Segment Reporting

12 Months Ended

Dec. 31, 2021

Segment Reporting [Abstract]

Segment Reporting

Note 24 – Segment Reporting

Virginia National Bankshares Corporation has four reportable segments. Each reportable segment is a strategic business unit that offers different products and services. They are managed separately, because each segment appeals to different markets and, accordingly, require different technology and marketing strategies. The accounting policies of the segments are the same as those described in the summary of significant accounting policies provided earlier in this report.

The four reportable segments are:

•Bank - The commercial banking segment involves making loans and generating deposits from individuals, businesses and charitable organizations. Loan fee income, service charges from deposit accounts, and other non-interest-related fees, such as fees for debit cards and ATM usage and fees for treasury management services, generate additional income for the Bank segment.

•Sturman Wealth Advisors – Sturman Wealth Advisors, formerly known as VNB Investment Services, offers wealth management and investment advisory services. Revenue for this segment is generated primarily from investment advisory and financial planning fees, with a small and decreasing portion attributable to brokerage commissions.

•VNB Trust and Estate Services – VNB Trust and Estate Services offers corporate trustee services, trust and estate administration, IRA administration and custody services. Revenue for this segment is generated from administration, service and custody fees, as well as management fees which are derived from Assets Under Management. Investment management services currently are offered through in-house and third-party managers. In addition, royalty income, in the form of fixed and incentive fees, from the sale of Swift Run Capital Management, LLC in 2013 is reported as income of VNB Trust and Estate Services. More information on royalty income and the related sale can be found under Note 1 - Summary of Significant Accounting Policies.

•Masonry Capital - Masonry Capital offers investment management services for separately managed accounts and a private investment fund employing a value-based, catalyst-driven investment strategy. Revenue for this segment is generated from management fees which are

derived from Assets Under Management and incentive income which is based on the investment returns generated on performance-based Assets Under Management.

A management fee for administrative and technology support services provided by the Bank is allocated to the non-bank segments. For both the years ended December 31, 2021 and 2020, management fees of $100 thousand were charged to the non-bank segments and eliminated in consolidated totals.

Segment information for the years ended December 31, 2021 and 2020 is shown in the following tables. Note that asset information is not reported below, as the assets of Sturman Wealth Advisors and VNB Trust & Estate Services are reported at the Bank level; also, assets specifically allocated to the lines of business other than the Bank are insignificant and are no longer provided to the chief operating decision maker.

2021 (Dollars in thousands)	Bank		Sturman Wealth Advisors		VNB Trust & Estate Services			Masonry Capital			Consolidated
Net interest income	$	44,988	$	-	$	-		$	-		$	44,988
Provision for loan losses		1,014		-		-			-			1,014
Noninterest income		5,704		1,213		1,969			1,579			10,465
Noninterest expense		39,164		725		1,764			869			42,522
Income before income taxes		10,514		488		205			710			11,917
Provision for income taxes		1,550		104		43			149			1,846
Net income	$	8,964	$	384	$	162		$	561		$	10,071
2020 (Dollars in thousands)	Bank		Sturman Wealth Advisors		VNB Trust & Estate Services			Masonry Capital			Consolidated
Net interest income	$	23,879	$	-	$	-		$	-		$	23,879
Provision for loan losses		1,622		-		-			-			1,622
Noninterest income		4,629		700		825			411			6,565
Noninterest expense		16,492		639		891			757			18,779
Income before income taxes		10,394		61		(66	)		(346	)		10,043
Provision for income taxes		2,138		13		(14	)		(72	)		2,065
Net income (loss)	$	8,256	$	48	$	(52	)	$	(274	)	$	7,978