VIRGINIA NATIONAL BANKSHARES CORPORATION ANNOUNCES 2024 THIRD QUARTER EARNINGS

PR Newswire · 10/17 12:53

CHARLOTTESVILLE, Va., Oct. 17, 2024 /PRNewswire/ -- Virginia National Bankshares Corporation (NASDAQ: VABK) (the "Company") today reported quarterly net income of $4.6 million, or $0.85 per diluted share, for the quarter ended September 30, 2024, compared to $4.7 million, or $0.86 per diluted share, recognized for the quarter ended September 30, 2023.  For the nine months ended September 30, 2024, the Company recognized net income of $12.4 million, or $2.30 per diluted share, compared to $16.1 million, or $2.99 per diluted share, for the nine months ended September 30, 2023. 

The decline in year-to-date 2024 net income compared to 2023 is primarily the result of 1) increased cost of funds and 2) the receipt in the prior year of bank-owned life insurance proceeds as a result of the death of a former employee, which was offset by an increase in interest income and a decline in operating expenses. 

President and Chief Executive Officer's comments:  "Our measures to reduce ongoing overhead costs are paying off for us as evidenced through reduced noninterest expenses," stated Glenn W. Rust, President and Chief Executive Officer.  "In addition, we continue to put new loans on the books, increasing loan balances 11% during 2024 and 19% year-over-year, and our credit quality metrics remain strong.  Our capital and liquidity positions continue to be solid and stable."

Key Performance Indicators

Third Quarter 2024 Compared to Second Quarter 2024

    • Return on average assets increased to 1.15% from 1.05%
    • Return on average equity increased to 11.44% from 11.07%
    • Net interest margin (FTE)1 improved to 3.24% from 3.04%
    • Loan-to-deposit ratio increased to 88.1% from 84.3%
    • Efficiency ratio (FTE)1 improved to 58.6% from 62.7%

September 2024 Balance Sheet Highlights

  • The Company continued to experience loan growth in the third quarter of 2024. Gross loans outstanding as of September 30, 2024 totaled $1.2 billion, an increase of $122.8 million, or 11.2%, compared to December 31, 2023 and an increase of $195.0 million, or 19.1%, compared to September 30, 2023.
  • As of September 30, 2024, the Company had unused borrowing facilities in place of approximately $160.4 million and held no brokered deposits.
  • Securities balances declined $141.9 million from December 31, 2023 to September 30, 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 Insured Cash Sweep® (ICS) plans. Deposit balances held in ICS plans amounted to $145.6 million as of September 30, 2024, $151.5 million as of December 31, 2023 and $128.7 million as of September 30, 2023.
  • Total deposits decreased $29.2 million, or 2.1% from December 31, 2023 to September 30, 2024 and increased $9.6 million, or 0.7% year-over-year.
  • Outstanding borrowings declined $14.0 million, or 21.1%, from December 31, 2023 to September 30, 2024, as management made a concerted effort to stabilize overall cost of funds.

Loans and Asset Quality

  • Credit performance remains strong with nonperforming assets as a percentage of total assets of 0.33% as of September 30, 2024, 0.17% as of December 31, 2023 and 0.13% as of September 30, 2023.
  • Nonperforming assets amounted to $5.3 million as of September 30, 2024, compared to $2.7 million as of December 31, 2023 and $2.0 million as of September 30, 2023;
    • Ten loans to nine borrowers are in non-accrual status, totaling $2.1 million, as of September 30, 2024, compared to $1.9 million as of December 31, 2023 and $1.1 million as of September 30, 2023.
    • Loans 90 days or more past due and still accruing interest amounted to $3.2 million as of September 30, 2024, compared to $880 thousand as of December 31, 2023 and $854 thousand as of September 30, 2023. The past due balance as of September 30, 2024 is comprised of four loans totaling $3.1 million which are 100% government-guaranteed, and four student loans totaling $66 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 0.70% as of September 30, 2024, 0.77% as of December 31, 2023 and 0.76% as of September 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 $111.1 million during the first nine months of 2024 and have increased $141.3 million since September 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 $7.3 million as of September 30, 2024.
  • For the three months ended September 30, 2024, the Company recorded a net recovery of provision for credit losses of $114 thousand, as the recovery of a previously charged-off loan nearly offset the increase in provision required for new loan balances; this balance includes a $111 thousand recovery of provision for unfunded reserves, as a result of a decline in unfunded construction commitments.

Net Interest Income

  • Net interest income for the three months ended September 30, 2024 of $12.0 million increased $924 thousand, or 8.3%, compared to the three months ended September 30, 2023, as the increase in interest income earned on assets outweighed the interest expense on deposit accounts and borrowings.
  • Net interest margin (FTE), (a non-GAAP financial measure)1, for the three months ended September 30, 2024 was 3.24%, compared to 2.89% and 3.04% for the three months ended December 31, 2023 and the three months ended September 30, 2023, respectively. The increase as compared to the third quarter of 2023 was primarily due to the increase in yield on loans, described below.
  • Yield on loans was 5.85% for the three months ended September 30, 2024, compared to 5.53% for the prior year same period, and was 5.73% for the nine months ended September 30, 2024, compared to 5.81% for the prior year same period. The accretion of the credit mark related to purchased loans positively impacted interest income by 25 bps in the third quarter of 2024, compared to 27 bps in the third quarter of 2023.
  • The overall cost of funds, including noninterest-bearing deposits, of 207 bps incurred in the three months ended September 30, 2024 increased 35 bps from 172 bps in the same period in the prior year. Overall, the cost of interest-bearing deposits increased period over period, from a cost of 226 bps to 271 bps. Management believes that the Bank's cost of funds stabilized during the first half of 2024, as the cost of funds and cost of interest bearing deposits is relatively unchanged during the nine months ended September 30, 2024.

_____________________________________________________________________

1

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

Noninterest Income

Noninterest income for the three months ended September 30, 2024 decreased $1.2 million, or 45.1%, compared to the three months ended September 30, 2023, primarily due to the recognition of bank-owned life insurance proceeds during the prior period due to the death of a former employee, as well as lower wealth management, deposit account, debit card, credit card and ATM fees.  

Noninterest Expense

Noninterest expense for the three months ended September 30, 2024 decreased $397 thousand, or 4.8%, compared to the three months ended September 30, 2023.  This decrease is primarily the result of lower compensation and occupancy 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 $30.89 as of September 30, 2024, compared to $25.29 as of September 30, 2023, and tangible book value per share (a non-GAAP financial measure)1 was $28.68 as of September 30, 2024 compared to $22.83 as of September 30, 2023.  These values increased as net retained income increased and unrealized losses in the investment portfolio declined period over period.

Income Taxes

The effective tax rates amounted to 18.5% and 15.0% for the three months ended September 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 third 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 third quarter of 2024.

_____________________________________________________________________

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 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)









September 30, 2024





December 31, 2023*





September 30, 2023





(Unaudited)











(Unaudited)



ASSETS

















Cash and due from banks

$

10,188





$

18,074





$

7,416



Interest-bearing deposits in other banks



8,977







10,316







9,959



Federal funds sold



-







-







1,015



Securities:

















Available for sale (AFS), at fair value



279,323







420,595







390,816



Restricted securities, at cost



7,737







8,385







7,269



Total securities



287,060







428,980







398,085



Loans, net of deferred fees and costs



1,215,512







1,092,665







1,020,518



Allowance for credit losses



(8,523)







(8,395)







(7,799)



Loans, net



1,206,989







1,084,270







1,012,719



Premises and equipment, net



15,562







16,195







16,298



Bank owned life insurance



39,762







38,904







38,635



Goodwill



7,768







7,768







7,768



Core deposit intangible, net



4,099







5,093







5,448



Right of use asset, net



5,921







6,748







7,110



Deferred tax asset, net



13,548







15,382







19,567



Accrued interest receivable and other assets



14,906







14,287







38,559



Total assets

$

1,614,780





$

1,646,017





$

1,562,579



LIABILITIES AND SHAREHOLDERS' EQUITY

















Liabilities:

















Demand deposits:

















Noninterest-bearing

$

359,900





$

372,857





$

399,158



Interest-bearing



258,439







305,541







287,480



Money market and savings deposit accounts



431,707







412,119







406,189



Certificates of deposit and other time deposits



329,857







318,581







277,471



Total deposits



1,379,903







1,409,098







1,370,298



Federal funds purchased



3,112







3,462







-



Borrowings



52,500







66,500







43,000



Junior subordinated debt, net



3,495







3,459







3,448



Lease liability



5,748







6,504







6,824



Accrued interest payable and other liabilities



4,113







3,954







3,282



Total liabilities



1,448,871







1,492,977







1,426,852



Commitments and contingent liabilities

















Shareholders' equity:

















Preferred stock, $2.50 par value



-







-







-



Common stock, $2.50 par value



13,257







13,258







13,253



Capital surplus



106,166







106,045







105,862



Retained earnings



80,789







73,781







72,384



Accumulated other comprehensive loss



(34,303)







(40,044)







(55,772)



Total shareholders' equity



165,909







153,040







135,727



Total liabilities and shareholders' equity

$

1,614,780





$

1,646,017





$

1,562,579





















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 nine months ended







September 30, 2024





September 30, 2023





September 30, 2024





September 30, 2023



Interest and dividend income:

























Loans, including fees



$

17,378





$

13,748





$

49,281





$

41,409



Federal funds sold





136







133







535







143



Other interest-bearing deposits





50







64







165







442



Investment securities:

























Taxable





1,414







2,848







5,349







8,674



Tax exempt





326







327







979







983



Dividends





102







94







320







265



Total interest and dividend income





19,406







17,214







56,629







51,916





























Interest expense:

























Demand deposits





66







78







205







273



Money market and savings deposits





2,990







2,739







8,864







6,709



Certificates and other time deposits





3,915







2,685







11,947







5,109



Borrowings





313







505







1,187







1,271



Federal funds purchased





9







21







25







112



Junior subordinated debt





89







86







260







226



Total interest expense





7,382







6,114







22,488







13,700



Net interest income





12,024







11,100







34,141







38,216



Recovery of credit losses





(114)







(73)







(474)







(60)



Net interest income after recovery of credit losses





12,138







11,173







34,615







38,276





























Noninterest income:

























Wealth management fees





239







419







905







1,220



Deposit account fees





317







404







1,042







1,204



Debit/credit card and ATM fees





474







535







1,485







1,742



Bank owned life insurance income





294







981







858







1,494



Gains (losses) on sales of assets, net





-







132







36







132



Gain on early redemption of debt





-







-







379







-



Gain on termination of interest rate swap





-







-







-







460



Losses on sales of AFS, net





-







-







(4)







(206)



Other





128







173







620







919



Total noninterest income





1,452







2,644







5,321







6,965





























Noninterest expense:

























Salaries and employee benefits





3,769







3,936







11,771







12,049



Net occupancy





919







991







2,756







3,099



Equipment





176







195







514







589



Bank franchise tax





366







292







1,051







929



Computer software





219







185







703







590



Data processing





707







623







2,025







2,171



FDIC deposit insurance assessment





125







220







500







540



Marketing, advertising and promotion





166







262







571







912



Professional fees





189







202







631







592



Core deposit intangible amortization





319







368







994







1,138



Other





988







1,066







3,368







3,156



Total noninterest expense





7,943







8,340







24,884







25,765



Income before income taxes





5,647







5,477







15,052







19,476



Provision for income taxes





1,047







824







2,647







3,381



Net income



$

4,600





$

4,653





$

12,405





$

16,095





























Net income per common share, basic



$

0.86





$

0.87





$

2.31





$

3.00



Net income per common share, diluted



$

0.85





$

0.86





$

2.30





$

2.99



Weighted average common shares outstanding, basic





5,370,912







5,365,982







5,371,616







5,354,086



Weighted average common shares outstanding, diluted





5,396,936







5,395,483







5,387,537







5,382,145





























 

VIRGINIA NATIONAL BANKSHARES CORPORATION

FINANCIAL HIGHLIGHTS

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

(Unaudited)











At or For the Three Months Ended







September 30, 2024





June 30, 2024





March 31, 2024





December 31, 2023





September 30, 2023



Common Share Data:































Net income



$

4,600





$

4,159





$

3,646





$

3,168





$

4,653



Net income per weighted average share, basic



$

0.86





$

0.77





$

0.68





$

0.59





$

0.87



Net income per weighted average share, diluted



$

0.85





$

0.77





$

0.68





$

0.59





$

0.86



Weighted average shares outstanding, basic





5,370,912







5,377,055







5,366,890







5,365,982







5,365,982



Weighted average shares outstanding, diluted





5,396,936







5,385,770







5,380,081







5,394,713







5,395,483



Actual shares outstanding





5,370,912







5,370,912







5,390,388







5,365,982







5,365,982



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



$

28.68





$

26.43





$

25.99





$

26.12





$

22.83



































Key Ratios:































Return on average assets 1





1.15

%





1.05

%





0.91

%





0.79

%





1.18

%

Return on average equity 1





11.44

%





11.07

%





9.57

%





9.03

%





12.91

%

Net interest margin (FTE) 2





3.24

%





3.04

%





2.93

%





2.89

%





3.04

%

Efficiency ratio (FTE) 3





58.6

%





62.7

%





66.8

%





64.0

%





60.3

%

Loan-to-deposit ratio





88.1

%





84.3

%





78.8

%





77.5

%





74.5

%

































Net Interest Income:































Net interest income



$

12,024





$

11,181





$

10,936





$

10,753





$

11,100



Net interest income (FTE) 2



$

12,111





$

11,268





$

11,023





$

10,839





$

11,187



































Capital Ratios:































Tier 1 leverage ratio





11.81

%





11.47

%





11.24

%





11.13

%





11.26

%

Total risk-based capital ratio





18.88

%





18.64

%





18.49

%





18.24

%





18.76

%

































Assets and Asset Quality:































Average earning assets



$

1,487,182





$

1,491,821





$

1,513,924





$

1,487,910





$

1,460,555



Average gross loans



$

1,181,447





$

1,144,350





$

1,117,570





$

1,061,297





$

986,480



Fair value mark on acquired loans



$

7,301





$

8,237





$

8,811





$

9,399





$

9,965



































Allowance for credit losses on loans:































Beginning of period



$

8,028





$

8,289





$

8,395





$

7,799





$

7,863



Provision for (recovery of) credit losses





(3)







(518)







11







713







2



Charge-offs





(272)







(208)







(184)







(207)







(199)



Recoveries





770







465







67







90







133



Net recoveries (charge-offs)





498







257







(117)







(117)







(66)



End of period



$

8,523





$

8,028





$

8,289





$

8,395





$

7,799



































Non-accrual loans



$

2,113





$

2,365





$

2,178





$

1,852





$

1,143



Loans 90 days or more past due and still accruing





3,214







1,596







876







880







854



Total nonperforming assets (NPA) 4



$

5,327





$

3,961





$

3,054





$

2,732





$

1,997



































NPA as a % of total assets





0.33

%





0.25

%





0.19

%





0.17

%





0.13

%

NPA as a % of gross loans





0.44

%





0.34

%





0.27

%





0.25

%





0.20

%

ACL to gross loans





0.70

%





0.69

%





0.73

%





0.77

%





0.76

%

Non-accruing loans to gross loans





0.17

%





0.20

%





0.19

%





0.17

%





0.11

%

Net charge-offs (recoveries) to average loans 1





-0.17

%





-0.09

%





0.04

%





0.04

%





0.03

%





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







September 30, 2024





September 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



$

221,548





$

1,516







2.74

%



$

387,180





$

2,942







3.04

%

Tax Exempt Securities 1





66,334







413







2.49

%





66,835







414







2.48

%

Total Securities 1





287,882







1,929







2.68

%





454,015







3,356







2.96

%

Loans:





































Real Estate





905,275







13,348







5.87

%





843,477







11,612







5.46

%

Commercial





238,407







3,418







5.70

%





103,059







1,394







5.37

%

Consumer





37,765







612







6.45

%





39,945







742







7.37

%

      Total Loans





1,181,447







17,378







5.85

%





986,481







13,748







5.53

%

Fed Funds Sold





9,875







136







5.48

%





9,569







133







5.51

%

Other interest-bearing deposits





7,978







50







2.49

%





10,491







64







2.42

%

Total Earning Assets





1,487,182







19,493







5.21

%





1,460,556







17,301







4.70

%

Less: Allowance for Credit Losses





(8,134)



















(7,907)















Total Non-Earning Assets





106,616



















114,792















Total Assets



$

1,585,664

















$

1,567,441





















































LIABILITIES AND SHAREHOLDERS' EQUITY





































Interest Bearing Liabilities:





































Interest Bearing Deposits:





































Interest Checking



$

261,961





$

66







0.10

%



$

304,969





$

78







0.10

%

Money Market and Savings Deposits





425,026







2,990







2.80

%





407,213







2,739







2.67

%

Time Deposits





334,768







3,915







4.65

%





252,917







2,685







4.21

%

Total Interest-Bearing Deposits





1,021,755







6,971







2.71

%





965,099







5,502







2.26

%

Borrowings





25,634







313







4.86

%





37,648







505







5.32

%

Federal funds purchased





616







9







5.81

%





1,300







21







6.41

%

Junior subordinated debt





3,487







89







10.15

%





3,443







86







9.91

%

Total Interest-Bearing Liabilities





1,051,492







7,382







2.79

%





1,007,490







6,114







2.41

%

Non-Interest-Bearing Liabilities:





































Demand deposits





363,929



















406,518















Other liabilities





10,347



















10,422















Total Liabilities





1,425,768



















1,424,430















Shareholders' Equity





159,896



















143,011















Total Liabilities & Shareholders' Equity



$

1,585,664

















$

1,567,441















Net Interest Income (FTE)









$

12,111

















$

11,187









Interest Rate Spread 2

















2.42

%

















2.29

%

Cost of Funds

















2.07

%

















1.72

%

Interest Expense as a Percentage of

     Average Earning Assets

















1.97

%

















1.66

%

Net Interest Margin (FTE) 3

















3.24

%

















3.04

%





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 nine months ended







September 30, 2024





September 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



$

262,029





$

5,669







2.88

%



$

418,367





$

8,939







2.85

%

Tax Exempt Securities 1





66,462







1,240







2.49

%





66,957







1,245







2.48

%

Total Securities 1





328,491







6,909







2.80

%





485,324







10,184







2.80

%

Loans:





































Real Estate





903,786







38,373







5.67

%





827,902







36,077







5.83

%

Commercial





206,420







8,923







5.77

%





83,393







3,103







4.97

%

Consumer





37,706







1,985







7.03

%





42,094







2,229







7.08

%

      Total Loans





1,147,912







49,281







5.73

%





953,389







41,409







5.81

%

Fed Funds Sold





13,101







535







5.45

%





3,527







143







5.42

%

Other interest-bearing deposits





8,002







165







2.75

%





17,444







442







3.39

%

Total Earning Assets





1,497,506







56,890







5.07

%





1,459,684







52,178







4.78

%

Less: Allowance for Credit Losses





(8,381)



















(7,933)















Total Non-Earning Assets





109,762



















114,387















Total Assets



$

1,598,887

















$

1,566,138





















































LIABILITIES AND SHAREHOLDERS' EQUITY





































Interest Bearing Liabilities:





































Interest Bearing Deposits:





































Interest Checking



$

271,102





$

205







0.10

%



$

332,587





$

273







0.11

%

Money Market and Savings Deposits





419,586







8,864







2.82

%





423,547







6,709







2.12

%

Time Deposits





338,154







11,947







4.72

%





192,139







5,109







3.56

%

Total Interest-Bearing Deposits





1,028,842







21,016







2.73

%





948,273







12,091







1.70

%

Borrowings





32,706







1,187







4.85

%





33,289







1,271







5.10

%

Federal funds purchased





558







25







5.98

%





2,927







112







5.12

%

Junior subordinated debt





3,476







260







9.99

%





3,430







226







8.81

%

Total Interest-Bearing Liabilities





1,065,582







22,488







2.82

%





987,919







13,700







1.85

%

Non-Interest-Bearing Liabilities:





































Demand deposits





367,688



















428,906















Other liabilities





10,808



















9,760















Total Liabilities





1,444,078



















1,426,585















Shareholders' Equity





154,809



















139,553















Total Liabilities & Shareholders' Equity



$

1,598,887

















$

1,566,138















Net Interest Income (FTE)









$

34,402

















$

38,478









Interest Rate Spread 2

















2.25

%

















2.93

%

Cost of Funds

















2.10

%

















1.29

%

Interest Expense as a Percentage of

     Average Earning Assets

















2.01

%

















1.25

%

Net Interest Margin (FTE) 3

















3.07

%

















3.52

%





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







September 30, 2024





June 30, 2024





March 31, 2024





December 31, 2023





September 30, 2023



Fully tax-equivalent measures































Net interest income



$

12,024





$

11,181





$

10,936





$

10,753





$

11,100



Fully tax-equivalent adjustment





87







87







87







86







87



Net interest income (FTE) 1



$

12,111





$

11,268





$

11,023





$

10,839





$

11,187



































Efficiency ratio 2





58.9

%





63.1

%





67.2

%





64.4

%





60.7

%

Fully tax-equivalent adjustment





-0.3

%





-0.4

%





-0.4

%





-0.4

%





-0.4

%

Efficiency ratio (FTE) 3





58.6

%





62.7

%





66.8

%





64.0

%





60.3

%

































Net interest margin





3.22

%





3.01

%





2.91

%





2.87

%





3.02

%

Fully tax-equivalent adjustment





0.02

%





0.03

%





0.02

%





0.02

%





0.02

%

Net interest margin (FTE) 1





3.24

%





3.04

%





2.93

%





2.89

%





3.04

%









As of







September 30, 2024





June 30, 2024





March 31, 2024





December 31, 2023





September 30, 2023



Other financial measures































Book value per share



$

30.89





$

28.70





$

28.31





$

28.52





$

25.29



Impact of intangible assets 4





(2.21)







(2.27)







(2.32)







(2.40)







(2.46)



Tangible book value per share (non-GAAP)



$

28.68





$

26.43





$

25.99





$

26.12





$

22.83



 





For the Nine Months Ended







September 30,

2024





September 30,

2023



Fully tax-equivalent measures













Net interest income



$

34,141





$

38,216



Fully tax-equivalent adjustment





261







262



Net interest income (FTE) 1



$

34,402





$

38,478

















Efficiency ratio 2





63.1

%





57.0

%

Fully tax-equivalent adjustment





-0.5

%





-0.3

%

Efficiency ratio (FTE) 3





62.6

%





56.7

%















Net interest margin





3.05

%





3.50

%

Fully tax-equivalent adjustment





0.02

%





0.02

%

Net interest margin (FTE) 1





3.07

%





3.52

%





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