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Virginia National Bankshares Corporation Announces 2024 Fourth Quarter and Full Year Earnings

Virginia National Bankshares Corporation, trading on NASDAQ under the symbol VABK, has released its earnings report for the fourth quarter and full year of 2024. The company reported a quarterly net income of $4.6 million, which corresponds to $0.85 per diluted share, marking an increase from the previous year's fourth quarter net income of $3.2 million or $0.59 per diluted share.

For the full year ending December 31, 2024, the bank posted a net income of $17.0 million, translating to $3.15 per diluted share, a decrease from $19.3 million or $3.58 per diluted share reported in 2023. The main driver for the quarterly increase in net income compared to the same period last year was the rise in interest income stemming from higher average loan balances and reduced interest expenses.

Operational Focus and Strategies

Glenn W. Rust, President and CEO, acknowledged the bank's successful focus on loan growth and management of operational costs throughout 2024. The bank achieved a 13% rise in loan balances compared to the previous year while simultaneously reducing overhead expenses. Rust emphasized the bank's strong credit quality metrics, alongside solid capital and liquidity positions.

The following key performance indicators for Q4 2024 reflect the bank’s efforts:

• - Return on average assets increased to 1.12%, up from 0.79%.
• - Return on average equity rose to 10.98% from 9.03%.
• - Net interest margin improved to 3.21%, compared to 2.89%.
• - Loan-to-deposit ratio climbed to 86.8% from 77.5%.
• - Efficiency ratio enhanced to 60.2% from 64.0%.

Balance Sheet Highlights

As of December 31, 2024, Virginia National Bankshares witnessed consistent loan growth, with gross outstanding loans totaling $1.2 billion, a $20.5 million or 1.7% increase from the previous quarter and a $143.3 million or 13.1% rise year-over-year combined with a substantial reduction in borrowing from the FHLB by $32.5 million.

Outstanding securities balances showed a decline of $17.3 million and $159.3 million compared with the previous quarter and year, respectively, as funds were reallocated from matured investments to higher-yielding loans.

The bank boasts unused borrowing facilities amounting to about $199 million, with no reliance on brokered deposits. The services offered by Virginia National Bank also extend to multi-million-dollar FDIC insurance via reciprocal Insured Cash Sweep® (ICS) plans, which held $166.6 million as of year-end.

Sound Credit and Asset Quality

Virginia National's credit performance remains robust, with nonperforming assets at just 0.19% of total assets. This is a slight improvement from 0.33% at the end of September 2024. The bank reported a decrease in nonperforming assets from $5.3 million in Q3 to $3 million in Q4 2024, showcasing effective credit management strategies. The allowance for credit losses percentage held steady at 0.68%.

Despite a growing loan portfolio, the bank is closely monitoring its credit risks and maintaining an adequate allowance for credit losses of $8.45 million, reflecting prudent risk management practices.

Financial Overview

Virginia National Bank has reported a notable increase in net interest income to $12.2 million, up 13.8% from the previous year. This was largely driven by higher interest income generated from assets, alongside reducing interest expenses.

Furthermore, the bank's efficiency ratio, a critical measure of a bank's perspective on operating costs, currently stands at 60.2%, illustrating an improved operational performance compared to the previous year.

In the view of long-term sustainability and growth, Virginia National Bankshares continues to navigate through market challenges while fortifying its financial health, primarily through focused growth strategies and prudent expense management.

Conclusion

In conclusion, Virginia National Bankshares' financial results for 2024 showcase its resilient operation amidst economic pressures. As the bank moves forward, its commitment to maintaining strong credit quality and enhancing profitability will remain pivotal to its overall growth strategy and market presence.