Company Overview - The Company was incorporated in Virginia on February 21, 2013, to acquire all outstanding shares of the Bank and became its holding company[17]. - Virginia National Bank, the principal operating subsidiary, commenced operations on July 29, 1998, and offers a full range of banking services including checking accounts, loans, and treasury management[19][25][26]. - The Company formed Masonry Capital Management, LLC in 2018, which will provide an annual revenue-share amount for six years after its membership interests are sold[23]. - The Company actively competes with other banks and financial institutions, facing strong competition for deposits and loans in its market areas[28][30]. - The Company’s market areas include Virginia communities around Charlottesville, Winchester, Manassas, and Richmond, with a focus on higher education and medical services[27]. Workforce and Diversity - As of December 31, 2024, the Company had 146 full-time equivalent employees, with women representing 75% and racial and ethnic minorities 17% of the workforce[36]. - The Company has a commitment to diversity, with a workforce that reflects the communities it serves, actively recruiting minorities and women[36]. - The Company has created the Finance Career & Leadership Academy to develop young talent in the financial industry, offering free training and potential career opportunities[31][32]. Regulatory Environment - The Company is subject to extensive regulation under federal and state laws, including supervision by the Federal Reserve and the SEC[18][39]. - The Federal Reserve and FDIC proposed rules in July 2023 that may impact banks with total assets of $100 billion or more, but these do not apply to the Company[61]. - The Company is subject to various legal limitations on dividend payments, which may be restricted based on its financial condition[52]. - The Company and the Bank are monitoring regulatory developments related to the Corporate Transparency Act (CTA) and assessing its potential impact[92]. - The Company and the Bank are subject to consumer protection regulations primarily enforced by the Federal Reserve Board and the OCC due to their asset size being below $10 billion[98]. Financial Performance - Net income for the year ended December 31, 2024, was $17.0 million, or $3.15 per diluted share, an 11.9% decrease compared to $19.3 million, or $3.58 per diluted share for 2023[189]. - Net interest income (FTE) for 2024 was $46,723 thousand, down from $49,316 thousand in 2023, reflecting a decrease of $2.6 million[186]. - The efficiency ratio (FTE) increased to 62.0% in 2024 from 58.3% in 2023, indicating a decline in operational efficiency[190]. - The Bank segment earned net income of $17.2 million in 2024, a decrease of $2.2 million compared to $19.4 million in 2023[192]. - Noninterest income for 2024 was $7,589 thousand, a decrease of $1,512 thousand or 16.6% compared to $9,101 thousand in 2023[211]. Capital and Risk Management - The Company's Tier 1 capital ratio was 17.94% as of December 31, 2024, exceeding the minimum requirements[59]. - The Bank's CET1 capital ratio was 17.77% as of December 31, 2024, also exceeding the minimum requirements[59]. - The Company expects to maintain a leverage ratio of 11.68% as of December 31, 2024, above the required minimum[59]. - The Company manages credit risk through consistent underwriting standards and a continuous quality assessment process, but there is no assurance that these measures will be fully effective[109]. - The allowance for credit losses (ACL) as a percentage of total loans was 0.68% at December 31, 2024, down from 0.77% at December 31, 2023[209]. Economic and Market Conditions - Economic conditions, including prolonged inflation, could negatively affect the Company's profitability and increase default rates on loans[118]. - A deterioration in economic conditions could lead to increased loan delinquencies and a decline in demand for the Company's products and services[118]. - The Company may face increased scrutiny from banking regulators due to its concentration in commercial real estate lending, which could require improved risk management policies[114]. - The Company focuses on lending to small to mid-sized businesses, which may increase credit risk due to their limited financial resources and vulnerability to economic conditions[112]. Operational Risks - Operational risks include reputational risk, legal compliance risk, and potential fraud, which could negatively impact the Company's financial results[132]. - The Company faces risks from cybersecurity threats, which could lead to legal claims, regulatory penalties, and damage to its reputation[142]. - The Company is required to maintain effective internal controls over financial reporting, and failures in this area could harm its reputation and operating results[136]. Shareholder Information - The Company is currently paying a quarterly cash dividend of $0.33 per share, having done so since July 2013[153]. - The cash dividend payout ratio increased to 41.80% in 2024 from 33.47% in 2023, reflecting a higher proportion of earnings distributed as dividends[189]. - The share repurchase plan approved in June 2023 allows for the repurchase of up to 5% of outstanding common stock, with no shares repurchased during the three months ending December 31, 2024[173]. - The Company had approximately 660 shareholders of record as of March 26, 2025[171]. Future Outlook - Future regulatory changes could significantly alter the operating environment for the Company and the Bank, impacting costs and permissible activities[105]. - The ability to attract deposits and identify attractive loan opportunities is crucial for the Company's growth strategy[128]. - The Company plans to consider acquisitions or expansion into new product lines to fulfill strategic objectives, but may face competition from larger financial institutions[129].

Core Insights - Virginia National Bankshares Corporation reported a quarterly net income of $4.6 million, or $0.85 per diluted share, for Q3 2024, a slight decrease from $4.7 million, or $0.86 per diluted share, in Q3 2023 [1] - Year-to-date net income for the first nine months of 2024 was $12.4 million, down from $16.1 million in the same period of 2023 [1][2] Financial Performance - The decline in net income is attributed to increased cost of funds and the absence of bank-owned life insurance proceeds received in the prior year, although there was an increase in interest income and a decrease in operating expenses [2] - Net interest income for Q3 2024 was $12.0 million, an increase of $924 thousand, or 8.3%, compared to Q3 2023 [6] - The net interest margin (FTE) improved to 3.24% in Q3 2024 from 2.89% in Q3 2023, primarily due to an increase in loan yields [6][23] Loan and Asset Quality - Gross loans outstanding as of September 30, 2024, totaled $1.2 billion, reflecting an increase of $122.8 million, or 11.2%, from December 31, 2023, and an increase of $195.0 million, or 19.1%, year-over-year [4] - Nonperforming assets as a percentage of total assets were 0.33% as of September 30, 2024, up from 0.17% at the end of 2023 [5][24] - The allowance for credit losses (ACL) as a percentage of total loans was 0.70% as of September 30, 2024, down from 0.77% at the end of 2023, driven by an increase in government-guaranteed loans [5][24] Operational Efficiency - The efficiency ratio (FTE) improved to 58.6% in Q3 2024 from 62.7% in Q2 2024, indicating better operational efficiency [4][23] - Noninterest expense decreased by $397 thousand, or 4.8%, compared to Q3 2023, primarily due to lower compensation and occupancy costs [10] Capital and Liquidity - The company maintained solid capital and liquidity positions, with unused borrowing facilities of approximately $160.4 million as of September 30, 2024 [4] - Book value per share increased to $30.89 as of September 30, 2024, compared to $25.29 a year earlier, reflecting net retained income growth and a decline in unrealized losses [11] Dividends and Share Repurchase - Cash dividends of $1.8 million, or $0.33 per share, were declared and paid during Q3 2024 [13] - Year-to-date, the company repurchased 20,350 shares at an average price of $27.42 per share, with no shares repurchased during Q3 2024 [13]

[Executive Summary](index=1&type=section&id=Executive%20Summary) The company reported reduced net income and EPS for Q2 and YTD 2024, offset by strong loan growth, solid credit quality, and robust capital [Earnings Announcement and Key Highlights](index=1&type=section&id=Earnings%20Announcement%20and%20Key%20Highlights) Net income and diluted EPS declined in Q2 and YTD 2024 due to higher cost of funds and lower credit mark accretion, despite strong loan growth and capital Net Income and Diluted EPS (Q2 & YTD 2024 vs. 2023) | Metric | Q2 2024 | Q2 2023 | YTD 2024 | YTD 2023 | | :--------------------- | :------------ | :------------ | :------------ | :------------ | | Net Income | $4.2 million | $5.7 million | $7.8 million | $11.4 million | | Diluted EPS | $0.77 | $1.05 | $1.45 | $2.13 | - **Declines in 2024 net income** for both quarterly and year-to-date periods are attributed to **increased cost of funds** and significantly **lower accretion of the credit mark** related to purchased loans compared to 2023[3](index=3&type=chunk) - **Loan balances increased 6%** in the first half of 2024 and **19% year-over-year**, with **credit quality metrics remaining solid**. **Capital and liquidity positions are strong and stable**[3](index=3&type=chunk) - Virginia National Bankshares Corporation has been included again in the **Russell 2000 index**, which is expected to **enhance stock liquidity**[3](index=3&type=chunk) [Financial Performance Overview](index=1&type=section&id=Financial%20Performance%20Overview) The company experienced a decline in net income and EPS, but key performance ratios showed mixed trends with some improvements from Q4 2023 [Net Income and Earnings Per Share](index=1&type=section&id=Net%20Income%20and%20Earnings%20Per%20Share) The Company's net income and diluted earnings per share saw a decrease in both the second quarter and year-to-date periods of 2024 compared to 2023, reflecting a challenging interest rate environment Net Income and Diluted EPS (Q2 & YTD 2024 vs. 2023) | Metric | Q2 2024 | Q2 2023 | YTD 2024 | YTD 2023 | | :--------------------- | :------------ | :------------ | :------------ | :------------ | | Net Income | $4,159 | $5,651 | $7,805 | $11,442 | | Diluted EPS | $0.77 | $1.05 | $1.45 | $2.13 | [Key Performance Ratios](index=1&type=section&id=Key%20Performance%20Ratios) Key performance indicators showed mixed trends in Q2 2024. Return on average assets and equity improved from Q4 2023, as did the net interest margin and efficiency ratio. The loan-to-deposit ratio also increased, while capital ratios remained strong Key Performance Ratios (Q2 2024 vs. Q4 2023) | Metric | Q2 2024 | Q4 2023 | | :-------------------------- | :-------- | :-------- | | Return on average assets | 1.05% | 0.79% | | Return on average equity | 11.07% | 9.03% | | Net interest margin (FTE) | 3.04% | 2.89% | | Loan-to-deposit ratio | 84.3% | 77.5% | | Efficiency ratio (FTE) | 62.7% | 64.0% | Capital Ratios (Q2 2024 vs. Q2 2023) | Metric | Q2 2024 | Q2 2023 | | :-------------------------- | :-------- | :-------- | | Tier 1 leverage ratio | 11.47% | 11.20% | | Total risk-based capital ratio | 18.64% | 18.80% | [Balance Sheet Highlights](index=1&type=section&id=Balance%20Sheet%20Highlights) The company achieved significant loan growth and reduced borrowings, while deposits saw a slight decrease from year-end 2023 [Loans and Deposits](index=1&type=section&id=Loans%20and%20Deposits) The Company experienced continued loan growth in Q2 2024, with gross loans increasing significantly year-over-year. Total deposits saw a slight decrease from December 2023 but an increase year-over-year, with a notable portion held in Insured Cash Sweep (ICS) plans Gross Loans Outstanding | Date | Amount ($ millions) | | :------------- | :------------------ | | June 30, 2024 | $1,200 | | Dec 31, 2023 | $1,134.5 | | June 30, 2023 | $1,015.1 | | **Change:** | | | vs. Dec 31, 2023 | +$65.5 (+6.0%) | | vs. June 30, 2023 | +$184.9 (+19.0%) | Total Deposits | Date | Amount ($ millions) | | :------------- | :------------------ | | June 30, 2024 | $1,373.8 | | Dec 31, 2023 | $1,409.1 | | June 30, 2023 | $1,348.1 | | **Change:** | | | vs. Dec 31, 2023 | -$35.3 (-2.5%) | | vs. June 30, 2023 | +$25.8 (+1.9%) | - Deposit balances held in Insured Cash Sweep (ICS) plans amounted to **$144.8 million** as of June 30, 2024[5](index=5&type=chunk) [Securities and Borrowings](index=3&type=section&id=Securities%20and%20Borrowings) Securities balances declined as funds were repurposed to higher-yielding assets and to reduce outstanding borrowings. The Company significantly reduced its outstanding borrowings and maintains substantial unused borrowing facilities Total Securities | Date | Amount ($ thousands) | | :------------- | :------------------- | | June 30, 2024 | $291,365 | | Dec 31, 2023 | $428,980 | | June 30, 2023 | $481,306 | | **Change:** | | | vs. Dec 31, 2023 | -$137,615 | Outstanding Borrowings | Date | Amount ($ thousands) | | :------------- | :------------------- | | June 30, 2024 | $30,000 | | Dec 31, 2023 | $66,500 | | June 30, 2023 | $59,666 | | **Change:** | |\ | vs. Dec 31, 2023 | -$36,500 (-54.9%) | | vs. June 30, 2023 | -$29,666 (-49.7%) | - The Company had unused borrowing facilities of approximately **$196.7 million** as of June 30, 2024[9](index=9&type=chunk) [Net Interest Income Analysis](index=3&type=section&id=Net%20Interest%20Income%20Analysis) Net interest income decreased year-over-year due to higher funding costs, though net interest margin improved quarter-over-quarter [Net Interest Income and Margin](index=3&type=section&id=Net%20Interest%20Income%20and%20Margin) Net interest income decreased year-over-year in Q2 2024, primarily due to higher interest expense on deposits and borrowings. However, the net interest margin (FTE) improved quarter-over-quarter, driven by an increase in loan yields Net Interest Income | Period | Amount ($ thousands) | | :--------------- | :------------------- | | Q2 2024 | $11,181 | | Q2 2023 | $13,703 | | **Change (YoY):** | -$2,522 (-18.4%) | Net Interest Margin (FTE) | Period | Rate | | :--------------- | :-------- | | Q2 2024 | 3.04% | | Q4 2023 | 2.89% | | Q2 2023 | 3.83% | - The increase in net interest margin compared to Q4 2023 was primarily due to an **increase in yield on loans from 5.47% to 5.71%**[11](index=11&type=chunk) [Yields and Cost of Funds](index=3&type=section&id=Yields%20and%20Cost%20of%20Funds) Loan yields decreased year-over-year, partly due to lower accretion of the credit mark on purchased loans. The overall cost of funds and cost of interest-bearing deposits increased significantly year-over-year but showed signs of stabilization in the first half of 2024 Yield on Loans | Period | Rate | | :--------------- | :-------- | | Q2 2024 | 5.71% | | Q2 2023 | 6.35% | | YTD 2024 | 5.67% | | YTD 2023 | 5.96% | Overall Cost of Funds | Period | Rate | | :--------------- | :-------- | | Q2 2024 | 210 bps | | Q2 2023 | 133 bps | | **Change (YoY):** | +77 bps | - The accretion of the credit mark related to purchased loans positively impacted interest income by **31 bps in Q2 2024**, down from **88 bps in Q2 2023**[11](index=11&type=chunk) [Noninterest Income and Expense](index=5&type=section&id=Noninterest%20Income%20and%20Expense) Noninterest income decreased, while noninterest expense also declined, reflecting cost management efforts [Noninterest Income](index=5&type=section&id=Noninterest%20Income) Noninterest income decreased in Q2 2024 compared to the prior year, primarily driven by lower fees from wealth management, deposit accounts, debit/credit cards, and ATMs Total Noninterest Income | Period | Amount ($ thousands) | | :--------------- | :------------------- | | Q2 2024 | $1,691 | | Q2 2023 | $2,045 | | **Change (YoY):** | -$354 (-17.3%) | - The decrease was primarily due to **lower wealth management, deposit account, debit card, credit card, and ATM fees**[13](index=13&type=chunk) [Noninterest Expense](index=5&type=section&id=Noninterest%20Expense) Noninterest expense decreased in Q2 2024 compared to the prior year, mainly due to reductions in compensation, occupancy, data processing, and marketing costs, reflecting efforts to right-size the branch network post-merger Total Noninterest Expense | Period | Amount ($ thousands) | | :--------------- | :------------------- | | Q2 2024 | $8,122 | | Q2 2023 | $8,564 | | **Change (YoY):** | -$442 (-5.2%) | - The decrease was primarily a result of **lower compensation, occupancy, and data processing costs** due to branch network right-sizing from the merger, and **reduced marketing, advertising, and promotion expense**[34](index=34&type=chunk) [Asset Quality](index=3&type=section&id=Asset%20Quality) Nonperforming assets increased, but the Allowance for Credit Losses decreased due to a rise in government-guaranteed loans [Nonperforming Assets](index=3&type=section&id=Nonperforming%20Assets) Nonperforming assets (NPA) and non-accrual loans increased as of June 30, 2024, compared to prior periods. However, a significant portion of past due loans are government-guaranteed, mitigating some risk Nonperforming Assets (NPA) | Date | Amount ($ thousands) | | :------------- | :------------------- | | June 30, 2024 | $4,000 | | Dec 31, 2023 | $2,700 | | June 30, 2023 | $1,300 | | **NPA as % of total assets:** | | | June 30, 2024 | 0.25% | | Dec 31, 2023 | 0.17% | | June 30, 2023 | 0.08% | Non-accrual Loans | Date | Amount ($ thousands) | | :------------- | :------------------- | | June 30, 2024 | $2,400 | | Dec 31, 2023 | $1,900 | | June 30, 2023 | $1,200 | - Loans 90 days or more past due and still accruing interest amounted to **$1.6 million** as of June 30, 2024, with **$1.5 million being 100% government-guaranteed**[10](index=10&type=chunk) [Allowance for Credit Losses](index=3&type=section&id=Allowance%20for%20Credit%20Losses) The Allowance for Credit Losses (ACL) as a percentage of total loans decreased, primarily driven by the proportionate increase in government-guaranteed loans, which do not require an ACL. The Company recorded a net recovery of provision for credit losses in Q2 2024 Allowance for Credit Losses (ACL) as % of Total Loans | Date | Rate | | :------------- | :-------- | | June 30, 2024 | 0.69% | | Dec 31, 2023 | 0.77% | | June 30, 2023 | 0.81% | - The **decrease in ACL as a percentage of total loans** is due to the **increase in government-guaranteed loans**, which do not require an ACL[10](index=10&type=chunk) - For Q2 2024, the Company recorded a **net recovery of provision for credit losses of $338 thousand**, primarily from a previously charged-off loan[10](index=10&type=chunk) [Capital and Shareholder Returns](index=5&type=section&id=Capital%20and%20Shareholder%20Returns) Book value per share increased, and the company continued its dividend payments and share repurchase program [Book Value](index=5&type=section&id=Book%20Value) Book value per share and tangible book value per share both increased year-over-year, supported by retained income and stable unrealized losses in the investment portfolio Book Value Per Share | Date | Amount ($) | | :------------- | :--------- | | June 30, 2024 | $28.70 | | June 30, 2023 | $26.54 | Tangible Book Value Per Share (Non-GAAP) | Date | Amount ($) | | :------------- | :--------- | | June 30, 2024 | $26.43 | | June 30, 2023 | $24.01 | [Dividends and Share Repurchase](index=5&type=section&id=Dividends%20and%20Share%20Repurchase) The Company declared and paid cash dividends and continued its share repurchase plan during Q2 2024, repurchasing shares at an average price of $27.32 Cash Dividends Declared and Paid (Q2 2024) | Metric | Amount ($) | | :------------- | :----------- | | Total Dividends | $1.8 million | | Per Share | $0.33 | Share Repurchase Activity (Q2 & YTD 2024) | Period | Shares Repurchased | Average Price Per Share ($) | | :------------- | :----------------- | :-------------------------- | | Q2 2024 | 19,476 | $27.32 | | Year-to-date | 20,350 | $27.42 | [Income Taxes](index=5&type=section&id=Income%20Taxes) Effective tax rates remained below the statutory rate due to tax credits and tax-exempt income [Effective Tax Rates](index=5&type=section&id=Effective%20Tax%20Rates) The effective tax rates for Q2 2024 and Q2 2023 were lower than the statutory rate, primarily due to the recognition of low-income housing tax credits and tax-exempt income from municipal bonds and bank-owned life insurance policies Effective Tax Rates | Period | Rate | | :----- | :---- | | Q2 2024 | 18.3% | | Q2 2023 | 18.4% | - The lower effective tax rates are due to **low-income housing tax credits** and **tax-exempt income from municipal bonds and bank-owned life insurance policies**[14](index=14&type=chunk) [Company Information](index=6&type=section&id=Company%20Information) This section provides an overview of the company, its services, stock listing, and important disclaimers regarding financial reporting [About Virginia National Bankshares Corporation](index=6&type=section&id=About%20Virginia%20National%20Bankshares%20Corporation) Virginia National Bankshares Corporation is the bank holding company for Virginia National Bank, offering a full range of banking and financial services through its offices in Virginia. Its common stock trades on the Nasdaq Capital Market under 'VABK' - Virginia National Bankshares Corporation is headquartered in Charlottesville, Virginia, and operates nine banking offices in Fauquier and Prince William counties, three in Charlottesville and Albemarle County, and offices in Winchester and Richmond, Virginia[16](index=16&type=chunk) - The Bank offers a full range of banking and related financial services to individuals, businesses, and charitable organizations, including fiduciary services through VNB Trust and Estate Services[16](index=16&type=chunk) - The Company's common stock trades on the Nasdaq Capital Market under the symbol **'VABK'**[16](index=16&type=chunk) [Non-GAAP Financial Measures](index=6&type=section&id=Non-GAAP%20Financial%20Measures) The Company uses certain non-GAAP financial measures to supplement the evaluation of its performance, believing they provide useful supplemental information for understanding core business operating results, while cautioning they should not substitute GAAP results - Management uses non-GAAP measures to supplement GAAP for evaluating performance and understanding core business operating results[17](index=17&type=chunk) - Non-GAAP disclosures should not be viewed as a substitute for or more important than GAAP results, nor are they necessarily comparable to non-GAAP measures presented by other companies[17](index=17&type=chunk) [Forward-Looking Statements](index=6&type=section&id=Forward-Looking%20Statements) The release contains forward-looking statements subject to various risks and uncertainties, including economic conditions, interest rates, regulatory changes, and market disruptions, which could cause actual results to differ materially from expectations - Statements in the release may contain forward-looking statements, characterized by words like 'expect,' 'believe,' 'estimate,' 'project,' 'anticipate,' 'intend,' 'will,' 'should,' or similar meanings[40](index=40&type=chunk) - Actual results may differ materially due to factors such as inflation, interest rates, market fluctuations, liquidity, capital requirements, economic conditions, regulatory changes, and cybersecurity threats[40](index=40&type=chunk) [Consolidated Financial Statements](index=7&type=section&id=Consolidated%20Financial%20Statements) This section presents the company's detailed balance sheets, income statements, and average balance data [Consolidated Balance Sheets](index=7&type=section&id=Consolidated%20Balance%20Sheets) The consolidated balance sheets provide a snapshot of the Company's financial position, showing total assets, liabilities, and shareholders' equity as of June 30, 2024, December 31, 2023, and June 30, 2023 Consolidated Balance Sheet Summary ($ thousands) | Metric | June 30, 2024 | Dec 31, 2023 | June 30, 2023 | | :------------------------- | :------------ | :------------ | :------------ | | Total Assets | $1,573,820 | $1,646,017 | $1,584,088 | | Total Liabilities | $1,419,656 | $1,492,977 | $1,441,649 | | Total Shareholders' Equity | $154,164 | $153,040 | $142,439 | [Consolidated Statements of Income](index=9&type=section&id=Consolidated%20Statements%20of%20Income) The consolidated statements of income detail the Company's revenues and expenses, leading to net income for the three and six months ended June 30, 2024 and 2023 Consolidated Statements of Income Summary ($ thousands) | Metric | Q2 2024 | Q2 2023 | YTD 2024 | YTD 2023 | | :------------------------- | :------------ | :------------ | :------------ | :------------ | | Total Interest & Dividend Income | $18,663 | $18,332 | $37,223 | $34,702 | | Total Interest Expense | $7,482 | $4,629 | $15,106 | $7,586 | | Net Interest Income | $11,181 | $13,703 | $22,117 | $27,116 | | Total Noninterest Income | $1,691 | $2,045 | $3,869 | $4,321 | | Total Noninterest Expense | $8,122 | $8,564 | $16,941 | $17,425 | | Net Income | $4,159 | $5,651 | $7,805 | $11,442 | [Average Balances, Income and Expenses, Yields and Rates](index=13&type=section&id=Average%20Balances%2C%20Income%20and%20Expenses%2C%20Yields%20and%20Rates) This section provides a detailed breakdown of average balances for interest-earning assets and interest-bearing liabilities, along with their corresponding interest income/expense and average yields/costs for the three and six months ended June 30, 2024 and 2023 Average Balances, Income, Yields & Rates (Q2 2024 vs. Q2 2023) ($ thousands) | Metric | Q2 2024 Average Balance | Q2 2024 Interest Income/Expense | Q2 2024 Average Yield/Cost | Q2 2023 Average Balance | Q2 2023 Interest Income/Expense | Q2 2023 Average Yield/Cost | | :------------------------- | :---------------------- | :------------------------------ | :------------------------- | :---------------------- | :------------------------------ | :------------------------- | | Total Earning Assets | $1,491,821 | $18,750 | 5.06% | $1,443,048 | $18,418 | 5.12% | | Total Interest-Bearing Liabilities | $1,063,413 | $7,482 | 2.83% | $981,361 | $4,629 | 1.89% | | Net Interest Income (FTE) | | $11,268 | | | $13,789 | | | Interest Rate Spread | | | 2.23% | | | 3.23% | | Cost of Funds | | | 2.10% | | | 1.33% | | Net Interest Margin (FTE) | | | 3.04% | | | 3.83% | Average Balances, Income, Yields & Rates (YTD 2024 vs. YTD 2023) ($ thousands) | Metric | YTD 2024 Average Balance | YTD 2024 Interest Income/Expense | YTD 2024 Average Yield/Cost | YTD 2023 Average Balance | YTD 2023 Interest Income/Expense | YTD 2023 Average Yield/Cost | | :------------------------- | :----------------------- | :------------------------------- | :-------------------------- | :----------------------- | :------------------------------- | :-------------------------- | | Total Earning Assets | $1,502,882 | $37,397 | 5.00% | $1,459,051 | $34,877 | 4.82% | | Total Interest-Bearing Liabilities | $1,072,704 | $15,106 | 2.83% | $977,972 | $7,586 | 1.56% | | Net Interest Income (FTE) | | $22,291 | | | $27,291 | | | Interest Rate Spread | | | 2.17% | | | 3.26% | | Cost of Funds | | | 2.11% | | | 1.08% | | Net Interest Margin (FTE) | | | 2.98% | | | 3.77% | [Reconciliation of Non-GAAP Financial Measures](index=16&type=section&id=Reconciliation%20of%20Non-GAAP%20Financial%20Measures) This section reconciles GAAP to non-GAAP measures, providing additional insights into financial performance [Non-GAAP Reconciliations](index=16&type=section&id=Non-GAAP%20Reconciliations) This section provides reconciliations of various GAAP financial measures to their non-GAAP fully tax-equivalent (FTE) counterparts and tangible book value per share, offering a clearer view of operational efficiency and underlying financial performance Net Interest Income (FTE) Reconciliation ($ thousands) | Metric | Q2 2024 | Q1 2024 | Q4 2023 | Q3 2023 | Q2 2023 | | :-------------------------- | :------------ | :------------ | :------------ | :------------ | :------------ | | Net interest income (GAAP) | $11,181 | $10,936 | $10,753 | $11,100 | $13,703 | | FTE adjustment | $87 | $87 | $86 | $87 | $86 | | Net interest income (FTE) | $11,268 | $11,023 | $10,839 | $11,187 | $13,789 | Efficiency Ratio (FTE) Reconciliation | Metric | Q2 2024 | Q1 2024 | Q4 2023 | Q3 2023 | Q2 2023 | | :-------------------------- | :-------- | :-------- | :-------- | :-------- | :-------- | | Efficiency ratio (GAAP) | 63.1% | 67.2% | 64.4% | 60.7% | 54.4% | | FTE adjustment | -0.4% | -0.4% | -0.4% | -0.4% | -0.3% | | Efficiency ratio (FTE) | 62.7% | 66.8% | 64.0% | 60.3% | 54.1% | Tangible Book Value Per Share Reconciliation ($) | Metric | Q2 2024 | Q1 2024 | Q4 2023 | Q3 2023 | Q2 2023 | | :-------------------------- | :------ | :------ | :------ | :------ | :------ | | Book value per share | $28.70 | $28.31 | $28.52 | $25.29 | $26.54 | | Impact of intangible assets | (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 |

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 s ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION VIRGINIA NATIONAL BANKSHARES CORPORATION (Exact Name of Registrant as Specified in its Charter) WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to ___________ Commission File Number: 001-40305 Vir ...

Exhibit 99.1 FOR IMMEDIATE RELEASE INVESTOR RELATIONS CONTACT: Tara Y. Harrison (434) 817-8587 VIRGINIA NATIONAL BANKSHARES CORPORATION ANNOUNCES 2024 FIRST QUARTER EARNINGS Charlottesville, VA – April 23, 2024 - Virginia National Bankshares Corporation (NASDAQ: VABK) (the "Company") today reported quarterly net income of $3.6 million, or $0.68 per diluted share, for the quarter ended March 31, 2024, compared to $3.2 million, or $0.59 per diluted share, recognized for the quarter ended December 31, 2023 and ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission File Number 001-40305 VIRGINIA NATIONAL BANKSHARES CORPORATION (Exact name of Registrant as specified in its Charter) Virginia 46-2331578 (State or o ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to ___________ Commission File Number: 001-40305 FORM 10-Q VIRGINIA NATIONAL BANKSHARES CORPORATION (Exact Name of Registrant as Specified in its Charter) Virginia 46-2331578 (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended S ...

[Part I. Financial Information](index=4&type=section&id=Part%20I.%20Financial%20Information) [Item 1. Financial Statements](index=4&type=section&id=Item%201%20Financial%20Statements) The unaudited statements present the company's financial position, operations, and cash flows, reflecting the adoption of the CECL accounting standard - The company adopted the new **CECL accounting standard (ASC 326)** on January 1, 2023, replacing the incurred loss methodology with an expected loss model[30](index=30&type=chunk) - The adoption of CECL increased the Allowance for Credit Losses (ACL) by **$2.5 million** and resulted in a net decrease to opening retained earnings of **$1.9 million**[32](index=32&type=chunk) [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) Total assets decreased to $1.58 billion as of June 30, 2023, driven by a reduction in deposits, while net loans and shareholders' equity increased Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Total Assets** | **$1,584,088** | **$1,623,359** | | Loans, net | $965,485 | $930,863 | | Securities Available for Sale | $473,868 | $538,186 | | **Total Liabilities** | **$1,441,649** | **$1,489,943** | | Total Deposits | $1,348,076 | $1,478,338 | | Short-term borrowings | $59,666 | $0 | | **Total Shareholders' Equity** | **$142,439** | **$133,416** | [Consolidated Statements of Income](index=5&type=section&id=Consolidated%20Statements%20of%20Income) Net income for Q2 2023 remained stable at $5.7 million, as higher net interest income was offset by lower noninterest income Quarterly Income Statement Highlights (in thousands) | Metric | Q2 2023 | Q2 2022 | | :--- | :--- | :--- | | Net Interest Income | $13,703 | $12,461 | | Provision for Credit Losses | $261 | ($217) | | Noninterest Income | $2,045 | $3,646 | | Noninterest Expense | $8,564 | $9,442 | | **Net Income** | **$5,651** | **$5,685** | | **Diluted EPS** | **$1.05** | **$1.06** | Six-Month Income Statement Highlights (in thousands) | Metric | H1 2023 | H1 2022 | | :--- | :--- | :--- | | Net Interest Income | $27,116 | $23,886 | | Provision for Credit Losses | $13 | ($69) | | Noninterest Income | $4,321 | $8,433 | | Noninterest Expense | $17,425 | $19,537 | | **Net Income** | **$11,442** | **$10,609** | | **Diluted EPS** | **$2.13** | **$1.98** | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Cash and cash equivalents decreased by $10.2 million in H1 2023, as cash used in financing outpaced cash provided by operations and investments Six-Month Cash Flow Summary (in thousands) | Activity | H1 2023 | H1 2022 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $10,117 | $9,666 | | Net Cash from Investing Activities | $32,808 | ($102,406) | | Net Cash from Financing Activities | ($53,122) | ($200,433) | | **Net Decrease in Cash** | **($10,197)** | **($293,173)** | [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail the adoption of CECL, the composition of the securities and loan portfolios, and confirm the Bank segment as the primary profit driver - The company's reportable segments are Bank, VNB Trust & Estate Services, and Masonry Capital, with the Bank segment being the primary source of income[131](index=131&type=chunk) - The fair value of the Available-for-Sale securities portfolio was **$473.9 million**, with gross unrealized losses of **$58.2 million** deemed temporary and not credit-related[49](index=49&type=chunk)[53](index=53&type=chunk) - Total loans stood at **$973.3 million** with strong credit quality, as nonaccrual loans were **$1.2 million**, or 0.12% of total loans[61](index=61&type=chunk)[63](index=63&type=chunk)[156](index=156&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=37&type=section&id=Item%202%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Total assets declined to $1.6 billion due to a strategic deposit decrease, while the loan portfolio grew, net interest margin expanded, and expenses fell Key Performance Ratios | Metric | Q2 2023 | Q2 2022 | | :--- | :--- | :--- | | ROAA | 1.46% | 1.27% | | ROAE | 15.98% | 16.20% | | Net Income per Diluted Share | $1.05 | $1.06 | - Total assets decreased by **2.4%** from year-end 2022, a result of an expected decline in deposit balances following a strategic decision on deposit rates[144](index=144&type=chunk) - The company's capital ratios as of June 30, 2023, significantly exceed "well capitalized" minimums, with a Common Equity Tier 1 ratio of **17.97%** and a Total Capital ratio of **18.80%**[185](index=185&type=chunk) [Financial Condition](index=39&type=section&id=Financial%20Condition) Assets stood at $1.6 billion, down 2.4% from year-end due to deposit outflows, which were used to fund loan growth while maintaining strong asset quality - Total loans increased by **$36.9 million (3.9%)** since December 31, 2022, reaching **$973.3 million**[153](index=153&type=chunk) - Total deposits decreased by **$130.3 million** to **$1.3 billion**, an expected result of a strategic decision to lag increases in deposit rates[171](index=171&type=chunk) - As of June 30, 2023, estimated uninsured deposits were **$311.6 million**, representing **23.1%** of total deposits[175](index=175&type=chunk) Allowance for Credit Losses (ACL) Ratios | Ratio | June 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | ACL to total loans | 0.81% | 0.59% | | Nonaccrual loans to total loans | 0.12% | 0.07% | | ACL to nonaccrual loans | 663.54% | 824.96% | [Results of Operations](index=46&type=section&id=Results%20of%20Operations) Q2 2023 net income was stable at $5.7 million, as a significant expansion in net interest margin was offset by lower noninterest income Net Interest Margin (FTE) Analysis | Metric | Q2 2023 | Q2 2022 | | :--- | :--- | :--- | | Net Interest Income (FTE) | $13,789 | $12,543 | | Average Earning Assets | $1,443,048 | $1,668,471 | | **Net Interest Margin (FTE)** | **3.83%** | **3.02%** | - Noninterest income for Q2 2023 was **$2.0 million**, a **43.9% decrease** from Q2 2022, primarily due to prior-year gains on property sales[209](index=209&type=chunk) - Noninterest expense for Q2 2023 decreased by **9.3%** to **$8.6 million** compared to Q2 2022, mainly due to efficiencies gained from the prior merger[211](index=211&type=chunk) - The efficiency ratio (FTE) improved to **54.1%** for Q2 2023 from 58.3% in Q2 2022, reflecting higher net interest income and lower noninterest expenses[214](index=214&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=53&type=section&id=Item%203%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company has indicated that this section is not required for this filing - Disclosure for this item is not required[217](index=217&type=chunk) [Controls and Procedures](index=53&type=section&id=Item%204%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, with no material changes to internal controls during the quarter - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of June 30, 2023[219](index=219&type=chunk) - No changes occurred in the company's internal control over financial reporting during the second quarter of 2023 that have materially affected these controls[219](index=219&type=chunk) [Part II. Other Information](index=53&type=section&id=Part%20II.%20Other%20Information) [Legal Proceedings](index=53&type=section&id=Item%201%20Legal%20Proceedings) The company reported no legal proceedings during the period - There are no legal proceedings to report[221](index=221&type=chunk) [Risk Factors](index=53&type=section&id=Item%201A%20Risk%20Factors) No material changes were reported to the risk factors previously disclosed in the company's 2022 Annual Report on Form 10-K - No material changes have occurred in the risk factors described in the Company's Form 10-K for the year ended December 31, 2022[221](index=221&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=53&type=section&id=Item%202%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities or use of proceeds during the period - There were no unregistered sales of equity securities and use of proceeds to report[222](index=222&type=chunk) [Other Information](index=54&type=section&id=Item%205%20Other%20Information) The company reported no other significant information required to be disclosed under this item - There were no disclosures required under Item 5 for the period[223](index=223&type=chunk) [Exhibits](index=54&type=section&id=Item%206%20Exhibits) The report lists filed exhibits, including CEO/CFO certifications and financial statements formatted in Inline XBRL - Filed exhibits include Section 302 and 906 certifications by the Principal Executive Officer and Principal Financial Officer[224](index=224&type=chunk)[225](index=225&type=chunk) - Financial statements and notes are provided in Inline eXtensible Business Reporting Language (iXBRL) format as Exhibit 101[226](index=226&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to ___________ Commission File Number: 001-40305 VIRGINIA NATIONAL BANKSHARES CORPORATION (Exact Name of Registrant as Specified in its Charter) Vir ...