Exhibit 99.1

 

FOR IMMEDIATE RELEASE	INVESTOR RELATIONS CONTACT:
	Tara Y. Harrison (434) 817-8587

VIRGINIA NATIONAL BANKSHARES CORPORATION

ANNOUNCES SECOND QUARTER 2022 EARNINGS

Charlottesville, VA – July 29, 2022 - Virginia National Bankshares Corporation (NASDAQ: VABK) (the “Company”) today reported net income of $5.7 million, or $1.06 per diluted share, for the quarter ended June 30, 2022, which represents a $5.5 million increase over net income of $147 thousand, or $0.03 per diluted share, recognized for the quarter ended June 30, 2021. For the six months ended June 30, 2022, net income of $10.6 million, or $1.98 per diluted share, was recognized, compared to $1.6 million, or $0.41 per diluted share, for the six months ended June 30, 2021. Note that merger and merger-related expenses of $5.9 million and $6.2 million were incurred in the quarterly and year-to-date periods ended June 30, 2021, respectively, in connection with the April 1, 2021 mergers of Fauquier Bankshares, Inc. and The Fauquier Bank (“Fauquier”) with and into the Company and Virginia National Bank (the "Bank"), respectively.

"We finished the first half of the year with strong financial results," commented President and Chief Executive Officer, Glenn W. Rust. “We continue to add talent in the Northern Virginia and Richmond markets. The Bank remains positioned to benefit from recent and anticipated increases in interest rates, and our history of strong credit quality has proven beneficial in trying economic times."

Second Quarter 2022 and Selected Balance Sheet Financial Highlights

•The efficiency ratio on a fully tax equivalent basis (“FTE”) (a non-GAAP financial measure) was 58.3% for the three months ended June 30, 2022, an improvement over 99.1% for the three months ended June 30, 2021. 1

•Return on average assets ("ROAA") for the three months ended June 30, 2022 increased to 1.27% compared to 0.03% realized in the same period in the prior year.

•Return on average equity (“ROAE”) for the three months ended June 30, 2022 improved to 16.16% compared to 0.37% realized in same period in the prior year.

•The Company has not incurred any merger or merger-related expenses since December 31, 2021, compared to $5.9 million incurred in the three months ended June 30, 2021.

•The Company has begun realizing savings associated with the merger and expects to realize significant additional savings in salaries and employee benefits, data processing and professional fees over the next year. Full-time equivalent employee headcount was 215 as of April 1, 2021, the effective date of the merger, and is down to 161 as of June 30, 2022.

Loans and Asset Quality

•Gross loans outstanding at June 30, 2022 totaled $960 million, a decrease of $206 million, or 18%, compared to June 30, 2021. The decrease is due predominantly to: 1) the forgiveness of Small Business Administration ("SBA") Paycheck Protection Program ("PPP") loans in the amount of $71.9 million, 2) paydowns of legacy organic loans due mainly to business sales, property sales and participation fluctuations of $53.8 million, and 3) workouts and paydowns of loans acquired from Fauquier ("acquired loans") of $50.4 million.

•Two loans to one borrower are in non-accrual status, totaling $511 thousand, as of June 30, 2022, compared to $17 thousand as of June 30, 2021. Acquired loans that otherwise would be in non-accrual status are not included in this figure, as they earn interest through the yield accretion.

__________________________________________________________________

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

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Loans and Asset Quality(continued)

•Loans 90 days or more past due and still accruing interest amounted to $626 thousand as of June 30, 2022, compared to $2.8 million as of June 30, 2021. The June 30, 2022 balance includes a government-guaranteed loan in the amount of $548 thousand. The portfolio includes four non-insured student loans that are 90 days or more past due and still accruing interest, amounting to $29 thousand. Acquired loans that 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 0.57% as of June 30, 2022 and 0.47% as of June 30, 2021. 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 $17.5 million as of June 30, 2022. The ALLL as a percentage of gross loans, excluding the impact of the acquired loans and fair value mark (a non-GAAP financial measure)1, would have been 0.91% as of June 30, 2022, compared to 0.88% as of June 30, 2021. The total of the ALLL and the fair value mark as a percentage of gross loans (a non-GAAP financial measure)1 amounted to 2.39% as of June 30, 2022 and 2.23% as of June 30, 2021.

•A recovery of provision for loan losses of $217 thousand was recognized during the three months ended June 30, 2022, compared to $141 thousand recognized in the three months ended June 30, 2021.

Net Interest Income

•Net interest income for the three months ended June 30, 2022 of $12.5 million decreased $690 thousand, or 5%, compared to the three months ended June 30, 2021, due primarily to the reduction in average balances of loans, which declined from an average of $1.2 billion for the three months ended June 30, 2021 to an average of $985 million for the three months ended June 30, 2022.

•The fair value accretion on acquired loans positively impacted net interest income by 12 basis points (“bps”) during the current quarter.

•The overall cost of funds, including noninterest deposits, of 17 bps incurred in the three months ended June 30, 2022 decreased 6 bps from 23 bps in the same period in the prior year, due primarily to lower rates paid on deposit accounts.

•Low-cost deposits, which include noninterest checking accounts and interest-bearing checking, savings and money market accounts, remained in excess of 89% of total deposits at June 30, 2022 and 2021.

Noninterest Income

Noninterest income for the three months ended June 30, 2022 increased $726 thousand, or 25%, compared to the three months ended June 30, 2021 largely due to the gain on sale of two buildings of $1.1 million, offset by a $408 thousand decline in wealth management fees due to a reduction in the number of accounts.

Noninterest Expense

Noninterest expense for the three months ended June 30, 2022 declined $6.6 million, or 41%, compared to the three months ended June 30, 2021, primarily due to reduction in merger and merger-related expenses of $5.9 million and the reduction of salaries and employee benefits of $655 thousand.

Book Value

Book value per share was $25.20 as of June 30, 2022 and $29.89 as of June 30, 2021, and tangible book value per share (a non-GAAP financial measure)1 was $22.24 as of June 30, 2022 compared to $26.60 as of June 30, 2021. These values declined primarily due to the increase in unrealized loss on the investment portfolio period over period.

Income Taxes

The effective tax rate for the three months ended June 30, 2022 amounted to 17.4%, due to the recognition of low-income housing tax credits in 2022, compared to 32.9% for the three months ended June 30, 2021, which was higher than the statutory rate due to the non-deductibility of certain merger and merger-related expenses.

Dividends

Cash dividends of $1.6 million were declared during the current quarter. The remaining 72% of net income was retained.

_____________________________________________________________________

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

Page 2 of 9

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 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 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, 2021 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.

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VIRGINIA NATIONAL BANKSHARES CORPORATION

CONSOLIDATED BALANCE SHEETS

(dollars in thousands, except per share data)

	June 30, 2022			December 31, 2021 *			June 30, 2021
	(Unaudited)						(Unaudited)
ASSETS
Cash and due from banks	$	17,631		$	20,345		$	29,605
Interest-bearing deposits in other banks		145,217			336,032			177,753
Federal funds sold		52,819			152,463			106,621
Securities:
Available for sale, at fair value		461,830			303,817			266,973
Restricted securities, at cost		5,138			4,950			4,272
Total securities		466,968			308,767			271,245
Loans, net of deferred fees and costs		960,192			1,061,211			1,166,161
Allowance for loan losses		(5,503	)		(5,984	)		(5,522	)
Loans, net		954,689			1,055,227			1,160,639
Premises and equipment, net		19,193			25,093			25,386
Bank owned life insurance		38,046			31,234			30,832
Goodwill		8,140			8,140			8,898
Core deposit intangible, net		7,405			8,271			8,272
Other intangible assets, net		240			274			307
Other real estate owned, net		-			611			611
Right of use asset, net		7,343			7,583			8,371
Accrued interest receivable and other assets		27,249			18,144			18,582
Total assets	$	1,744,940		$	1,972,184		$	1,847,122
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Demand deposits:
Noninterest-bearing	$	512,889		$	522,281		$	449,483
Interest-bearing		399,930			446,314			431,556
Money market and savings deposit accounts		535,958			665,530			577,414
Certificates of deposit and other time deposits		150,121			162,045			170,995
Total deposits		1,598,898			1,796,170			1,629,448
Advances from the FHLB		-			-			42,989
Junior subordinated debt, net		3,390			3,367			3,345
Lease liability		6,925			7,108			7,833
Accrued interest payable and other liabilities		1,511			3,552			4,905
Total liabilities		1,610,724			1,810,197			1,688,520
Commitments and contingent liabilities
Shareholders' equity:
Preferred stock, $2.50 par value		-			-			-
Common stock, $2.50 par value		13,201			13,178			13,176
Capital surplus		104,858			104,584			104,360
Retained earnings		53,852			46,436			41,201
Accumulated other comprehensive loss		(37,695	)		(2,211	)		(135	)
Total shareholders' equity		134,216			161,987			158,602
Total liabilities and shareholders' equity	$	1,744,940		$	1,972,184		$	1,847,122
Common shares outstanding		5,326,271			5,308,335			5,305,819
Common shares authorized		10,000,000			10,000,000			10,000,000
Preferred shares outstanding		-			-			-
Preferred shares authorized		2,000,000			2,000,000			2,000,000

* Derived from audited consolidated financial statements

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VIRGINIA NATIONAL BANKSHARES CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

(dollars in thousands, except per share data)

(Unaudited)

	For the three months ended						For the six months ended
	June 30, 2022			June 30, 2021			June 30, 2022			June 30, 2021
Interest and dividend income:
Loans, including fees	$	10,610		$	13,009		$	21,379		$	18,947
Federal funds sold		302			21			363			33
Other interest-bearing deposits		219			39			355			39
Investment securities:
Taxable		1,662			757			2,674			1,264
Tax exempt		308			273			612			449
Dividends		64			32			126			66
Total interest and dividend income		13,165			14,131			25,509			20,798
Interest expense:
Demand and savings deposits		498			548			1,174			925
Certificates and other time deposits		157			324			352			604
Borrowings		49			108			97			144
Total interest expense		704			980			1,623			1,673
Net interest income		12,461			13,151			23,886			19,125
Provision for (recovery of) loan losses		(217	)		(141	)		(69	)		210
Net interest income after provision for (recovery of) loan losses		12,678			13,292			23,955			18,915
Noninterest income:
Wealth management fees		572			980			1,129			1,309
Advisory and brokerage income		210			359			426			550
Deposit account fees		458			426			923			586
Debit/credit card and ATM fees		779			599			1,486			753
Earnings/increase in value of bank owned life insurance		246			199			457			306
Resolution of commercial dispute		-			-			2,400			-
Gains on sale of assets		1,113			-			1,113			27
Other		268			357			499			428
Total noninterest income		3,646			2,920			8,433			3,959
Noninterest expense:
Salaries and employee benefits		4,086			4,741			8,817			7,143
Net occupancy		1,282			1,109			2,479			1,604
Equipment		254			340			537			456
Bank franchise tax		304			429			608			602
Computer software		357			216			620			383
Data processing		699			994			1,437			1,283
FDIC deposit insurance assessment		125			182			351			245
Marketing, advertising and promotion		259			232			526			369
Merger and merger-related expenses		-			5,874			-			6,152
Plastics expense		92			-			231			-
Professional fees		404			510			741			687
Core deposit intangible amortization		427			428			866			428
Other		1,153			938			2,324			1,422
Total noninterest expense		9,442			15,993			19,537			20,774
Income before income taxes		6,882			219			12,851			2,100
Provision for income taxes		1,197			72			2,242			448
Net income	$	5,685		$	147		$	10,609		$	1,652
Net income per common share, basic	$	1.07		$	0.03		$	1.99		$	0.41
Net income per common share, diluted	$	1.06		$	0.03		$	1.98		$	0.41
Weighted average common shares outstanding, basic		5,326,271			5,305,277			5,319,166			4,019,700
Weighted average common shares outstanding, diluted		5,347,008			5,320,290			5,345,242			4,031,301

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VIRGINIA NATIONAL BANKSHARES CORPORATION

FINANCIAL HIGHLIGHTS

(dollars in thousands, except per share data)

(Unaudited)

	At or For the Three Months Ended
	June 30, 2022			March 31, 2022			December 31, 2021			September 30, 2021			June 30, 2021
Common Share Data:
Net income per weighted average share, basic	$	1.07		$	0.93		$	0.98		$	0.59		$	0.03
Net income per weighted average share, diluted	$	1.06		$	0.92		$	0.98		$	0.59		$	0.03
Weighted average shares outstanding, basic		5,326,271			5,311,983			5,308,108			5,306,370			5,305,277
Weighted average shares outstanding, diluted		5,347,008			5,343,564			5,338,088			5,338,872			5,320,290
Actual shares outstanding		5,326,271			5,326,271			5,308,335			5,307,235			5,305,819
Tangible book value per share at period end	$	22.24		$	24.37		$	27.36		$	26.92		$	26.60
Key Ratios:
Return on average assets 1		1.27	%		1.03	%		1.06	%		0.65	%		0.03	%
Return on average equity 1		16.16	%		12.53	%		12.86	%		7.70	%		0.37	%
Net interest margin (FTE) 2		3.02	%		2.59	%		2.72	%		3.08	%		3.05	%
Efficiency ratio (FTE) 3		58.32	%		62.02	%		57.70	%		75.17	%		99.06	%
Loan-to-deposit ratio		60.05	%		56.75	%		59.08	%		64.04	%		71.57	%
Net Interest Income:
Net interest income	$	12,461		$	11,425		$	12,359		$	13,504		$	13,151
Net interest income (FTE) 2	$	12,543		$	11,506		$	12,437		$	13,581		$	13,224
Capital Ratios:
Tier 1 leverage ratio		8.79	%		8.03	%		7.61	%		7.59	%		7.66	%
Total risk-based capital ratio		16.51	%		15.66	%		14.56	%		13.74	%		13.47	%
Assets and Asset Quality:
Average earning assets	$	1,668,471		$	1,802,461		$	1,817,010		$	1,750,799		$	1,740,338
Average gross loans	$	984,883		$	1,031,593		$	1,088,278		$	1,140,281		$	1,214,123
Paycheck Protection Program loans, end of period	$	1,925		$	9,976		$	24,482		$	36,740		$	73,784
Fair value mark on acquired loans	$	17,502		$	17,920		$	18,466		$	19,328		$	20,582
Allowance for loan losses:
Beginning of period	$	5,834		$	5,984		$	5,623		$	5,522		$	5,615
Provision for (recovery of) loan losses		(217	)		148			537			267			(141	)
Charge-offs		(191	)		(473	)		(230	)		(208	)		(156	)
Recoveries		77			175			54			42			204
Net recoveries (charge-offs)		(114	)		(298	)		(176	)		(166	)		48
End of period	$	5,503		$	5,834		$	5,984		$	5,623		$	5,522
Non-accrual loans 4	$	511		$	518		$	495		$	777		$	17
Loans 90 days or more past due and still accruing 5		626			837			800			1,044			2,770
OREO		-			611			611			611			611
Total nonperforming assets (NPA)	$	1,137		$	1,966		$	1,906		$	2,432		$	3,398
NPA as a % of total assets		0.07	%		0.10	%		0.10	%		0.13	%		0.18	%
NPA as a % of gross loans plus OREO		0.12	%		0.20	%		0.18	%		0.22	%		0.29	%
ALLL to gross loans		0.57	%		0.58	%		0.56	%		0.51	%		0.47	%
ALLL + fair value mark to gross loans (non-GAAP)		2.39	%		2.35	%		2.30	%		2.24	%		2.23	%
Non-accruing loans to gross loans 4		0.05	%		0.05	%		0.05	%		0.07	%		0.00	%
Net charge-offs (recoveries) to average loans 1		0.05	%		0.12	%		0.06	%		0.06	%		-0.02	%

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.

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VIRGINIA NATIONAL BANKSHARES CORPORATION

AVERAGE BALANCES, INCOME AND EXPENSES, YIELDS AND RATES (TAXABLE EQUIVALENT BASIS)

(dollars in thousands)

(Unaudited)

	For the three months ended
	June 30, 2022								June 30, 2021
				Interest								Interest
	Average			Income/		Average			Average			Income/		Average
(dollars in thousands)	Balance			Expense		Yield/Cost			Balance			Expense		Yield/Cost
ASSETS
Interest Earning Assets:
Securities:
Taxable Securities	$	325,833		$	1,726		2.12	%	$	211,827		$	792		1.50	%
Tax Exempt Securities 1		65,352			390		2.39	%		58,398			346		2.37	%
Total Securities 1		391,185			2,116		2.16	%		270,225			1,138		1.68	%
Loans:
Real Estate		847,661			8,988		4.25	%		997,446			10,175		4.09	%
Commercial		86,394			995		4.62	%		144,209			1,967		5.47	%
Consumer		50,828			627		4.95	%		72,468			867		4.80	%
Total Loans		984,883			10,610		4.32	%		1,214,123			13,009		4.30	%
Fed Funds Sold		150,393			302		0.81	%		106,934			21		0.08	%
Other interest-bearing deposits		142,010			219		0.62	%		149,056			36		0.10	%
Total Earning Assets		1,668,471			13,247		3.18	%		1,740,338			14,204		3.27	%
Less: Allowance for Loan Losses		(5,866	)							(5,732	)
Total Non-Earning Assets		133,526								124,287
Total Assets	$	1,796,131							$	1,858,893
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest Bearing Liabilities:
Interest Bearing Deposits:
Interest Checking	$	411,374		$	58		0.06	%	$	437,611		$	93		0.09	%
Money Market and Savings Deposits		550,883			440		0.32	%		561,940			455		0.32	%
Time Deposits		152,695			157		0.41	%		169,556			324		0.77	%
Total Interest-Bearing Deposits		1,114,952			655		0.24	%		1,169,107			872		0.30	%
Borrowings		—			—		—			43,030			59		0.55	%
Junior subordinated debt		3,383			49		5.81	%		3,334			49		5.89	%
Total Interest-Bearing Liabilities		1,118,335			704		0.25	%		1,215,471			980		0.32	%
Non-Interest-Bearing Liabilities:
Demand deposits		527,008								471,078
Other liabilities		10,067								14,109
Total Liabilities		1,655,410								1,700,658
Shareholders' Equity		140,721								158,235
Total Liabilities & Shareholders' Equity	$	1,796,131							$	1,858,893
Net Interest Income (FTE)				$	12,543							$	13,224
Interest Rate Spread 2							2.93	%							2.95	%
Cost of Funds							0.17	%							0.23	%
Interest Expense as a Percentage of      Average Earning Assets							0.17	%							0.23	%
Net Interest Margin (FTE) 3							3.02	%							3.05	%

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.

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VIRGINIA NATIONAL BANKSHARES CORPORATION

AVERAGE BALANCES, INCOME AND EXPENSES, YIELDS AND RATES (TAXABLE EQUIVALENT BASIS)

(dollars in thousands)

(Unaudited)

	For the six month ended
	June 30, 2022								June 30, 2021
				Interest								Interest
	Average			Income/		Average			Average			Income/		Average
(dollars in thousands)	Balance			Expense		Yield/Cost			Balance			Expense		Yield/Cost
ASSETS
Interest Earning Assets:
Securities:
Taxable Securities	$	287,241		$	2,800		1.95	%	$	176,151		$	1,264		1.44	%
Tax Exempt Securities 1		65,249			775		2.38	%		45,818			569		2.48	%
Total Securities 1		352,490			3,575		2.03	%		221,969			1,833		1.65	%
Loans:
Real Estate		866,863			18,082		4.21	%		679,951			14,282		4.24	%
Commercial		89,944			2,084		4.67	%		166,941			3,156		3.81	%
Consumer		51,302			1,213		4.77	%		63,148			1,509		4.82	%
Total Loans		1,008,109			21,379		4.28	%		910,040			18,947		4.20	%
Fed Funds Sold		151,429			363		0.48	%		87,276			72		0.17	%
Other interest-bearing deposits		235,418			356		0.30	%		74,475			66		0.18	%
Total Earning Assets		1,747,446			25,673		2.96	%		1,293,760			20,918		3.26	%
Less: Allowance for Loan Losses		(5,946	)							(5,624	)
Total Non-Earning Assets		124,851								84,069
Total Assets	$	1,866,351							$	1,372,205
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest Bearing Liabilities:
Interest Bearing Deposits:
Interest Checking	$	416,393		$	119		0.06	%	$	291,025		$	119		0.08	%
Money Market and Savings Deposits		603,259			1,055		0.35	%		422,048			806		0.39	%
Time Deposits		155,544			352		0.46	%		134,355			604		0.91	%
Total Interest-Bearing Deposits		1,175,196			1,526		0.26	%		847,428			1,529		0.36	%
Borrowings		—			—		—			36,551			95		0.52	%
Junior subordinated debt		3,377			98		5.85	%		1,255			49		7.87	%
Total Interest-Bearing Liabilities		1,178,573			1,624		0.28	%		885,234			1,673		0.38	%
Non-Interest-Bearing Liabilities:
Demand deposits		527,049								363,709
Other liabilities		10,704								2,877
Total Liabilities		1,716,326								1,251,820
Shareholders' Equity		150,025								120,385
Total Liabilities & Shareholders' Equity	$	1,866,351							$	1,372,205
Net Interest Income (FTE)				$	24,049							$	19,245
Interest Rate Spread 2							2.68	%							2.88	%
Cost of Funds							0.19	%							0.27	%
Interest Expense as a Percentage of      Average Earning Assets							0.19	%							0.26	%
Net Interest Margin (FTE) 3							2.78	%							3.00	%

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.

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VIRGINIA NATIONAL BANKSHARES CORPORATION

QUARTERLY RECONCILIATION OF CERTAIN NON-GAAP FINANCIAL MEASURES

(dollars in thousands, except per share data)

(Unaudited)

	Three Months Ended
	June 30, 2022			March 31, 2022			December 31, 2021			September 30, 2021			June 30, 2021
Fully tax-equivalent measures
Net interest income	$	12,461		$	11,425		$	12,359		$	13,504		$	13,151
Fully tax-equivalent adjustment		82			81			78			77			73
Net interest income (FTE) 1	$	12,543		$	11,506		$	12,437		$	13,581		$	13,224
Efficiency ratio 2		58.6	%		62.3	%		58.0	%		75.5	%		99.5	%
Fully tax-equivalent adjustment		-0.3	%		-0.3	%		-0.3	%		-0.3	%		-0.4	%
Efficiency ratio (FTE) 3		58.3	%		62.0	%		57.7	%		75.2	%		99.1	%
Net interest margin		3.00	%		2.57	%		2.70	%		3.06	%		3.03	%
Fully tax-equivalent adjustment		0.02	%		0.02	%		0.02	%		0.02	%		0.02	%
Net interest margin (FTE) 1		3.02	%		2.59	%		2.72	%		3.08	%		3.05	%
	As of
	June 30, 2022			March 31, 2022			December 31, 2021			September 30, 2021			June 30, 2021
Other financial measures
ALLL to gross loans		0.57	%		0.58	%		0.56	%		0.51	%		0.47	%
Impact of acquired loans and fair value mark		0.34	%		0.37	%		0.39	%		0.39	%		0.41	%
ALLL to gross loans, excluding acquired loans and fair value mark (non-GAAP)		0.91	%		0.95	%		0.95	%		0.90	%		0.88	%
ALLL to gross loans		0.57	%		0.58	%		0.56	%		0.51	%		0.47	%
Fair value mark to gross loans		1.82	%		1.77	%		1.74	%		1.73	%		1.76	%
ALLL + fair value mark to gross loans (non-GAAP)		2.39	%		2.35	%		2.30	%		2.24	%		2.23	%
Book value per share	$	25.20		$	27.42		$	30.50		$	30.13		$	29.89
Impact of intangible assets		(2.96	)		(3.05	)		(3.14	)		(3.21	)	$	(3.29	)
Tangible book value per share (non-GAAP)	$	22.24		$	24.37		$	27.36		$	26.92		$	26.60

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.

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