VIRGINIA NATIONAL BANKSHARES CORPORATION ANNOUNCES RECORD NET INCOME FOR 2021

Rhea-AI Summary

Virginia National Bankshares Corporation (NASDAQ: VABK) reported record net income of $10.0 million for the year ended December 31, 2021, a 25% increase from $8.0 million in 2020, despite incurring $7.4 million in merger-related expenses. Net income for Q4 2021 was $5.2 million, doubling from $2.6 million in Q4 2020. The merger with Fauquier Bank contributed to a 74% increase in gross loans, totaling $1.1 billion. However, net income per diluted share declined to $2.13 from $2.95 due to the increase in shares from the merger.

Positive

• Record net income of $10.0 million for 2021, a 25% increase YoY.
• Quarterly net income for Q4 2021 increased 100% to $5.2 million.
• Significant increase in gross loans by 74% to $1.1 billion, driven by Fauquier acquisition.
• Cost savings expected from the Fauquier merger.
• Return on average equity (ROAE) improved to 12.86% in Q4 2021.

Negative

• Net income per diluted share declined to $2.13 from $2.95 YoY.
• Efficiency ratio increased to 57.7% in Q4 2021 from 57.0% in Q4 2020.
• Noninterest expense surged 126% for the year, largely due to Fauquier's costs.

CHARLOTTESVILLE, Va., Feb. 18, 2022 /PRNewswire/ -- Virginia National Bankshares Corporation (NASDAQ: VABK) (the "Company") today reported net income of $10.0 million for the year ended December 31, 2021, attaining the highest consolidated net income for any year in the Company's history, even after realizing $7.4 million of pre-tax ($5.6 million after-tax) merger and merger-related expenses.  The record net income of $10.0 million is a  25% increase compared to net income of $8.0 million recognized for the year ended December 31, 2020. 

Net income of $5.2 million for the quarter ended December 31, 2021, represents a 100% increase over net income of $2.6 million recognized for the quarter ended December 31, 2020.  Net income per diluted share of $2.13 for the year ended December 31, 2021 declined from $2.95 for the year ended December 31, 2020 and this decline was driven by the increase in number of shares outstanding as a result of the April 1, 2021 mergers of Fauquier Bankshares, Inc. and The Fauquier Bank ("Fauquier") with and into the Company and Virginia National Bank, respectively. 

Excluding merger and merger-related expenses, the Company would have posted net income of $15.6 million, or $3.31 per diluted share, (a non-GAAP financial measure)¹ for the year ended December 31, 2021.  Return on average assets ("ROAA") of 0.61% for the year ended December 31, 2021 would have amounted to 0.95% excluding merger and merger-related expenses (a non-GAAP financial measure),¹ compared to 1.00%, or 1.09% excluding merger and merger-related expenses (a non-GAAP financial measure),¹ in the  year ended December 31, 2020. 

"We finished the year with strong financial results after successfully integrating our systems, processes and people in the merger with Fauquier," said Glenn W. Rust, President and Chief Executive Officer.  "We have begun to realize significant cost savings, which will allow us to return value to our shareholders earlier than originally anticipated."

Fourth Quarter 2021 Results of Operations

• The efficiency ratio on a fully tax equivalent basis ("FTE") (a non-GAAP financial measure) was 57.7% for the three months ended December 31, 2021, compared to 57.0% for the three months ended December 31, 2020. ¹

• ROAA for the three months ended December 31, 2021 declined to 1.06% compared to 1.23% realized in the same period in the prior year, primarily due to the significant increase in assets as a result of the merger.

• Return on average equity ("ROAE") for the three months ended December 31, 2021 increased to 12.86% compared to 12.75% realized in same period in the prior year, as the increase in net income was greater than the increase in equity as a result of the merger.

• The Company reversed $664 thousand in pre-tax merger and merger-related expenses during the three months ended December 31, 2021, after receiving a refund from a third-party vendor for system implementation credits and adjusting merger-related accrued bonuses. This post-tax reversal of $588 thousand represents an improvement of $0.11 per diluted share.

• The Company has begun realizing savings associated with the merger and expects to realize significant additional savings over the next year. Full-time equivalent employee headcount was 215 as of April 1, 2021 and 173 as of December 31, 2021.

____________________

1 See "Reconciliation of Certain Non-GAAP Financial Measures" at the end of this release.

Loans and Asset Quality

• Gross loans outstanding at December 31, 2021 totaled $1.1 billion, an increase of $452 million, or 74%, compared to December 31, 2020. The increase is predominantly due to the acquisition of Fauquier, which added $602.6 million of loan balances, net of the fair value mark, on the consolidated balance sheet beginning April 1, 2021, but was offset by the decline in outstanding balances of Paycheck Protection Program ("PPP") loans of $121.2 million, due to loan forgiveness, the sale of the $6 million student loan portfolio formerly held by Fauquier, and other loan paydowns.

• Loan deferrals declined to $1.2 million as of December 31, 2021, from $3.3 million as of December 31, 2020. Only two loans remain in deferral status as of December 31, 2021, and each loan is government guaranteed.

• One non-accrual loan, in the amount of $495 thousand, was on the books as of December 31, 2021, compared to $8 thousand as of December 31, 2020. Acquired loans which otherwise would be in non-accrual status are not included in this figure, as they earn interest through the yield accretion.

• Loans 90 days or more past due and still accruing interest amounted to $800 thousand as of December 31, 2021, compared to $137 thousand as of December 31, 2020. The December 31, 2021 balance includes a government-guaranteed loan in the amount of $548 thousand. The portfolio only includes eight non-insured student loans that are 90 days or more past due and still accruing interest, amounting to $83 thousand. Loans acquired from Fauquier which are greater than 90 days past due and still accruing interest are included in this figure, net of their fair value mark.

• The period-end allowance for loan losses ("ALLL") as a percentage of total loans was 0.56% as of December 31, 2021 and 0.90% as of December 31, 2020. The decrease is the result of bringing the Fauquier loans onto the Company's balance sheet at fair value, with a credit and liquidity mark of $21.3 million effective April 1, 2021. The ALLL as a percentage of loans, excluding the impact of the acquired loans and fair value mark (a non-GAAP financial measure)¹, would have been 0.95% as of December 31, 2021, and the ALLL as a percentage of total loans, excluding PPP loans (a non-GAAP financial measure)¹, would have been 0.58% as of December 31, 2021.

• A provision for loan losses of $537 thousand was recognized during the three months ended December 31, 2021, compared to $255 thousand recognized in the three months ended December 31, 2020. A provision for loan losses of $1.0 million was recognized during the year ended December 31, 2021, compared to $1.6 million recognized during the year ended December 31, 2020.

Net Interest Income

• Net interest income for the three months ended December 31, 2021 of $12.4 million increased $5.7 million, or 84%, compared to the three months ended December 31, 2020, due to the inclusion of Fauquier's interest income and expense for the current quarter and the lower rates paid on deposits as compared to the prior year. Net interest income for the year ended December 31, 2021 of $45.0 million increased $21.1 million, or 88%, compared to the prior year due to the inclusion of Fauquier's interest income and expense for three quarters and lower rates paid on deposits.

• The fair value accretion on loans acquired positively impacted net interest income by 19 basis points ("bps") during the current quarter and by 72 bps for the year ended December 31, 2021.

• The overall cost of funds, including noninterest deposits, of 22 bps incurred in the three months ended December 31, 2021 decreased 14 bps from 36 bps in the same period in 2020, due to lower rates paid on deposit accounts, coupled with the acceleration of the fair value accretion related to the payoff of FHLB advances.

• Low-cost deposits, which include noninterest checking accounts and interest-bearing checking, savings and money market accounts, remained in excess of 86% of total deposits at December 31, 2021 and 2020.

_______________

1 See "Reconciliation of Certain Non-GAAP Financial Measures" at the end of this release.

Noninterest Income

Noninterest income for the three months ended December 31, 2021 increased $1.2 million, or 64%, compared to the three months ended December 31, 2020 primarily due to the recognition of $822 thousand of performance fee income by Masonry's Capital LLC (a wholly-owned subsidiary of the Company), included in wealth management fees on the consolidated statements of income.  Also, the inclusion of Fauquier's wealth management fees, advisory and brokerage income, income from bank-owned life insurance policies, deposit fees and debit card income attributed to increases in each of those categories.  Swap fee income declined $314 thousand, as swap arrangements are not as attractive to borrowers in the current rate environment.

Noninterest income for the year ended December 31, 2021  increased $3.9 million, or 59%, compared to the prior year.  Wealth management income, including the performance fees noted above, contributed $2.4 million of this increase.  The inclusion of Fauquier's wealth management fees, advisory and brokerage income,  income from bank-owned life insurance policies, deposit fees and debit card income also attributed to the year-over-year increase.  Swap fee income declined $1.2 million, and limited securities were sold in the current year, compared to a gain of $743 thousand in the prior year. 

Noninterest Expense

Noninterest expense for the three months ended December 31, 2021 increased $4.0 million, or 82%, compared to the three months ended December 31, 2020, due to the inclusion of Fauquier's noninterest expense, in nearly all line items within the category, offset by an adjustment to merger and merger-related expenses after receiving a refund from a third-party vendor for system implementation credits and adjusting merger-related accrued bonuses.  

Noninterest expense for the year ended December 31, 2021 increased $23.7 million, or 126%, due to the inclusion of Fauquier's noninterest expenses and an increase of $6.4 million in merger and merger-related expenses.

Book Value

Book value per share was $30.50 as of December 31, 2021 and $30.43 as of December 31, 2020.  Tangible book value per share (a non-GAAP financial measure)¹ as of December 31, 2021 was $27.36 compared to $30.17 as of December 31, 2020, declining due to the impact of goodwill and other intangible assets recorded upon the acquisition of Fauquier.  These amounts are impacted by the increase in shares outstanding as a result of the merger.

Income Taxes

The effective tax rate for the three months ended December 31, 2021 amounted to 11.9%, due to the recognition of low-income housing tax credits, compared to 22.9% for the three months ended December 31, 2020.  The effective tax rate for 2021 was 16.0%, also less than the statutory rate due to the recognition of low-income housing tax credits, compared to 20.6% in the prior year.

Dividends

Cash dividends of $1.6 million were declared during the fourth quarter of 2021.  The remaining 69% of net income was retained.

____________________

1 See "Reconciliation of Certain 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 ten banking offices throughout Fauquier and Prince William counties, four banking offices in Charlottesville and Albemarle County, and one banking office in Winchester, and offers loan, deposit and treasury management services in 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 Bank also offers, through its networking agreements with third parties, investment advisory and other investment services under Sturman Wealth Advisors.  Investment management services are offered through Masonry Capital Management, LLC, a registered investment adviser and wholly-owned subsidiary of the Company.

The Company's common stock trades on the Nasdaq Capital Market under the symbol "VABK."  Additional information on the Company is also available at www.vnbcorp.com.

Non-GAAP Financial Measures

The accounting and reporting policies of the Company conform to U.S. generally accepted accounting principles ("GAAP") and prevailing practices in the banking industry. However, management uses certain non-GAAP measures to supplement the evaluation of the Company's performance. Management believes presentations of these non-GAAP financial measures provide useful supplemental information that is essential to a proper understanding of the operating results of the Company's core businesses. These non-GAAP disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Reconciliations of GAAP to non-GAAP measures are included at the end of this release.

Forward-Looking Statements; Other Information

Certain statements in this release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, without limitation, statements with respect to the Company's operations, performance, future strategy and goals, and are often characterized by use of qualified words such as "expect," "believe," "estimate," "project," "anticipate," "intend," "will," "should," or words of similar meaning or other statements concerning the opinions or judgement of the Company and its management about future events. While Company management believes such statements to be reasonable, future events and predictions are subject to circumstances that are not within the control of the Company and its management.  Actual results may differ materially from those included in the forward-looking statements due to a number of factors, including, without limitation, the effects of and changes in: general economic and market conditions, including the effects of declines in real estate values, an increase in unemployment levels and general economic contraction as a result of COVID-19 or other pandemics; fluctuations in interest rates, deposits, loan demand, and asset quality; assumptions that underlie the Company's allowance for loan losses; the potential adverse effects of unusual and infrequently occurring events, such as weather-related disasters, terrorist acts or public health events (e.g., COVID-19 or other pandemics), and of governmental and societal responses thereto; the performance of vendors or other parties with which the Company does business; competition; technology; changes in laws, regulations and guidance; changes in accounting principles or guidelines; performance of assets under management; expected revenue synergies and cost savings from the recently completed merger with Fauquier may not be fully realized or realized within the expected timeframe; the businesses of the Company and Fauquier may not be integrated successfully or such integration may be more difficult, time-consuming or costly than expected; revenues following the merger may be lower than expected; customer and employee relationships and business operations may be disrupted by the merger; and other factors impacting financial services businesses.  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, 2020 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, 2021				December 31,  2020 *
		(Unaudited)
ASSETS
Cash and due from banks		$	20,345			$	8,116
Interest-bearing deposits in other banks			336,032				-
Federal funds sold			152,463				26,579
Securities:
Available for sale, at fair value			303,817				174,086
Restricted securities, at cost			4,950				3,010
Total securities			308,767				177,096
Loans			1,061,211				609,406
Allowance for loan losses			(5,984)				(5,455)
Loans, net			1,055,227				603,951
Premises and equipment, net			25,093				5,238
Bank owned life insurance			31,234				16,849
Goodwill			8,140				372
Core deposit intangible, net			8,271				-
Other intangible assets, net			274				341
Other real estate owned, net			611				-
Right of use asset, net			7,583				3,527
Accrued interest receivable and other assets			18,485				6,341
Total assets		$	1,972,525			$	848,410
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Demand deposits:
Noninterest-bearing		$	522,281			$	209,772
Interest-bearing			446,314				148,910
Money market and savings deposit accounts			665,530				272,980
Certificates of deposit and other time deposits			162,045				99,102
Total deposits			1,796,170				730,764
Advances from the FHLB			-				30,000
Junior subordinated debt			3,367				-
Lease liability			7,108				3,589
Accrued interest payable and other liabilities			3,955				1,459
Total liabilities			1,810,600				765,812
Commitments and contingent liabilities
Shareholders' equity:
Preferred stock, $2.50 par value, 2,000,000 shares authorized,    no shares outstanding			-				-
Common stock, $2.50 par value, 10,000,000 shares authorized;      5,308,335 shares issued and outstanding as of December 31,                2021 (includes 35,911 nonvested), and 2,714,273 shares issued      and outstanding as of December 31, 2020 (includes      25,268 nonvested)			13,178				6,722
Capital surplus			104,584				32,457
Retained earnings			46,374				41,959
Accumulated other comprehensive income (loss)			(2,211)				1,460
Total shareholders' equity			161,925				82,598
Total liabilities and shareholders' equity		$	1,972,525			$	848,410

*  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, 2021			December 31, 2020				December 31, 2021				December 31, 2020
Interest and dividend income:
Loans, including fees		$	11,995		$	6,743			$	43,899			$	24,945
Federal funds sold			61			6				139				104
Other interest-bearing deposits			139			-				233				-
Investment securities:
Taxable			804			452				2,810				1,602
Tax exempt			292			149				1,021				475
Dividends			49			34				170				104
Total interest and dividend income			13,340			7,384				48,272				27,230
Interest expense:
Demand and savings deposits			710			356				2,308				1,824
Certificates and other time deposits			222			288				1,108				1,454
Borrowings			49			38				(132)				73
Total interest expense			981			682				3,284				3,351
Net interest income			12,359			6,702				44,988				23,879
Provision for loan losses			537			255				1,014				1,622
Net interest income after provision for loan losses			11,822			6,447				43,974				22,257
Noninterest income:
Wealth management fees			1,455			332				3,508				1,133
Advisory and brokerage income			246			184				1,154				700
Deposit account fees			477			167				1,459				651
Debit/credit card and ATM fees			509			177				2,070				612
Earnings/increase in value of bank owned life insurance			201			110				708				437
Gains on sales of securities			1			9				1				743
Loan swap fee income			22			336				81				1,313
Other			117			530				1,484				976
Total noninterest income			3,028			1,845				10,465				6,565
Noninterest expense:
Salaries and employee benefits			4,424			2,462				16,129				9,466
Net occupancy			932			503				3,575				1,908
Equipment			305			62				966				463
Bank franchise tax			214			161				1,136				649
Computer software			276			143				1,020				579
Data processing			620			266				3,017				1,106
FDIC deposit insurance assessment			264			99				858				187
Marketing, advertising and promotion			216			74				922				409
Merger and merger-related expenses			(664)			439				7,423				988
Plastics expense			389			40				978				180
Professional fees			244			221				1,117				723
Core deposit intangible amortization			544			-				1,389				-
Other			1,160			427				3,992				2,121
Total noninterest expense			8,924			4,897				42,522				18,779
Income before income taxes			5,926			3,395				11,917				10,043
Provision for income taxes			707			779				1,908				2,065
Net income		$	5,219		$	2,616			$	10,009			$	7,978
Net income per common share, basic		$	0.98		$	0.96			$	2.14			$	2.95
Net income per common share, diluted		$	0.98		$	0.96			$	2.13			$	2.95
Weighted average common shares outstanding, basic			5,308,108			2,714,273				4,668,761				2,707,877
Weighted average common shares outstanding, diluted			5,338,088			2,714,905				4,695,405				2,708,567

 

VIRGINIA NATIONAL BANKSHARES CORPORATION
FINANCIAL HIGHLIGHTS
(dollars in thousands, except per share data)
(Unaudited)
		At or For the Three Months Ended
		December 31, 2021				September 30, 2021				June 30, 2021				March 31, 2021				December 31, 2020
Common Share Data:
Net income per weighted average share, basic		$	0.98			$	0.59			$	0.03			$	0.55			$	0.96
Net income per weighted average share, diluted		$	0.98			$	0.59			$	0.03			$	0.55			$	0.96
Weighted average shares outstanding, basic			5,308,108				5,306,370				5,305,277				2,719,840				2,714,273
Weighted average shares outstanding, diluted			5,338,088				5,338,872				5,320,290				2,727,448				2,714,905
Actual shares outstanding			5,308,335				5,307,235				5,305,819				2,728,327				2,714,273
Tangible book value per share at period end		$	27.36			$	26.92			$	26.60			$	29.07			$	30.17
Key Ratios:
Return on average assets 1			1.06	%			0.65	%			0.03	%			0.68	%			1.23	%
Return on average equity 1			12.86	%			7.70	%			0.37	%			7.40	%			12.75	%
Net interest margin (FTE) 2			2.72	%			3.08	%			3.05	%			2.83	%			3.32	%
Efficiency ratio (FTE) 3			57.70	%			75.17	%			99.27	%			67.72	%			57.03	%
Loan-to-deposit ratio			59.08	%			64.04	%			71.57	%			77.23	%			83.39	%
Net Interest Income:
Net interest income		$	12,359			$	13,504			$	13,151			$	5,974			$	6,702
Net interest income (FTE) 2,3		$	12,437			$	13,581			$	13,224			$	6,021			$	6,740
Capital Ratios:
Tier 1 leverage ratio			7.61	%			7.59	%			7.66	%			9.01	%			9.54	%
Total risk-based capital ratio			14.56	%			13.74	%			13.47	%			15.49	%			15.35	%
Assets and Asset Quality:
Average Earning Assets		$	1,817,010			$	1,750,799			$	1,740,338			$	862,373			$	807,351
Average Gross Loans		$	1,088,278			$	1,140,281			$	1,214,123			$	618,902			$	618,296
Paycheck Protection Program Loans, end of period		$	24,482			$	36,740			$	73,784			$	70,171			$	55,120
Loan Deferrals, Pandemic Related		$	1,215			$	1,243			$	2,004			$	1,539			$	3,346
Allowance for loan losses:
Beginning of period		$	5,623			$	5,522			$	5,615			$	5,455			$	5,334
Provision for (recovery of) loan losses			537				267				(141)				351				255
Charge-offs			(230)				(208)				(156)				(241)				(162)
Recoveries			54				42				204				50				28
Net recoveries (charge-offs)			(176)				(166)				48				(191)				(134)
End of period		$	5,984			$	5,623			$	5,522			$	5,615			$	5,455
Non-accrual loans 4		$	495			$	777			$	17			$	5			$	8
Loans 90 days or more past due and still accruing 5			800				1,044				2,770				399				137
OREO			611				611				611				-				-
Total nonperforming assets (NPA)		$	1,906			$	2,432			$	3,398			$	404			$	145
NPA as a % of total assets			0.10	%			0.13	%			0.18	%			0.04	%			0.02	%
NPA as a % of total loans plus OREO			0.18	%			0.22	%			0.29	%			0.07	%			0.02	%
ALLL to total loans			0.56	%			0.51	%			0.47	%			0.90	%			0.90	%
ALLL to total loans, excluding PPP loans (non-GAAP)			0.58	%			0.52	%			0.51	%			1.02	%			0.98	%
Non-accruing loans to total loans 4			0.05	%			0.07	%			0.00	%			0.00	%			0.00	%
Net charge-offs (recoveries) to average loans 1			0.06	%			0.06	%			-0.02	%			0.12	%			0.09	%

1	Ratio is computed on an annualized basis.
2	The net interest margin and net interest income are reported on a FTE basis, using a Federal income tax rate of 21%.
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	Acquired loans which otherwise would be in non-accrual status are not included in this figure, as they earn interest through the yield accretion.
5	Past due loans from the acquired portfolio are included at fair value.

 

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, 2021									September 30, 2021									December 31, 2020
					Interest									Interest									Interest
		Average			Income/			Average			Average			Income/			Average			Average			Income/			Average
(dollars in thousands)		Balance			Expense			Yield/Cost			Balance			Expense			Yield/Cost			Balance			Expense			Yield/Cost
ASSETS
Interest Earning Assets:
Securities
Taxable Securities		$	225,757		$	853			1.51	%	$	214,194		$	797			1.49	%	$	129,201		$	526			1.63	%
Tax Exempt Securities 1			63,083			371			2.35	%		59,869			355			2.37	%		26,932			149			2.21	%
Total Securities 1			288,840			1,224			1.70	%		274,063			1,152			1.68	%		156,133			675			1.73	%
Total Loans			1,088,278			11,995			4.37	%		1,140,281			12,959			4.51	%		618,296			6,742			4.34	%
Fed Funds Sold			152,435			61			0.16	%		137,472			45			0.13	%		32,922			6			0.07	%
Other interest-bearing deposits			287,457			138			0.19	%		198,983			55			0.11	%		—			—			—
Total Earning Assets			1,817,010			13,418			2.93	%		1,750,799			14,211			3.22	%		807,351			7,423			3.65	%
Less: Allowance for Loan Losses			(5,704)									(5,532)									(5,345)
Total Non-Earning Assets			140,539									159,014									43,184
Total Assets		$	1,951,845								$	1,904,281								$	845,190
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest Bearing Liabilities:
Interest Bearing Deposits:
Interest Checking		$	421,372		$	70			0.07	%	$	410,504		$	72			0.07	%	$	135,993		$	24			0.07	%
Money Market and Savings Deposits			660,438			639			0.38	%		621,211			601			0.38	%		277,850			332			0.48	%
Time Deposits			162,584			222			0.54	%		171,256			282			0.65	%		98,447			288			1.16	%
Total Interest-Bearing Deposits			1,244,394			931			0.30	%		1,202,971			955			0.31	%		512,290			644			0.50	%
Short term borrowings			—			—			—			22,260			(375)			-6.68	%		32,719			39			0.47	%
Junior subordinated debt			3,360			50			5.86	%		3,349			50			5.92	%		—			—			—
Total Interest-Bearing Liabilities			1,247,754			981			0.31	%		1,228,580			630			0.20	%		545,009			683			0.50	%
Non-Interest-Bearing Liabilities:
Demand deposits			532,397									499,068									214,020
Other liabilities			10,741									15,003									4,210
Total Liabilities			1,790,892									1,742,651									763,239
Shareholders' Equity			160,953									161,630									81,951
Total Liabilities & Shareholders' Equity		$	1,951,845								$	1,904,281								$	845,190
Net Interest Income (FTE)					$	12,437								$	13,581								$	6,740
Interest Rate Spread 2									2.62	%								3.02	%								3.16	%
Cost of Funds									0.22	%								0.14	%								0.36	%
Interest Expense as a Percentage of Average Earning Assets									0.21	%								0.14	%								0.34	%
Net Interest Margin (FTE) 3									2.72	%								3.08	%								3.32	%

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
QUARTERLY RECONCILIATION OF CERTAIN NON-GAAP FINANCIAL MEASURES
(dollars in thousands, except per share data)
(Unaudited)
		Three Months Ended
		December 31, 2021				September 30, 2021				June 30, 2021						March 31, 2021				December 31, 2020
Performance measures
Return on average assets ("ROAA")			1.06	%			0.65	%			0.03	%					0.68	%			1.23	%
Impact of merger expenses 1			-0.12	%			0.30	%			0.99	%					0.08	%			0.17	%
ROAA, excluding merger expenses 1 (non-GAAP)			0.94	%			0.95	%			1.02	%					0.76	%			1.40	%
Return on average equity ("ROAE")			12.86	%			7.70	%			0.37	%					7.40	%			12.75	%
Impact of merger expenses 1			-1.45	%			3.53	%			11.51	%					0.83	%			1.79	%
ROAE, excluding merger expenses 1 (non-GAAP)			11.41	%			11.23	%			11.88	%					8.23	%			14.54	%
Net income		$	5,219			$	3,138			$	147					$	1,505			$	2,616
Impact of merger expenses 1			(588)				1,424				4,553			0			169				368
Net income, excluding merger expenses 1 (non-GAAP)		$	4,631			$	4,562			$	4,700					$	1,674			$	2,984
Net income per share		$	0.98			$	0.59			$	0.03					$	0.53			$	0.77
Impact of merger expenses 1			(0.11)				0.27				0.86						0.06				0.15
Net income per share, excluding merger expenses 1 (non-GAAP)		$	0.87			$	0.86			$	0.89					$	0.59			$	0.92
Fully tax-equivalent measures
Net interest income		$	12,359			$	13,504			$	13,151					$	5,974			$	6,702
Fully tax-equivalent adjustment			78				77				73						47				38
Net interest income (FTE) 2		$	12,437			$	13,581			$	13,224					$	6,021			$	6,740
Efficiency ratio 3			58.0	%			75.5	%			99.5	%					68.2	%			57.3	%
Fully tax-equivalent adjustment			-0.3	%			-0.3	%			-0.4	%					-0.5	%			-0.3	%
Efficiency ratio (FTE) 4			57.7	%			75.2	%			99.1	%					67.7	%			57.0	%
Net interest margin			2.70	%			3.06	%			3.03	%					2.81	%			3.30	%
Fully tax-equivalent adjustment			0.02	%			0.02	%			0.02	%					0.02	%			0.02	%
Net interest margin (FTE) 2			2.72	%			3.08	%			3.05	%					2.83	%			3.32	%
		As of
		December 31,				September 30,				June 30,						March 31,				December 31,
		2021				2021				2021						2021				2020
Other financial measures
ALLL to total loans			0.56	%			0.51	%			0.47	%					0.90	%			0.90	%
Impact of acquired loans and fair value mark			0.39	%			0.39	%			0.41	%					—				—
ALLL to total loans, excluding acquired loans and fair value mark (non-GAAP)			0.95	%			0.90	%			0.88	%					0.90	%			0.90	%
ALLL to total loans			0.56	%			0.51	%			0.47	%					0.90	%			0.90	%
Impact of PPP loans			0.02	%			0.01	%			0.04	%					0.12	%			0.08	%
ALLL to total loans, excluding PPP loans (non-GAAP)			0.58	%			0.52	%			0.51	%					1.02	%			0.98	%
Book value per share		$	30.50			$	30.13			$	29.89					$	29.33			$	30.43
Impact of intangible assets			(3.14)				(3.21)				(3.29)					$	(0.26)			$	(0.26)
Tangible book value per share (non-GAAP)		$	27.36			$	26.92			$	26.60					$	29.07			$	30.17

1	References to merger expenses include merger and merger-related expenses and are net of tax.
2	FTE calculations use a Federal income tax rate of 21%.
3	The efficiency ratio, GAAP basis, is computed by dividing noninterest expense by the sum of net interest income and noninterest income.
4	The efficiency ratio, FTE, is computed by dividing noninterest expense by the sum of net interest income (FTE) and noninterest income.

 

VIRGINIA NATIONAL BANKSHARES CORPORATION
ANNUAL RECONCILIATION OF CERTAIN NON-GAAP FINANCIAL MEASURES
(dollars in thousands, except per share data)
(Unaudited)
		For the Twelve Months Ended
		December 31, 2021				December 31, 2020
Performance measures
Return on average assets ("ROAA")			0.61	%			1.00	%
Impact of merger expenses 1			0.34	%			0.09	%
ROAA, excluding merger expenses 1 (non-GAAP)			0.95	%			1.09	%
Return on average equity ("ROAE")			7.12	%			10.01	%
Impact of merger expenses 1			3.95	%			0.88	%
ROAE, excluding merger expenses 1 (non-GAAP)			11.07	%			10.89	%
Net income		$	10,009			$	7,978
Impact of merger expenses 1			5,557				704
Net income, excluding merger expenses 1 (non-GAAP)		$	15,566			$	8,682
Net income per share		$	2.13			$	2.95
Impact of merger expenses 1			1.18				0.26
Net income per share, excluding merger expenses 1 (non-GAAP)		$	3.31			$	3.21
Fully tax-equivalent measures
Net interest income		$	44,988			$	23,879
Fully tax-equivalent adjustment			275				126
Net interest income (FTE) 2		$	45,263			$	24,005
Efficiency ratio 3			76.7	%			61.7	%
Fully tax-equivalent adjustment			-0.4	%			-0.3	%
Efficiency ratio (FTE) 4			76.3	%			61.4	%
Net interest margin			2.73	%			3.16	%
Fully tax-equivalent adjustment			0.01	%			0.01	%
Net interest margin (FTE) 2			2.74	%			3.17	%

1	References to merger expenses include merger and merger-related expenses and are net of tax.
2	FTE calculations use a Federal income tax rate of 21%.
3	The efficiency ratio, GAAP basis, is computed by dividing noninterest expense by the sum of net interest income and noninterest income.
4	The efficiency ratio, FTE, is computed by dividing noninterest expense by the sum of net interest income (FTE) and noninterest income.

 

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SOURCE Virginia National Bankshares

FAQ

What was Virginia National Bankshares Corporation's net income for 2021?

Virginia National Bankshares Corporation reported a net income of $10.0 million for the year ended December 31, 2021.

How much did net income increase in 2021 for VABK?

Net income increased by 25% in 2021 compared to 2020.

What were the gross loans reported by VABK as of December 31, 2021?

Gross loans outstanding totaled $1.1 billion as of December 31, 2021, a 74% increase from the previous year.

How much was the net income for VABK in Q4 2021?

Net income for the quarter ended December 31, 2021, was $5.2 million.

What is VABK's projected cost savings from the merger with Fauquier?

VABK expects to realize significant cost savings from the merger with Fauquier, enhancing shareholder value.