VIRGINIA NATIONAL BANKSHARES CORPORATION ANNOUNCES 2024 SECOND QUARTER EARNINGS

CHARLOTTESVILLE, Va., July 19, 2024 /PRNewswire/ — Virginia National Bankshares Corporation (NASDAQ: VABK) (the “Company”) today reported quarterly net income of $4.2 million, or $0.77 per diluted share, for the quarter ended June 30, 2024, compared to $5.7 million, or $1.05 per diluted share, recognized for the quarter ended June 30, 2023.  For the six months ended June 30, 2024, the Company recognized net income of $7.8 million, or $1.45 per diluted share, compared to $11.4 million, or $2.13 per diluted share, for the six months ended June 30, 2023. 

The declines in 2024 net income compared to 2023 for the quarterly and year-to-date periods are the result of 1) increased cost of funds and 2) the accretion of the credit mark related to purchased loans when satisfied by the borrower, which was significantly larger in the second quarter of 2023 when compared to the same period of 2024.

President and Chief Executive Officer’s comments:  “Loan balances continued to increase during the second quarter of this year, with organic growth and continued purchases of the government-guaranteed portions of USDA and SBA loans,” stated Glenn W. Rust, President and Chief Executive Officer.  “We increased our loan balances 6% during the first half of the year, 19% year-over-year and our credit quality metrics remain solid.  Our capital and liquidity positions continue to be strong and stable. We are also pleased to report that Virginia National Bankshares Corporation has been included again in the Russell 2000, which reconstituted at the end of the second quarter.  Inclusion will likely enhance stock liquidity through trading by index funds and benchmarked investment strategies.”

Key Performance Indicators Second quarter 2024 compared to fourth quarter 2023

Return on average assets increased to 1.05% from 0.79%
Return on average equity increased to 11.07% from 9.03%
Net interest margin (FTE)1 improved to 3.04% from 2.89%
Loan-to-deposit ratio increased to 84.3% from 77.5%
Efficiency ratio (FTE)1 improved to 62.7% from 64.0%

June 2024 Balance Sheet Highlights

The Company continued to experience loan growth in the second quarter of 2024. Gross loans outstanding as of June 30, 2024 totaled $1.2 billion, an increase of $65.5 million, or 6.0%, compared to December 31, 2023 and an increase of $184.9 million, or 19.0%, compared to June 30, 2023.
Outstanding borrowings declined $36.5 million, or 54.9%, from December 31, 2023 to June 30, 2024 and declined $29.7 million, or 49.7% year-over year, as management made a concerted effort to stabilize overall cost of funds.
As of June 30, 2024, the Company had unused borrowing facilities in place of approximately $196.7 million.
The Company holds no brokered deposits.
The Company utilizes a third-party to offer multi-million-dollar FDIC insurance to customers with balances in excess of single-bank limits through Insured Cash Sweep® (ICS) plans. Deposit balances held in ICS plans amounted to $144.8 million as of June 30, 2024, $151.5 million as of December 31, 2023 and $132.8 million as of June 30, 2023.
Total deposits decreased $35.3 million, or 2.5% from December 31, 2023 to June 30, 2024 and increased $25.8 million, or 1.9% year-over-year.
Securities balances declined $137.6 million from December 31, 2023 to June 30, 2024; funds from the maturities of investments were repurposed to higher yielding assets in the form of loans and to reduce the level of outstanding borrowings.

Loans and Asset Quality

Credit performance remains strong with nonperforming assets as a percentage of total assets of 0.25% as of June 30, 2024, 0.17% as of December 31, 2023 and 0.08% as of June 30, 2023.
Nonperforming assets amounted to $4.0 million as of June 30, 2024, compared to $2.7 million as of December 31, 2023 and $1.3 million as of June 30, 2023;

Ten loans to nine borrowers are in non-accrual status, totaling $2.4 million, as of June 30, 2024, compared to $1.9 million as of December 31, 2023 and $1.2 million as of June 30, 2023.
Loans 90 days or more past due and still accruing interest amounted to $1.6 million as of June 30, 2024, compared to $880 thousand as of December 31, 2023 and $107 thousand as of June 30, 2023. The past due balance as of June 30, 2024 is comprised of four loans totaling $1.5 million which are 100% government-guaranteed, and seven student loans totaling $63 thousand.
The Company currently holds no other real estate owned.

The period-end Allowance for Credit Losses (“ACL”) as a percentage of total loans was 0.69% as of June 30, 2024, 0.77% as of December 31, 2023 and 0.81% as of June 30, 2023. The proportionate increase in government-guaranteed loans over the respective periods is the driver of the decrease in the ACL as a percentage of total loans. Balances in government-guaranteed loans have increased $42.4 million during the second quarter of 2024 and have increased $130.2 million since June 30, 2023. Such loans are 100% government-guaranteed and do not require an ACL.
The fair value mark that was allocated to the acquired loans was $21.3 million as of April 1, 2021, with a remaining balance of $8.2 million as of June 30, 2024.
For the three months ended June 30, 2024, the Company recorded a net recovery of provision for credit losses of $338 thousand, primarily due to the recovery of a previously charged-off loan; this balance is net of a $180 thousand provision for unfunded commitments.

Net Interest Income

Net interest income for the three months ended June 30, 2024 of $11.2 million decreased $2.5 million, or 18.4%, compared to the three months ended June 30, 2023, as the increase in interest expense on deposit accounts and borrowings outweighed the increase in interest income earned on assets.
Net interest margin (FTE), (a non-GAAP financial measure)2, for the three months ended June 30, 2024 was 3.04%, compared to 2.89% and 3.83% for the three months ended December 31, 2023 and the three months ended June 30, 2023, respectively. The increase as compared to the fourth quarter of 2023 was primarily due to the increase in yield on loans, increasing from 5.47% to 5.71% for the periods noted, while the decline when compared to the prior year second quarter was due to increased cost of funds.
Yield on loans was 5.71% for the three months ended June 30, 2024, compared to 6.35% for the prior year same period, and was 5.67% for the six months ended June 30, 2024, compared to 5.96% for the prior year same period. The accretion of the credit mark related to purchased loans positively impacted interest income by 31 bps in the second quarter of 2024, compared to 88 bps in the second quarter of 2023, fluctuating primarily due to the treatment of the credit mark under CECL2. When a purchased loan, which was identified as purchased credit-deteriorated as of the date of the acquisition, is satisfied by the borrower, the remaining mark is recognized as interest income in accordance with CECL.
The overall cost of funds, including noninterest-bearing deposits, of 210 bps incurred in the three months ended June 30, 2024 increased 77 bps from 133 bps in the same period in the prior year. Overall, the cost of interest-bearing deposits increased period over period, from a cost of 174 bps to 274 bps. Management believes that the Bank’s cost of funds has stabilized during the first half of 2024, as the cost of funds and cost of interest bearing deposits is relatively unchanged from the three months ended March 31, 2024.

Noninterest Income

Noninterest income for the three months ended June 30, 2024 decreased $354 thousand, or 17.3%, compared to the three months ended June 30, 2023, primarily due to lower wealth management, deposit account, debit card, credit card and ATM fees.  

Noninterest Expense

Noninterest expense for the three months ended June 30, 2024 decreased $442 thousand, or 5.2%, compared to the three months ended June 30, 2023.  This decrease is primarily the result of lower compensation, occupancy and data processing costs, as a result of right-sizing the branch network from the merger, and reduced marketing, advertising and promotion expense.

Book Value

Book value per share increased to $28.70 as of June 30, 2024, compared to $26.54 as of June 30, 2023, and tangible book value per share (a non-GAAP financial measure)1 was $26.43 as of June 30, 2024 compared to $24.01 as of June 30, 2023.  These values increased as net retained income increased and unrealized losses in the investment portfolio remained relatively constant period over period.

Income Taxes

The effective tax rates amounted to 18.3% and 18.4% for the three months ended June 30, 2024 and 2023, respectively, which are lower than the statutory rate, due to the recognition of low-income housing tax credits and the effect of tax-exempt income from municipal bonds and income from bank owned life insurance policies.

Dividends

Cash dividends of $1.8 million, or $0.33 per share, were declared and paid during the second quarter of 2024.

Share Repurchase Plan

During the second quarter of 2024, the Company continued its share repurchase plan, repurchasing 19,476 shares at an average price of $27.32 per share.  Year-to-date, the Company has repurchased 20,350 shares at an average price of $27.42 per share.

_____________________________________________________________________

1 See “Reconciliation of Certain Quarterly Non-GAAP Financial Measures” at the end of this release.

2 For more information regarding the adoption of FASB’s Topic 326, Financial Instruments – Credit Losses (“CECL”) effective January 1, 2023, refer to the Company’s first quarter 2023 Form 10-Q.

About Virginia National Bankshares Corporation

Virginia National Bankshares Corporation, headquartered in Charlottesville, Virginia, is the bank holding company for Virginia National Bank. The Bank has nine banking offices throughout Fauquier and Prince William counties, three banking offices in Charlottesville and Albemarle County, and banking offices in Winchester and Richmond, Virginia.  The Bank offers a full range of banking and related financial services to meet the needs of individuals, businesses and charitable organizations, including the fiduciary services of VNB Trust and Estate Services. The Company’s common stock trades on the Nasdaq Capital Market under the symbol “VABK.”  Additional information on the Company is also available at www.vnbcorp.com.

Non-GAAP Financial Measures

The accounting and reporting policies of the Company conform to U.S. generally accepted accounting principles (“GAAP”) and prevailing practices in the banking industry. However, management uses certain non-GAAP measures to supplement the evaluation of the Company’s performance. Management believes presentations of these non-GAAP financial measures provide useful supplemental information that is essential to a proper understanding of the operating results of the Company’s core businesses. These non-GAAP disclosures should not be viewed as a substitute for, or more important than, operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Reconciliations of GAAP to non-GAAP measures are included at the end of this release.

Forward-Looking Statements; Other Information

Certain statements in this release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, without limitation, statements with respect to the Company’s operations, performance, future strategy and goals, and are often characterized by use of qualified words such as “expect,” “believe,” “estimate,” “project,” “anticipate,” “intend,” “will,” “should,” or words of similar meaning or other statements concerning the opinions or judgement of the Company and its management about future events. While Company management believes such statements to be reasonable, future events and predictions are subject to circumstances that are not within the control of the Company and its management.  Actual results may differ materially from those included in the forward-looking statements due to a number of factors, including, without limitation, the effects of and changes in: inflation, interest rates, market and monetary fluctuations; liquidity and capital requirements; market disruptions including pandemics or significant health hazards, severe weather conditions, natural disasters, terrorist activities, financial crises, political crises, war and other military conflicts or other major events, the governmental and societal responses thereto, or the prospect of these events; changes, particularly declines, in general economic and market conditions in the local economies in which the Company operates, including the effects of declines in real estate values;  the effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System; the impact of changes in laws, regulations and guidance related to financial services  including, but not limited to, taxes, banking, securities and insurance; changes in accounting principles, policies and guidelines; the financial condition of the Company’s borrowers; the Company’s ability to attract, hire, train and retain qualified employees; an increase in unemployment levels; competitive pressures on loan and deposit pricing and demand; fluctuation in asset quality; assumptions that underlie the Company’s ACL; the value of securities held in the Company’s investment portfolio; performance of assets under management; cybersecurity threats or attacks and the development and maintenance of reliable electronic systems; changes in technology and their impact on the marketing of new products and services and the acceptance of these products and services by new and existing customers; the willingness of customers to substitute competitors’ products and services for the Company’s products and services; the risks and uncertainties described from time to time in the Company’s press releases and filings with the SEC; and the Company’s performance in managing the risks involved in any of the foregoing.  Many of these factors and additional risks and uncertainties are described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 and other reports filed from time to time by the Company with the Securities and Exchange Commission. These statements speak only as of the date made, and the Company does not undertake to update any forward-looking statements to reflect changes or events that may occur after this release.

VIRGINIA NATIONAL BANKSHARES CORPORATION

CONSOLIDATED BALANCE SHEETS

(dollars in thousands, except share and per share data)

June 30, 2024

December 31, 2023*

June 30, 2023

(Unaudited)

(Unaudited)

ASSETS

Cash and due from banks

$

8,785

$

18,074

$

9,714

Interest-bearing deposits in other banks

8,515

10,316

20,225

Securities:

Available for sale (AFS), at fair value

284,698

420,595

473,868

Restricted securities, at cost

6,667

8,385

7,438

Total securities

291,365

428,980

481,306

Loans, net of deferred fees and costs

1,158,214

1,092,665

973,348

Allowance for credit losses

(8,028)

(8,395)

(7,863)

Loans, net

1,150,186

1,084,270

965,485

Premises and equipment, net

15,818

16,195

17,564

Bank owned life insurance

39,468

38,904

39,065

Goodwill

7,768

7,768

7,768

Core deposit intangible, net

4,418

5,093

5,815

Right of use asset, net

6,287

6,748

6,634

Deferred tax asset, net

15,860

15,382

16,961

Accrued interest receivable and other assets

25,350

14,287

13,551

Total assets

$

1,573,820

$

1,646,017

$

1,584,088

LIABILITIES AND SHAREHOLDERS’ EQUITY

Liabilities:

Demand deposits:

 Noninterest-bearing

$

357,931

$

372,857

$

412,273

 Interest-bearing

257,365

305,541

312,773

Money market and savings deposit accounts

423,055

412,119

398,074

Certificates of deposit and other time deposits

335,490

318,581

224,956

Total deposits

1,373,841

1,409,098

1,348,076

Federal funds purchased

2,438

3,462

20,503

Borrowings

30,000

66,500

59,666

Junior subordinated debt, net

3,483

3,459

3,436

Lease liability

6,102

6,504

6,301

Accrued interest payable and other liabilities

3,792

3,954

3,667

Total liabilities

1,419,656

1,492,977

1,441,649

Commitments and contingent liabilities

Shareholders’ equity:

Preferred stock, $2.50 par value

–

–

–

Common stock, $2.50 par value

13,256

13,258

13,250

Capital surplus

105,935

106,045

105,667

Retained earnings

77,961

73,781

69,502

Accumulated other comprehensive loss

(42,988)

(40,044)

(45,980)

Total shareholders’ equity

154,164

153,040

142,439

Total liabilities and shareholders’ equity

$

1,573,820

$

1,646,017

$

1,584,088

Common shares outstanding

5,370,912

5,365,982

5,365,982

Common shares authorized

10,000,000

10,000,000

10,000,000

Preferred shares outstanding

–

–

–

Preferred shares authorized

2,000,000

2,000,000

2,000,000

*  Derived from audited consolidated financial statements

VIRGINIA NATIONAL BANKSHARES CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

(dollars in thousands, except per share and share data)

(Unaudited)

For the three months ended

For the six months ended

June 30, 2024

June 30, 2023

June 30, 2024

June 30, 2023

Interest and dividend income:

Loans, including fees

$

16,242

$

14,894

$

31,903

$

27,661

Federal funds sold

160

10

399

10

Other interest-bearing deposits

58

119

115

378

Investment securities:

 Taxable

1,776

2,876

3,935

5,826

 Tax exempt

327

329

653

656

 Dividends

100

104

218

171

Total interest and dividend income

18,663

18,332

37,223

34,702

Interest expense:

Demand deposits

68

106

139

195

Money market and savings deposits

2,952

2,197

5,874

3,970

Certificates and other time deposits

3,982

1,776

8,032

2,424

Borrowings

388

439

874

766

Federal funds purchased

9

32

16

91

Junior subordinated debt

83

79

171

140

 Total interest expense

7,482

4,629

15,106

7,586

 Net interest income

11,181

13,703

22,117

27,116

Provision for (recovery of) credit losses

(338)

261

(360)

13

Net interest income after provision for (recovery of) credit losses

11,519

13,442

22,477

27,103

Noninterest income:

Wealth management fees

240

397

666

801

Deposit account fees

338

399

725

800

Debit/credit card and ATM fees

523

636

1,011

1,207

Bank owned life insurance income

289

261

564

513

Gains (losses) on sales of assets, net

(3)

–

36

–

Gain on early redemption of debt

–

–

379

–

Gain on termination of interest rate swap

–

–

–

460

Losses on sales of AFS, net

–

–

(4)

(206)

Other

304

352

492

746

Total noninterest income

1,691

2,045

3,869

4,321

Noninterest expense:

Salaries and employee benefits

3,850

4,062

8,002

8,113

Net occupancy

865

929

1,837

2,108

Equipment

167

176

338

394

Bank franchise tax

345

313

685

637

Computer software

276

203

484

405

Data processing

579

806

1,318

1,548

FDIC deposit insurance assessment

180

220

375

320

Marketing, advertising and promotion

157

275

405

650

Professional fees

190

198

442

390

Core deposit intangible amortization

332

379

675

770

Other

1,181

1,003

2,380

2,090

Total noninterest expense

8,122

8,564

16,941

17,425

Income before income taxes

5,088

6,923

9,405

13,999

  Provision for income taxes

929

1,272

1,600

2,557

Net income

$

4,159

$

5,651

$

7,805

$

11,442

Net income per common share, basic

$

0.77

$

1.05

$

1.45

$

2.14

Net income per common share, diluted

$

0.77

$

1.05

$

1.45

$

2.13

Weighted average common shares outstanding, basic

5,377,055

5,357,873

5,371,972

5,348,040

Weighted average common shares outstanding, diluted

5,385,770

5,375,073

5,382,980

5,375,545

VIRGINIA NATIONAL BANKSHARES CORPORATION

FINANCIAL HIGHLIGHTS

(dollars in thousands, except per share data)

(Unaudited)

At or For the Three Months Ended

June 30,
2024

March 31,
2024

December 31,
2023

September 30,
2023

June 30,
2023

Common Share Data:

Net income per weighted average share, basic

$

0.77

$

0.68

$

0.59

$

0.87

$

1.05

Net income per weighted average share, diluted

$

0.77

$

0.68

$

0.59

$

0.86

$

1.05

Weighted average shares outstanding, basic

5,377,055

5,366,890

5,365,982

5,365,982

5,357,873

Weighted average shares outstanding, diluted

5,385,770

5,380,081

5,394,713

5,395,483

5,375,073

Actual shares outstanding

5,370,912

5,390,388

5,365,982

5,365,982

5,365,982

Tangible book value per share at period end (non-GAAP) 5

$

26.43

$

25.99

$

26.12

$

22.83

$

24.01

Key Ratios:

Return on average assets 1

1.05

%

0.91

%

0.79

%

1.18

%

1.46

%

Return on average equity 1

11.07

%

9.57

%

9.03

%

12.91

%

15.98

%

Net interest margin (FTE) 2

3.04

%

2.93

%

2.89

%

3.04

%

3.83

%

Efficiency ratio (FTE) 3

62.7

%

66.8

%

64.0

%

60.3

%

54.1

%

Loan-to-deposit ratio

84.3

%

78.8

%

77.5

%

74.5

%

72.2

%

Net Interest Income:

Net interest income

$

11,181

$

10,936

$

10,753

$

11,100

$

13,703

Net interest income (FTE) 2

$

11,268

$

11,023

$

10,839

$

11,187

$

13,789

Capital Ratios:

Tier 1 leverage ratio

11.47

%

11.24

%

11.13

%

11.26

%

11.20

%

Total risk-based capital ratio

18.64

%

18.39

%

18.24

%

18.76

%

18.80

%

Assets and Asset Quality:

Average earning assets

$

1,491,821

$

1,513,924

$

1,487,910

$

1,460,555

$

1,443,048

Average gross loans

$

1,144,350

$

1,117,570

$

1,061,297

$

986,480

$

940,264

Fair value mark on acquired loans

$

8,237

$

8,811

$

9,399

$

9,965

$

10,957

Allowance for credit losses on loans:

Beginning of period

$

8,289

$

8,395

$

7,799

$

7,863

$

7,772

Provision for (recovery of) credit losses

(518)

11

713

2

216

Charge-offs

(208)

(184)

(207)

(199)

(180)

Recoveries

465

67

90

133

55

Net recoveries (charge-offs)

257

(117)

(117)

(66)

(125)

End of period

$

8,028

$

8,289

$

8,395

$

7,799

$

7,863

Non-accrual loans

$

2,365

$

2,178

$

1,852

$

1,143

$

1,185

Loans 90 days or more past due and still accruing

1,596

876

880

854

107

Total nonperforming assets (NPA) 4

$

3,961

$

3,054

$

2,732

$

1,997

$

1,292

NPA as a % of total assets

0.25

%

0.19

%

0.17

%

0.13

%

0.08

%

NPA as a % of gross loans

0.34

%

0.27

%

0.25

%

0.20

%

0.13

%

ACL to gross loans

0.69

%

0.73

%

0.77

%

0.76

%

0.81

%

Non-accruing loans to gross loans

0.20

%

0.19

%

0.17

%

0.11

%

0.12

%

Net charge-offs (recoveries) to average loans 1

-0.09

%

0.04

%

0.04

%

0.03

%

0.05

%

1

Ratio is computed on an annualized basis.

2

The net interest margin and net interest income are reported on a fully tax-equivalent basis (FTE) basis, using a Federal income tax rate of 21%.  This is a non-GAAP financial measure.  Refer to the Reconciliation of Certain Non-GAAP Financial (FTE) Measures at the end of this release.

3

The efficiency ratio (FTE) is computed as a percentage of noninterest expense divided by the sum of net interest income (FTE) and noninterest income. This is a non-GAAP financial measure that management believes provides investors with important information regarding operational efficiency. Management believes such financial information is meaningful to the reader in understanding operating performance, but cautions that such information should not be viewed as a substitute for GAAP.  Comparison of our efficiency ratio with those of other companies may not be possible because other companies may calculate them differently.  Refer to the Reconciliation of Certain Non-GAAP Financial (FTE) Measures at the end of this release.

4

The Bank held no other real estate owned during any of the periods presented.

5

This is a non-GAAP financial measure.  Refer to the Reconciliation of Certain Non-GAAP Financial (FTE) Measures at the end of this release.

VIRGINIA NATIONAL BANKSHARES CORPORATION

AVERAGE BALANCES, INCOME AND EXPENSES, YIELDS AND RATES (TAXABLE EQUIVALENT BASIS)

(dollars in thousands)

(Unaudited)

For the three months ended

June 30, 2024

June 30, 2023

Interest

Interest

Average

Income/

Average

Average

Income/

Average

Balance

Expense

Yield/Cost

Balance

Expense

Yield/Cost

ASSETS

Interest Earning Assets:

Securities:

Taxable Securities and Dividends

$

261,250

$

1,876

2.87

%

$

421,156

$

2,980

2.83

%

Tax Exempt Securities 1

66,463

414

2.49

%

66,956

415

2.48

%

Total Securities 1

327,713

2,290

2.80

%

488,112

3,395

2.78

%

Loans:

Real Estate

900,581

12,483

5.57

%

823,289

13,167

6.41

%

Commercial

206,125

3,080

6.01

%

74,665

969

5.21

%

Consumer

37,644

679

7.25

%

42,310

758

7.19

%

      Total Loans

1,144,350

16,242

5.71

%

940,264

14,894

6.35

%

Fed Funds Sold

11,840

160

5.44

%

895

10

4.48

%

Other interest-bearing deposits

7,918

58

2.95

%

13,777

119

3.46

%

Total Earning Assets

1,491,821

18,750

5.06

%

1,443,048

18,418

5.12

%

Less: Allowance for Credit Losses

(8,299)

(7,805)

Total Non-Earning Assets

112,246

113,883

Total Assets

$

1,595,768

$

1,549,126

LIABILITIES AND SHAREHOLDERS’ EQUITY

Interest Bearing Liabilities:

Interest Bearing Deposits:

Interest Checking

$

268,621

$

68

0.10

%

$

331,523

$

106

0.13

%

Money Market and Savings Deposits

421,700

2,952

2.82

%

415,015

2,197

2.12

%

Time Deposits

338,648

3,982

4.73

%

194,736

1,776

3.66

%

Total Interest-Bearing Deposits

1,028,969

7,002

2.74

%

941,274

4,079

1.74

%

Borrowings

30,407

388

5.13

%

34,265

439

5.14

%

Federal funds purchased

561

9

6.45

%

2,392

32

5.37

%

Junior subordinated debt

3,476

83

9.60

%

3,430

79

9.24

%

Total Interest-Bearing Liabilities

1,063,413

7,482

2.83

%

981,361

4,629

1.89

%

Non-Interest-Bearing Liabilities:

Demand deposits

370,640

416,039

Other liabilities

10,545

9,853

Total Liabilities

1,444,598

1,407,253

Shareholders’ Equity

151,170

141,873

Total Liabilities & Shareholders’ Equity

$

1,595,768

$

1,549,126

Net Interest Income (FTE)

$

11,268

$

13,789

Interest Rate Spread 2

2.23

%

3.23

%

Cost of Funds

2.10

%

1.33

%

Interest Expense as a Percentage of
     Average Earning Assets

2.02

%

1.29

%

Net Interest Margin (FTE) 3

3.04

%

3.83

%

1

Tax-exempt income for investment securities has been adjusted to a fully tax-equivalent basis (FTE), using a Federal income tax rate of 21%.

Refer to the Reconcilement of Non-GAAP Measures table at the end of this release.

2

Interest spread is the average yield earned on earning assets less the average rate paid on interest-bearing liabilities.

3

Net interest margin (FTE) is net interest income expressed as a percentage of average earning assets.

VIRGINIA NATIONAL BANKSHARES CORPORATION

AVERAGE BALANCES, INCOME AND EXPENSES, YIELDS AND RATES (TAXABLE EQUIVALENT BASIS)

(dollars in thousands)

(Unaudited)

For the six months ended

June 30, 2024

June 30, 2023

Interest

Interest

Average

Income/

Average

Average

Income/

Average

Balance

Expense

Yield/Cost

Balance

Expense

Yield/Cost

ASSETS

Interest Earning Assets:

Securities:

Taxable Securities and Dividends

$

282,493

$

4,153

2.94

%

$

434,219

$

5,997

2.76

%

Tax Exempt Securities 1

66,526

827

2.49

%

67,019

831

2.48

%

Total Securities 1

349,019

4,980

2.85

%

501,238

6,828

2.72

%

Loans:

Real Estate

903,033

25,026

5.57

%

820,033

24,032

5.91

%

Commercial

190,251

5,505

5.82

%

73,357

2,098

5.77

%

Consumer

37,676

1,372

7.32

%

43,179

1,531

7.15

%

      Total Loans

1,130,960

31,903

5.67

%

936,569

27,661

5.96

%

Fed Funds Sold

14,732

399

5.45

%

455

10

4.43

%

Other interest-bearing deposits

8,171

115

2.83

%

20,789

378

3.67

%

Total Earning Assets

1,502,882

37,397

5.00

%

1,459,051

34,877

4.82

%

Less: Allowance for Credit Losses

(8,356)

(7,947)

Total Non-Earning Assets

111,045

114,372

Total Assets

$

1,605,571

$

1,565,476

LIABILITIES AND SHAREHOLDERS’ EQUITY

Interest Bearing Liabilities:

Interest Bearing Deposits:

Interest Checking

$

275,723

$

139

0.10

%

$

346,625

$

195

0.11

%

Money Market and Savings Deposits

416,837

5,874

2.83

%

431,849

3,970

1.85

%

Time Deposits

339,866

8,032

4.75

%

161,247

2,424

3.03

%

Total Interest-Bearing Deposits

1,032,426

14,045

2.74

%

939,721

6,589

1.41

%

Borrowings

36,280

874

4.84

%

31,074

766

4.97

%

Federal funds purchased

528

16

6.09

%

3,754

91

4.89

%

Junior subordinated debt

3,470

171

9.91

%

3,423

140

8.25

%

Total Interest-Bearing Liabilities

1,072,704

15,106

2.83

%

977,972

7,586

1.56

%

Non-Interest-Bearing Liabilities:

Demand deposits

369,588

440,285

Other liabilities

11,041

9,423

Total Liabilities

1,453,333

1,427,680

Shareholders’ Equity

152,238

137,796

Total Liabilities & Shareholders’ Equity

$

1,605,571

$

1,565,476

Net Interest Income (FTE)

$

22,291

$

27,291

Interest Rate Spread 2

2.17

%

3.26

%

Cost of Funds

2.11

%

1.08

%

Interest Expense as a Percentage of
     Average Earning Assets

2.02

%

1.05

%

Net Interest Margin (FTE) 3

2.98

%

3.77

%

1

Tax-exempt income for investment securities has been adjusted to a fully tax-equivalent basis (FTE), using a Federal income tax rate of 21%.

Refer to the Reconcilement of Non-GAAP Measures table at the end of this release.

2

Interest spread is the average yield earned on earning assets less the average rate paid on interest-bearing liabilities.

3

Net interest margin (FTE) is net interest income expressed as a percentage of average earning assets.

VIRGINIA NATIONAL BANKSHARES CORPORATION

RECONCILIATION OF CERTAIN QUARTERLY NON-GAAP FINANCIAL MEASURES

(dollars in thousands, except per share data)

(Unaudited)

For the Three Months Ended

June 30,
2024

March 31,
2024

December 31,
2023

September 30,
2023

June 30,
2023

Fully tax-equivalent measures

Net interest income

$

11,181

$

10,936

$

10,753

$

11,100

$

13,703

Fully tax-equivalent adjustment

87

87

86

87

86

Net interest income (FTE) 1

$

11,268

$

11,023

$

10,839

$

11,187

$

13,789

Efficiency ratio 2

63.1

%

67.2

%

64.4

%

60.7

%

54.4

%

Fully tax-equivalent adjustment

-0.4

%

-0.4

%

-0.4

%

-0.4

%

-0.3

%

Efficiency ratio (FTE) 3

62.7

%

66.8

%

64.0

%

60.3

%

54.1

%

Net interest margin

3.01

%

2.91

%

2.87

%

3.02

%

3.81

%

Fully tax-equivalent adjustment

0.03

%

0.02

%

0.02

%

0.02

%

0.02

%

Net interest margin (FTE) 1

3.04

%

2.93

%

2.89

%

3.04

%

3.83

%

As of

June 30,
2024

March 31,
2024

December 31,
2023

September 30,
2023

June 30,
2023

Other financial measures

Book value per share

$

28.70

$

28.31

$

28.52

$

25.29

$

26.54

Impact of intangible assets 4

(2.27)

(2.32)

(2.40)

(2.46)

(2.53)

Tangible book value per share (non-GAAP)

$

26.43

$

25.99

$

26.12

$

22.83

$

24.01

For the Six Months Ended

June 30, 2024

June 30, 2023

Fully tax-equivalent measures

Net interest income

$

22,117

$

27,116

Fully tax-equivalent adjustment

174

175

Net interest income (FTE) 1

$

22,291

$

27,291

Efficiency ratio 2

65.2

%

55.4

%

Fully tax-equivalent adjustment

-0.4

%

-0.3

%

Efficiency ratio (FTE) 3

64.8

%

55.1

%

Net interest margin

2.96

%

3.75

%

Fully tax-equivalent adjustment

0.02

%

0.02

%

Net interest margin (FTE) 1

2.98

%

3.77

%

1

FTE calculations use a Federal income tax rate of 21%.

2

The efficiency ratio, GAAP basis, is computed by dividing noninterest expense by the sum of net interest income and noninterest income.

3

The efficiency ratio, FTE, is computed by dividing noninterest expense by the sum of net interest income (FTE) and noninterest income.

4

Intangible assets include goodwill and core deposit intangible assets, net of accumulated amortization, for all periods presented.

SOURCE Virginia National Bankshares Corporation


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