VIRGINIA NATIONAL BANKSHARES CORPORATION ANNOUNCES 2024 SECOND QUARTER EARNINGS
CHARLOTTESVILLE, Va., July 19, 2024 /PRNewswire/ — Virginia National Bankshares Corporation (NASDAQ: VABK) (the “Company”) today reported quarterly net income of $4.2 million, or $0.77 per diluted share, for the quarter ended June 30, 2024, compared to $5.7 million, or $1.05 per diluted share, recognized for the quarter ended June 30, 2023. For the six months ended June 30, 2024, the Company recognized net income of $7.8 million, or $1.45 per diluted share, compared to $11.4 million, or $2.13 per diluted share, for the six months ended June 30, 2023.
The declines in 2024 net income compared to 2023 for the quarterly and year-to-date periods are the result of 1) increased cost of funds and 2) the accretion of the credit mark related to purchased loans when satisfied by the borrower, which was significantly larger in the second quarter of 2023 when compared to the same period of 2024.
President and Chief Executive Officer’s comments: “Loan balances continued to increase during the second quarter of this year, with organic growth and continued purchases of the government-guaranteed portions of USDA and SBA loans,” stated Glenn W. Rust, President and Chief Executive Officer. “We increased our loan balances 6% during the first half of the year, 19% year-over-year and our credit quality metrics remain solid. Our capital and liquidity positions continue to be strong and stable. We are also pleased to report that Virginia National Bankshares Corporation has been included again in the Russell 2000, which reconstituted at the end of the second quarter. Inclusion will likely enhance stock liquidity through trading by index funds and benchmarked investment strategies.”
Key Performance Indicators
Second quarter 2024 compared to fourth quarter 2023
Return on average assets increased to 1.05% from 0.79%Return on average equity increased to 11.07% from 9.03%Net interest margin (FTE)1 improved to 3.04% from 2.89%Loan-to-deposit ratio increased to 84.3% from 77.5%Efficiency ratio (FTE)1 improved to 62.7% from 64.0%
June 2024 Balance Sheet Highlights
The Company continued to experience loan growth in the second quarter of 2024. Gross loans outstanding as of June 30, 2024 totaled $1.2 billion, an increase of $65.5 million, or 6.0%, compared to December 31, 2023 and an increase of $184.9 million, or 19.0%, compared to June 30, 2023.Outstanding borrowings declined $36.5 million, or 54.9%, from December 31, 2023 to June 30, 2024 and declined $29.7 million, or 49.7% year-over year, as management made a concerted effort to stabilize overall cost of funds.As of June 30, 2024, the Company had unused borrowing facilities in place of approximately $196.7 million.The Company holds no brokered deposits.The Company utilizes a third-party to offer multi-million-dollar FDIC insurance to customers with balances in excess of single-bank limits through Insured Cash Sweep® (ICS) plans. Deposit balances held in ICS plans amounted to $144.8 million as of June 30, 2024, $151.5 million as of December 31, 2023 and $132.8 million as of June 30, 2023.Total deposits decreased $35.3 million, or 2.5% from December 31, 2023 to June 30, 2024 and increased $25.8 million, or 1.9% year-over-year.Securities balances declined $137.6 million from December 31, 2023 to June 30, 2024; funds from the maturities of investments were repurposed to higher yielding assets in the form of loans and to reduce the level of outstanding borrowings.
Loans and Asset Quality
Credit performance remains strong with nonperforming assets as a percentage of total assets of 0.25% as of June 30, 2024, 0.17% as of December 31, 2023 and 0.08% as of June 30, 2023.Nonperforming assets amounted to $4.0 million as of June 30, 2024, compared to $2.7 million as of December 31, 2023 and $1.3 million as of June 30, 2023;Ten loans to nine borrowers are in non-accrual status, totaling $2.4 million, as of June 30, 2024, compared to $1.9 million as of December 31, 2023 and $1.2 million as of June 30, 2023.Loans 90 days or more past due and still accruing interest amounted to $1.6 million as of June 30, 2024, compared to $880 thousand as of December 31, 2023 and $107 thousand as of June 30, 2023. The past due balance as of June 30, 2024 is comprised of four loans totaling $1.5 million which are 100% government-guaranteed, and seven student loans totaling $63 thousand.The Company currently holds no other real estate owned.The period-end Allowance for Credit Losses (“ACL”) as a percentage of total loans was 0.69% as of June 30, 2024, 0.77% as of December 31, 2023 and 0.81% as of June 30, 2023. The proportionate increase in government-guaranteed loans over the respective periods is the driver of the decrease in the ACL as a percentage of total loans. Balances in government-guaranteed loans have increased $42.4 million during the second quarter of 2024 and have increased $130.2 million since June 30, 2023. Such loans are 100% government-guaranteed and do not require an ACL.The fair value mark that was allocated to the acquired loans was $21.3 million as of April 1, 2021, with a remaining balance of $8.2 million as of June 30, 2024.For the three months ended June 30, 2024, the Company recorded a net recovery of provision for credit losses of $338 thousand, primarily due to the recovery of a previously charged-off loan; this balance is net of a $180 thousand provision for unfunded commitments.
Net Interest Income
Net interest income for the three months ended June 30, 2024 of $11.2 million decreased $2.5 million, or 18.4%, compared to the three months ended June 30, 2023, as the increase in interest expense on deposit accounts and borrowings outweighed the increase in interest income earned on assets.Net interest margin (FTE), (a non-GAAP financial measure)2, for the three months ended June 30, 2024 was 3.04%, compared to 2.89% and 3.83% for the three months ended December 31, 2023 and the three months ended June 30, 2023, respectively. The increase as compared to the fourth quarter of 2023 was primarily due to the increase in yield on loans, increasing from 5.47% to 5.71% for the periods noted, while the decline when compared to the prior year second quarter was due to increased cost of funds.Yield on loans was 5.71% for the three months ended June 30, 2024, compared to 6.35% for the prior year same period, and was 5.67% for the six months ended June 30, 2024, compared to 5.96% for the prior year same period. The accretion of the credit mark related to purchased loans positively impacted interest income by 31 bps in the second quarter of 2024, compared to 88 bps in the second quarter of 2023, fluctuating primarily due to the treatment of the credit mark under CECL2. When a purchased loan, which was identified as purchased credit-deteriorated as of the date of the acquisition, is satisfied by the borrower, the remaining mark is recognized as interest income in accordance with CECL.The overall cost of funds, including noninterest-bearing deposits, of 210 bps incurred in the three months ended June 30, 2024 increased 77 bps from 133 bps in the same period in the prior year. Overall, the cost of interest-bearing deposits increased period over period, from a cost of 174 bps to 274 bps. Management believes that the Bank’s cost of funds has stabilized during the first half of 2024, as the cost of funds and cost of interest bearing deposits is relatively unchanged from the three months ended March 31, 2024.
Noninterest Income
Noninterest income for the three months ended June 30, 2024 decreased $354 thousand, or 17.3%, compared to the three months ended June 30, 2023, primarily due to lower wealth management, deposit account, debit card, credit card and ATM fees.
Noninterest Expense
Noninterest expense for the three months ended June 30, 2024 decreased $442 thousand, or 5.2%, compared to the three months ended June 30, 2023. This decrease is primarily the result of lower compensation, occupancy and data processing costs, as a result of right-sizing the branch network from the merger, and reduced marketing, advertising and promotion expense.
Book Value
Book value per share increased to $28.70 as of June 30, 2024, compared to $26.54 as of June 30, 2023, and tangible book value per share (a non-GAAP financial measure)1 was $26.43 as of June 30, 2024 compared to $24.01 as of June 30, 2023. These values increased as net retained income increased and unrealized losses in the investment portfolio remained relatively constant period over period.
Income Taxes
The effective tax rates amounted to 18.3% and 18.4% for the three months ended June 30, 2024 and 2023, respectively, which are lower than the statutory rate, due to the recognition of low-income housing tax credits and the effect of tax-exempt income from municipal bonds and income from bank owned life insurance policies.
Dividends
Cash dividends of $1.8 million, or $0.33 per share, were declared and paid during the second quarter of 2024.
Share Repurchase Plan
During the second quarter of 2024, the Company continued its share repurchase plan, repurchasing 19,476 shares at an average price of $27.32 per share. Year-to-date, the Company has repurchased 20,350 shares at an average price of $27.42 per share.
_____________________________________________________________________
1 See “Reconciliation of Certain Quarterly Non-GAAP Financial Measures” at the end of this release.
2 For more information regarding the adoption of FASB’s Topic 326, Financial Instruments – Credit Losses (“CECL”) effective January 1, 2023, refer to the Company’s first quarter 2023 Form 10-Q.
About Virginia National Bankshares Corporation
Virginia National Bankshares Corporation, headquartered in Charlottesville, Virginia, is the bank holding company for Virginia National Bank. The Bank has nine banking offices throughout Fauquier and Prince William counties, three banking offices in Charlottesville and Albemarle County, and banking offices in Winchester and Richmond, Virginia. The Bank offers a full range of banking and related financial services to meet the needs of individuals, businesses and charitable organizations, including the fiduciary services of VNB Trust and Estate Services. The Company’s common stock trades on the Nasdaq Capital Market under the symbol “VABK.” Additional information on the Company is also available at www.vnbcorp.com.
Non-GAAP Financial Measures
The accounting and reporting policies of the Company conform to U.S. generally accepted accounting principles (“GAAP”) and prevailing practices in the banking industry. However, management uses certain non-GAAP measures to supplement the evaluation of the Company’s performance. Management believes presentations of these non-GAAP financial measures provide useful supplemental information that is essential to a proper understanding of the operating results of the Company’s core businesses. These non-GAAP disclosures should not be viewed as a substitute for, or more important than, operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Reconciliations of GAAP to non-GAAP measures are included at the end of this release.
Forward-Looking Statements; Other Information
Certain statements in this release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, without limitation, statements with respect to the Company’s operations, performance, future strategy and goals, and are often characterized by use of qualified words such as “expect,” “believe,” “estimate,” “project,” “anticipate,” “intend,” “will,” “should,” or words of similar meaning or other statements concerning the opinions or judgement of the Company and its management about future events. While Company management believes such statements to be reasonable, future events and predictions are subject to circumstances that are not within the control of the Company and its management. Actual results may differ materially from those included in the forward-looking statements due to a number of factors, including, without limitation, the effects of and changes in: inflation, interest rates, market and monetary fluctuations; liquidity and capital requirements; market disruptions including pandemics or significant health hazards, severe weather conditions, natural disasters, terrorist activities, financial crises, political crises, war and other military conflicts or other major events, the governmental and societal responses thereto, or the prospect of these events; changes, particularly declines, in general economic and market conditions in the local economies in which the Company operates, including the effects of declines in real estate values; the effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System; the impact of changes in laws, regulations and guidance related to financial services including, but not limited to, taxes, banking, securities and insurance; changes in accounting principles, policies and guidelines; the financial condition of the Company’s borrowers; the Company’s ability to attract, hire, train and retain qualified employees; an increase in unemployment levels; competitive pressures on loan and deposit pricing and demand; fluctuation in asset quality; assumptions that underlie the Company’s ACL; the value of securities held in the Company’s investment portfolio; performance of assets under management; cybersecurity threats or attacks and the development and maintenance of reliable electronic systems; changes in technology and their impact on the marketing of new products and services and the acceptance of these products and services by new and existing customers; the willingness of customers to substitute competitors’ products and services for the Company’s products and services; the risks and uncertainties described from time to time in the Company’s press releases and filings with the SEC; and the Company’s performance in managing the risks involved in any of the foregoing. Many of these factors and additional risks and uncertainties are described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 and other reports filed from time to time by the Company with the Securities and Exchange Commission. These statements speak only as of the date made, and the Company does not undertake to update any forward-looking statements to reflect changes or events that may occur after this release.
VIRGINIA NATIONAL BANKSHARES CORPORATION
CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except share and per share data)
June 30, 2024
December 31, 2023*
June 30, 2023
(Unaudited)
(Unaudited)
ASSETS
Cash and due from banks
$
8,785
$
18,074
$
9,714
Interest-bearing deposits in other banks
8,515
10,316
20,225
Securities:
Available for sale (AFS), at fair value
284,698
420,595
473,868
Restricted securities, at cost
6,667
8,385
7,438
Total securities
291,365
428,980
481,306
Loans, net of deferred fees and costs
1,158,214
1,092,665
973,348
Allowance for credit losses
(8,028)
(8,395)
(7,863)
Loans, net
1,150,186
1,084,270
965,485
Premises and equipment, net
15,818
16,195
17,564
Bank owned life insurance
39,468
38,904
39,065
Goodwill
7,768
7,768
7,768
Core deposit intangible, net
4,418
5,093
5,815
Right of use asset, net
6,287
6,748
6,634
Deferred tax asset, net
15,860
15,382
16,961
Accrued interest receivable and other assets
25,350
14,287
13,551
Total assets
$
1,573,820
$
1,646,017
$
1,584,088
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Demand deposits:
Noninterest-bearing
$
357,931
$
372,857
$
412,273
Interest-bearing
257,365
305,541
312,773
Money market and savings deposit accounts
423,055
412,119
398,074
Certificates of deposit and other time deposits
335,490
318,581
224,956
Total deposits
1,373,841
1,409,098
1,348,076
Federal funds purchased
2,438
3,462
20,503
Borrowings
30,000
66,500
59,666
Junior subordinated debt, net
3,483
3,459
3,436
Lease liability
6,102
6,504
6,301
Accrued interest payable and other liabilities
3,792
3,954
3,667
Total liabilities
1,419,656
1,492,977
1,441,649
Commitments and contingent liabilities
Shareholders’ equity:
Preferred stock, $2.50 par value
–
–
–
Common stock, $2.50 par value
13,256
13,258
13,250
Capital surplus
105,935
106,045
105,667
Retained earnings
77,961
73,781
69,502
Accumulated other comprehensive loss
(42,988)
(40,044)
(45,980)
Total shareholders’ equity
154,164
153,040
142,439
Total liabilities and shareholders’ equity
$
1,573,820
$
1,646,017
$
1,584,088
Common shares outstanding
5,370,912
5,365,982
5,365,982
Common shares authorized
10,000,000
10,000,000
10,000,000
Preferred shares outstanding
–
–
–
Preferred shares authorized
2,000,000
2,000,000
2,000,000
* Derived from audited consolidated financial statements
VIRGINIA NATIONAL BANKSHARES CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands, except per share and share data)
(Unaudited)
For the three months ended
For the six months ended
June 30, 2024
June 30, 2023
June 30, 2024
June 30, 2023
Interest and dividend income:
Loans, including fees
$
16,242
$
14,894
$
31,903
$
27,661
Federal funds sold
160
10
399
10
Other interest-bearing deposits
58
119
115
378
Investment securities:
Taxable
1,776
2,876
3,935
5,826
Tax exempt
327
329
653
656
Dividends
100
104
218
171
Total interest and dividend income
18,663
18,332
37,223
34,702
Interest expense:
Demand deposits
68
106
139
195
Money market and savings deposits
2,952
2,197
5,874
3,970
Certificates and other time deposits
3,982
1,776
8,032
2,424
Borrowings
388
439
874
766
Federal funds purchased
9
32
16
91
Junior subordinated debt
83
79
171
140
Total interest expense
7,482
4,629
15,106
7,586
Net interest income
11,181
13,703
22,117
27,116
Provision for (recovery of) credit losses
(338)
261
(360)
13
Net interest income after provision for (recovery of) credit losses
11,519
13,442
22,477
27,103
Noninterest income:
Wealth management fees
240
397
666
801
Deposit account fees
338
399
725
800
Debit/credit card and ATM fees
523
636
1,011
1,207
Bank owned life insurance income
289
261
564
513
Gains (losses) on sales of assets, net
(3)
–
36
–
Gain on early redemption of debt
–
–
379
–
Gain on termination of interest rate swap
–
–
–
460
Losses on sales of AFS, net
–
–
(4)
(206)
Other
304
352
492
746
Total noninterest income
1,691
2,045
3,869
4,321
Noninterest expense:
Salaries and employee benefits
3,850
4,062
8,002
8,113
Net occupancy
865
929
1,837
2,108
Equipment
167
176
338
394
Bank franchise tax
345
313
685
637
Computer software
276
203
484
405
Data processing
579
806
1,318
1,548
FDIC deposit insurance assessment
180
220
375
320
Marketing, advertising and promotion
157
275
405
650
Professional fees
190
198
442
390
Core deposit intangible amortization
332
379
675
770
Other
1,181
1,003
2,380
2,090
Total noninterest expense
8,122
8,564
16,941
17,425
Income before income taxes
5,088
6,923
9,405
13,999
Provision for income taxes
929
1,272
1,600
2,557
Net income
$
4,159
$
5,651
$
7,805
$
11,442
Net income per common share, basic
$
0.77
$
1.05
$
1.45
$
2.14
Net income per common share, diluted
$
0.77
$
1.05
$
1.45
$
2.13
Weighted average common shares outstanding, basic
5,377,055
5,357,873
5,371,972
5,348,040
Weighted average common shares outstanding, diluted
5,385,770
5,375,073
5,382,980
5,375,545
VIRGINIA NATIONAL BANKSHARES CORPORATION
FINANCIAL HIGHLIGHTS
(dollars in thousands, except per share data)
(Unaudited)
At or For the Three Months Ended
June 30,
2024
March 31,
2024
December 31,
2023
September 30,
2023
June 30,
2023
Common Share Data:
Net income per weighted average share, basic
$
0.77
$
0.68
$
0.59
$
0.87
$
1.05
Net income per weighted average share, diluted
$
0.77
$
0.68
$
0.59
$
0.86
$
1.05
Weighted average shares outstanding, basic
5,377,055
5,366,890
5,365,982
5,365,982
5,357,873
Weighted average shares outstanding, diluted
5,385,770
5,380,081
5,394,713
5,395,483
5,375,073
Actual shares outstanding
5,370,912
5,390,388
5,365,982
5,365,982
5,365,982
Tangible book value per share at period end (non-GAAP) 5
$
26.43
$
25.99
$
26.12
$
22.83
$
24.01
Key Ratios:
Return on average assets 1
1.05
%
0.91
%
0.79
%
1.18
%
1.46
%
Return on average equity 1
11.07
%
9.57
%
9.03
%
12.91
%
15.98
%
Net interest margin (FTE) 2
3.04
%
2.93
%
2.89
%
3.04
%
3.83
%
Efficiency ratio (FTE) 3
62.7
%
66.8
%
64.0
%
60.3
%
54.1
%
Loan-to-deposit ratio
84.3
%
78.8
%
77.5
%
74.5
%
72.2
%
Net Interest Income:
Net interest income
$
11,181
$
10,936
$
10,753
$
11,100
$
13,703
Net interest income (FTE) 2
$
11,268
$
11,023
$
10,839
$
11,187
$
13,789
Capital Ratios:
Tier 1 leverage ratio
11.47
%
11.24
%
11.13
%
11.26
%
11.20
%
Total risk-based capital ratio
18.64
%
18.39
%
18.24
%
18.76
%
18.80
%
Assets and Asset Quality:
Average earning assets
$
1,491,821
$
1,513,924
$
1,487,910
$
1,460,555
$
1,443,048
Average gross loans
$
1,144,350
$
1,117,570
$
1,061,297
$
986,480
$
940,264
Fair value mark on acquired loans
$
8,237
$
8,811
$
9,399
$
9,965
$
10,957
Allowance for credit losses on loans:
Beginning of period
$
8,289
$
8,395
$
7,799
$
7,863
$
7,772
Provision for (recovery of) credit losses
(518)
11
713
2
216
Charge-offs
(208)
(184)
(207)
(199)
(180)
Recoveries
465
67
90
133
55
Net recoveries (charge-offs)
257
(117)
(117)
(66)
(125)
End of period
$
8,028
$
8,289
$
8,395
$
7,799
$
7,863
Non-accrual loans
$
2,365
$
2,178
$
1,852
$
1,143
$
1,185
Loans 90 days or more past due and still accruing
1,596
876
880
854
107
Total nonperforming assets (NPA) 4
$
3,961
$
3,054
$
2,732
$
1,997
$
1,292
NPA as a % of total assets
0.25
%
0.19
%
0.17
%
0.13
%
0.08
%
NPA as a % of gross loans
0.34
%
0.27
%
0.25
%
0.20
%
0.13
%
ACL to gross loans
0.69
%
0.73
%
0.77
%
0.76
%
0.81
%
Non-accruing loans to gross loans
0.20
%
0.19
%
0.17
%
0.11
%
0.12
%
Net charge-offs (recoveries) to average loans 1
-0.09
%
0.04
%
0.04
%
0.03
%
0.05
%
1
Ratio is computed on an annualized basis.
2
The net interest margin and net interest income are reported on a fully tax-equivalent basis (FTE) basis, using a Federal income tax rate of 21%. This is a non-GAAP financial measure. Refer to the Reconciliation of Certain Non-GAAP Financial (FTE) Measures at the end of this release.
3
The efficiency ratio (FTE) is computed as a percentage of noninterest expense divided by the sum of net interest income (FTE) and noninterest income. This is a non-GAAP financial measure that management believes provides investors with important information regarding operational efficiency. Management believes such financial information is meaningful to the reader in understanding operating performance, but cautions that such information should not be viewed as a substitute for GAAP. Comparison of our efficiency ratio with those of other companies may not be possible because other companies may calculate them differently. Refer to the Reconciliation of Certain Non-GAAP Financial (FTE) Measures at the end of this release.
4
The Bank held no other real estate owned during any of the periods presented.
5
This is a non-GAAP financial measure. Refer to the Reconciliation of Certain Non-GAAP Financial (FTE) Measures at the end of this release.
VIRGINIA NATIONAL BANKSHARES CORPORATION
AVERAGE BALANCES, INCOME AND EXPENSES, YIELDS AND RATES (TAXABLE EQUIVALENT BASIS)
(dollars in thousands)
(Unaudited)
For the three months ended
June 30, 2024
June 30, 2023
Interest
Interest
Average
Income/
Average
Average
Income/
Average
Balance
Expense
Yield/Cost
Balance
Expense
Yield/Cost
ASSETS
Interest Earning Assets:
Securities:
Taxable Securities and Dividends
$
261,250
$
1,876
2.87
%
$
421,156
$
2,980
2.83
%
Tax Exempt Securities 1
66,463
414
2.49
%
66,956
415
2.48
%
Total Securities 1
327,713
2,290
2.80
%
488,112
3,395
2.78
%
Loans:
Real Estate
900,581
12,483
5.57
%
823,289
13,167
6.41
%
Commercial
206,125
3,080
6.01
%
74,665
969
5.21
%
Consumer
37,644
679
7.25
%
42,310
758
7.19
%
Total Loans
1,144,350
16,242
5.71
%
940,264
14,894
6.35
%
Fed Funds Sold
11,840
160
5.44
%
895
10
4.48
%
Other interest-bearing deposits
7,918
58
2.95
%
13,777
119
3.46
%
Total Earning Assets
1,491,821
18,750
5.06
%
1,443,048
18,418
5.12
%
Less: Allowance for Credit Losses
(8,299)
(7,805)
Total Non-Earning Assets
112,246
113,883
Total Assets
$
1,595,768
$
1,549,126
LIABILITIES AND SHAREHOLDERS’ EQUITY
Interest Bearing Liabilities:
Interest Bearing Deposits:
Interest Checking
$
268,621
$
68
0.10
%
$
331,523
$
106
0.13
%
Money Market and Savings Deposits
421,700
2,952
2.82
%
415,015
2,197
2.12
%
Time Deposits
338,648
3,982
4.73
%
194,736
1,776
3.66
%
Total Interest-Bearing Deposits
1,028,969
7,002
2.74
%
941,274
4,079
1.74
%
Borrowings
30,407
388
5.13
%
34,265
439
5.14
%
Federal funds purchased
561
9
6.45
%
2,392
32
5.37
%
Junior subordinated debt
3,476
83
9.60
%
3,430
79
9.24
%
Total Interest-Bearing Liabilities
1,063,413
7,482
2.83
%
981,361
4,629
1.89
%
Non-Interest-Bearing Liabilities:
Demand deposits
370,640
416,039
Other liabilities
10,545
9,853
Total Liabilities
1,444,598
1,407,253
Shareholders’ Equity
151,170
141,873
Total Liabilities & Shareholders’ Equity
$
1,595,768
$
1,549,126
Net Interest Income (FTE)
$
11,268
$
13,789
Interest Rate Spread 2
2.23
%
3.23
%
Cost of Funds
2.10
%
1.33
%
Interest Expense as a Percentage of
Average Earning Assets
2.02
%
1.29
%
Net Interest Margin (FTE) 3
3.04
%
3.83
%
1
Tax-exempt income for investment securities has been adjusted to a fully tax-equivalent basis (FTE), using a Federal income tax rate of 21%.
Refer to the Reconcilement of Non-GAAP Measures table at the end of this release.
2
Interest spread is the average yield earned on earning assets less the average rate paid on interest-bearing liabilities.
3
Net interest margin (FTE) is net interest income expressed as a percentage of average earning assets.
VIRGINIA NATIONAL BANKSHARES CORPORATION
AVERAGE BALANCES, INCOME AND EXPENSES, YIELDS AND RATES (TAXABLE EQUIVALENT BASIS)
(dollars in thousands)
(Unaudited)
For the six months ended
June 30, 2024
June 30, 2023
Interest
Interest
Average
Income/
Average
Average
Income/
Average
Balance
Expense
Yield/Cost
Balance
Expense
Yield/Cost
ASSETS
Interest Earning Assets:
Securities:
Taxable Securities and Dividends
$
282,493
$
4,153
2.94
%
$
434,219
$
5,997
2.76
%
Tax Exempt Securities 1
66,526
827
2.49
%
67,019
831
2.48
%
Total Securities 1
349,019
4,980
2.85
%
501,238
6,828
2.72
%
Loans:
Real Estate
903,033
25,026
5.57
%
820,033
24,032
5.91
%
Commercial
190,251
5,505
5.82
%
73,357
2,098
5.77
%
Consumer
37,676
1,372
7.32
%
43,179
1,531
7.15
%
Total Loans
1,130,960
31,903
5.67
%
936,569
27,661
5.96
%
Fed Funds Sold
14,732
399
5.45
%
455
10
4.43
%
Other interest-bearing deposits
8,171
115
2.83
%
20,789
378
3.67
%
Total Earning Assets
1,502,882
37,397
5.00
%
1,459,051
34,877
4.82
%
Less: Allowance for Credit Losses
(8,356)
(7,947)
Total Non-Earning Assets
111,045
114,372
Total Assets
$
1,605,571
$
1,565,476
LIABILITIES AND SHAREHOLDERS’ EQUITY
Interest Bearing Liabilities:
Interest Bearing Deposits:
Interest Checking
$
275,723
$
139
0.10
%
$
346,625
$
195
0.11
%
Money Market and Savings Deposits
416,837
5,874
2.83
%
431,849
3,970
1.85
%
Time Deposits
339,866
8,032
4.75
%
161,247
2,424
3.03
%
Total Interest-Bearing Deposits
1,032,426
14,045
2.74
%
939,721
6,589
1.41
%
Borrowings
36,280
874
4.84
%
31,074
766
4.97
%
Federal funds purchased
528
16
6.09
%
3,754
91
4.89
%
Junior subordinated debt
3,470
171
9.91
%
3,423
140
8.25
%
Total Interest-Bearing Liabilities
1,072,704
15,106
2.83
%
977,972
7,586
1.56
%
Non-Interest-Bearing Liabilities:
Demand deposits
369,588
440,285
Other liabilities
11,041
9,423
Total Liabilities
1,453,333
1,427,680
Shareholders’ Equity
152,238
137,796
Total Liabilities & Shareholders’ Equity
$
1,605,571
$
1,565,476
Net Interest Income (FTE)
$
22,291
$
27,291
Interest Rate Spread 2
2.17
%
3.26
%
Cost of Funds
2.11
%
1.08
%
Interest Expense as a Percentage of
Average Earning Assets
2.02
%
1.05
%
Net Interest Margin (FTE) 3
2.98
%
3.77
%
1
Tax-exempt income for investment securities has been adjusted to a fully tax-equivalent basis (FTE), using a Federal income tax rate of 21%.
Refer to the Reconcilement of Non-GAAP Measures table at the end of this release.
2
Interest spread is the average yield earned on earning assets less the average rate paid on interest-bearing liabilities.
3
Net interest margin (FTE) is net interest income expressed as a percentage of average earning assets.
VIRGINIA NATIONAL BANKSHARES CORPORATION
RECONCILIATION OF CERTAIN QUARTERLY NON-GAAP FINANCIAL MEASURES
(dollars in thousands, except per share data)
(Unaudited)
For the Three Months Ended
June 30,
2024
March 31,
2024
December 31,
2023
September 30,
2023
June 30,
2023
Fully tax-equivalent measures
Net interest income
$
11,181
$
10,936
$
10,753
$
11,100
$
13,703
Fully tax-equivalent adjustment
87
87
86
87
86
Net interest income (FTE) 1
$
11,268
$
11,023
$
10,839
$
11,187
$
13,789
Efficiency ratio 2
63.1
%
67.2
%
64.4
%
60.7
%
54.4
%
Fully tax-equivalent adjustment
-0.4
%
-0.4
%
-0.4
%
-0.4
%
-0.3
%
Efficiency ratio (FTE) 3
62.7
%
66.8
%
64.0
%
60.3
%
54.1
%
Net interest margin
3.01
%
2.91
%
2.87
%
3.02
%
3.81
%
Fully tax-equivalent adjustment
0.03
%
0.02
%
0.02
%
0.02
%
0.02
%
Net interest margin (FTE) 1
3.04
%
2.93
%
2.89
%
3.04
%
3.83
%
As of
June 30,
2024
March 31,
2024
December 31,
2023
September 30,
2023
June 30,
2023
Other financial measures
Book value per share
$
28.70
$
28.31
$
28.52
$
25.29
$
26.54
Impact of intangible assets 4
(2.27)
(2.32)
(2.40)
(2.46)
(2.53)
Tangible book value per share (non-GAAP)
$
26.43
$
25.99
$
26.12
$
22.83
$
24.01
For the Six Months Ended
June 30, 2024
June 30, 2023
Fully tax-equivalent measures
Net interest income
$
22,117
$
27,116
Fully tax-equivalent adjustment
174
175
Net interest income (FTE) 1
$
22,291
$
27,291
Efficiency ratio 2
65.2
%
55.4
%
Fully tax-equivalent adjustment
-0.4
%
-0.3
%
Efficiency ratio (FTE) 3
64.8
%
55.1
%
Net interest margin
2.96
%
3.75
%
Fully tax-equivalent adjustment
0.02
%
0.02
%
Net interest margin (FTE) 1
2.98
%
3.77
%
1
FTE calculations use a Federal income tax rate of 21%.
2
The efficiency ratio, GAAP basis, is computed by dividing noninterest expense by the sum of net interest income and noninterest income.
3
The efficiency ratio, FTE, is computed by dividing noninterest expense by the sum of net interest income (FTE) and noninterest income.
4
Intangible assets include goodwill and core deposit intangible assets, net of accumulated amortization, for all periods presented.
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SOURCE Virginia National Bankshares Corporation