Virginia National Bankshares Reports $4.5 Million Net Income for Q1 2025

Virginia National Bankshares Corporation reported a net income of $4.5 million for the first quarter of 2025, reflecting an increase of $843,000 compared to $3.6 million in the same period last year. This translates to a diluted earnings per share of $0.83, up from $0.68 in the prior year. The growth in profitability was primarily driven by an increase in net interest income, which rose to $12.3 million from $10.9 million year-over-year. The net interest margin also improved to 3.28%, compared to 2.93% in the previous year, attributed to a higher volume of loans and a decrease in interest expenses.

Total assets for the company reached $1.634 billion as of March 31, 2025, marking a $17.2 million increase from the end of 2024. The loan portfolio remained stable at $1.242 billion, with a slight increase of $6.5 million from the previous quarter. The composition of the loan portfolio included $610.8 million in commercial mortgages and $310.3 million in 1-4 family residential mortgages. The allowance for credit losses (ACL) decreased to $8.3 million, representing 0.67% of total loans, down from 0.68% at the end of 2024.

In terms of operational developments, the company continues to focus on maintaining a strong capital position while managing its growth. As of March 31, 2025, total deposits increased to $1.434 billion, a rise of $10.7 million from the previous quarter. The company’s capital ratios remained robust, with a Tier 1 capital ratio of 18.12%, significantly above the regulatory minimum requirements. The company also reported a slight increase in noninterest expenses, which totaled $8.8 million, remaining relatively flat compared to the previous year.

Strategically, Virginia National Bankshares has been focusing on optimizing its asset portfolio. The investment securities portfolio decreased to $269.1 million, down from $348 million a year earlier, as part of a strategy to reinvest proceeds into higher-yielding assets. The company also sold its membership interests in Masonry Capital Management, LLC, effective April 1, 2024, which is expected to provide a revenue share for the next six years without incurring additional expenses.

Looking ahead, the company remains cautious about potential economic challenges, including inflation and interest rate volatility, which could impact asset quality. Management believes that the current ACL is adequate but acknowledges that further increases may be necessary if economic conditions worsen. The company continues to monitor its loan portfolio closely, maintaining rigorous underwriting standards to mitigate risks associated with potential defaults.