VIRGINIA NATIONAL BANKSHARES CORPORATION ANNOUNCES 2024 FOURTH QUARTER AND FULL YEAR EARNINGS

VIRGINIA NATIONAL BANKSHARES CORPORATION ANNOUNCES 2024 FOURTH QUARTER AND FULL YEAR EARNINGS , /PRNewswire/ -- Virginia National Bankshares Corporation (NASDAQ: VABK) (the "Company") today reported quarterly net income of $4.6 million, or $0.85 per diluted share, for the quarter ended December 31, 2024, compared to $3.2 million, or $0.59 per diluted share, recognized for the quarter ended December 31, 2023. For the twelve months ended December 31, 2024, the Company recognized net income of $17.0 million, or $3.15 per diluted share, compared to $19.3 million, or $3.58 per diluted share, for the twelve months ended December 31, 2023. The increase in net income from the fourth quarter of 2023 to the same quarter in 2024 was primarily the result of increased interest income from increased average balances of loans at higher rates than the prior period, combined with decreased interest expense, as we reduced our borrowing expense and overall cost of funds. The decline in full year 2024 net income compared to 2023 was primarily the result of increased cost of funds year-over-year. President and Chief Executive Officer's comments: "During 2024, we focused on loan growth and reducing ongoing operating expenses," stated Glenn W. Rust, President and Chief Executive Officer. "I am proud to announce that we succeeded in both of these endeavors. We increased loan balances 13% over the prior year while decreasing our overhead costs. Our credit quality metrics continue to be strong, along with our capital and liquidity positions." Key Performance Indicators Fourth Quarter 2024 Compared to Fourth Quarter 2023 Return on average assets increased to 1.12% from 0.79%Return on average equity increased to 10.98% from 9.03%Net interest margin (FTE)1 improved to 3.21% from 2.89%Loan-to-deposit ratio increased to 86.8% from 77.5%Efficiency ratio (FTE)1 improved to 60.2% from 64.0% December 2024 Balance Sheet Highlights The Company continued to experience loan growth in the fourth quarter of 2024. Gross loans outstanding as of December 31, 2024 totaled $1.2 billion, an increase of $20.5 million, or 1.7%, compared to September 30, 2024, and an increase of $143.3 million, or 13.1% compared to December 31, 2023.Outstanding borrowing from the FHLB declined from the prior quarter by $32.5 million and declined from the prior year-end by $46.5 million, as management made a concerted effort to stabilize overall cost of funds. As of December 31, 2024, the Company had unused borrowing facilities in place of approximately $199.0 million and held no brokered deposits.Securities balances declined $17.3 million and $159.3 million from September 30, 2024 and December 31, 2023, respectively, to December 31, 2024; funds from the maturities of investments were repurposed to higher yielding assets in the form of loans.The Company utilizes a third-party to offer multi-million-dollar FDIC insurance to customers with balances in excess of single-bank limits through reciprocal Insured Cash Sweep® (ICS) plans. Deposit balances held in ICS plans amounted to $166.6 million as of December 31, 2024, $145.6 million as of September 30, 2024 and $151.5 million as of December 31, 2023.Total deposits increased $43.6 million, or 3.2% from September 30, 2024 to December 31, 2024 and increased $14.4 million, or 1.0% year-over year. Loans and Asset Quality Credit performance remains strong with nonperforming assets as a percentage of total assets of 0.19% as of December 31, 2024, 0.33% as of September 30, 2024 and 0.17% as of December 31, 2023.Nonperforming assets amounted to $3.0 million as of December 31, 2024, compared to $5.3 million as of September 30, 2024 and $2.7 million as of December 31, 2023;Twelve loans to eleven borrowers are in non-accrual status, totaling $2.3 million, as of December 31, 2024, compared to $2.1 million as of September 30, 2024 and $1.9 million as of December 31, 2023.Loans 90 days or more past due and still accruing interest amounted to $754 thousand as of December 31, 2024, compared to $3.2 million as of September 30, 2024 and $880 thousand as of December 31, 2023. The past due balance as of December 31, 2024 is comprised of three loans totaling $705 thousand which are 100% government-guaranteed, and three student loans totaling $49 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 0.68% as of December 31, 2024, 0.70% as of September 30, 2024 and 0.77% as of December 31, 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 year-over-year. Balances in government-guaranteed loans have increased $108.6 million from December 31, 2023 to December 31, 2024. 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 $6.8 million as of December 31, 2024.For the three months ended December 31, 2024, the Company recorded a net recovery of provision for credit losses of $126 thousand, as the recovery of previously charged-off loans nearly offset the increase in provision required for new loan balances; this balance is net of an $82 thousand provision for unfunded reserves, as a result of an increase in unfunded construction commitments. Net Interest Income - Quarterly Comparison Net interest income for the three months ended December 31, 2024 of $12.2 million increased $1.5 million, or 13.8%, compared to the three months ended December 31, 2023, as interest income earned on assets increased and interest expense on deposit accounts and borrowings declined.Net interest margin (FTE), (a non-GAAP financial measure)1, for the three months ended December 31, 2024 was 3.21%, compared to 2.89% for the three months ended December 31, 2023. The increase as compared to the fourth quarter of 2023 was the outcome of the increase in yield on loans and the decrease in cost of funds, both described below.Yield on loans was 5.63% for the three months ended December 31, 2024, compared to 5.47% for the prior year same period. The accretion of the credit mark related to purchased loans positively impacted interest income by 13 bps in the fourth quarter of 2024, compared to 15 bps in the fourth quarter of 2023.The overall cost of funds, including noninterest-bearing deposits, of 194 bps incurred in the three months ended December 31, 2024 decreased 7 bps from 201 bps in the same period in the prior year. Overall, the cost of interest-bearing deposits also decreased period over period by 7 bps, from a cost of 258 bps to 251 bps. Management believes that the Bank's cost of funds stabilized during the first half of 2024, and the cost of funds and cost of interest-bearing deposits have been declining in the second half of 2024. The cost of borrowings also declined from the fourth quarter of 2023 to the fourth quarter of 2024, from 5.35% to 4.33%. __________________________________________________________________ 1 See "Reconciliation of Certain Quarterly Non-GAAP Financial Measures" at the end of this release. Noninterest Income - Quarterly Comparison Noninterest income for the three months ended December 31, 2024 increased $132 thousand, or 6.2%, compared to the three months ended December 31, 2023, as the gain on early redemption of debt of $525 thousand partially offset the lower wealth management, deposit account, debit card, credit card and ATM fees. Noninterest Expense - Quarterly Comparison Noninterest expense for the three months ended December 31, 2024 increased $484 thousand, or 5.8%, compared to the three months ended December 31, 2023. This increase is primarily the result of increased compensation expense from lender incentives related to increased loan production, as well as increased professional services expense from increased cost of such services. These increases were partially offset by lower data processing costs, as a result of effective contract negotiations. Income Taxes - Quarterly Comparison The effective tax rates amounted to 22.0% and 16.6% for the three months ended December 31, 2024 and 2023, respectively. The increase in the effective tax rate in the current year period is higher than the statutory rate as a result of the adoption of the proportional amortization method for accounting for low-income housing tax credits, which increased tax expense. The prior year period effective tax rate is 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. Book Value Book value per share increased to $29.85 as of December 31, 2024, compared to $28.52 as of December 31, 2023, and tangible book value per share (a non-GAAP financial measure)1 was $27.70 as of December 31, 2024 compared to $26.12 as of December 31, 2023. These values increased as net retained income increased and unrealized losses in the investment portfolio remained relatively flat period over period. Dividends Cash dividends of $1.8 million, or $0.33 per share, were declared and paid during the fourth quarter of 2024. Share Repurchase Plan Year-to-date, the Company has repurchased 20,350 shares at an average price of $27.42 per share. No shares were repurchased during the second half of 2024. _____________________________________________________________________ 1 See "Reconciliation of Certain Quarterly Non-GAAP Financial Measures" at the end of this release. About Virginia National Bankshares Corporation Virginia National Bankshares Corporation, headquartered in Charlottesville, Virginia, is the bank holding company for Virginia National Bank. The Bank has eight 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 per share data) December 31, 2024 December 31, 2023* (Unaudited) ASSETS Cash and due from banks $ 5,311 $ 18,074 Interest-bearing deposits in other banks 11,792 10,316 Securities: Available for sale (AFS), at fair value 263,537 420,595 Restricted securities, at cost 6,193 8,385 Total securities 269,730 428,980 Loans, net of deferred fees and costs 1,235,969 1,092,665 Allowance for credit losses (8,455) (8,395) Loans, net 1,227,514 1,084,270 Premises and equipment, net 15,383 16,195 Bank owned life insurance 40,059 38,904 Goodwill 7,768 7,768 Core deposit intangible, net 3,792 5,093 Right of use asset, net 5,551 6,748 Deferred tax asset, net 15,407 15,382 Accrued interest receivable and other assets 14,519 14,287 Total assets $ 1,616,826 $ 1,646,017 LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Demand deposits: Noninterest-bearing $ 374,079 $ 372,857 Interest-bearing 303,405 305,541 Money market and savings deposit accounts 437,619 412,119 Certificates of deposit and other time deposits 308,443 318,581 Total deposits 1,423,546 1,409,098 Federal funds purchased 236 3,462 Borrowings 20,000 66,500 Junior subordinated debt, net 3,506 3,459 Lease liability 5,389 6,504 Accrued interest payable and other liabilities 3,847 3,954 Total liabilities 1,456,524 1,492,977 Commitments and contingent liabilities Shareholders' equity: Preferred stock, $2.50 par value - - Common stock, $2.50 par value 13,263 13,258 Capital surplus 106,394 106,045 Retained earnings 82,507 73,781 Accumulated other comprehensive loss (41,862) (40,044) Total shareholders' equity 160,302 153,040 Total liabilities and shareholders' equity $ 1,616,826 $ 1,646,017 Common shares outstanding 5,370,912 5,365,982 Common shares authorized 10,000,000 10,000,000 Preferred shares outstanding - - Preferred shares authorized 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 data) (Unaudited) For the three months ended For the twelve months ended December 31, 2024 December 31, 2023 December 31, 2024 December 31, 2023 Interest and dividend income: Loans, including fees $ 17,253 $ 14,644 $ 66,534 $ 56,053 Federal funds sold 230 64 765 207 Other interest-bearing deposits 41 59 206 501 Investment securities: Taxable 1,340 2,880 6,689 11,554 Tax exempt 323 325 1,302 1,308 Dividends 111 102 431 367 Total interest and dividend income 19,298 18,074 75,927 69,990 Interest expense: Demand deposits 67 73 272 346 Money market and savings deposits 2,939 2,964 11,803 9,673 Certificates and other time deposits 3,463 3,508 15,410 8,617 Borrowings 504 663 1,691 1,934 Federal funds purchased 4 26 29 138 Junior subordinated debt 86 87 346 313 Total interest expense 7,063 7,321 29,551 21,021 Net interest income 12,235 10,753 46,376 48,969 Provision for (recovery of) credit losses (126) 794 (600) 734 Net interest income after provision for (recovery of) credit losses 12,361 9,959 46,976 48,235 Noninterest income: Wealth management fees 247 756 1,152 1,976 Deposit account fees 321 389 1,363 1,593 Debit/credit card and ATM fees 429 535 1,914 2,277 Bank owned life insurance income 297 270 1,155 1,764 Gains (losses) on sales of assets, net - (20) 36 112 Gain on early redemption of debt 525 - 904 - Gain on termination of interest rate swap - - - 460 Losses on sales of AFS, net - - (4) (206) Other 449 206 1,069 1,125 Total noninterest income 2,268 2,136 7,589 9,101 Noninterest expense: Salaries and employee benefits 4,162 3,851 15,933 15,900 Net occupancy 906 918 3,662 4,017 Equipment 206 173 720 762 Bank franchise tax 401 291 1,452 1,220 Computer software 214 188 917 778 Data processing 622 799 2,647 2,970 FDIC deposit insurance assessment 200 170 700 710 Marketing, advertising and promotion 159 186 730 1,098 Professional fees 303 82 934 674 Core deposit intangible amortization 307 355 1,301 1,493 Other 1,302 1,285 4,670 4,441 Total noninterest expense 8,782 8,298 33,666 34,063 Income before income taxes 5,847 3,797 20,899 23,273 Provision for income taxes 1,286 629 3,933 4,010 Net income $ 4,561 $ 3,168 $ 16,966 $ 19,263 Net income per common share, basic $ 0.85 $ 0.59 $ 3.16 $ 3.60 Net income per common share, diluted $ 0.85 $ 0.59 $ 3.15 $ 3.58 Weighted average common shares outstanding, basic 5,370,912 5,365,982 5,371,439 5,357,085 Weighted average common shares outstanding, diluted 5,407,489 5,394,713 5,392,114 5,382,145 VIRGINIA NATIONAL BANKSHARES CORPORATION FINANCIAL HIGHLIGHTS (dollars in thousands, except share and per share data) (Unaudited) At or For the Three Months Ended December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023 Common Share Data: Net income $ 4,561 $ 4,600 $ 4,159 $ 3,646 $ 3,168 Net income per weighted average share, basic $ 0.85 $ 0.86 $ 0.77 $ 0.68 $ 0.59 Net income per weighted average share, diluted $ 0.85 $ 0.85 $ 0.77 $ 0.68 $ 0.59 Weighted average shares outstanding, basic 5,370,912 5,370,912 5,377,055 5,366,890 5,365,982 Weighted average shares outstanding, diluted 5,407,489 5,396,936 5,385,770 5,380,081 5,394,713 Actual shares outstanding 5,370,912 5,370,912 5,370,912 5,390,388 5,365,982 Tangible book value per share at period end (non-GAAP) 5 $ 27.70 $ 28.68 $ 26.43 $ 25.99 $ 26.12 Key Ratios: Return on average assets 1 1.12 % 1.15 % 1.05 % 0.91 % 0.79 % Return on average equity 1 10.98 % 11.44 % 11.07 % 9.57 % 9.03 % Net interest margin (FTE) 2 3.21 % 3.24 % 3.04 % 2.93 % 2.89 % Efficiency ratio (FTE) 3 60.2 % 58.6 % 62.7 % 66.8 % 64.0 % Loan-to-deposit ratio 86.8 % 88.1 % 84.3 % 78.8 % 77.5 % Net Interest Income: Net interest income $ 12,235 $ 12,024 $ 11,181 $ 10,936 $ 10,753 Net interest income (FTE) 2 $ 12,321 $ 12,111 $ 11,268 $ 11,023 $ 10,839 Company Capital Ratios: Tier 1 leverage ratio 11.34 % 11.81 % 11.47 % 11.24 % 11.13 % Total risk-based capital ratio 18.77 % 18.88 % 18.64 % 18.49 % 18.24 % Assets and Asset Quality: Average earning assets $ 1,526,464 $ 1,487,182 $ 1,491,821 $ 1,513,924 $ 1,487,910 Average gross loans $ 1,218,460 $ 1,181,447 $ 1,144,350 $ 1,117,570 $ 1,061,297 Fair value mark on acquired loans $ 6,785 $ 7,301 $ 8,237 $ 8,811 $ 9,399 Allowance for credit losses on loans: Beginning of period $ 8,523 $ 8,028 $ 8,289 $ 8,395 $ 7,799 Provision for (recovery of) credit losses (208) (3) (518) 11 713 Charge-offs (127) (272) (208) (184) (207) Recoveries 267 770 465 67 90 Net recoveries (charge-offs) 140 498 257 (117) (117) End of period $ 8,455 $ 8,523 $ 8,028 $ 8,289 $ 8,395 Non-accrual loans $ 2,267 $ 2,113 $ 2,365 $ 2,178 $ 1,852 Loans 90 days or more past due and still accruing 754 3,214 1,596 876 880 Total nonperforming assets (NPA)4 $ 3,021 $ 5,327 $ 3,961 $ 3,054 $ 2,732 NPA as a % of total assets 0.19 % 0.33 % 0.25 % 0.19 % 0.17 % NPA as a % of gross loans 0.24 % 0.44 % 0.34 % 0.27 % 0.25 % ACL to gross loans 0.68 % 0.70 % 0.69 % 0.73 % 0.77 % Non-accruing loans to gross loans 0.18 % 0.17 % 0.20 % 0.19 % 0.17 % Net charge-offs (recoveries) to average loans 1 -0.05 % -0.17 % -0.09 % 0.04 % 0.04 % 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 December 31, 2024 December 31, 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 $ 213,609 $ 1,451 2.72 % $ 346,248 $ 2,982 3.44 % Tax Exempt Securities1 66,211 409 2.47 % 66,710 411 2.46 % Total Securities1 279,820 1,860 2.66 % 412,958 3,393 3.29 % Loans: Real Estate 921,967 13,159 5.68 % 873,226 11,919 5.42 % Commercial 261,544 3,507 5.33 % 149,765 2,018 5.35 % Consumer 34,949 587 6.68 % 38,306 707 7.32 % Total Loans 1,218,460 17,253 5.63 % 1,061,297 14,644 5.47 % Fed Funds Sold 19,313 230 4.74 % 4,709 64 5.39 % Other interest-bearing deposits 8,871 41 1.84 % 8,946 59 2.62 % Total Earning Assets 1,526,464 19,384 5.05 % 1,487,910 18,160 4.84 % Less: Allowance for Credit Losses (8,555) (7,833) Total Non-Earning Assets 109,030 115,114 Total Assets $ 1,626,939 $ 1,595,191 LIABILITIES AND SHAREHOLDERS' EQUITY Interest Bearing Liabilities: Interest Bearing Deposits: Interest Checking $ 263,281 $ 67 0.10 % $ 287,228 $ 73 0.10 % Money Market and Savings Deposits 442,660 2,939 2.64 % 413,771 2,964 2.84 % Time Deposits 318,203 3,463 4.33 % 304,053 3,508 4.58 % Total Interest-Bearing Deposits 1,024,144 6,469 2.51 % 1,005,052 6,545 2.58 % Borrowings 46,253 504 4.33 % 49,147 663 5.35 % Federal funds purchased 284 4 5.60 % 1,755 26 5.88 % Junior subordinated debt 3,499 86 9.78 % 3,454 87 9.99 % Total Interest-Bearing Liabilities 1,074,180 7,063 2.62 % 1,059,408 7,321 2.74 % Non-Interest-Bearing Liabilities: Demand deposits 377,596 386,001 Other liabilities 9,965 10,666 Total Liabilities 1,461,741 1,456,075 Shareholders' Equity 165,198 139,116 Total Liabilities & Shareholders' Equity $ 1,626,939 $ 1,595,191 Net Interest Income (FTE) $ 12,321 $ 10,839 Interest Rate Spread2 2.43 % 2.10 % Cost of Funds 1.94 % 2.01 % Interest Expense as a Percentage of Average Earning Assets 1.84 % 1.95 % Net Interest Margin (FTE)3 3.21 % 2.89 % 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 twelve months ended December 31, 2024 December 31, 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 $ 249,858 $ 7,120 2.85 % $ 400,189 $ 11,921 2.98 % Tax Exempt Securities1 66,399 1,649 2.48 % 66,895 1,655 2.47 % Total Securities1 316,257 8,769 2.77 % 467,084 13,576 2.91 % Loans: Real Estate 908,356 51,532 5.67 % 839,326 47,996 5.72 % Commercial 220,276 12,430 5.64 % 100,122 5,121 5.11 % Consumer 37,013 2,572 6.95 % 41,140 2,936 7.14 % Total Loans 1,165,645 66,534 5.71 % 980,588 56,053 5.72 % Fed Funds Sold 14,663 765 5.22 % 3,825 207 5.41 % Other interest-bearing deposits 8,220 206 2.51 % 15,489 501 3.23 % Total Earning Assets 1,504,785 76,274 5.07 % 1,466,986 70,337 4.79 % Less: Allowance for Credit Losses (8,350) (7,907) Total Non-Earning Assets 109,503 115,908 Total Assets $ 1,605,938 $ 1,574,987 LIABILITIES AND SHAREHOLDERS' EQUITY Interest Bearing Liabilities: Interest Bearing Deposits: Interest Checking $ 269,136 $ 272 0.10 % $ 321,154 $ 346 0.11 % Money Market and Savings Deposits 425,386 11,803 2.77 % 421,083 9,673 2.30 % Time Deposits 333,139 15,410 4.63 % 220,348 8,617 3.91 % Total Interest-Bearing Deposits 1,027,661 27,485 2.67 % 962,585 18,636 1.94 % Borrowings 36,111 1,691 4.68 % 37,286 1,934 5.19 % Federal funds purchased 489 29 5.93 % 2,632 138 5.24 % Junior subordinated debt 3,482 346 9.94 % 3,436 313 9.11 % Total Interest-Bearing Liabilities 1,067,743 29,551 2.77 % 1,005,939 21,021 2.09 % Non-Interest-Bearing Liabilities: Demand deposits 370,178 418,091 Other liabilities 10,597 11,514 Total Liabilities 1,448,518 1,435,544 Shareholders' Equity 157,420 139,443 Total Liabilities & Shareholders' Equity $ 1,605,938 $ 1,574,987 Net Interest Income (FTE) $ 46,723 $ 49,316 Interest Rate Spread2 2.30 % 2.70 % Cost of Funds 2.06 % 1.48 % Interest Expense as a Percentage of Average Earning Assets 1.96 % 1.43 % Net Interest Margin (FTE)3 3.10 % 3.36 % 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 December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023 Fully tax-equivalent measures Net interest income $ 12,235 $ 12,024 $ 11,181 $ 10,936 $ 10,753 Fully tax-equivalent adjustment 86 87 87 87 86 Net interest income (FTE)1 $ 12,321 $ 12,111 $ 11,268 $ 11,023 $ 10,839 Efficiency ratio2 60.6 % 58.9 % 63.1 % 67.2 % 64.4 % Fully tax-equivalent adjustment -0.4 % -0.3 % -0.4 % -0.4 % -0.4 % Efficiency ratio (FTE) 3 60.2 % 58.6 % 62.7 % 66.8 % 64.0 % Net interest margin 3.19 % 3.22 % 3.01 % 2.91 % 2.87 % Fully tax-equivalent adjustment 0.02 % 0.02 % 0.03 % 0.02 % 0.02 % Net interest margin (FTE)1 3.21 % 3.24 % 3.04 % 2.93 % 2.89 % As of December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023 Other financial measures Book value per share $ 29.85 $ 30.89 $ 28.70 $ 28.31 $ 28.52 Impact of intangible assets4 (2.15) (2.21) (2.27) (2.32) (2.40) Tangible book value per share (non-GAAP) $ 27.70 $ 28.68 $ 26.43 $ 25.99 $ 26.12 For the Twelve Months Ended December 31, 2024 December 31, 2023 Fully tax-equivalent measures Net interest income $ 46,376 $ 48,969 Fully tax-equivalent adjustment 347 347 Net interest income (FTE)1 $ 46,723 $ 49,316 Efficiency ratio2 62.4 % 58.7 % Fully tax-equivalent adjustment -0.4 % -0.4 % Efficiency ratio (FTE) 3 62.0 % 58.3 % Net interest margin 3.08 % 3.34 % Fully tax-equivalent adjustment 0.02 % 0.02 % Net interest margin (FTE)1 3.10 % 3.36 % 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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