Segment Reporting

12 Months Ended

Dec. 31, 2023

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, offered wealth management and investment advisory services. Revenue for this segment was generated primarily from investment advisory and financial planning fees, with a small and decreasing portion attributable to brokerage commissions. Note that the Bank sold this business line effective December 19, 2022.

•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. Note that the membership interests in this business line are planned to be sold to an officer of the Company effective April 1, 2024. Subsequent to the date of sale, the Company will receive an annual revenue-share amount for a period of six years. No expenses will be incurred by the Company related to Masonry Capital subsequent to April 1, 2024.

Segment information for the years ended December 31, 2023 and 2022 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. Note also that the Bank sold the Sturman Wealth Advisors business line effective December 19, 2022.

2023 (Dollars in thousands)	Bank		VNB Trust & Estate Services			Masonry Capital		Consolidated
Net interest income	$	48,969	$	-		$	-	$	48,969
Provision for credit losses		734		-			-		734
Noninterest income		7,064		1,030			1,007		9,101
Noninterest expense		31,822		1,418			823		34,063
Income before income taxes		23,477		(388	)		184		23,273
Provision for income taxes		4,052		(81	)		39		4,010
Net income (loss)	$	19,425	$	(307	)	$	145	$	19,263
2022 (Dollars in thousands)	Bank		Sturman Wealth Advisors			VNB Trust & Estate Services		Masonry Capital		Consolidated
Net interest income	$	53,547	$	-		$	-	$	-	$	53,547
Provision for loan losses		106		-			-		-		106
Noninterest income		7,936		770			3,937		1,018		13,661
Noninterest expense		35,097		615			1,957		887		38,556
Income before income taxes		26,280		155			1,980		131		28,546
Provision for income taxes		4,631		33			416		28		5,108
Net income	$	21,649	$	122		$	1,564	$	103	$	23,438