Executive Summary

EPS of $0.68 rose sequentially from $0.59 (Q4 2023) but declined from $1.08 (Q1 2023) as higher deposit and borrowing costs continued to compress margins despite healthy loan growth .
Net interest margin (FTE) stabilized at 2.93% vs 2.89% in Q4 2023, aided by redeploying securities into loans and reducing borrowings; management said cost of funds “has stabilized” in Q1 2024 .
Balance sheet mix improved: loans +3.2% q/q (+20.0% y/y), deposits +1.6% q/q, borrowings −$46.5M q/q; credit quality remained strong with NPAs at 0.19% of assets .
Capital return steady: $0.33 dividend paid in Q1 and continued in May; share repurchases initiated (874 shares at $29.60) .
No formal quantitative guidance and no earnings call transcript available; near-term narrative centers on funding-cost stabilization, asset mix shift to higher-yielding loans, and disciplined credit .

What Went Well and What Went Wrong

What Went Well

Loan growth and mix: Gross loans reached ~$1.13B, +$35.5M q/q (+20.0% y/y); yield on loans improved to 5.64% vs 5.55% a year ago, supporting NIM stabilization .
Funding progress: Deposits grew $22.9M q/q while borrowings fell $46.5M; management: “we…refrained from utilizing brokered funds and reduced our level of debt, which stabilized our cost of funds” .
Credit quality resilient: NPAs at 0.19% of assets; allowance ratio lower (0.73%) driven by higher proportions of 100% government‑guaranteed loans; net recovery of credit loss provision of $22K .

What Went Wrong

Margin and earnings pressure y/y: NIM (FTE) 2.93% vs 3.71% in Q1 2023; net interest income down 18.5% y/y as interest expense rose faster than asset yields; EPS $0.68 vs $1.08 y/y .
Efficiency slippage: Efficiency ratio (FTE) at 66.8% vs 56.2% in Q1 2023 amid lower net interest income; management continues expense discipline, but revenue pressures weighed on operating leverage .
Nonperformers ticked up: NPAs rose to $3.05M from $2.73M in Q4 2023 (still low at 0.19% of assets); loans 90+ days accruing $876K (largely government‑guaranteed) .

Financial Results

P&L, Margins, and Returns

Metric	Q1 2023	Q4 2023	Q1 2024
Total interest & dividend income ($000s)	$16,370	$18,074	$18,560
Net interest income ($000s)	$13,413	$10,753	$10,936
Noninterest income ($000s)	$2,276	$2,136	$2,178
Net income ($000s)	$5,791	$3,168	$3,646
Diluted EPS ($)	$1.08	$0.59	$0.68
NIM (FTE) %	3.71%	2.89%	2.93%
Efficiency ratio (FTE) %	56.2%	64.0%	66.8%
ROAA %	1.48%	0.79%	0.91%
ROAE %	17.57%	9.03%	9.57%

Balance Sheet and Credit

Metric	Q1 2023	Q4 2023	Q1 2024
Loans, gross ($000s)	$932,834 avg	$1,092,665 period-end	$1,128,168 period-end
Deposits ($000s)	$1,475,617 avg EA context	$1,409,098	$1,431,972
Borrowings ($000s)	— (avg immaterial)	$66,500	$20,000
Securities ($000s)	$514,511 avg	$428,980	$348,049
Book value per share ($)	$26.50	$28.52	$28.31
Tangible book value per share ($)	$23.88	$26.12	$25.99
NPAs ($000s)	$1,297	$2,732	$3,054
NPA / Total assets %	0.08%	0.17%	0.19%
ACL / Gross loans %	0.83%	0.77%	0.73%

Funding & Yield KPIs

KPI	Q1 2023	Q4 2023	Q1 2024
Yield on loans %	5.55%	5.47%	5.64%
Cost of funds %	0.83%	2.01%	2.11%
Cost of interest‑bearing deposits %	1.09%	2.58%	2.73%
ICS balances ($MM)	$126.4	$134.6	$144.0
Unused borrowing capacity ($MM)	—	$119.5 (Dec-23)	$189.2 (Mar-24)

Notes: NIM (FTE), efficiency ratio (FTE), and tangible book value are non‑GAAP measures; see company reconciliations .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Dividend per share	Q1 2024	$0.33 in prior quarter	$0.33 declared/paid in Q1	Maintained
Dividend per share	Q2 2024	$0.33 prior run‑rate	$0.33 declared May 22, payable Jun 28	Maintained
Share repurchases	1H 2024	Not previously active	Repurchased 874 shares in Q1; “will continue…in the second quarter”	Initiated/Continuing
Formal financial guidance	2024	None	None	N/A

Earnings Call Themes & Trends

No Q1 2024 earnings call transcript was found in filings or typical transcript sources; we searched but none was available, suggesting no public call or no published transcript [ListDocuments: 0 earnings-call-transcript].

Topic	Q3 2023	Q4 2023	Q1 2024	Trend
Funding costs	Rising; cost of funds 1.72% with pressure from deposit repricing	Cost of funds 2.01%; deposit mix shifting to meet rate demands	Cost of funds 2.11%; management says stabilized	Stabilizing per management
Loan growth	+5% q/q; continued momentum	+7.1% q/q; +16.7% y/y YE	+3.2% q/q; +20.0% y/y	Strong, decelerating q/q
Deposits & brokered	No brokered deposits; deposits −7.3% YTD then +1.6% q/q	Deposits +2.8% q/q; strategy shift to meet rates	Deposits +1.6% q/q; ICS balances up	Improving balances
Securities repositioning	Portfolio down y/y; redeployment ongoing	AFS $429M at YE	Securities −$80.9M in Q1; redeployed to loans and fed funds	Redeployment accelerates
Credit quality	NPAs 0.13%; high gov’t guarantees; provision recovery	NPAs 0.17%; provision expense up	NPAs 0.19%; net recovery of provision; ACL ratio lower on mix	Benign, modest NPA uptick
Expense discipline	Efficiencies from merger reduce opex y/y	Noninterest expense −10.5% y/y; opex discipline	Slight opex decline y/y; marketing/occupancy lower	Ongoing discipline
Wealth/adjacent businesses	Sturman sale in 2022 affects fees y/y comps	Masonry Capital still consolidated in 2023	Sold Masonry Capital effective Apr 1, 2024 (post‑Q1)	Simplifying mix

Management Commentary

“The Company achieved solid first quarter results… we increased our loan balances 20% year‑over‑year and our credit quality metrics remain strong… increased deposit balances… reduced our level of debt, which stabilized our cost of funds.” — Glenn W. Rust, President & CEO .
“Net interest margin (FTE)… declined to 2.93%… yet increased from 2.89% for the three months ended December 31, 2023.” .
“The period‑end ACL… was 0.73%… The proportionate increase in government‑guaranteed loans… is the driver of the decrease… Such loans are 100% government‑guaranteed and do not require an ACL.” .

Q&A Highlights

No Q1 2024 earnings call transcript or Q&A was available in filings or common sources; we searched and found none [ListDocuments: 0 earnings-call-transcript].

Estimates Context

We attempted to retrieve Wall Street consensus estimates (S&P Global) for Q1 2024 EPS and revenue; data could not be retrieved at this time due to service limits, and we found no published consensus in filings. As a result, we cannot provide an estimates comparison for Q1 2024 at this time [GetEstimates error].

Key Takeaways for Investors

Funding-cost headwinds appear to be stabilizing; NIM (FTE) ticked up sequentially to 2.93% as securities were redeployed into higher‑yielding loans and borrowings were reduced .
Solid core growth: loans +20% y/y and deposits +2.5% y/y, supporting balance sheet scale amid a cautious credit posture; NPAs remain low at 0.19% of assets .
Operating leverage remains a watch item: efficiency ratio (FTE) deteriorated y/y to 66.8% given lower net interest income; expense discipline is helping but revenue normalization is key .
Capital return steady with a 4%+ dividend run‑rate and opportunistic buybacks; continuation of the $0.33 dividend into Q2 underscores confidence in earnings durability and capital .
Mix shift tailwinds: continued runoff of lower‑yielding securities and growth in higher‑yielding loans should support margin improvement if funding costs remain stable .
Credit benign but monitored: modest uptick in NPAs and continued use of government‑guaranteed lending keep loss content low; ACL ratio decline reflects mix rather than loosening standards .
Near‑term catalyst path: evidence of sustained NIM expansion and deposit growth, alongside continued securities redeployment and controlled opex, would likely drive estimate revisions and multiple support once consensus data is accessible .

Additional Sources Read

Q1 2024 8‑K (Item 2.02) and attached press statement (full financials) .
Q1 2024 press release with detailed tables .
Q4 2023 and Q3 2023 8‑Ks for trend analysis .
May 24, 2024 dividend press release .

Non‑GAAP note: NIM (FTE), efficiency ratio (FTE), and tangible book value are non‑GAAP measures; see reconciliations in company materials .

Virginia National Bankshares Corp (VABK)·Q1 2024 Earnings Summary