VIRGINIA NATIONAL BANKSHARES CORPORATION ANNOUNCES 2023 FOURTH QUARTER AND FULL YEAR EARNINGS
Press Releases

VIRGINIA NATIONAL BANKSHARES CORPORATION ANNOUNCES 2023 FOURTH QUARTER AND FULL YEAR EARNINGS

CHARLOTTESVILLE, Va., Jan. 26, 2024 /PRNewswire/ — Virginia National Bankshares Corporation (NASDAQ: VABK) (the “Company”) today reported quarterly net income of $3.2 million, or $0.59 per diluted share, for the quarter ended December 31, 2023, compared to $7.1 million, or $1.32 per diluted share, recognized for the quarter ended December 31, 2022.  For the twelve months ended December 31, 2023, the Company recognized net income of $19.3 million, or $3.58 per diluted share, compared to $23.4 million, or $4.38 per diluted share, for the twelve months ended December 31, 2022.  Gross loans outstanding as of December 31, 2023 totaled $1.1 billion, an increase of $156.3 million, or 16.7%, compared to December 31, 2022 and an increase of $72.1 million, or 7.1%, compared to September 30, 2023.

2023 Fourth Quarter and Full Year Highlights

  • The Company continued to experience loan growth in the fourth quarter of 2023, resulting in a 7.1% increase from the prior quarter and 16.7% over the prior year-end.
  • Yield on loans elevated to 5.47% for the three months ended December 31, 2023, from 5.00% for the prior year same period and increased to 5.72% for the year ended December 31, 2023, from 4.52% for the year ended December 31, 2022.
  • Credit performance remains strong with nonperforming assets as a percentage of total assets of 0.17% as of December 31, 2023, and 0.08% as of December 31, 2022.
  • Noninterest expense for the three months ended December 31, 2023 decreased $977 thousand, or 10.5%, compared to the three months ended December 31, 2022. For the year ended December 31, 2023, noninterest expense decreased $4.5 million, or 11.7%. Such decreases are the result of continued efficiencies gained from the merger, including: reduced headcount resulting in lower salaries and employee benefit costs; lower occupancy costs from right-sizing our branch network; and reduced professional fees.
  • 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 $151.6 million as of December 31, 2023 and $134.6 million as of December 31, 2022.
  • Total deposits declined $69.2 million, or 4.7% from December 31, 2022 to December 31, 2023, as many customers moved funds outside of the Bank to earn higher yields while the Bank’s strategy was to keep cost of funds low during the first quarter of 2023. Deposit balances increased $38.8 million, or 2.8%, from September 30, 2023 to December 31, 2023, as the Bank’s strategy shifted to meet customer rate demands.
  • Correlated with the year-over-year deposit decline noted above, borrowings increased from December 31, 2022 to December 31, 2023 by $66.5 million. As of December 31, 2023, the Company had unused borrowing facilities in place of approximately $119.5 million. Management closely monitors its liquidity position.

Loans and Asset Quality

  • Gross loans outstanding as of December 31, 2023 totaled $1.1 billion, an increase of $156.3 million, or 16.7%, compared to December 31, 2022. 
  • Nonperforming assets amounted to $2.7 million as of December 31, 2023, compared to $1.4 million as of December 31, 2022; the Company currently holds no other real estate owned.
    • Eight loans to seven borrowers are in non-accrual status, totaling $1.9 million, as of December 31, 2023, compared to $673 thousand as of December 31, 2022.  The adoption of CECL altered the manner in which purchased loans that were in non-accrual status are presented, and as a result, two such loans totaling $470 thousand are now included in this figure.
    • Loans 90 days or more past due and still accruing interest amounted to $880 thousand as of December 31, 2023, compared to $705 thousand as of December 31, 2022.  The past due balance as of December 31, 2023 is comprised of two loans totaling $783 thousand which are 100% government-guaranteed, and five student loans totaling $97 thousand
  • The period-end Allowance for Credit Losses (“ACL”) as a percentage of total loans was 0.77% as of December 31, 2023 and 0.59% as of December 31, 2022.  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 $9.4 million as of December 31, 2023.
  • For the three months ended December 31, 2023, the Company recorded a provision for credit losses of $794 thousand, which includes an $81 thousand provision for unfunded commitments.  The increase in provision over the prior year is primarily the result of the increase in originated loan balances.

Net Interest Income

  • Net interest income for the three months ended December 31, 2023 of $10.8 million decreased $4.6 million, or 30.1%, compared to the three months ended December 31, 2022, as the increase in interest expense on deposit accounts and borrowings outweighed the increase in interest income earned on assets. Net interest income for 2023 of $49.0 million decreased $4.6 million, or 8.6%, compared to 2022.
  • Net interest margin (FTE), (a non-GAAP financial measure)1, for the three months ended December 31, 2023 declined to 2.89%, compared to 3.91% for the three months ended December 31, 2022. However, net interest margin (FTE), (a non-GAAP financial measure)1, for 2023 increased to 3.37% compared to 3.21% for 2022.
  • The overall cost of funds, including noninterest-bearing deposits, of 201 bps incurred in the three months ended December 31, 2023 increased 178 bps from 23 bps in the same period in the prior year. Overall, the cost of interest-bearing deposits increased period over period, from a cost of 32 bps to 258 bps. The overall cost of funds, including noninterest-bearing deposits, of 148 bps incurred for the full year of 2023 increased 129 bps from 19 bps in 2022. Overall, the cost of interest-bearing deposits increased year-over-year, from a cost of 27 bps to 194 bps.

Noninterest Income

  • Noninterest income for the three months ended December 31, 2023 decreased $550 thousand, or 20.5%, compared to the three months ended December 31, 2022. In the fourth quarter of 2022, the Company received a $267 thousand recovery of unearned premiums related to the loss of insurance on the student loan portfolio. Also, $131 thousand of income was recognized in the fourth quarter of 2022 related to advisory and brokerage income; this business line was sold in the fourth quarter of 2022, eliminating future income and expense related thereto.
  • Noninterest income for 2023 decreased $4.6 million, or 33.4%, compared to 2022. During the prior year, the Company received and recognized a $2.4 million one-time payment to resolve a commercial dispute and a $1.0 million gain was recognized in connection with the sale of two buildings. Also during 2022, a $404 thousand gain was recognized in connection with the sale of Sturman Wealth Advisors; as noted above, as a result of the sale of the business line, future income and expense is eliminated related thereto.

Book Value

Book value per share was $28.52 as of December 31, 2023 and $25.00 as of December 31, 2022, and tangible book value per share (a non-GAAP financial measure)1 was $26.12 as of December 31, 2023 compared to $22.31 as of December 31, 2022.  These values increased as net retained income increased and unrealized losses in the investment portfolio decreased period over period.

_____________________________________________________________________

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

Income Taxes

The effective tax rate amounted to 16.6% compared to 18.5% for the three months ended December 31, 2023 and 2022, respectively, and 17.2% and 17.9% for the full years of 2023 and 2022, respectively, which are all 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 in the form of interest and proceeds as a result of a death of a former employee. 

Dividends

Cash dividends of $1.8 million, or $0.33 per share, were declared and paid during the fourth quarter of 2023.

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. Investment management services are offered through Masonry Capital Management, LLC, a registered investment adviser and wholly-owned subsidiary of the Company.

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 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, 2022 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 per share data)



December 31, 2023



December 31, 2022*



(Unaudited)





ASSETS






Cash and due from banks

$

18,074



$

20,993


Interest-bearing deposits in other banks


10,316




19,098


Federal funds sold





45


Securities:






Available for sale (AFS), at fair value


420,595




538,186


Restricted securities, at cost


8,385




5,137


Total securities


428,980




543,323


Loans, net of deferred fees and costs


1,092,665




936,415


Allowance for credit losses


(8,395)




(5,552)


Loans, net


1,084,270




930,863


Premises and equipment, net


16,195




17,808


Assets held for sale





965


Bank owned life insurance


38,904




38,552


Goodwill


7,768




7,768


Core deposit intangible, net


5,093




6,586


Right of use asset, net


6,748




6,536


Deferred tax asset, net


15,382




17,315


Accrued interest receivable and other assets


14,287




13,507


Total assets

$

1,646,017



$

1,623,359


LIABILITIES AND SHAREHOLDERS’ EQUITY






Liabilities:






Demand deposits:






Noninterest-bearing

$

372,857



$

495,649


Interest-bearing


305,541




399,983


Money market and savings deposit accounts


412,119




467,600


Certificates of deposit and other time deposits


318,581




115,106


Total deposits


1,409,098




1,478,338


Federal funds purchased


3,462





Borrowings


66,500





Junior subordinated debt, net


3,459




3,413


Lease liability


6,504




6,173


Accrued interest payable and other liabilities


3,954




2,019


Total liabilities


1,492,977




1,489,943


Commitments and contingent liabilities






Shareholders’ equity:






Preferred stock, $2.50 par value






Common stock, $2.50 par value


13,253




13,214


Capital surplus


107,940




105,344


Retained earnings


71,891




63,482


Accumulated other comprehensive loss


(40,044)




(48,624)


Total shareholders’ equity


153,040




133,416


Total liabilities and shareholders’ equity

$

1,646,017



$

1,623,359


Common shares outstanding


5,365,982




5,337,271


Common shares authorized


10,000,000




10,000,000


Preferred shares outstanding






Preferred shares authorized


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 data)

(Unaudited)




For the three months ended



For the twelve months ended




December 31,

2023



December 31,

2022



December 31,

2023



December 31,

2022


Interest and dividend income:













Loans, including fees


$

14,644



$

11,828



$

56,053



$

44,231


Federal funds sold



64




427




207




1,088


Other interest-bearing deposits



59




494




501




1,467


Investment securities:













Taxable



2,880




3,115




11,554




8,416


Tax exempt



325




324




1,308




1,249


Dividends



102




88




367




280


Total interest and dividend income



18,074




16,276




69,990




56,731















Interest expense:













Demand deposits



73




55




346




230


Money market and savings deposits



2,964




627




9,673




2,097


Certificates and other time deposits



3,508




159




8,617




657


Borrowings



663







1,934





Federal funds purchased



26







138





Junior subordinated debt



87




51




313




200


Total interest expense



7,321




892




21,021




3,184


Net interest income



10,753




15,384




48,969




53,547


Provision for credit losses



794




136




734




106


Net interest income after provision for credit losses



9,959




15,248




48,235




53,441















Noninterest income:













Wealth management fees



756




721




1,976




2,440


Advisory and brokerage income






131







770


Deposit account fees



389




434




1,593




1,799


Debit/credit card and ATM fees



535




647




2,277




2,794


Bank owned life insurance income



270




253




1,764




963


Resolution of commercial dispute












2,400


Gains (losses) on sales of assets, net



(20)




87




112




1,043


Gain on termination of interest swap









460





Gains (losses) on sales of AFS, net









(206)




404


Other



206




413




1,125




1,048


Total noninterest income



2,136




2,686




9,101




13,661















Noninterest expense:













Salaries and employee benefits



3,851




3,652




15,900




17,260


Net occupancy



918




729




4,017




4,526


Equipment



173




111




762




897


Bank franchise tax



291




304




1,220




1,216


Computer software



188




228




778




1,136


Data processing



799




806




2,970




2,727


FDIC deposit insurance assessment



170




90




710




511


Marketing, advertising and promotion



186




351




1,098




1,224


Plastics expense



48




72




177




394


Professional fees



82




306




674




1,357


Core deposit intangible amortization



355




403




1,493




1,684


Other



1,237




2,223




4,264




5,624


Total noninterest expense



8,298




9,275




34,063




38,556


Income before income taxes



3,797




8,659




23,273




28,546


Provision for income taxes



629




1,602




4,010




5,108


Net income


$

3,168



$

7,057



$

19,263



$

23,438


Net income per common share, basic


$

0.59



$

1.32



$

3.60



$

4.40


Net income per common share, diluted


$

0.59



$

1.32



$

3.58



$

4.38


Weighted average common shares outstanding, basic



5,365,982




5,333,902




5,357,085




5,324,740


Weighted average common shares outstanding, diluted



5,394,713




5,362,220




5,385,201




5,351,358


 

VIRGINIA NATIONAL BANKSHARES CORPORATION

FINANCIAL HIGHLIGHTS

(dollars in thousands, except per share data)

(Unaudited)




At or For the Three Months Ended




December 31,

2023



September 30,

2023



June 30,

2023



March 31,

2023



December 31,

2022


Common Share Data:
















Net income per weighted average share, basic


$

0.59



$

0.87



$

1.05



$

1.08



$

1.32


Net income per weighted average share, diluted


$

0.59



$

0.86



$

1.05



$

1.08



$

1.32


Weighted average shares outstanding, basic



5,365,982




5,365,982




5,357,873




5,338,099




5,333,902


Weighted average shares outstanding, diluted



5,394,713




5,395,483




5,375,073




5,375,619




5,362,220


Actual shares outstanding



5,365,982




5,365,982




5,365,982




5,338,650




5,327,271


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


$

26.12



$

22.83



$

24.01



$

23.88



$

22.31


















Key Ratios:
















Return on average assets 1



0.79

%



1.18

%



1.46

%



1.48

%



1.65

%

Return on average equity 1



9.03

%



12.91

%



15.98

%



17.57

%



22.23

%

Net interest margin (FTE) 2



2.89

%



3.04

%



3.83

%



3.71

%



3.91

%

Efficiency ratio (FTE) 3



64.0

%



60.3

%



54.1

%



56.2

%



51.7

%

Loan-to-deposit ratio



77.5

%



74.5

%



72.2

%



67.3

%



63.3

%

















Capital Ratios:
















Tier 1 leverage ratio



11.13

%



11.26

%



11.20

%



10.64

%



9.77

%

Total risk-based capital ratio



18.24

%



18.76

%



18.80

%



18.37

%



17.64

%

















Assets and Asset Quality:
















Average earning assets


$

1,487,910



$

1,460,555



$

1,443,048



$

1,475,617



$

1,568,765


Average gross loans


$

1,061,297



$

986,480



$

940,264



$

932,834



$

938,740


Fair value mark on acquired loans


$

9,399



$

9,965



$

10,957



$

14,120



$

15,887


















Allowance for credit losses:
















Beginning of period


$

7,799



$

7,863



$

7,772



$

5,552



$

5,485


Impact of adoption of CECL





$



$



$

2,491



$


Provision for (recovery of) credit losses



713




2




216




(235)




136


Charge-offs



(207)




(199)




(180)




(136)




(472)


Recoveries



90




133




55




100




403


Net charge-offs



(117)




(66)




(125)




(36)




(69)


End of period


$

8,395



$

7,799



$

7,863



$

7,772



$

5,552


















Non-accrual loans


$

1,852



$

1,143



$

1,185



$

1,228



$

673


Loans 90 days or more past due and still accruing



880




854




107




69




705


Total nonperforming assets (NPA) 4


$

2,732



$

1,997



$

1,292



$

1,297



$

1,378


















NPA as a % of total assets



0.17

%



0.13

%



0.08

%



0.08

%



0.08

%

NPA as a % of gross loans



0.25

%



0.20

%



0.13

%



0.14

%



0.15

%

ACL to gross loans



0.77

%



0.76

%



0.81

%



0.83

%



0.59

%

Non-accruing loans to gross loans



0.17

%



0.11

%



0.12

%



0.13

%



0.07

%

Net charge-offs to average loans 1



0.04

%



0.03

%



0.05

%



0.02

%



0.03

%



Ratio is computed on an annualized basis.

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.

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.

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




December 31, 2023



December 31, 2022







Interest









Interest







Average



Income/



Average



Average



Income/



Average




Balance



Expense



Yield/Cost



Balance



Expense



Yield/Cost


ASSETS



















Interest Earning Assets:



















Securities:



















Taxable Securities


$

346,248



$

2,982




3.44

%


$

471,566



$

3,204




2.72

%

Tax Exempt Securities 1



66,710




411




2.46

%



67,090




410




2.44

%

Total Securities 1



412,958




3,393




3.29

%



538,656




3,614




2.68

%

Loans:



















Real Estate



873,226




11,919




5.42

%



820,751




10,322




4.99

%

Commercial



149,765




2,018




5.35

%



71,730




785




4.34

%

Consumer



38,306




707




7.32

%



46,259




721




6.18

%

      Total Loans



1,061,297




14,644




5.47

%



938,740




11,828




5.00

%

Fed Funds Sold



4,709




64




5.39

%



46,042




426




3.67

%

Other interest-bearing deposits



8,946




59




2.62

%



45,327




494




4.32

%

Total Earning Assets



1,487,910




18,160




4.84

%



1,568,765




16,362




4.14

%

Less: Allowance for Credit Losses



(7,833)










(5,395)








Total Non-Earning Assets



115,114










135,015








Total Assets


$

1,595,191









$

1,698,385



























LIABILITIES AND SHAREHOLDERS’ EQUITY



















Interest Bearing Liabilities:



















Interest Bearing Deposits:



















Interest Checking


$

287,228



$

73




0.10

%


$

403,570



$

55




0.05

%

Money Market and Savings Deposits



413,771




2,964




2.84

%



500,397




627




0.50

%

Time Deposits



304,053




3,508




4.58

%



125,334




158




0.50

%

Total Interest-Bearing Deposits



1,005,052




6,545




2.58

%



1,029,301




840




0.32

%

Borrowings



49,147




663




5.35

%



2








Federal funds purchased



1,755




26




5.88

%










Junior subordinated debt



3,454




87




9.99

%



3,406




52




6.06

%

Total Interest-Bearing Liabilities



1,059,408




7,321




2.74

%



1,032,709




892




0.34

%

Non-Interest-Bearing Liabilities:



















Demand deposits



386,001










531,719








Other liabilities



10,666










8,021








Total Liabilities



1,456,075










1,572,449








Shareholders’ Equity



139,116










125,936








Total Liabilities & Shareholders’ Equity


$

1,595,191









$

1,698,385








Net Interest Income (FTE)





$

10,839









$

15,470





Interest Rate Spread 2









2.10

%









3.80

%

Cost of Funds









2.01

%









0.23

%

Interest Expense as a Percentage of

     Average Earning Assets









1.95

%









0.23

%

Net Interest Margin (FTE) 3









2.89

%









3.91

%



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.

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 twelve months ended




December 31, 2023



December 31, 2022







Interest









Interest







Average



Income/



Average



Average



Income/



Average




Balance



Expense



Yield/Cost



Balance



Expense



Yield/Cost


ASSETS



















Interest Earning Assets:



















Securities:



















Taxable Securities


$

400,189



$

11,921




2.98

%


$

373,680



$

8,696




2.33

%

Tax Exempt Securities 1



66,895




1,657




2.48

%



65,861




1,582




2.40

%

Total Securities 1



467,084




13,578




2.91

%



439,541




10,278




2.34

%

Loans:



















Real Estate



839,326




47,996




5.72

%



847,238




38,011




4.49

%

Commercial



100,122




5,121




5.11

%



81,410




3,583




4.40

%

Consumer



41,140




2,936




7.14

%



49,619




2,637




5.31

%

      Total Loans



980,588




56,053




5.72

%



978,267




44,231




4.52

%

Fed Funds Sold



3,825




207




5.41

%



100,033




1,088




1.09

%

Other interest-bearing deposits



13,964




501




3.59

%



161,260




1,467




0.91

%

Total Earning Assets



1,465,461




70,339




4.80

%



1,679,101




57,064




3.40

%

Less: Allowance for Credit Losses



(7,907)










(5,702)








Total Non-Earning Assets



115,908










124,525








Total Assets


$

1,573,462









$

1,797,924



























LIABILITIES AND SHAREHOLDERS’ EQUITY



















Interest Bearing Liabilities:



















Interest Bearing Deposits:



















Interest Checking


$

321,154



$

346




0.11

%


$

409,504



$

230




0.06

%

Money Market and Savings Deposits



421,083




9,673




2.30

%



563,374




2,097




0.37

%

Time Deposits



220,348




8,617




3.91

%



144,565




657




0.45

%

Total Interest-Bearing Deposits



962,585




18,636




1.94

%



1,117,443




2,984




0.27

%

Borrowings



37,286




1,934




5.19

%










Federal funds purchased



2,632




138




5.24

%










Junior subordinated debt



3,436




313




9.11

%



3,388




200




5.90

%

Total Interest-Bearing Liabilities



1,005,939




21,021




2.09

%



1,120,831




3,184




0.28

%

Non-Interest-Bearing Liabilities:



















Demand deposits



418,091










526,389








Other liabilities



9,989










9,581








Total Liabilities



1,434,019










1,656,801








Shareholders’ Equity



139,443










141,123








Total Liabilities & Shareholders’ Equity


$

1,573,462









$

1,797,924








Net Interest Income (FTE)





$

49,318









$

53,880





Interest Rate Spread 2









2.71

%









3.12

%

Cost of Funds









1.48

%









0.19

%

Interest Expense as a Percentage of

     Average Earning Assets









1.43

%









0.19

%

Net Interest Margin (FTE) 3









3.37

%









3.21

%



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




December 31,

2023



September 30,

2023



June 30,

2023



March 31,

2023



December 31,

2022


Fully tax-equivalent measures
















Net interest income


$

10,753



$

11,100



$

13,703



$

13,413



$

15,384


Fully tax-equivalent adjustment



86




87




86




87




86


Net interest income (FTE) 1


$

10,839



$

11,187



$

13,789



$

13,500



$

15,470


















Efficiency ratio 2



64.4

%



60.7

%



54.4

%



56.5

%



52.0

%

Fully tax-equivalent adjustment



-0.4

%



-0.4

%



-0.3

%



-0.3

%



-0.3

%

Efficiency ratio (FTE) 3



64.0

%



60.3

%



54.1

%



56.2

%



51.7

%

















Net interest margin



2.87

%



3.02

%



3.81

%



3.69

%



3.89

%

Fully tax-equivalent adjustment



0.02

%



0.02

%



0.02

%



0.02

%



0.02

%

Net interest margin (FTE) 1



2.89

%



3.04

%



3.83

%



3.71

%



3.91

%

 



For the Twelve Months Ended




December 31,

2023



December 31,

2022


Fully tax-equivalent measures







Net interest income


$

48,969



$

53,547


Fully tax-equivalent adjustment



349




333


Net interest income (FTE) 1


$

49,318



$

53,880









Efficiency ratio 2



58.7

%



57.4

%

Fully tax-equivalent adjustment



-0.4

%



-0.3

%

Efficiency ratio (FTE) 3



58.3

%



57.1

%








Net interest margin



3.34

%



3.19

%

Fully tax-equivalent adjustment



0.03

%



0.02

%

Net interest margin (FTE) 1



3.37

%



3.21

%

 



As of




December 31,

2023



September 30,

2023



June 30,

2023



March 31,

2023



December 31,

2022


Other financial measures
















Book value per share


$

28.52



$

25.29



$

26.54



$

26.50



$

25.00


Impact of intangible assets 4



(2.40)




(2.46)




(2.53)




(2.62)




(2.69)


Tangible book value per share (non-GAAP)


$

26.12



$

22.83



$

24.01



$

23.88



$

22.31




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. 

 

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