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American National Bankshares is in Southside Virginia, which is
an area that is in transition with new businesses moving in, while expanding into the
growth markets of Lynchburg, Virginia and Greensboro, North Carolina
American National Bankshares Inc.
628 Main Street
Danville, VA 24541
President and CEO
Interview conducted by:
Walter Banks Publisher
September 28, 2006
BIO: 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.
Company Profile:) American National Bankshares Inc. is the
holding company of American National Bank and Trust Company, a community bank with
eighteen full service offices serving the areas of Danville, Pittsylvania County, Martinsville,
Henry County, South Boston, Halifax County, Lynchburg, Bedford, Bedford County, Campbell County,
and portions of Nelson County in Virginia, along with portions of Caswell County in North
Carolina. The Bank also operates a loan production office in Greensboro, North Carolina.
American National Bank and Trust Company provides a
full array of financial products and services, including commercial, mortgage, and
consumer banking; trust and investment services; and insurance. Services are also provided
through twenty-three ATMs, "AmeriLink" Internet banking, and 24-hour
"Access American" phone banking. Additional information is available on the
Bank's website at http://www.amnb.com. The shares of American National Bankshares Inc. are
traded on the NASDAQ National Market under the symbol "AMNB."
CEOCFO: Mr. Majors, please tell us how long youve been
with American National Bankshares and what brought you to the company?
Mr. Majors: Im in my 13th year with
American National Bankshares; I was actually a practicing attorney and was counsel to the
bank and also on the board of the bank prior to coming. I spent one year with my
predecessor before he retired and then I became CEO, so Im in my 12 year as the CEO
of the bank.
CEOCFO: So youve been there for quite awhile, can you
tell us about any changes that have occurred over those 12 years?
Mr. Majors: When I came, American National was
basically a bank located and situated only in the city of Danville, Virginia, with assets
of about $240 million. We fairly quickly saw that we need to change along with the other
aspects of banking that were changing, both in terms of becoming more of a sales
organization and also looking at other opportunities outside of the city of Danville.
Therefore, during that period weve expanded both geographically and in size; we now
have 18 offices in a 65 radius of the city of Danville and we have almost $800 million in
assets. In addition weve become less of a retail bank and more of a small business
bank and I think that is probably true of many community banks our size as credit cards
and the retail financing of automobiles have gone in other directions. Weve begun to
focus more on the small commercial lending.
CEOCFO: You mentioned building out the size of your business;
was that done through de novo or through acquisitions?
Mr. Majors: Weve actually grown through a
combination of de novo and acquisitions; toward the beginning of my tenure here, 10 years
ago we acquired a savings bank of about $80 million and then just recently in April of
this year (2006), we acquired a bank in Lynchburg; that was about $160 million. In
addition, we have acquired 2 branches during that period from other banks and then the
final thing is that we have opened new offices, hiring the right people while opening
those de novo offices. Therefore, weve actually looked at a combination of all of
the ways of growing and expanding our organization and each one has been a real benefit to
us; theyve fit in different situations.
CEOCFO: Are all of your branches under one name?
Mr. Majors: Weve actually operated all of our
offices under the American National name and have found that to be the more successful way
for us. We think that is a name that is good, certainly throughout our market area.
However, what we have done is that we have structured our organization in regions, so that
we try to continue to have a community bank approach within the regions. We have three
geographic regions within our banking organization and then a 4th division,
which is our trust and investment services division.
CEOCFO: In looking at the competition in your area, whether
it is major banks or other smaller community banks, what would you say sets American
Mr. Majors: What we try to do is we have created a
situation where we want to be the relationship bank for our market area. We want to be big
enough and be able to offer the things that our customers expect, those are the products
and services that the type of technology that they expect and that they could get from the
larger banks. However, at the same time we want to be able to be small enough that we can
be responsive to them, so they can feel like they are going to have local decision making
and that they can build a relationship with someone who plays a major role within the
organization. The niche that we believe that we have is that we believe we can be
successful as we build relationships with our customers and as long as we are large
enough, we can provide them with the products and services that they need and
CEOCFO: Do you feel like you have the personnel in place or
will you have to add more people as you grow?
Mr. Majors: You are always looking for the right people
at the right time; however, 4 years ago we began a process in which we said that we had to
build for growth and expansion. Therefore, we had to develop infrastructure and that was
physical infrastructure and the human infrastructure. Hence, we created new positions, we
added new people and weve been looking to make sure that we do have those right
people. Banking is not a complicated matter; it is all about people, because people bank
with people, so therefore we work very hard to make sure that we have the right people in
the right positions and particularly those that are customer contact people.
CEOCFO: Tell us about the decision making process from the
individual branches to management.
Mr. Majors: What we try to do is we try to push down as
much of the decision making down to the level that we can and we try to give them the
opportunity to make decisions. We give our regional people a great deal of authority; all
the way down to the lender and the branch manager, we give authority both in terms of
approving loans at certain levels and making other decisions. Certainly, just like in any
bank where you are dealing with risk, you have to have certain policies and procedures in
place that protect you with that, but we try not to make every decision have to go up to
CEOCFO: What is your greatest revenue-generating product at
Mr. Majors: The greatest revenue right now is in the
area of commercial loans and commercial lending - dealing with small businesses. That is
by far our greatest revenue source; however, a lot of banks dont have what we do
have, and that is our highly profitable trust and investment services division. We have
over $400 million in assets under management and that does not show when you look at us.
When you talk about a bank of $800 million, those trust and investment assets are not
included in that amount. A very profitable trust and investment services division is
unusual for a community bank of our size.
CEOCFO: Will future growth come from developing the markets
that you have or moving into new areas and does that future include new products?
Mr. Majors: We certainly will work very hard to grow
our business within the markets that we are in. However, one of the things that we have to
realize is that our original markets, Danville and the counties immediately adjacent to
the city of Danville, are not high growth markets. Therefore, that is why we have been
moving into new markets like Lynchburg and why we have a loan production office in Greensboro,
North Carolina. Hence, we see that the major part of our growth is going to come from
moving into new markets that have a higher growth potential, yet which are close enough
and compatible enough to us that we can be successful in those areas. As far as new
products and services, we are always looking at what our customers need and what new type
of product we might need to be providing to meet their needs. One of the things that we
see is a real opportunity for us going back into the trust and investment management area
is that we are beginning to pick-up a lot of general investment accounts as opposed to
trust accounts. These are people who are looking for someone to manage their money, but
they dont necessarily want the big national stock brokerage firms that arent
looking on a long-term basis. They want somebody local that they can have a lot of
confidence in and they have a lot of confidence when dealing with a bank and with us in
particular. Therefore, we see that as an emerging opportunity for us.
CEOCFO: What is the health of the communities that you are
in, financially and otherwise?
Mr. Majors: We are in Southside Virginia, which is a
market area that had its history steeped in tobacco, textiles and furniture and it
doesnt take much for you to realize that these industries have taken a real beating
over the last decade. This is because much of that manufacturing has moved offshore. What
has happened is that this market area is in a transition, with new businesses moving in.
We have a workforce that is very strongly attuned toward manufacturing; they dont
mind doing shift work and they dont mind working in manufacturing. Therefore, what
we are seeing is new businesses that are moving in and picking up the slack where tobacco,
textiles and furniture have been greatly reduced. It has been a market of transition and
again, that is why we have expanded our region to include north into the Lynchburg,
Virginia area and south into the North Carolina triad, which is the Greensboro area in
order to pick-up the areas that are more of a growth market and offer more opportunity for
CEOCFO: Do you have the cash to sustain your growth or will
you have to raise additional funds?
Mr. Majors: We are very heavily capitalized and it has
given us the opportunity to be able to do deals when we need to, because we are so well
capitalized and weve not had to go out and raise funds. When we did this most recent
acquisition in Lynchburg, we did borrow using trust preferred securities. We borrowed $20
million to assist with that acquisition and that was primarily just an investment
management strategy, using the existing capital and funds within the bank. We paid half of
the purchase price with cash and so we used those trust securities for that.
CEOCFO: In closing, could you address potential investors and
tell us why they should be interested in American National Bankshares?
Mr. Majors: If you look at our numbers, you are going
to see that we stand out as one of the high performing banks in terms of ROA (Return On
Assets). We are highly capitalized which lowers our ROE (Return on Equity). We pay a very
strong dividend and we are a well-managed, very profitable bank that offers opportunities
for the investor both in terms of a good strong dividend and an opportunity for upside.
Our stock price has been held down some, because of not being in high-growth markets,
relative to banks and financial institutions that are in the faster grow markets. We have
not traded at that multiple and as we begin to move and see greater growth, that will
provide a tremendous opportunity for our shareholders to see an appreciation in our stock
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