Virginia National Bankshares (VABK) Q2 2024 earnings summary

Executive summary

• Net income for Q2 2024 was $4.2 million ($0.77 per diluted share), down from $5.7 million ($1.05 per share) in Q2 2023, primarily due to increased cost of funds and lower net interest income and credit mark accretion.

• Six-month net income was $7.8 million, down from $11.4 million year-over-year.

• Return on average assets (ROAA) for Q2 2024 was 1.05%, down from 1.46% in Q2 2023; return on average equity (ROAE) was 11.07%, down from 15.98%.

• Loan balances grew 6% in the first half and 19% year-over-year, with strong credit quality and stable capital/liquidity.

• Included in the Russell 2000 index at the end of Q2 2024, expected to enhance stock liquidity.

Financial highlights

• Total assets as of June 30, 2024 were $1.57 billion, a 4.4% decrease from December 31, 2023.

• Gross loans outstanding reached $1.2 billion, up $65.5 million (6.0%) from year-end and $184.9 million (19.0%) year-over-year.

• Deposits totaled $1.37 billion, down 2.5% from year-end 2023, with a shift toward higher-cost time deposits.

• Net interest income (FTE) for Q2 2024 was $11.2 million, down 18.4% from Q2 2023; net interest margin (FTE) declined to 3.04% from 3.83%.

• Noninterest income for Q2 2024 was $1.7 million, a 17.3% decrease year-over-year, mainly due to lower wealth management and card fees.

• Noninterest expense for Q2 2024 was $8.1 million, down 5.2% year-over-year, reflecting cost reductions post-merger.

• Book value per share increased to $28.70 at June 30, 2024, from $26.54 a year earlier; tangible book value per share rose to $26.43 from $24.01.

Outlook and guidance

• Management expects continued pressure on net interest margin due to elevated interest rates and deposit competition, but cost of funds may have stabilized in the first half of 2024.

• Continued focus on organic loan growth and government-guaranteed loan purchases.

• The allowance for credit losses (ACL) may increase if economic conditions deteriorate further.

• No material changes to risk factors or forward-looking statements since the last annual report.