January 26, 2024

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

–

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

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

Preferred shares outstanding

–

Preferred shares authorized

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

427

207

1,088

Other interest-bearing deposits

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

367

280

Total interest and dividend income

18,074

16,276

69,990

56,731

Interest expense:

Demand deposits

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

–

138

–

Junior subordinated debt

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)

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

710

511

Marketing, advertising and promotion

186

351

1,098

1,224

Plastics expense

177

394

Professional fees

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

5,357,873

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

5,338,650

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

216

(235)

136

Charge-offs

(207)

(199)

(180)

(136)

(472)

Recoveries

133

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

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

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.

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

Average

Income/

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

5.39

46,042

426

3.67

Other interest-bearing deposits

8,946

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

0.10

403,570

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

—

Federal funds purchased

1,755

5.88

—

Junior subordinated debt

3,454

9.99

3,406

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

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.

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

Average

Income/

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

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.

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

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

-0.3

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

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

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

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

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

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

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

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

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