American National Bankshares, Inc. (Virginia) – Value Analysis (NASDAQ:AMNB) : December 22, 2017

Capitalcube gives American National Bankshares, Inc. (Virginia) a score of 43.

Our analysis is based on comparing American National Bankshares, Inc. (Virginia) with the following peers – TowneBank, National Bankshares, Inc., United Community Banks, Inc., Old Point Financial Corporation, Xenith Bankshares, Inc., Fauquier Bankshares, Inc. and Union Bankshares Corporation (TOWN-US, NKSH-US, UCBI-US, OPOF-US, XBKS-US, FBSS-US and UBSH-US).

Fundamental Overview

American National Bankshares, Inc. (Virginia) has a fundamental score of 43 and has a relative valuation of OVERVALUED.

Fundamental Score

Company Overview

  • It’s current Price/Book of 1.63 is about median in its peer group.
  • The market expects AMNB-US to grow at about the same rate as the peers and to maintain the median returns it currently generates.
  • AMNB-US‘s relative capital efficiency and net profit margins are both around the median level.
  • Changes in annual earnings are in line with its chosen peers but lags in terms of revenue, implying the company is cost conscious and selective about spending for growth.
  • AMNB-US‘s return on equity currently and over the past five years is around the peer median and suggest that it does not have any particular operational advantages versus peers.
  • AMNB-US‘s revenue growth in recent years and current P/E ratio are both around their respective peer medians suggesting that historical performance and long-term growth expectations for the company are largely in sync.
  • The company’s equity capital investment program suggests it is under-investing in a business that is producing peer median returns.

Drivers of Margin

  • Margins do not suggest any relative benefit from a pricing or an operating cost advantage.
  • The company’s net interest income (net interest income/total revenues) of 79.65% is around peer median suggesting that AMNB-US‘s lending operations does not benefit from any differentiating pricing advantage. In addition, AMNB-US‘s pre-tax margin of 36.58% is also around the peer median suggesting no operating cost advantage relative to peers.
  • The company’s proportion of fee based income (i.e. non interest income/total revenues) of 20.35% is around peer median. In addition, AMNB-US‘s proportion of overhead costs (i.e. non interest expense/total revenues) of 62.24x is also around peer median — suggesting no cost advantage on fee-based overhead operations.
Drivers of Margins

Quadrant label definitions. Hover to know more

Differentiated; Low Cost, Differentiated; High Cost, Commodity; High Cost, Commodity; Low Cost

Company Profile

American National Bankshares, Inc. operates as a bank holding company, which engages in the provision of financial products and services. It includes commercial, mortgage, consumer banking, trust, investment services, and insurance. It operates through the following segments: Community Banking; Trust and Investment Services; and Others. The Community Banking segment involves making loans to and generating deposits from individuals and businesses. The Trust and Investment Services segment offers estate planning, trust account administration, investment management, and retail brokerage. The Others segment includes debt service on trust preferred securities and corporate items. The company was founded in 1984 and is headquartered in Danville, VA.