American National Bankshares Inc. (AMNB-NASDAQ)

CEOCFO-Members Login

September 25, 2009 Issue

The Most Powerful Name In Corporate News and Information

Energy | Energy-Tech | Energy-Infrastructure | Oil & Gas | Natural-Gas | Clean Energy | Renewable-Energy | Green | Energy-Analyst

Precious-Metals | Resources | Mining | Metals | Gold | Capital Goods | Industrial-Goods | Product-Development | Waste-Management 

Healthcare  |  Biotechnology | Drug-Development | Pharma | Natural-Health | Medical-Device  | Medical-Tech  | Medical-Instruments

 Bank |  Financial | Business-Banks |  Community Banks |  Commercial-Bank   |  Regional-Banks  | Specialty-Finance | Bank-Analyst

Pacific-Bank | Business-Developmentt | REIT | Services | Business-Services | Global-Services | Retail | Canadian

Technology | Security | Authentication | Telecommunications | Semiconductor | Communications | Logistics-Tech

CURRENT ISSUE |  COVER ARCHIVES  |  INDEX  |  CONTACT  |  FINANCIALS |  SERVICES  | HOME PAGE

Being Well Capitalized And A Focus On Their Credit Standards Has Allowed American National Bankshares To Stay Profitable And Avoid Some Of The Problems Experienced By Some Of The Other Financial Institutions During The Current Economic Downturn

Company Profile:

American National Bankshares Inc. is the holding company of American National Bank and Trust Company, a community bank serving Southern and Central Virginia and the northern portion of Central North Carolina with twenty banking offices and a loan production office.

The Bank provides a full array of financial products and services, including commercial, mortgage and consumer banking; trust and investment services; and insurance.

Charles H. Majors
President, CEO and Director
Charles H. Majors is President & Chief Executive Officer of American National Bankshares Inc. and its banking subsidiary, American National Bank and Trust Company. He received his undergraduate degree from Auburn University and his law degree from the University of Virginia. He practiced law for twenty years with an emphasis on business law. He became president in 1993 and chief executive officer in 1994.
 

Financial
Regional – Mid-Atlantic Banks
(AMNB-NASDAQ)

American National Bankshares Inc.
628 Main Street
Danville, VA 24541
Phone: 434-792-5111
 

Interview conducted by: Walter Banks, Publisher, CEOCFOinterviews.com, Published – September 25, 2009

CEOCFO: Mr. Majors, last spoke back in December of 2007, can you tell us about any changes that have taken place in your banks since that time?  
Mr. Majors: “We’ve experienced the same things that everyone else has experienced during 2008 with the economy. The major changes that we have made is working to maintain our credit standards during this period, while making sure that we prepare for when the economy does turn around and we’re ready to move back into a real growth mode. Right now, it is more just to make sure that we protect what we have and that we have the best earnings as possible during this period. We have reduced some of our staff and tightened our belt a little bit, about 5% of our FTE positions. We have watched our expenses and are very fortunate that we went into this economic situation with a lot of capital. We worked very carefully at our credit standards, so we have not had the same problems that some of the other financial institutions have had. We also have not leveraged the way some others have done. We went into this situation in good shape and it has paid off for us because we have been able to continue to be profitable during this period.”

CEOCFO: How do you stand with your non-performing loans?
Mr. Majors: “They are less than 50 basis points of our total loans and our total non performing assets which is less than one percent of total assets. So we actually are in very good shape with regard to non-performing loan and on performing assets.”
 

CEOCFO: “You mentioned the economy of the area, how has that affected your clients in general?”

Mr. Majors: “Our market areas are areas that have had economic problems even before this global economic downturn. We have been rebuilding our economy in our region over the last 10 years from tobacco, textiles, and furniture, all have which gone down significantly. We’ve been diversifying and rebuilding and so we have not had quite the impact that some of the other places have, but our customers have tightened their belts. Because we do have good credit, our customers are relatively strong and have been able to withstand this economic difficulty. They have however begun to pay down debt, rather than borrow, and to save. That has certainly had an effect on our ability to grow loans during this period, but the good news is that they have been able to weather the storm probably better than in some of the other areas of the United States. There are a lot of areas that fly high, and then fall fast; however, our growth is much more of a slower, more consistent growth, so we did not have quite the fall. Bit that is not to say that people in this region have not have problems. We always have a relatively higher unemployment rate in this area and our customers have therefore been able to withstand probably better than in same areas.”

CEOCFO: Would you give us a closer look at your capital situation?

Mr. Majors: “We are a highly capitalized. Our shareholders’ equity was about over 12 ½ % of average assets as of June 30^th. While there are different ratios that are measured in terms of capital, we are in the top tier of our peers across the country. We made the decision not to participate in the government’s capital access program, the TARP program. We are fortunate to be able to forgo any participation in it and still maintain our position as being one of the highest capitalized institutions relative to our size. When we last talked in late 2007, there were people who said that we had too much capital and that we needed to leverage, going out and buying organizations and expand into some of these faster, growing markets. We made a conscious decision that we were going to remain highly capitalized. If we didn’t have the appropriate way to use earnings, we would pay out strong dividends and we continue to do that. But we did make the decision that we were not going to go out and just leverage because that was the popular thing to do. It has paid off rough because, during this troubled time, we remain well capitalized. We’ve been able to do the things that we wanted to do without having to be concerned about either participating in TARP or raising capital, which is very difficult this time for anyone. Fortunately, we don’t have to.”

CEOCFO: Are you still focused on branching out at this point?

Mr. Majors: “We are still focused on growing, but we are focused on what we call smart growth. We’re not as concerned about growing at a large and rapid rate, but are rather concerned about growth that makes sense for us and is profitable for the organization and therefore beneficial to the shareholders. Since we spoke last, we’ve gone into a new market between Danville and Lynchburg; the Bedford market, and opened the office there. At the same time, we’ve looked at some of our legacy markets including Danville, realized that we had too many offices there and so we’ve consolidated some offices. We are trying to grow in a smart manner. In this time, it is more important that we make sure that we are doing the right things.”

CEOCFO: Are you focused on new products such as remote capture deposit or online banking services?

Mr. Majors: “Yes. As you know, we are about an $800 million asset size bank, which makes us a good sized community bank. However, we have invested consistently in technology because we believe that we need to be able to provide the products and services that our customers want and we math our services against anyone’s. We’re not as big as the big banks, but we can get it done. We offer remote capture and have been able to get customers who were interested in it. We think it is going to be very popular going forward with a lot of our businesses who want to use that. We have internet banking and have been able to work with a lot of our commercial customers to provide them through technology with the types of reports and information that they want to have and to help them be able to reconcile their statements quickly for those who have many transactions. This is value added. We also work well with municipalities and have picked up significant business in the region with governmental entities.”

CEOCFO: What is the breakdown of you lending?

Mr. Majors: “We consider ourselves to be primarily a small business bank. We have a good strong retail presence particularly in our Danville market, which is our original market and where we have 30% of the deposit share. About 80% of our lending is to businesses, whether for commercial real estate or regular small business lending. We have a pretty substantial amount of residential real estate that we keep in our own portfolio and our equity lines within our own portfolio.”

CEOCFO: Summing it up for potential investors, why should they consider American National Bankshares?

Mr. Majors: “The major reason is that we are very focused on what we do and are not going to go out and do something crazy just to try to build numbers. Instead, we are focused on being good at what we do on building relationships with our customers, so that we are here for the long term. We pay a strong dividend. We’re paying 4% based on the current market price. We are now on the Russell 2000 Index. We went on it this past, June, which means that we got Index Funds following us. That gives investors some comfort. We are not going to be a stock that is going to grow into large burst, but instead we will have good, strong, slow, steady earnings growth and therefore growth in the value of our shares.”

disclaimers

Any reproduction or further distribution of this article without the express written consent of CEOCFOinterviews.com is prohibited.

“We made a conscious decision that we were going to remain highly capitalized. If we didn’t have the appropriate way to use earnings, we would pay out strong dividends and we continue to do that. But we did make the decision that we were not going to go out and just leverage because that was the popular thing to do. It has paid off rough because, during this troubled time, we remain well capitalized. We’ve been able to do the things that we wanted to do without having to be concerned about either participating in TARP or raising capital, which is very difficult this time for anyone. Fortunately, we don’t have to.” - Charles H. Majors