Virginia NationalBankshares Corporation (NASDAQ: VABK) (the “Company”) today reported quarterly net income of $4.6 million, or $0.85 per diluted share, for the quarter ended December 31, 2024, compared to $3.2 million, or $0.59 per diluted share, recognized for the quarter ended December 31, 2023. For the twelve months ended December 31, 2024, the Company recognized net income of $17.0 million, or $3.15 per diluted share, compared to $19.3 million, or $3.58 per diluted share, for the twelve months ended December 31, 2023.
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The increase in net income from the fourth quarter of 2023 to the same quarter in 2024 was primarily the result of increased interest income from increased average balances of loans at higher rates than the prior period, combined with decreased interest expense, as we reduced our borrowing expense and overall cost of funds. The decline in full year 2024 net income compared to 2023 was primarily the result of increased cost of funds year-over-year.
President and Chief Executive Officer's comments: “During 2024, we focused on loan growth and reducing ongoing operating expenses,” stated Glenn W. Rust, President and Chief Executive Officer. “I am proud to announce that we succeeded in both of these endeavors. We increased loan balances 13% over the prior year while decreasing our overhead costs. Our credit quality metrics continue to be strong, along with our capital and liquidity positions.”
Key Performance Indicators Fourth Quarter 2024 Compared to Fourth Quarter 2023
— Return on average assets increased to 1.12% from 0.79%
— Return on average equity increased to 10.98% from 9.03%
— Net interest margin (FTE)1 improved to 3.21% from 2.89%
— Loan-to-deposit ratio increased to 86.8% from 77.5%
— Efficiency ratio (FTE)1 improved to 60.2% from 64.0%
December 2024 Balance Sheet Highlights
— The Company continued to experience loan growth in the fourth quarter of 2024. Gross loans outstanding as of December 31, 2024 totaled $1.2 billion, an increase of $20.5 million, or 1.7%, compared to September 30, 2024, and an increase of $143.3 million, or 13.1% compared to December 31, 2023.
— Outstanding borrowing from the FHLB declined from the prior quarter by $32.5 million and declined from the prior year-end by $46.5 million, as management made a concerted effort to stabilize overall cost of funds. As of December 31, 2024, the Company had unused borrowing facilities in place of approximately $199.0 million and held no brokered deposits.
— Securities balances declined $17.3 million and $159.3 million from September 30, 2024 and December 31, 2023, respectively, to December 31, 2024; funds from the maturities of investments were repurposed to higher yielding assets in the form of loans.
— The Company utilizes a third-party to offer multi-million-dollar FDIC insurance to customers with balances in excess of single-bank limits through reciprocal Insured Cash Sweep® (ICS) plans. Deposit balances held in ICS plans amounted to $166.6 million as of December 31, 2024, $145.6 million as of September 30, 2024 and $151.5 million as of December 31, 2023.
— Total deposits increased $43.6 million, or 3.2% from September 30, 2024 to December 31, 2024 and increased $14.4 million, or 1.0% year-over year.
Loans and Asset Quality
— Credit performance remains strong with nonperforming assets as a percentage of total assets of 0.19% as of December 31, 2024, 0.33% as of September 30, 2024 and 0.17% as of December 31, 2023.
— Nonperforming assets amounted to $3.0 million as of December 31, 2024, compared to $5.3 million as of September 30, 2024 and $2.7 million as of December 31, 2023;
— Twelve loans to eleven borrowers are in non-accrual status, totaling $2.3 million, as of December 31, 2024, compared to $2.1 million as of September 30, 2024 and $1.9 million as of December 31, 2023.
— Loans 90 days or more past due and still accruing interest amounted to $754 thousand as of December 31, 2024, compared to $3.2 million as of September 30, 2024 and $880 thousand as of December 31, 2023. The past due balance as of December 31, 2024 is comprised of three loans totaling $705 thousand which are 100% government-guaranteed, and three student loans totaling $49 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 0.68% as of December 31, 2024, 0.70% as of September 30, 2024 and 0.77% as of December 31, 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 year-over-year. Balances in government-guaranteed loans have increased $108.6 million from December 31, 2023 to December 31, 2024. 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 $6.8 million as of December 31, 2024.
— For the three months ended December 31, 2024, the Company recorded a net recovery of provision for credit losses of $126 thousand, as the recovery of previously charged-off loans nearly offset the increase in provision required for new loan balances; this balance is net of an $82 thousand provision for unfunded reserves, as a result of an increase in unfunded construction commitments.
Net Interest Income – Quarterly Comparison
— Net interest income for the three months ended December 31, 2024 of $12.2 million increased $1.5 million, or 13.8%, compared to the three months ended December 31, 2023, as interest income earned on assets increased and interest expense on deposit accounts and borrowings declined.
— Net interest margin (FTE), (a non-GAAP financial measure)1, for the three months ended December 31, 2024 was 3.21%, compared to 2.89% for the three months ended December 31, 2023. The increase as compared to the fourth quarter of 2023 was the outcome of the increase in yield on loans and the decrease in cost of funds, both described below.
— Yield on loans was 5.63% for the three months ended December 31, 2024, compared to 5.47% for the prior year same period. The accretion of the credit mark related to purchased loans positively impacted interest income by 13 bps in the fourth quarter of 2024, compared to 15 bps in the fourth quarter of 2023.
— The overall cost of funds, including noninterest-bearing deposits, of 194 bps incurred in the three months ended December 31, 2024 decreased 7 bps from 201 bps in the same period in the prior year. Overall, the cost of interest-bearing deposits also decreased period over period by 7 bps, from a cost of 258 bps to 251 bps. Management believes that the Bank's cost of funds stabilized during the first half of 2024, and the cost of funds and cost of interest-bearing deposits have been declining in the second half of 2024. The cost of borrowings also declined from the fourth quarter of 2023 to the fourth quarter of 2024, from 5.35% to 4.33%.
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1 See “Reconciliation of Certain Quarterly Non-GAAP Financial Measures” at the end of this release.
Noninterest Income – Quarterly Comparison Noninterest income for the three months ended December31, 2024 increased $132 thousand, or 6.2%, compared to the three months ended December31, 2023, as the gain on early redemption of debt of $525 thousand partially offset the lower wealth management, deposit account, debit card, credit card and ATM fees.
Noninterest Expense – Quarterly Comparison Noninterest expense for the three months ended December31, 2024 increased $484 thousand, or 5.8%, compared to the three months ended December31, 2023. This increase is primarily the result of increased compensation expense from lender incentives related to increased loan production, as well as increased professional services expense from increased cost of such services. These increases were partially offset by lower data processing costs, as a result of effective contract negotiations.
Income Taxes – Quarterly Comparison The effective tax rates amounted to 22.0% and 16.6% for the three months ended December31, 2024 and 2023, respectively. The increase in the effective tax rate in the current year period is higher than the statutory rate as a result of the adoption of the proportional amortization method for accounting for low-income housing tax credits, which increased tax expense. The prior year period effective tax rate is 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.
Book Value Book value per share increased to $29.85 as of December31, 2024, compared to $28.52 as of December31, 2023, and tangible book value per share (a non-GAAP financial measure)1 was $27.70 as of December31, 2024 compared to $26.12 as of December31, 2023. These values increased as net retained income increased and unrealized losses in the investment portfolio remained relatively flat period over period.
Dividends Cash dividends of $1.8 million, or $0.33 per share, were declared and paid during the fourth quarter of 2024.
Share Repurchase Plan Year-to-date, the Company has repurchased 20,350 shares at an average price of $27.42 per share. No shares were repurchased during the second half of 2024.
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1 See “Reconciliation of Certain Quarterly Non-GAAP Financial Measures” at the end of this release.
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 eight 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 CORPORATIONCONSOLIDATED BALANCE SHEETS(dollars in thousands, except per share data) December31, 2024 December 31, 2023* (Unaudited)ASSETSCash and due from banks $ 5,311 $ 18,074Interest-bearing deposits in other banks 11,792 10,316Securities:Available for sale (AFS), at fair value 263,537 420,595Restricted securities, at cost 6,193 8,385Total securities 269,730 428,980Loans, net of deferred fees and costs 1,235,969 1,092,665Allowance for credit losses (8,455) (8,395)Loans, net 1,227,514 1,084,270Premises and equipment, net 15,383 16,195Bank owned life insurance 40,059 38,904Goodwill 7,768 7,768Core deposit intangible, net 3,792 5,093Right of use asset, net 5,551 6,748Deferred tax asset, net 15,407 15,382Accrued interest receivable and other assets 14,519 14,287Total assets $ 1,616,826 $ 1,646,017LIABILITIES AND SHAREHOLDERS' EQUITYLiabilities:Demand deposits:Noninterest-bearing $ 374,079 $ 372,857Interest-bearing 303,405 305,541Money market and savings deposit accounts 437,619 412,119Certificates of deposit and other time deposits 308,443 318,581Total deposits 1,423,546 1,409,098Federal funds purchased 236 3,462Borrowings 20,000 66,500Junior subordinated debt, net 3,506 3,459Lease liability 5,389 6,504Accrued interest payable and other liabilities 3,847 3,954Total liabilities 1,456,524 1,492,977Commitments and contingent liabilitiesShareholders' equity:Preferred stock, $2.50 par value – -Common stock, $2.50 par value 13,263 13,258Capital surplus 106,394 106,045Retained earnings 82,507 73,781Accumulated other comprehensive loss (41,862) (40,044)Total shareholders' equity 160,302 153,040Total liabilities and shareholders' equity $ 1,616,826 $ 1,646,017Common shares outstanding 5,370,912 5,365,982Common shares authorized 10,000,000 10,000,000Preferred shares outstanding – -Preferred shares authorized 2,000,000 2,000,000
* Derived from audited consolidated financial statements
VIRGINIA NATIONAL BANKSHARES CORPORATIONCONSOLIDATED STATEMENTS OF INCOME(dollars in thousands, except per share data)(Unaudited) For the three months ended For the twelve months ended December31, 2024 December31, 2023 December31, 2024 December31, 2023Interest and dividend income:Loans, including fees $ 17,253 $ 14,644 $ 66,534 $ 56,053Federal funds sold 230 64 765 207Other interest-bearing deposits 41 59 206 501Investment securities:Taxable 1,340 2,880 6,689 11,554Tax exempt 323 325 1,302 1,308Dividends 111 102 431 367Total interest and dividend income 19,298 18,074 75,927 69,990Interest expense:Demand deposits 67 73 272 346Money market and savings deposits 2,939 2,964 11,803 9,673Certificates and other time deposits 3,463 3,508 15,410 8,617Borrowings 504 663 1,691 1,934Federal funds purchased 4 26 29 138Junior subordinated debt 86 87 346 313Total interest expense 7,063 7,321 29,551 21,021Net interest income 12,235 10,753 46,376 48,969Provision for (recovery of) credit losses (126) 794 (600) 734Net interest income after provision for (recovery of) credit losses 12,361 9,959 46,976 48,235Noninterest income:Wealth management fees 247 756 1,152 1,976Deposit account fees 321 389 1,363 1,593Debit/credit card and ATM fees 429 535 1,914 2,277Bank owned life insurance income 297 270 1,155 1,764Gains (losses) on sales of assets, net – (20) 36 112Gain on early redemption of debt 525 – 904 -Gain on termination of interest rate swap – – – 460Losses on sales of AFS, net – – (4) (206)Other 449 206 1,069 1,125Total noninterest income 2,268 2,136 7,589 9,101Noninterest expense:Salaries and employee benefits 4,162 3,851 15,933 15,900Net occupancy 906 918 3,662 4,017Equipment 206 173 720 762Bank franchise tax 401 291 1,452 1,220Computer software 214 188 917 778Data processing 622 799 2,647 2,970FDIC deposit insurance assessment 200 170 700 710Marketing, advertising and promotion 159 186 730 1,098Professional fees 303 82 934 674Core deposit intangible amortization 307 355 1,301 1,493Other 1,302 1,285 4,670 4,441Total noninterest expense 8,782 8,298 33,666 34,063Income before income taxes 5,847 3,797 20,899 23,273Provision for income taxes 1,286 629 3,933 4,010Net income $ 4,561 $ 3,168 $ 16,966 $ 19,263Net income per common share, basic $ 0.85 $ 0.59 $ 3.16 $ 3.60Net income per common share, diluted $ 0.85 $ 0.59 $ 3.15 $ 3.58Weighted average common shares outstanding, basic 5,370,912 5,365,982 5,371,439 5,357,085Weighted average common shares outstanding, diluted 5,407,489 5,394,713 5,392,114 5,382,145
VIRGINIA NATIONALBANKSHARES CORPORATIONFINANCIAL HIGHLIGHTS(dollars in thousands, except share and per share data)(Unaudited) At or For the Three Months Ended December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023Common Share Data:Net income $ 4,561 $ 4,600 $ 4,159 $ 3,646 $ 3,168Net income per weighted average share, basic $ 0.85 $ 0.86 $ 0.77 $ 0.68 $ 0.59Net income per weighted average share, diluted $ 0.85 $ 0.85 $ 0.77 $ 0.68 $ 0.59Weighted average shares outstanding, basic 5,370,912 5,370,912 5,377,055 5,366,890 5,365,982Weighted average shares outstanding, diluted 5,407,489 5,396,936 5,385,770 5,380,081 5,394,713Actual shares outstanding 5,370,912 5,370,912 5,370,912 5,390,388 5,365,982Tangible book value per share at period end (non-GAAP) 5 $ 27.70 $ 28.68 $ 26.43 $ 25.99 $ 26.12Key Ratios:Return on average assets 1 1.12 % 1.15 % 1.05 % 0.91 % 0.79 %Return on average equity 1 10.98 % 11.44 % 11.07 % 9.57 % 9.03 %Net interest margin (FTE) 2 3.21 % 3.24 % 3.04 % 2.93 % 2.89 %Efficiency ratio (FTE) 3 60.2 % 58.6 % 62.7 % 66.8 % 64.0 %Loan-to-deposit ratio 86.8 % 88.1 % 84.3 % 78.8 % 77.5 %Net Interest Income:Net interest income $ 12,235 $ 12,024 $ 11,181 $ 10,936 $ 10,753Net interest income (FTE) 2 $ 12,321 $ 12,111 $ 11,268 $ 11,023 $ 10,839Company Capital Ratios:Tier 1 leverage ratio 11.34 % 11.81 % 11.47 % 11.24 % 11.13 %Total risk-based capital ratio 18.77 % 18.88 % 18.64 % 18.49 % 18.24 %Assets and Asset Quality:Average earning assets $ 1,526,464 $ 1,487,182 $ 1,491,821 $ 1,513,924 $ 1,487,910Average gross loans $ 1,218,460 $ 1,181,447 $ 1,144,350 $ 1,117,570 $ 1,061,297Fair value mark on acquired loans $ 6,785 $ 7,301 $ 8,237 $ 8,811 $ 9,399Allowance for credit losses on loans:Beginning of period $ 8,523 $ 8,028 $ 8,289 $ 8,395 $ 7,799Provision for (recovery of) credit losses (208) (3) (518) 11 713Charge-offs (127) (272) (208) (184) (207)Recoveries 267 770 465 67 90Net recoveries (charge-offs) 140 498 257 (117) (117)End of period $ 8,455 $ 8,523 $ 8,028 $ 8,289 $ 8,395Non-accrual loans $ 2,267 $ 2,113 $ 2,365 $ 2,178 $ 1,852Loans 90 days or more past due and still accruing 754 3,214 1,596 876 880Total nonperforming assets (NPA) 4 $ 3,021 $ 5,327 $ 3,961 $ 3,054 $ 2,732NPA as a % of total assets 0.19 % 0.33 % 0.25 % 0.19 % 0.17 %NPA as a % of gross loans 0.24 % 0.44 % 0.34 % 0.27 % 0.25 %ACL to gross loans 0.68 % 0.70 % 0.69 % 0.73 % 0.77 %Non-accruing loans to gross loans 0.18 % 0.17 % 0.20 % 0.19 % 0.17 %Net charge-offs (recoveries) to average loans 1 -0.05 % -0.17 % -0.09 % 0.04 % 0.04 %
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 CORPORATIONAVERAGE BALANCES, INCOME AND EXPENSES, YIELDS AND RATES (TAXABLE EQUIVALENT BASIS)(dollars in thousands)(Unaudited) For the three months ended December31, 2024 December31, 2023 Interest Interest Average Income/ Average Average Income/ Average Balance Expense Yield/Cost Balance Expense Yield/CostASSETSInterest Earning Assets:Securities:Taxable Securities and Dividends $ 213,609 $ 1,451 2.72 % $ 346,248 $ 2,982 3.44 %Tax Exempt Securities 1 66,211 409 2.47 % 66,710 411 2.46 %Total Securities 1 279,820 1,860 2.66 % 412,958 3,393 3.29 %Loans:Real Estate 921,967 13,159 5.68 % 873,226 11,919 5.42 %Commercial 261,544 3,507 5.33 % 149,765 2,018 5.35 %Consumer 34,949 587 6.68 % 38,306 707 7.32 %Total Loans 1,218,460 17,253 5.63 % 1,061,297 14,644 5.47 %Fed Funds Sold 19,313 230 4.74 % 4,709 64 5.39 %Other interest-bearing deposits 8,871 41 1.84 % 8,946 59 2.62 %Total Earning Assets 1,526,464 19,384 5.05 % 1,487,910 18,160 4.84 %Less: Allowance for Credit Losses (8,555) (7,833)Total Non-Earning Assets 109,030 115,114Total Assets $ 1,626,939 $ 1,595,191LIABILITIES AND SHAREHOLDERS' EQUITYInterest Bearing Liabilities:Interest Bearing Deposits:Interest Checking $ 263,281 $ 67 0.10 % $ 287,228 $ 73 0.10 %Money Market and Savings Deposits 442,660 2,939 2.64 % 413,771 2,964 2.84 %Time Deposits 318,203 3,463 4.33 % 304,053 3,508 4.58 %Total Interest-Bearing Deposits 1,024,144 6,469 2.51 % 1,005,052 6,545 2.58 %Borrowings 46,253 504 4.33 % 49,147 663 5.35 %Federal funds purchased 284 4 5.60 % 1,755 26 5.88 %Junior subordinated debt 3,499 86 9.78 % 3,454 87 9.99 %Total Interest-Bearing Liabilities 1,074,180 7,063 2.62 % 1,059,408 7,321 2.74 %Non-Interest-Bearing Liabilities:Demand deposits 377,596 386,001Other liabilities 9,965 10,666Total Liabilities 1,461,741 1,456,075Shareholders' Equity 165,198 139,116Total Liabilities & Shareholders' Equity $ 1,626,939 $ 1,595,191Net Interest Income (FTE) $ 12,321 $ 10,839Interest Rate Spread 2 2.43 % 2.10 %Cost of Funds 1.94 % 2.01 %Interest Expense as a Percentage of 1.84 % 1.95 %Average Earning AssetsNet Interest Margin (FTE) 3 3.21 % 2.89 %
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 CORPORATIONAVERAGE BALANCES, INCOME AND EXPENSES, YIELDS AND RATES (TAXABLE EQUIVALENT BASIS)(dollars in thousands)(Unaudited) For the twelve months ended December31, 2024 December31, 2023 Interest Interest Average Income/ Average Average Income/ Average Balance Expense Yield/Cost Balance Expense Yield/CostASSETSInterest Earning Assets:Securities:Taxable Securities and Dividends $ 249,858 $ 7,120 2.85 % $ 400,189 $ 11,921 2.98 %Tax Exempt Securities 1 66,399 1,649 2.48 % 66,895 1,655 2.47 %Total Securities 1 316,257 8,769 2.77 % 467,084 13,576 2.91 %Loans:Real Estate 908,356 51,532 5.67 % 839,326 47,996 5.72 %Commercial 220,276 12,430 5.64 % 100,122 5,121 5.11 %Consumer 37,013 2,572 6.95 % 41,140 2,936 7.14 %Total Loans 1,165,645 66,534 5.71 % 980,588 56,053 5.72 %Fed Funds Sold 14,663 765 5.22 % 3,825 207 5.41 %Other interest-bearing deposits 8,220 206 2.51 % 15,489 501 3.23 %Total Earning Assets 1,504,785 76,274 5.07 % 1,466,986 70,337 4.79 %Less: Allowance for Credit Losses (8,350) (7,907)Total Non-Earning Assets 109,503 115,908Total Assets $ 1,605,938 $ 1,574,987LIABILITIES AND SHAREHOLDERS' EQUITYInterest Bearing Liabilities:Interest Bearing Deposits:Interest Checking $ 269,136 $ 272 0.10 % $ 321,154 $ 346 0.11 %Money Market and Savings Deposits 425,386 11,803 2.77 % 421,083 9,673 2.30 %Time Deposits 333,139 15,410 4.63 % 220,348 8,617 3.91 %Total Interest-Bearing Deposits 1,027,661 27,485 2.67 % 962,585 18,636 1.94 %Borrowings 36,111 1,691 4.68 % 37,286 1,934 5.19 %Federal funds purchased 489 29 5.93 % 2,632 138 5.24 %Junior subordinated debt 3,482 346 9.94 % 3,436 313 9.11 %Total Interest-Bearing Liabilities 1,067,743 29,551 2.77 % 1,005,939 21,021 2.09 %Non-Interest-Bearing Liabilities:Demand deposits 370,178 418,091Other liabilities 10,597 11,514Total Liabilities 1,448,518 1,435,544Shareholders' Equity 157,420 139,443Total Liabilities & Shareholders' Equity $ 1,605,938 $ 1,574,987Net Interest Income (FTE) $ 46,723 $ 49,316Interest Rate Spread 2 2.30 % 2.70 %Cost of Funds 2.06 % 1.48 %Interest Expense as a Percentage of 1.96 % 1.43 %Average Earning AssetsNet Interest Margin (FTE) 3 3.10 % 3.36 %
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 CORPORATIONRECONCILIATION OF CERTAIN QUARTERLY NON-GAAP FINANCIAL MEASURES(dollars in thousands, except per share data)(Unaudited) For the Three Months Ended December31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023Fully tax-equivalent measuresNet interest income $ 12,235 $ 12,024 $ 11,181 $ 10,936 $ 10,753Fully tax-equivalent adjustment 86 87 87 87 86Net interest income (FTE) 1 $ 12,321 $ 12,111 $ 11,268 $ 11,023 $ 10,839Efficiency ratio 2 60.6 % 58.9 % 63.1 % 67.2 % 64.4 %Fully tax-equivalent adjustment -0.4 % -0.3 % -0.4 % -0.4 % -0.4 %Efficiency ratio (FTE) 3 60.2 % 58.6 % 62.7 % 66.8 % 64.0 %Net interest margin 3.19 % 3.22 % 3.01 % 2.91 % 2.87 %Fully tax-equivalent adjustment 0.02 % 0.02 % 0.03 % 0.02 % 0.02 %Net interest margin (FTE) 1 3.21 % 3.24 % 3.04 % 2.93 % 2.89 % As of December31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023Other financial measuresBook value per share $ 29.85 $ 30.89 $ 28.70 $ 28.31 $ 28.52Impact of intangible assets 4 (2.15) (2.21) (2.27) (2.32) (2.40)Tangible book value per share (non-GAAP) $ 27.70 $ 28.68 $ 26.43 $ 25.99 $ 26.12
For the Twelve Months Ended December31, December31, 2024 2023Fully tax-equivalent measuresNet interest income $ 46,376 $ 48,969Fully tax-equivalent adjustment 347 347Net interest income (FTE) 1 $ 46,723 $ 49,316Efficiency ratio 2 62.4 % 58.7 %Fully tax-equivalent adjustment -0.4 % -0.4 %Efficiency ratio (FTE) 3 62.0 % 58.3 %Net interest margin 3.08 % 3.34 %Fully tax-equivalent adjustment 0.02 % 0.02 %Net interest margin (FTE) 1 3.10 % 3.36 %
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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SOURCE Virginia National Bankshares Corporation
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