,035
120,720
378,855
1,370,640

39,166
20,000
9,980
27,724
9,748
1,477,258

2015

$ 19,352
75,985

340,349
5,312
3,266

1,005,525
(12,601)
992,924

23,567

2,184
43,872
2,683
17,658
20,447
$ 1,54799

$ 322,442
227,030
200,495
115,383
39710
1,262,600

40,611

9,958
27,622
8,913
1,349,764

Preferred stock, $5 par, 2,000,0000 shares authorized, none outstanding
Common stock $1 paz, 20,000,000 shares authorized,

8,618,051 shares outstanding at December 31, 2016, and
8,622,007 shares outstanding at December 31,2015

Capital in excess of paz value
Retained earnings
Accumulated other comprehensive income, net

Total shareholders' equity
Total liabilities and shareholders' equity

8,578
75,076
119,600
(1,874)
201,380
$ 1,678,638

8,605
75,375
111,565
2,290
197,835
$ 1,547,599

CONSOLIDATED STATEMENTS OF INCOME

Interest and Dividend Income:
Interest and fees on loan
Interest on federal funds sold
Interest ar~d 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 junior subordinated debt

Total interest e~ense

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
Brokerage fees
Income from Small Business Investment Companies
Other

Total noninterest income

Noninterest Expense:
Salaries
Employee benefits
Occupancy and equipment
FDIC assessment
Bank franchise ta~c
Core deposit intangible amortization
Data processing
Sofrwaze
Other real estate owned, net
Merger-related expenses
Other

Total noninterest elcpense

Income before income taxes
Income taxes
Net Income

Net Income Per Common Share:
Basic
Diluted
Average Common Shares Outstanding:
Basic
Diluted

2016

2015

2014

$ 47,971

$46,860
6

$ 39,257
-

4,454
3,135
334
276
56,170

5,103
10
325
878
616
49,854
250
49,604

3,791
2,048
2,680
1,713
836
843
463
1,131
13,505

17,568
4,264
4,246
647
995
964
1,828
1,143
336

7.810
39,801
23,308
7,007
$16,301

4,072
3,681
346
204
55.169

4,81 l
9
324
760
504
49,265
qsn
4ti,315

3,935
2,066
2,377
1,320
867
946
912
864
13,287

16,554
4,311
4,425
750
898
1,201
1,725
1,158
99
1,998
7,424
40,543
21,059
6,020
$15,039

3,775
3,971
296
156
47A55

4,654
9
325
742
5,730
41,725
arx~
41X25

4,196
1,735
1,903
1,126
505
643
176
892
11,176

14,688
2,988
3,727
647
901
1,114
1,448
1,019
240
780
7,006
34,558
1743
5,202
$12,741

$ 1.89
$ 1.89

$ 1.73
$ 1.73

$ 1.62
$1.62

8,611,507
8,621,241

8,680,502
8,688,450

7,867,198
7,877,576

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~~I

ON COURSE FOR THE

We have charted a "Course for the Future" on a strong

foundation of loyal customers and staff and a historical

economic impact for our communities that builds

confidence. To succeed in these efforts requires a

strong bond, and American National Bankshares and

our operating subsidiary American National Bank

and Trust Company shares that bond with our staff,

communities and future. There is a clear path to and

connection between the communities we call home and

the growth and prosperity of our organization. Because

while there are many types of banks —international,
national, regional, local — we believe the best fit for

our communities we serve and our organization is that

of a "community bank" where our actions and benefits

apply to our local community. Loans we grant enable

staff leaders, and vibrant new products and services
to meet our customers' needs are both testaments to
our community banking focus and a guide for future
success. The American National Bank brand, the
instant thought one has about our bank, provides a

strong backdrop for working with our communities,
introducing ourselves to new customers and ensuring
we have a playbook to which every member of our
team subscribes. Our brand is 108 years in the making
and represents a solid and successful past; an engaging
present; and a future full of hope, opportunity and

wonder.

We believe that certain traits underscore our connection
between the communities we serve and the community

small business success and the achievement of home

banking heritage we share.

ownership. The deposits we accept increase the value

of our customer financial holdings, making them safe

AMONG THESE ARE:

and easily accessible. The financial planning and

• CONSISTENT GROWTH

investing we complete provides a clear financial future

• SUSTAINABLE PROGRESS

of customers and businesses.

• ENGAGED COMMUNITIES
• COMMUNITY LEADERSHIP ROLES

On Course for the Future is a carefully articulated

FOR STAFF

strategy that leverages our strengths, ma~cimizes our

opportunities, and inclusively engages key stakeholders

• REINVESTMENT IN OUR LOCAL MARKETS
• PROGRESSIVE VISION, CONSERVATIVE

in our success. Record loan growth, new markets, new

APPLICATION

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G ~ OUR BANK HAS ATHREE-YEAR STRATEGIC PLAN

THAT GUIDES OUR EFFORTS AND FOCAL POINTS.
EACH YEAR WE FINE-TUNE IT BASED ON OUR

MARKETS AND INDUSTRY CHANGES."

—JEFF HALEY, PRESIDENT AND CEO

~_,

._F - ~ ---

v~ .":'

~.. Y

A PROGRESSIVE

2016 proved to be a successful year in our financial

• EMV CHIP CARDS

statements, service to our customers, commitment of

our staff, and work in our communities. American

National Bank's progressive, consistent and

The new EMV chip cards provide an enhanced layer
of security and protection for our cardholders. The
new technology creates safety and confidence in

sustainable outcomes are based on years of work and

your ANB card for everyday use.

our 108-year history. The recent strategic planning

and subsequent development of a tactical strategy to

• NEW ATM

implement that plan have placed our organization on

the course for the future.

In 2016, we released many new products, enhanced
several services, launched new market areas, and

refined customer service processes all designed to

We also created additional convenient access
through our new ATM placed at our Guildford
College branch. The 24-access and capability of the
new ATM increase a customer's ability to get cash,
transfer funds, and much more.

provide our customers a better way to bank.

• TREASURY MANAGEMENT

SOME OF OUR 2016 ADDITIONS:

• OPENING ACT

We launched the Opening Act which allows customers

the freedom to open a new checking or savings

account online at AMNB.com. Customers can access

Opening Act through our website or directly through

SERVICES EXPANSION
Lastly, our Treasury Management Services for our
commercial customers expanded our capabilities
and grew significantly in 2016, almost doubling our
service footprint. Access to these services greatly
enhances our customers' ability to manage their
funds efficiently and effectively.

OUR

Our roadmap for success and to stay "On Course
for the Future" relies on maintaining the close
relationships between our bankers and customers.
Being knowledgeable about our customer needs,
technology preferences, and service requirements
ensures that we deliver products and services tailored
to their needs. Whether it be asmall-business owner
looking for astart-up loan, a corporation looking
for health insurance, a new family looking for their
first home, or a student seeking a checking account,
we can meet those needs with a smiling face, warm
welcome and the time and attentive listening of a true
community bank.

We have grown our footprint in communities
served by maintaining a focus on helping people
manage their finances easier and more effectively.
Most importantly, we have maintained the service

our customers expect and the local decisions and
community engagement that is our hallmark.

In 2016, we announced two key growth opportunities
with de novo market introductions into Roanoke,
Virginia, and Winston-Salem, North Carolina.

These markets are contiguous to current markets
and allow our growth to follow a pattern of similar

communities where we are located and provide
access to new, growing areas. We added two
teams of experienced bankers representing 19 staff
positions that immediately brought benefit to the

bank as a result of their existing relationships,

expertise and experience in the local communities.

We continue to creatively look for outlets for growth

that allow our community banking model to shine
and our customer base to enjoy greater access and
convenience.

ANB'S COMMUNITY BANKING DELIVERY -I-

STRONG FINANCIAL PERFORMANCE +

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Growing and expanding, center of excellence, two new markets,

full service lenders, local decisions.

TRUST AND

New leadership, $781 million in managed assets, full product

INVESTMENT suite, tailored planning, experience and expertise.

Personal, business and health coverage; Bankers Insurance is one

of the largest independent agencies in Virginia.

PERSONAL
BANKING

Focus on core deposits, new relationships, 26 offices, excellent
customer service, new access tools and technology.

Loan growth, flexible programs, local decisions, in-house processing.

FINANCIAL

Consistent growth, strong capital ratio, progressive earnings,

PERFORMANCE strong credit culture.

OUR

GRETNA
109 North Main Street
Gretna, VA 24557

ROANOKE
3000 Ogden Road
Roanoke, VA 24018

HARDY
Westlake
12930
Booker T Washington Hwy
Hardy, VA 24101

LOVINGSTON
150 Front Street
Lovingston, VA 22949

LYNCHBURG
Graves Mill
1646 Graves Mill Road
Lynchburg, VA 24502

'I~mberlake
20479 Timberlake Road
Lynchburg, VA 24502

MARTINSVILLE
900 Liberty Street
Martinsville, VA 24112

RIDGEWAY / 220 SOUTH
3810 Greensboro Road
Ridgeway, VA 24148

ROCKY MOUNT
400 Old Franklin Turnpike,
Suite 100
Rocky Mount, VA 24151

SOUTH BOSTON
3609 Old Halifax Road
South Boston, VA 24592

UNION HALL
Southlake
25 Southlake Drive
Union Hall, VA 24176
Phone: (540)576-1218

Village at Brookwood
1840 Brookwood Avenue
Burlington, NC 27215

GRAHAM
842 South Main Stet
Graham, NC 27253

GREENSBORO
Green Valley Road
703 Green Valley Road,
Suite 101
Greensboro, NC 27408

Guilford College
5509-A West Friendly Avenue,
Suite 102
Greensboro, NC 27410

NORTH
CAROLINA Mebane, NC 27302

MEBANE
1008 Mebane Oaks Road

BURLINGTON
SouW Church Street
3101 South Church Street
Burlington, NC 27215

Cum Park Plaza
2214 North Church Street
Burlington, NC 27217

YANCEYVILLE
173 Main Stet
Y~ceyville, NC 27379

yy~NSTON-SALEM
110 Oakwood Dr Suite 510
Winston-Salem, NC 27103

VIRGINIA

DANVILLE
Main
628 Main Street
Danville, VA 24541

Nor-Dan
239 Nor-Dan Drive
Danville, VA 24540

Piedmont Drive
445 Mount Cross Road
Danville, VA 24540

Airport
1407 South Boston Road
Danville, VA 24540

BEDFORD
207 North Bridge Street
Bedford, VA 24523

CHATHAM
13880 U.S. Highway 29
Chatham, VA 24531

COLLINSVILLE
2484 Vuginia Avenue
Collinsville, VA 24078

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The Piedmont Valley, the Triad and our surrounding

footprint comprise a wealth of economic activity and

vitality. From world-renowned universities to major

retailers, manufacturers and leaders in aviation healthcare
and more, they all call our region home. The opportunity
provided by the presence of these companies includes

employment, development of feeder companies, stable

economic impact, community infrastructure and an

improved quality of life for the entire community.

For American National Bank, our size and commitment
to personalized service yield a strong banking partner
with flexible products and services and local
management decisions that provide key support.
As our communities grow and reinvest in themselves,
we are at the epicenter of the financial community
and continually provide an opportunity for business
to prosper, fund growth and expansion, and hue a
growing and solid workforce.

Reynolds ~~~~YOKOHAMA , K E A

American

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Connecting with our communities is both a

As a bank, covering our 19 communities served,

commitment of our organization and a fundamental

American National Bankshares contributed

part of who we are as a team of associates working

support in:

for American National Bank. We live, work and raise

24 local organization projects

families in the communities we serve.

•Financial education across all markets

• Hundreds of community service hours by

That connection creates a bond that sustains both the
community and our staff along with the bank. Strong •Numerous leadership roles by our staff and more
communities make great places to live for our staff

our staff

and an excellent banking environment for our bank.

In 2016, we again demonstrated our commitment

through hard work, leadership participation by our

team in community organizations and by dollars

contributed to help those organizations succeed.

We are proud of our commitment, but more
importantly stand proud with each organization to
support and cheer their success. As the saying goes,
it takes a village to raise a child and effect positive
change —and we are happily part of that village!

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THE FOLLOWING ARE A FEW OF THE ORGANIZATIONS
THAT BENEFITED FROM OUR SUPPORT AND ASSISTANCE
IN 2016, JOINING A LIST OF OVER 200 GROUPS WE HAVE
RECENTLY SUPPORTED:

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• 9th Annual Dentistry from the Heart Event

• Piedmont VA Dental Health Foundation

• Alamance Community College

• Alamance County Economic

Development Foundation

• Bassett High School

• Danville YMCA

• Future of the Piedmont Foundation

• Graham Area Business Association

• Goodwill Industries

• Habitat for Humanity

• Martinsville/Henry County National

Society of Black Engineers

• United Way of Alamance County

• United Way of Caswell County

• United Way of Central VA
• United Way of Danville/Pittsylvania County
• United Way of Franklin County

• United Way of Greensboro
• United Way of Halifax/South Boston
• United Way of Henry County/Martinsville

• VBA Education Foundation
• YMCA of Alamance County

• YMCA of Greensboro

EXECUTIVE LEADERSHIP~~,,u~„~,,.,,zo„

Jeffrey V. Haley
President
Chief Executive O,~cer

R. Helm Dobbins
Executive ice President
Chief Credit O„Qicer
(retired March 30, 2017)

Ramsey Hamadi
Executive Vice President
ChiefAdministrative Officer

H. Gregg Strader
Executive ice President
Chief Banking OJj"icer

William W.'I'raynham
Executive ice President
Chief Financial O, fficer

BOARD O F DIRECTORS ~.~ ~~f~o~~4~.,, z~,~

BOARD OF DIRECTORS
Fred A. Blair
Chief Executive O,~icer
Blau 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 Bankshazes
Inc. and American National
Bank and Trust Company
Danville, VA
Director since 2010
Committee 7

Michael P. Haley
Retired Advisor
Fenway Partners
New York, NY
Duector since 2002
Committees 1, 2, 4, 6, 8

Charles S. Harris
Executive ice President
Averett University
Danville, VA
Director since 2008
Committees 5, 6

R D. Hornaday III
President &Chief Executive
O,~cer
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.
Bwlington, NC
Director since 2011
Committees 4, 5, 6

Franklin W. Maddux, M.D.
Chief Medical Officer
Executive V ce 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. and American National
Bank and Trust Company
Danville, VA
Duector 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

Ronda M. Penn
Chief Financial Officer
Plexus Capital LLC
Raleigh, NC
Director since 2015
Committees 1, 6

Dan M. Pleasant
Chief Operating Officer
The Dewberry Companies Inc.
Fairfax, VA
Director since 201 I
Committees 4, 6, 8

Joel R. Shepherd
President
Virginia Home Furnishings Inc.
220 Self Storage Inc.
Roanoke, VA
Director since 2015
Committees 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

` ` WE HAVE A STRONG AND EFFECTIVE
BOARD OF DIRECTORS... PROVIDING
~ STRATEGIC POLICY LEADERSHIP AND

MANAGEMENT OVERSIGHT."

-CHARLES MAJORS, CHAIRMAN

STATE ADVISORY BOARDS q.c ojJanuary 1, 2017

NORTH CAROLINA

Thomas E. Chandler Jr.
President
Chandler Concrete Company Inc.

Dawn S. Chaney
President
Chaney Properties

James B. Crouch Jr.
Partner
Harris, Crouch, Long, Scott &Miller Inc.

J. Nathan Duggins III
Partner
Tuggle, Duggins, P.A.

Anthony E. Foriest
Retired
Xerox Corporation

John A. Holt Sr.
President &Chief Financial Offrcer
DynaYam USA LLC

David S. Johnson, M.D.
Physician
Burlington Pediatrics

Teena M. Koury
Owner
Carolina Hosiery Mills

John B. Leath
Chief Executive Officer
Acucote Inc.

Phillip J. Nahser Jr., M.D.
Cardiologist
Cone Health Medical Group

Richard H. Ramsey
Operating Partner
New Page Capital
President
Engineered Steel Products, Inc.

Diane M. Rumley, CPA
Partner
Leeper, Kean & Rumley LLP

Adrian T. Smith
Chief Executive O„~"icer
Ice Age Management

James H. Smith Jr.
President
Villane Inc.

VIRGINIA

Kim E. Adkins
Former Mayor
City of Martinsville
President
KEA Consulting Services

C. Scott Elliott
President
CS Custom Structures, Inc.

T[ffany M. Franks, Ed.D.
President
Averett University

Harold E. Green Jr.
President
Distinct Impressions Inc.

Wanda B. Jeffress
Owner
Jeffress Funeral Home

Earnest C. Jordan
Retired Senior ice President
American National Bank and Trust Company

Jay E. Barker
President
JEB International Tobacco Company

Brian J. Kelleher
President
Atlantic Precision Resources Inc.

James E. Barkhouser
President
Barkhouser Motors Inc.

Martha W. Medley
Partner
Daniel, Medley &Kirby P.C.

J. Brian Burton
President
J.E. Burton Construction Company

Chris F. Mohr
Chairman &Chief Executive Officer
Ameristaff Inc.

Thomas C. Capps
President
Capps Shoe Company Inc.

Timothy J. Clark
President
Blair Construction Inc.

James D. Coleman Jr.
President
Rives Brown Realty

S. Cabell Dudley Jr.
Retired Executive Vice President
American National Bank and
Trust Company

James K. Muehleck, D.D.S
Dentist
Martinsville

Thomas S. Stump
President &Chief Executive O,~icer
First Piedmont Corporation

Michael A. Thornton
President
Progress Printing

William C. Vaughn
ice President
J & R Management Inc.

MARKET MAKERS

STOCKHOLDER INFORMATION
Annual Meeting
• The 2017 Annual Meeting of Shareholders ofAmerican
National Bankshares Inc. will be held on Tuesday,
May 16, 2017, 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."

Shareholder Inquiries
• Shazeholders needing information on stock transfer

requirements, lost certificates, dividends, the dividend
retirement plan and other shareholder matters may contact:

Computersbare Inc.
PO Box 30170
College Station, TX 77842
800.368.5948

General Corporate Information
Independent Auditors

Yount, Hyde &Barbour PC
50 South Cameron Street
Winchester, VA 22601

Re ug latory and Securities Counsel

Williams Mullen
Williams Mullen Center
200 South 10th Street, Suite 1600
P.O. Box 1320 (23218)
Richmond, VA 23219

Equal Opportunity Employer
American National Bank and Trust Company, 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. 2016 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 2016 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

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MISSION, VISION,
GUIDING PRINCIPLES AND

~''~~

MISSION STATEMENT:

VISION STATEMENT:

We provide quality financial services with exceptional

customer service.

We will enhance the value of our shareholders' investment by
being our communities' preferred provider of relationship-based

GUIDING PRINCIPLES:
To achieve our vision and carry out our mission, we:
• Operate a sound, efficient, and highly profitable company,
• Identify and respond to our internal and external customers'

needs and expectations in an ever changing financial services

environment,

• Provide quality sales and quality service to our customers,

• Produce profitable growth,

• Provide an attractive return for our shareholders,

• Furnish positive leadership for the well-being of all

communities we serve,

• Continuously develop a challenging and rewarding work

environment for our employees, and

• Conduct our work with integrity and professionalism.

financial services.

CORE VALUES:

• Build personal relationships based on honesty and integrity

• Treat people fairly and speak with candor and care

• Develop people to their highest potential
• Coach for improved performance
• Show a passion for winning

• Act like business owners

• Celebrate individual and team successes often
• Communicate with strategic purpose and aim for consistency
• Hold ourselves and our teammates accountable for results.

~~MERICAN NATIONAL

BANKSHARES INC.

AMERICAN NATIONAL

BANKSHARES INC.

628 Main Street, Danville, VA 24541

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