EX-99.1 2 vabk-ex99_1.htm EX-99.1 EX-99.1

 

Exhibit 99.1

img2203825_0.jpg 

 

FOR IMMEDIATE RELEASE

INVESTOR RELATIONS CONTACT:

 

Tara Y. Harrison (434) 817-8587

 

VIRGINIA NATIONAL BANKSHARES CORPORATION

ANNOUNCES RECORD NET INCOME FOR 2021

Charlottesville, VA – February 18, 2022 - 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.

 

Page 1 of 10

 

 

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.

 

Page 2 of 10

 

 

 

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.

 

Page 3 of 10

 

 

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.

 

 

Page 4 of 10

 

 

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

 

Page 5 of 10

 

 

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

 

 

Page 6 of 10

 

 

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.

Page 7 of 10

 

 

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.

 

 

Page 8 of 10

 

 

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.

 

 

Page 9 of 10

 

 

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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