Virginia National Bankshares Corporation — Third Quarter 2026 Earnings Summary

Financial Performance:

• Reported quarterly net income of $6.6 million ($1.20 per diluted share) for the quarter ended September 30, 2026, compared to $4.6 million ($0.84 per diluted share) in the same period in 2025.
• Net interest income for the quarter increased $1.5 million (11.2%) to $14.5 million, driven by decreased interest expense and increased loan yields.
• Net interest margin (FTE) expanded 30 basis points to 3.73% from 3.43% in the prior year quarter; year-to-date NIM (FTE) was 3.59% compared to 3.37%.
• Loan yield increased 26 basis points to 5.90% for the quarter, while the overall cost of funds decreased 9 basis points to 1.68%.
• Noninterest income increased $0.3 million (24.1%) to $1.7 million, primarily due to a $421,000 payout from bank owned life insurance.
• Noninterest expense decreased $134,000 (1.6%) to $8.3 million, attributed to reduced data processing expenses following a core contract renewal.
• Efficiency ratio (FTE) improved to 50.7% from 57.9% year-over-year.
• Return on average assets (ROAA) improved to 1.58% from 1.12%; return on average equity (ROAE) improved to 13.34% from 10.48%.
• Effective tax rate was 18.7% for the quarter, down from 19.5% in the prior year period.
• Total assets were $1.628 billion as of September 30, 2026.
• Gross loans outstanding totaled $1.2 billion, an increase of 1.0% from September 30, 2025.
• Total deposits were $1.4 billion, a $14.6 million increase from September 30, 2025.
• Book value per share increased to $35.01 from $32.89; tangible book value per share increased to $33.21 from $30.90.
• Allowance for credit losses (ACL) as a percentage of total loans was 0.66% as of September 30, 2026.
• Provision for credit losses on loans was $91,000 for the quarter, with a net recovery of $114,000 including unfunded commitments.

Guidance and Future Outlook:

• No specific forward guidance or future financial targets were provided in the press release.
• Management expressed confidence in delivering long-term value to shareholders through disciplined balance sheet management.

Business Segments and Product Lines:

• The company operates as a commercial bank with seven offices in Fauquier and Prince William counties, four in Charlottesville and Albemarle County, and offices in Winchester and Richmond.
• Services include fiduciary services through VNB Trust and Estate Services.
• Loan portfolio growth was supported by accretion of fair value marks on purchased loans, which positively impacted interest income by 18 basis points in the quarter.
• Securities portfolio declined $39.7 million from September 30, 2025, due to normal portfolio runoff from maturities and issuer calls.

Market and Competitive Landscape:

• Deposit fluctuations are attributed to normal seasonal customer behavior.
• The company holds no brokered deposits.
• Unused borrowing facilities from the Federal Home Loan Bank of Atlanta totaled approximately $227.0 million.

Risks and Challenges:

• Nonperforming assets were $5.9 million (0.36% of total assets), down from $6.8 million (0.42%) in the prior year period.
• Government-guaranteed loans serviced by a third party continue to impact reserve fluctuations due to timing of payment distributions from servicers.
• Forward-looking statements note risks including inflation, interest rate changes, economic conditions, cybersecurity threats, and regulatory changes.

Management Commentary and Tone:

• President and CEO Glenn W. Rust stated, "We are very pleased with our third quarter 2026 performance," highlighting the 30-basis point expansion in net interest margin.
• Management attributed the net income increase to higher loan yields, lower cost of funds, and the bank owned life insurance payout.
• The tone reflects satisfaction with operational efficiency and asset quality.

Other Key Points:

• Cash dividends of $2.0 million ($0.36 per share) were declared and paid during the third quarter of 2026.
• 70% of net income was retained during the quarter.
• A $4.7 million gain on the sale of a limited partnership interest contributed to noninterest income on a year-to-date basis.
• Outstanding borrowings from the FHLB decreased to $20.0 million from $30.0 million in the prior year period.
• The company's common stock trades on the Nasdaq Capital Market under the symbol "VABK."