Virginia National Bankshares (VABK) - 2019 Q1 - Quarterly Report

Financial Performance - Net income for the three months ended March 31, 2019, was $1.246 million, a decrease of 55.4% compared to $2.796 million for the same period in 2018[10]. - Total comprehensive income for Q1 2019 was $2.000 million, slightly down from $2.053 million in Q1 2018, a decrease of 2.6%[13]. - Basic net income per share for the three months ended March 31, 2019, was $0.49, down from $1.10 for the same period in 2018[73]. - Diluted net income per share for the three months ended March 31, 2019, was $0.49, compared to $1.09 for the same period in 2018[73]. - The company reported net income of $1,246,000 for the three months ended March 31, 2019, down from $2,796,000 in the same period of 2018, a decrease of 55.42%[107]. Asset and Liability Changes - Total assets decreased to $635.8 million as of March 31, 2019, down from $644.8 million at December 31, 2018, representing a decline of approximately 1.5%[8]. - Total deposits decreased to $557.199 million as of March 31, 2019, down from $572.533 million at December 31, 2018, a decline of approximately 2.7%[8]. - The carrying value of cash and cash equivalents decreased from $18,874,000 on December 31, 2018, to $14,604,000 on March 31, 2019, representing a decline of 22.06%[98]. - Demand deposits and interest-bearing transaction accounts decreased from $464,002,000 as of December 31, 2018, to $426,741,000 as of March 31, 2019, a decline of 8.01%[98]. Income and Expense Analysis - Net interest income after provision for loan losses was $4.884 million for Q1 2019, down from $5.792 million in Q1 2018, reflecting a decline of 15.7%[10]. - Total noninterest income decreased to $1.059 million in Q1 2019, down 38.2% from $1.714 million in Q1 2018[10]. - Total noninterest expense increased to $4.411 million in Q1 2019, compared to $4.017 million in Q1 2018, marking an increase of 9.8%[10]. - The provision for loan losses was $684,000 in Q1 2019, compared to a recovery of $96,000 in Q1 2018, indicating a significant shift in loan loss provisioning[10]. Loan Portfolio and Credit Quality - As of March 31, 2019, the total loan portfolio amounted to $528.36 million, a decrease from $537.19 million as of December 31, 2018, representing a decline of approximately 1.57%[35]. - The net loans after allowance for loan losses were $523.46 million as of March 31, 2019, compared to $532.30 million at the end of 2018, indicating a reduction of about 1.66%[35]. - The total impaired loans were $2.75 million as of March 31, 2019, slightly down from $2.77 million at December 31, 2018, reflecting a decrease of approximately 0.54%[38]. - The allowance for loan losses stood at $4.91 million as of March 31, 2019, compared to $4.89 million at December 31, 2018, showing a marginal increase of about 0.41%[35]. Dividends and Shareholder Returns - Cash dividends declared were $0.30 per share for Q1 2019, compared to $0.19 per share in Q1 2018, reflecting an increase of 57.9%[14]. - Cash dividends paid increased to $763 million from $458 million, representing a rise of 66.5% year-over-year[17]. Securities and Investments - The company reported unrealized losses on available-for-sale securities amounting to $780 thousand as of March 31, 2019, with a total fair value of $61,312 million[26]. - The total securities available for sale decreased from $63,009 million at December 31, 2018, to $61,974 million by March 31, 2019[26]. - The fair value of loans, net, as of March 31, 2019, was $506,505,000, a slight decrease from $514,917,000 as of December 31, 2018, reflecting a decline of 1.60%[98]. Stock Options and Compensation - The Company had 65,113 stock options outstanding with a weighted average exercise price of $43.48 as of March 31, 2019[80]. - The Company recognized $24 thousand in stock-based compensation expense for stock options for the three months ended March 31, 2019, compared to $1 thousand for the same period in 2018[79]. - A total of 10,993 shares of stock were granted on February 20, 2019, with an estimated total expense of $424 thousand to be recognized over the year[84]. Regulatory and Accounting Changes - The company is currently assessing the impact of new accounting standards on its financial statements, particularly regarding credit losses and goodwill impairment[23][24]. - The implementation of the new lease standard resulted in the recognition of a right-of-use asset and lease liability of $4.3 million at the date of adoption[109].