Executive Summary

Q3 2024 delivered steady profitability: diluted EPS of $0.85 and net income of $4.6M; operating metrics strengthened with NIM (FTE) up to 3.24%, ROAA to 1.15%, ROAE to 11.44%, and efficiency ratio (FTE) improving to 58.6% versus Q2 .
Asset growth and mix shifts continued: gross loans reached ~$1.20B while securities contracted as management redeployed into higher-yielding loans; loan-to-deposit ratio rose to 88.1% .
Credit metrics remain sound though NPA increased: nonperforming assets were 0.33% of total assets; ACL/gross loans at 0.70% reflecting higher government-guaranteed balances that require no ACL .
Noninterest income fell 45% YoY due to prior-year BOLI proceeds and lower fee income; cost of funds rose YoY but management reiterated stabilization during 2024 .
Dividend maintained at $0.33/share (Dec 20 payable), supporting capital return; no formal guidance provided on revenues/margins/expenses .

What Went Well and What Went Wrong

What Went Well

Operating efficiency and margin expansion: NIM (FTE) improved to 3.24% (from 3.04% in Q2) and efficiency ratio (FTE) improved to 58.6% (from 62.7% in Q2), driving better core earnings quality .
Loan growth and redeployment: gross loans reached ~$1.20B (+$122.8M YTD; +$195.0M YoY), funded by declining securities balances as maturities were redeployed into loans .
Management execution on cost control: “Our measures to reduce ongoing overhead costs are paying off for us as evidenced through reduced noninterest expenses,” said CEO Glenn W. Rust .

What Went Wrong

Noninterest income headwinds: down 45.1% YoY due to prior-year BOLI proceeds and lower wealth management and deposit-related fees, pressuring top-line diversity .
Higher cost of funds YoY: overall cost of funds rose to 207 bps from 172 bps YoY; cost of interest-bearing deposits increased to 271 bps from 226 bps .
Credit metrics ticked up: NPA as % of assets rose to 0.33% (from 0.25% in Q2 and 0.19% in Q1), and loans 90+ days past due and accruing climbed to $3.2M (largely government-guaranteed) .

Financial Results

Metric	Q1 2024	Q2 2024	Q3 2024
Net Income ($USD Millions)	$3.65	$4.16	$4.60
Diluted EPS ($USD)	$0.68	$0.77	$0.85
Net Interest Income ($USD Millions)	$10.94	$11.18	$12.02
Noninterest Income ($USD Millions)	$2.18	$1.69	$1.45
Net Interest Margin (FTE %)	2.93%	3.04%	3.24%
Efficiency Ratio (FTE %)	66.8%	62.7%	58.6%
Return on Average Assets %	0.91%	1.05%	1.15%
Return on Average Equity %	9.57%	11.07%	11.44%

KPIs and Balance Sheet

KPI	Q1 2024	Q2 2024	Q3 2024
Gross Loans ($USD Billions)	$1.10B	$1.20B	$1.20B
Total Deposits ($USD Millions)	$1,432	$1,374	$1,380
Loan-to-Deposit Ratio (%)	78.8%	84.3%	88.1%
Borrowings ($USD Millions)	$20.0	$30.0	$52.5
NPA as % of Total Assets (%)	0.19%	0.25%	0.33%
ACL to Gross Loans (%)	0.73%	0.69%	0.70%

Notes:

Yield on loans rose to 5.85% in Q3 (vs. 5.71% in Q2; 5.53% in Q3’23), aided by accretion of purchased loan credit marks (25 bps in Q3) .
Net interest income increased 8.3% YoY in Q3 as asset yields outpaced deposit and borrowing costs .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Quarterly Cash Dividend per Share	Q4 2024 (payable Dec 20, 2024)	$0.33/share (Q3 paid)	$0.33/share declared Oct 23	Maintained
Share Repurchase	FY 2024	YTD 20,350 shares; continued plan through Q2	No shares repurchased in Q3	Paused in Q3

Management did not issue formal quantitative guidance for revenue, margins, operating expenses, OI&E, tax rate, or segment metrics in Q3 2024 .

Earnings Call Themes & Trends

No public earnings call transcript found for Q3 2024; themes reflect press release commentary .

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q3 2024)	Trend
Cost of Funds	Stabilizing through H1’24; cost of funds 2.10–2.11% (FTE); deposit costs rising YoY	Cost of funds 2.07% in Q3; deposit costs up YoY; management reiterates stabilization	Stabilizing
Loan Growth & Gov’t-Guaranteed Purchases (USDA/SBA)	Continued purchases and organic growth; +6% YTD loans by Q2	Gross loans ~$1.20B; +$122.8M YTD; +$195.0M YoY; gov’t-guaranteed balances up	Improving
Credit Quality	NPA % assets: 0.19% (Q1) → 0.25% (Q2)	NPA % assets up to 0.33%; 90+ day accruing $3.2M (mostly government-guaranteed)	Mixed (slight deterioration, low severity)
NIM (FTE)	2.93% (Q1) → 3.04% (Q2)	3.24% in Q3; loan yields higher; credit mark accretion supports	Improving
Securities Repositioning	Declines with redeployment to loans; Q1 and Q2 reductions	Further decline; funds repurposed into higher-yield loans	Ongoing
Capital & Liquidity	Unused borrowing facilities ~$189–197M; no brokered deposits	Unused facilities ~$160.4M; no brokered deposits	Stable
Shareholder Returns	Dividend $0.33/share; repurchases in Q1/Q2	Dividend maintained; no Q3 repurchases	Stable dividend; paused buybacks

Management Commentary

“Our measures to reduce ongoing overhead costs are paying off for us as evidenced through reduced noninterest expenses…we continue to put new loans on the books…our credit quality metrics remain strong. Our capital and liquidity positions continue to be solid and stable.” — Glenn W. Rust, President & CEO (Q3 release) .
“Loan balances continued to increase…with organic growth and continued purchases of the government-guaranteed portions of USDA and SBA loans…capital and liquidity positions continue to be strong and stable.” — Glenn W. Rust (Q2 release) .
“We increased our loan balances 20% year-over-year…increased deposit balances…reduced our level of debt, which stabilized our cost of funds.” — Glenn W. Rust (Q1 release) .

Q&A Highlights

No public earnings call transcript or Q&A available for Q3 2024 based on available filings and company investor news resources .

Estimates Context

Wall Street consensus estimates via S&P Global were not available during this session; as a result, beat/miss versus consensus cannot be assessed at this time. Attempted retrieval returned a daily limit error [functions.GetEstimates error].
Given limited disclosures on external estimates in company materials, investors should monitor subsequent consensus updates for EPS, NIM trajectories, and fee-income expectations.

Key Takeaways for Investors

Core profitability momentum: NIM (FTE) climbed to 3.24% and efficiency improved to 58.6%, positioning earnings quality favorably into year-end if cost of funds remains stable .
Balance sheet mix shift supports margins: continued securities runoff and redeployment to loans underpin yield expansion and net interest income growth .
Credit watch points: NPA % assets rose to 0.33% and 90+ day accruing increased, but exposure is largely government-guaranteed, keeping loss content low; ACL/gross loans at 0.70% remains adequate for portfolio mix .
Noninterest income softness: fee-income declines and absence of prior-year BOLI proceeds reduce diversification; incremental growth in wealth management/fee lines would be a tailwind .
Capital return steady: $0.33/share dividend maintained; buybacks paused in Q3, providing flexibility as deposit mix and funding costs normalize .
Near-term trading: narrative favors NIM/efficiency tailwinds; watch deposit trends and funding costs for confirmation of stabilization and monitor any further uptick in NPAs for sentiment risk .
Medium-term thesis: redeployment to higher-yield loans and government-guaranteed balances should sustain margin efficiency while moderating credit risk; delivery on fee-income stabilization is key to multiple expansion .

Sources: Q3 2024 press release and Form 8-K (including full financial tables) ; Q2 and Q1 2024 press releases and 8-Ks ; dividend press release and related 8-K .

Virginia National Bankshares Corp (VABK)·Q3 2024 Earnings Summary