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VIRGINIA NATIONAL BANKSHARES CORPORATION ANNOUNCES RECORD NET INCOME FOR 2021

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.

 

Cision View original content:https://www.prnewswire.com/news-releases/virginia-national-bankshares-corporation-announces-record-net-income-for-2021-301485972.html

SOURCE Virginia National Bankshares

Written by Tenner Smith

Tenner Smith - I have experience in financial intelligence and automated intelligence. In industry I have worked on artificial intelligence and machine learning. Tenner Smith is a reporter at DF media.

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