falseFY0001572334http://fasb.org/us-gaap/2025#MunicipalBondsMemberhttp://xbrl.sec.gov/country/2025#UShttp://xbrl.sec.gov/country/2025#UShttp://www.vnb.com/20251231#ChiefExecutiveOfficerAndChiefFinancialOfficerMember0001572334us-gaap:RestrictedStockMembervabk:EmployeeAndNonEmployeeDirectorsMember2024-01-012024-12-310001572334vabk:CommercialMortgagesMember2024-01-012024-12-310001572334us-gaap:AccumulatedOtherComprehensiveIncomeMember2025-01-012025-12-310001572334vabk:CommercialMortgagesMember2025-12-310001572334us-gaap:ConsumerLoanMembervabk:FauquierBanksharesIncMember2024-12-310001572334vabk:LowIncomeHousingTaxCreditProgramMember2024-01-010001572334vabk:RealEstateConstructionAndLandMember2025-12-310001572334us-gaap:FairValueInputsLevel2Memberus-gaap:CorporateBondSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2025-12-310001572334us-gaap:CommercialLoanMember2024-12-310001572334us-gaap:FinancingReceivables60To89DaysPastDueMember2024-12-310001572334us-gaap:FinancingReceivables60To89DaysPastDueMemberus-gaap:CommercialLoanMember2025-12-310001572334us-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:FairValueInputsLevel1Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2024-12-310001572334us-gaap:ConstructionLoansMember2023-12-310001572334us-gaap:RetainedEarningsMember2025-01-012025-12-310001572334srt:MaximumMember2019-09-170001572334us-gaap:AccumulatedOtherComprehensiveIncomeMember2025-12-310001572334us-gaap:ConsumerLoanMemberus-gaap:SubstandardMember2024-12-310001572334vabk:CommercialMortgagesMembervabk:FauquierBanksharesIncMember2024-12-310001572334us-gaap:RestrictedStockMembervabk:TwoThousandFourteenPlanMember2025-12-310001572334us-gaap:StandbyLettersOfCreditMember2025-12-310001572334us-gaap:ConsumerLoanMembervabk:FauquierBanksharesIncMembervabk:AcquiredLoansNonPurchasedCreditDeterioratedMember2024-12-310001572334vabk:OneToFourFamilyResidentialMortgagesMember2025-01-012025-12-310001572334us-gaap:RestrictedStockMembervabk:TwoThousandTwentyTwoPlanMember2025-01-012025-12-310001572334us-gaap:ConstructionLoansMember2025-12-310001572334us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:EstimateOfFairValueFairValueDisclosureMember2024-12-310001572334us-gaap:AccountingStandardsUpdate202309Member2025-12-310001572334us-gaap:ConsumerLoanMember2025-01-012025-12-310001572334us-gaap:PassMemberus-gaap:CommercialLoanMembervabk:TermLoansMember2024-12-310001572334vabk:GovernmentGuaranteedLoansMembervabk:CommercialLoansMember2024-12-310001572334vabk:OneToFourFamilyResidentialMortgagesMemberus-gaap:DoubtfulMember2025-12-310001572334us-gaap:RetainedEarningsMember2025-12-310001572334us-gaap:FairValueMeasurementsRecurringMember2024-12-310001572334vabk:OneToFourFamilyResidentialMortgagesMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2025-12-310001572334us-gaap:CorporateBondSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2025-12-310001572334vabk:OneToFourFamilyResidentialMortgagesMember2024-12-310001572334vabk:StudentLoansPurchasedMember2024-12-310001572334us-gaap:AdditionalPaidInCapitalMember2025-01-012025-12-310001572334vabk:FauquierBanksharesIncMembervabk:AcquiredLoansNonPurchasedCreditDeterioratedMemberus-gaap:CommercialLoanMember2024-12-310001572334us-gaap:RelatedPartyMembersrt:DirectorMember2024-01-012024-12-310001572334us-gaap:ConsumerLoanMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2025-12-310001572334us-gaap:FinancingReceivables30To59DaysPastDueMember2024-12-310001572334us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MunicipalBondsMember2025-12-310001572334us-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:EstimateOfFairValueFairValueDisclosureMember2024-12-310001572334vabk:ExercisePriceRangeTwoMember2025-01-012025-12-310001572334us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:FairValueMeasurementsNonrecurringMember2024-12-310001572334vabk:InsuredCashSweepMember2024-12-310001572334vabk:OneToFourFamilyResidentialMortgagesMemberus-gaap:PassMember2024-12-310001572334us-gaap:FinancingReceivables60To89DaysPastDueMemberus-gaap:CommercialLoanMember2024-12-310001572334vabk:OneToFourFamilyResidentialMortgagesMember2023-12-310001572334us-gaap:CommonStockMember2025-01-012025-12-310001572334vabk:ConsumerMember2024-12-310001572334us-gaap:FurnitureAndFixturesMember2025-12-310001572334us-gaap:USGovernmentAgenciesDebtSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2025-12-310001572334vabk:FloatingRateCapitalSecuritiesMembervabk:WhollyOwnedConnecticutStatutoryBusinessTrustMember2006-09-210001572334us-gaap:RetainedEarningsMember2023-12-310001572334srt:SubsidiariesMember2024-12-310001572334vabk:SBHCPolicyStatementMember2018-08-300001572334us-gaap:ConstructionLoansMemberus-gaap:FinancialAssetNotPastDueMember2025-12-310001572334vabk:OneToFourFamilyResidentialPropertyMember2025-01-012025-12-310001572334us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MunicipalBondsMember2024-12-310001572334vabk:IndividuallyEvaluatedLoansMemberus-gaap:FairValueMeasurementsNonrecurringMember2025-12-310001572334srt:MinimumMembervabk:TwoThousandFourteenPlanMember2025-12-310001572334us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-12-310001572334vabk:FauquierBanksharesIncMembervabk:PurchasedCreditDeterioratedLoansMember2025-12-310001572334us-gaap:RestrictedStockMembervabk:EmployeeAndNonEmployeeDirectorsMembersrt:MinimumMember2025-01-012025-12-310001572334us-gaap:RetainedEarningsMember2024-01-012024-12-310001572334us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-01-012024-12-310001572334us-gaap:AssetPledgedAsCollateralWithoutRightMemberus-gaap:DepositsMember2025-12-310001572334vabk:FloatingRateJuniorSubordinatedDeferrableInterestDebenturesDueTwentyThirtySixMember2006-09-210001572334us-gaap:CommonStockMember2025-12-310001572334vabk:TwoThousandTwentyTwoPlanMember2025-01-012025-12-310001572334us-gaap:ConsumerLoanMemberus-gaap:SpecialMentionMember2024-12-310001572334vabk:VNBTrustAndEstateServicesMember2025-01-012025-12-310001572334us-gaap:ConstructionLoansMemberus-gaap:PassMember2025-12-310001572334us-gaap:LeaseholdImprovementsMember2024-12-310001572334vabk:OneToFourFamilyResidentialMortgagesMemberus-gaap:SubstandardMember2025-12-310001572334vabk:FauquierBanksharesIncMemberus-gaap:CommercialLoanMember2024-12-310001572334us-gaap:ConsumerLoanMemberus-gaap:SubstandardMember2025-12-310001572334us-gaap:ConsumerLoanMemberus-gaap:FinancialAssetNotPastDueMember2025-12-310001572334vabk:StudentLoansPurchasedMember2025-12-310001572334us-gaap:RestrictedStockMember2024-01-012024-12-310001572334us-gaap:MunicipalBondsMember2025-12-310001572334vabk:FauquierBanksharesIncMembervabk:AcquiredLoansNonPurchasedCreditDeterioratedMembervabk:OneToFourFamilyResidentialPropertyMember2025-12-310001572334vabk:CommercialMortgagesMember2025-01-012025-12-310001572334vabk:SecuritiesAvailableForSaleMember2023-12-310001572334vabk:AcquiredLoansPurchasedCreditDeterioratedMembervabk:FauquierBanksharesIncMemberus-gaap:CommercialLoanMember2024-12-310001572334stpr:VAvabk:AffordableHousingProjectsMember2025-01-012025-12-3100015723342024-12-310001572334vabk:FauquierBanksharesIncMembervabk:AcquiredLoansNonPurchasedCreditDeterioratedMember2025-12-310001572334srt:ParentCompanyMember2024-01-012024-12-310001572334us-gaap:ConsumerLoanMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2024-12-310001572334us-gaap:ConsumerLoanMember2025-12-310001572334us-gaap:ConstructionLoansMemberus-gaap:SubstandardMember2024-12-310001572334us-gaap:FinancialAssetNotPastDueMemberus-gaap:CommercialLoanMember2025-12-310001572334vabk:ExercisePriceRangeTwoMember2025-12-310001572334us-gaap:ConstructionLoansMembervabk:AcquiredLoansPurchasedCreditDeterioratedMembervabk:FauquierBanksharesIncMember2024-12-310001572334vabk:FauquierBanksharesIncMember2025-12-310001572334vabk:FauquierBanksharesIncMembervabk:OneToFourFamilyResidentialPropertyMember2024-12-310001572334us-gaap:ConstructionLoansMemberus-gaap:DoubtfulMember2025-12-310001572334us-gaap:CollateralPledgedMembervabk:CommercialRealEstateNonOwnerOccupiedMember2024-12-310001572334vabk:FloatingRateCapitalSecuritiesMemberus-gaap:SecuredOvernightFinancingRateSofrOvernightIndexSwapRateMember2025-01-012025-12-310001572334vabk:ExercisePriceRangeThreeMember2025-12-310001572334vabk:OneToFourFamilyResidentialMortgagesMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2024-12-3100015723342024-04-012024-04-010001572334vabk:ExercisePriceRangeOneMember2025-01-012025-12-310001572334vabk:CommercialMortgagesMembervabk:FauquierBanksharesIncMembervabk:AcquiredLoansNonPurchasedCreditDeterioratedMember2025-12-310001572334vabk:AcquiredLoansPurchasedCreditDeterioratedMembervabk:FauquierBanksharesIncMember2023-12-310001572334vabk:OneToFourFamilyResidentialMortgagesMemberus-gaap:DoubtfulMember2024-12-310001572334us-gaap:FinancialAssetNotPastDueMember2024-12-310001572334us-gaap:UnusedLinesOfCreditMember2024-12-310001572334us-gaap:CollateralPledgedMember2025-12-310001572334vabk:CommercialMortgagesMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2024-12-310001572334us-gaap:ConstructionLoansMembervabk:FauquierBanksharesIncMember2024-12-310001572334us-gaap:CollateralPledgedMembervabk:OneToFourFamilyResidentialMortgagesMember2025-12-310001572334srt:SubsidiariesMember2025-12-310001572334us-gaap:EmployeeStockOptionMembervabk:TwoThousandFourteenPlanMember2025-01-012025-12-310001572334vabk:OneToFourFamilyResidentialMortgagesMemberus-gaap:PassMember2025-12-310001572334us-gaap:MortgageBackedSecuritiesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2024-12-310001572334vabk:ConsumerMember2025-12-310001572334us-gaap:CommonStockMember2024-01-012024-12-310001572334stpr:VAvabk:AffordableHousingProjectsMember2025-12-310001572334vabk:OneToFourFamilyResidentialMortgagesMember2025-12-310001572334vabk:MasonryCapitalMember2024-01-012024-12-310001572334us-gaap:FairValueInputsLevel2Memberus-gaap:CorporateBondSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2024-12-310001572334srt:MinimumMember2025-01-012025-12-310001572334us-gaap:AdditionalPaidInCapitalMember2024-12-310001572334us-gaap:RetainedEarningsMember2024-12-310001572334us-gaap:RestrictedStockMember2025-12-310001572334us-gaap:ConsumerLoanMembervabk:AcquiredLoansPurchasedCreditDeterioratedMembervabk:FauquierBanksharesIncMember2025-12-310001572334us-gaap:FinancialAssetNotPastDueMember2025-12-3100015723342023-04-012023-06-300001572334us-gaap:FinancingReceivables30To59DaysPastDueMemberus-gaap:CommercialLoanMember2024-12-310001572334us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:EstimateOfFairValueFairValueDisclosureMember2025-12-310001572334us-gaap:ConstructionLoansMemberus-gaap:SpecialMentionMember2025-12-310001572334us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2024-12-310001572334vabk:OneToFourFamilyResidentialPropertyMember2024-01-012024-12-310001572334us-gaap:FinancingReceivables30To59DaysPastDueMemberus-gaap:CommercialLoanMember2025-12-310001572334us-gaap:RestrictedStockMembervabk:NonEmployeeDirectorsMember2024-01-012024-12-310001572334us-gaap:RestrictedStockMembervabk:TwoThousandTwentyTwoPlanMember2025-12-310001572334vabk:GovernmentGuaranteedLoansMembervabk:CommercialLoansMember2025-12-310001572334us-gaap:USGovernmentAgenciesDebtSecuritiesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2024-12-310001572334us-gaap:AssetPledgedAsCollateralWithoutRightMemberus-gaap:DepositsMember2024-12-310001572334us-gaap:PassMemberus-gaap:CommercialLoanMembervabk:TermLoansMember2025-12-310001572334srt:MaximumMember2025-12-310001572334us-gaap:EmployeeStockOptionMembervabk:TwoThousandTwentyTwoPlanMember2025-01-012025-12-310001572334vabk:FauquierBanksharesIncMembervabk:AcquiredLoansNonPurchasedCreditDeterioratedMemberus-gaap:CommercialLoanMember2025-12-310001572334us-gaap:FairValueMeasurementsRecurringMember2025-12-310001572334us-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:EstimateOfFairValueFairValueDisclosureMember2025-12-310001572334us-gaap:StockOptionMember2025-01-012025-12-310001572334srt:MinimumMembervabk:WellCapitalizedMember2025-12-310001572334us-gaap:ConstructionLoansMember2025-01-012025-12-3100015723342025-06-300001572334us-gaap:ConstructionInProgressMember2025-12-310001572334us-gaap:SoftwareAndSoftwareDevelopmentCostsMember2024-12-3100015723342026-03-230001572334vabk:FauquierBanksharesIncMember2023-12-310001572334us-gaap:LeaseholdImprovementsMember2025-12-310001572334us-gaap:ConsumerLoanMember2023-12-310001572334us-gaap:CommercialLoanMembervabk:TermLoansMember2025-01-012025-12-310001572334us-gaap:EmployeeStockOptionMember2024-12-310001572334us-gaap:FairValueInputsLevel2Memberus-gaap:USGovernmentAgenciesDebtSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2025-12-310001572334us-gaap:FairValueInputsLevel3Membervabk:IndividuallyEvaluatedLoansMemberus-gaap:FairValueMeasurementsNonrecurringMember2024-12-310001572334vabk:AcquiredLoansPurchasedCreditDeterioratedMembervabk:FauquierBanksharesIncMember2025-12-310001572334us-gaap:AdditionalPaidInCapitalMember2024-01-012024-12-310001572334us-gaap:OtherAssetsMembervabk:LowIncomeHousingTaxCreditProgramMember2025-12-310001572334vabk:OneToFourFamilyResidentialMortgagesMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2025-12-310001572334srt:ParentCompanyMember2025-01-012025-12-310001572334vabk:VNBTrustAndEstateServicesMember2024-01-012024-12-310001572334srt:ParentCompanyMember2023-12-310001572334vabk:RealEstateConstructionAndLandMember2024-12-310001572334us-gaap:FinancingReceivables30To59DaysPastDueMember2025-12-310001572334us-gaap:ConsumerLoanMember2024-12-310001572334us-gaap:SpecialMentionMemberus-gaap:CommercialLoanMembervabk:TermLoansMember2024-12-310001572334us-gaap:ConstructionLoansMemberus-gaap:FinancialAssetNotPastDueMember2024-12-310001572334us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:EstimateOfFairValueFairValueDisclosureMember2024-12-310001572334us-gaap:CorporateBondSecuritiesMember2025-12-3100015723342025-10-012025-12-310001572334vabk:ThresholdMember2018-08-300001572334vabk:CommercialMortgagesMemberus-gaap:FinancialAssetNotPastDueMember2024-12-310001572334us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2025-12-310001572334vabk:CommercialMortgagesMemberus-gaap:PassMember2024-12-310001572334us-gaap:ConstructionLoansMembervabk:AcquiredLoansPurchasedCreditDeterioratedMembervabk:FauquierBanksharesIncMember2025-12-310001572334us-gaap:CommercialLoanMemberus-gaap:DoubtfulMembervabk:TermLoansMember2024-12-310001572334vabk:SecuritiesAvailableForSaleMember2024-12-310001572334us-gaap:UnusedLinesOfCreditMembervabk:ThirdPartyFinancialInstitutionsMember2025-12-310001572334us-gaap:SubstandardMemberus-gaap:CommercialLoanMembervabk:TermLoansMember2024-12-310001572334us-gaap:CorporateBondSecuritiesMember2024-12-310001572334vabk:AcquiredLoansPurchasedCreditDeterioratedMembervabk:FauquierBanksharesIncMemberus-gaap:CommercialLoanMember2025-12-310001572334vabk:OneToFourFamilyResidentialPropertyMember2025-12-310001572334vabk:ACHMember2025-12-310001572334srt:MaximumMember2025-01-012025-12-310001572334vabk:SpecialPropertiesAcquisitionVaLlcMember2025-12-310001572334us-gaap:EmployeeStockOptionMembervabk:TwoThousandFourteenPlanMember2025-12-310001572334us-gaap:CommercialLoanMembervabk:TermLoansMember2025-12-310001572334us-gaap:EmployeeStockOptionMember2025-12-310001572334vabk:OneToFourFamilyResidentialMortgagesMemberus-gaap:FinancialAssetNotPastDueMember2025-12-310001572334us-gaap:SoftwareAndSoftwareDevelopmentCostsMember2025-12-310001572334us-gaap:ResidentialPortfolioSegmentMembervabk:OneToFourFamilyResidentialPropertyMember2024-12-310001572334us-gaap:ConsumerLoanMembervabk:AcquiredLoansPurchasedCreditDeterioratedMembervabk:FauquierBanksharesIncMember2024-12-310001572334vabk:CommercialMortgagesMemberus-gaap:DoubtfulMember2024-12-310001572334us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:EstimateOfFairValueFairValueDisclosureMember2025-12-310001572334vabk:FauquierBanksharesIncMembervabk:NonPurchasedCreditDeterioratedLoansMember2025-12-310001572334us-gaap:ConstructionLoansMemberus-gaap:DoubtfulMember2024-12-310001572334us-gaap:CreditConcentrationRiskMembervabk:CommercialMortgagesMembervabk:Non-OwnerOccupiedMember2025-12-310001572334us-gaap:ConsumerLoanMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2025-12-310001572334vabk:CommercialMortgagesMemberus-gaap:SubstandardMember2025-12-310001572334srt:MinimumMember2025-12-310001572334us-gaap:USTreasurySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2024-12-310001572334vabk:CommercialMortgagesMembervabk:AcquiredLoansPurchasedCreditDeterioratedMembervabk:FauquierBanksharesIncMember2025-12-310001572334vabk:OneToFourFamilyResidentialPropertyMember2024-12-310001572334vabk:TwoThousandTwentyTwoPlanMember2022-06-230001572334us-gaap:RestrictedStockMembervabk:EmployeesMember2025-01-012025-12-310001572334vabk:CommercialMortgagesMembervabk:AcquiredLoansPurchasedCreditDeterioratedMembervabk:FauquierBanksharesIncMember2024-12-310001572334us-gaap:RelatedPartyMembersrt:DirectorMember2025-01-012025-12-310001572334us-gaap:ConsumerLoanMembervabk:FauquierBanksharesIncMembervabk:AcquiredLoansNonPurchasedCreditDeterioratedMember2025-12-310001572334us-gaap:ConstructionLoansMemberus-gaap:SubstandardMember2025-12-310001572334us-gaap:StandbyLettersOfCreditMember2024-12-310001572334vabk:FauquierBanksharesIncMembervabk:PurchasedCreditDeterioratedLoansMember2024-12-310001572334us-gaap:ConstructionLoansMember2024-01-012024-12-310001572334vabk:CommercialMortgagesMemberus-gaap:PassMember2025-12-310001572334vabk:IndividuallyEvaluatedLoansMemberus-gaap:FairValueMeasurementsNonrecurringMember2024-12-310001572334srt:ParentCompanyMember2024-12-310001572334us-gaap:CorporateBondSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2024-12-310001572334us-gaap:FederalFundsPurchasedMember2025-12-310001572334us-gaap:CommercialLoanMember2025-01-012025-12-310001572334us-gaap:StockOptionMember2024-01-012024-12-310001572334us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MunicipalBondsMember2024-12-310001572334vabk:TwoThousandFourteenPlanMembersrt:MaximumMember2025-12-310001572334us-gaap:CorporateMember2025-01-012025-12-310001572334us-gaap:AdditionalPaidInCapitalMember2025-12-310001572334vabk:FauquierBanksharesIncMembervabk:AcquiredLoansNonPurchasedCreditDeterioratedMember2024-12-310001572334vabk:FauquierBanksharesIncMembervabk:NonPurchasedCreditDeterioratedLoansMember2024-12-310001572334us-gaap:ConstructionLoansMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2024-12-310001572334vabk:CommercialMortgagesMemberus-gaap:FinancialAssetNotPastDueMember2025-12-310001572334us-gaap:USTreasurySecuritiesMember2024-12-310001572334vabk:CommercialMortgagesMembervabk:FauquierBanksharesIncMembervabk:AcquiredLoansNonPurchasedCreditDeterioratedMember2024-12-310001572334vabk:TwoThousandFourteenPlanMembervabk:UnrestrictedStockMember2025-01-012025-12-310001572334us-gaap:OtherAssetsMembervabk:LowIncomeHousingTaxCreditProgramMember2024-12-310001572334us-gaap:RestrictedStockMember2025-01-012025-12-310001572334us-gaap:FinancialAssetNotPastDueMemberus-gaap:CommercialLoanMember2024-12-310001572334vabk:CommercialMortgagesMember2023-12-310001572334us-gaap:ConstructionLoansMembervabk:FauquierBanksharesIncMembervabk:AcquiredLoansNonPurchasedCreditDeterioratedMember2025-12-310001572334vabk:ExercisePriceRangeThreeMember2025-01-012025-12-310001572334vabk:FauquierBanksharesIncMembervabk:AcquiredLoansNonPurchasedCreditDeterioratedMembervabk:OneToFourFamilyResidentialPropertyMember2024-12-310001572334us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:FairValueMeasurementsNonrecurringMember2025-12-310001572334vabk:TwoThousandFourteenPlanMember2025-12-310001572334us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-12-310001572334us-gaap:ConsumerLoanMemberus-gaap:PassMember2025-12-310001572334us-gaap:FinancingReceivables60To89DaysPastDueMember2025-12-310001572334vabk:FloatingRateJuniorSubordinatedDeferrableInterestDebenturesDueTwentyThirtySixMember2006-09-212006-09-210001572334us-gaap:ConsumerLoanMemberus-gaap:DoubtfulMember2025-12-310001572334us-gaap:AccountsPayableAndAccruedLiabilitiesMemberus-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember2025-12-310001572334vabk:CommercialMortgagesMembervabk:FauquierBanksharesIncMember2025-12-310001572334srt:MinimumMember2019-09-170001572334us-gaap:ConsumerLoanMemberus-gaap:FinancialAssetNotPastDueMember2024-12-310001572334us-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:FairValueInputsLevel1Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2025-12-310001572334vabk:TwoThousandTwentyTwoPlanMembersrt:MaximumMember2025-12-310001572334us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MunicipalBondsMember2025-12-310001572334vabk:OneToFourFamilyResidentialMortgagesMemberus-gaap:FinancialAssetNotPastDueMember2024-12-310001572334vabk:OneToFourFamilyResidentialMortgagesMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2024-12-310001572334vabk:FauquierBanksharesIncMember2024-12-310001572334us-gaap:ConsumerLoanMemberus-gaap:SpecialMentionMember2025-12-310001572334vabk:CommercialMortgagesMember2024-12-310001572334vabk:SecuritiesAvailableForSaleMember2024-01-012024-12-310001572334vabk:FauquierBanksharesIncMembervabk:OneToFourFamilyResidentialPropertyMember2025-12-310001572334srt:ParentCompanyMember2025-12-310001572334us-gaap:USGovernmentAgenciesDebtSecuritiesMember2024-12-310001572334us-gaap:ConsumerLoanMember2024-01-012024-12-310001572334us-gaap:FairValueInputsLevel3Membervabk:IndividuallyEvaluatedLoansMemberus-gaap:MarketApproachValuationTechniqueMemberus-gaap:FairValueMeasurementsNonrecurringMember2024-01-012024-12-310001572334us-gaap:ConstructionLoansMember2024-12-310001572334us-gaap:AdditionalPaidInCapitalMember2023-12-310001572334us-gaap:UnusedLinesOfCreditMember2025-12-310001572334us-gaap:ConstructionLoansMembervabk:FauquierBanksharesIncMember2025-12-310001572334us-gaap:CollateralPledgedMember2024-12-310001572334vabk:OneToFourFamilyResidentialMortgagesMemberus-gaap:SubstandardMember2024-12-310001572334us-gaap:RestrictedStockMembervabk:TwoThousandFourteenPlanMember2025-01-012025-12-310001572334vabk:SecuritiesAvailableForSaleMember2025-01-012025-12-310001572334us-gaap:USGovernmentAgenciesDebtSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2024-12-310001572334us-gaap:FurnitureAndFixturesMember2024-12-310001572334us-gaap:CreditConcentrationRiskMembervabk:CommercialMortgagesMembervabk:Multi-FamilyMember2025-12-310001572334us-gaap:FairValueInputsLevel3Membervabk:IndividuallyEvaluatedLoansMemberus-gaap:MarketApproachValuationTechniqueMemberus-gaap:FairValueMeasurementsNonrecurringMember2024-12-310001572334vabk:AcquiredLoansPurchasedCreditDeterioratedMembervabk:FauquierBanksharesIncMember2024-12-310001572334vabk:CommercialMortgagesMemberus-gaap:SpecialMentionMember2024-12-310001572334vabk:ACHMember2024-12-3100015723342025-01-012025-12-310001572334us-gaap:MortgageBackedSecuritiesMember2024-12-310001572334vabk:OneToFourFamilyResidentialMortgagesMemberus-gaap:SpecialMentionMember2024-12-310001572334us-gaap:CommercialLoanMember2025-12-310001572334us-gaap:CollateralPledgedMembervabk:OneToFourFamilyResidentialMortgagesMember2024-12-310001572334us-gaap:MunicipalBondsMember2025-12-310001572334us-gaap:ConstructionLoansMemberus-gaap:PassMember2024-12-310001572334vabk:OneToFourFamilyResidentialPropertyMemberus-gaap:ResidentialPortfolioSegmentMember2025-12-310001572334vabk:FloatingRateCapitalSecuritiesMember2025-01-012025-12-310001572334us-gaap:SpecialMentionMemberus-gaap:CommercialLoanMembervabk:TermLoansMember2025-12-310001572334us-gaap:MortgageBackedSecuritiesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2025-12-310001572334us-gaap:ConstructionInProgressMember2024-12-310001572334us-gaap:CommonStockMember2023-12-310001572334us-gaap:LandAndBuildingMember2025-12-310001572334us-gaap:MortgageBackedSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2024-12-310001572334us-gaap:CoreDepositsMember2024-12-310001572334srt:MinimumMembervabk:TwoThousandTwentyTwoPlanMember2025-12-310001572334vabk:CommercialMortgagesMemberus-gaap:SubstandardMember2024-12-310001572334us-gaap:DoubtfulMemberus-gaap:CommercialLoanMembervabk:TermLoansMember2025-12-310001572334vabk:TwoThousandTwentyTwoPlanMember2025-12-310001572334us-gaap:USGovernmentAgenciesDebtSecuritiesMember2025-12-310001572334vabk:InsuredCashSweepMember2025-12-310001572334us-gaap:FairValueInputsLevel2Memberus-gaap:USTreasurySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2024-12-310001572334vabk:AcquiredLoansPurchasedCreditDeterioratedMembervabk:FauquierBanksharesIncMembervabk:OneToFourFamilyResidentialPropertyMember2025-12-310001572334us-gaap:EmployeeStockOptionMembervabk:TwoThousandTwentyTwoPlanMember2025-12-310001572334us-gaap:CommercialLoanMember2023-12-310001572334us-gaap:CollateralPledgedMembervabk:CommercialRealEstateNonOwnerOccupiedMember2025-12-310001572334us-gaap:ConsumerLoanMemberus-gaap:PassMember2024-12-310001572334us-gaap:CreditConcentrationRiskMember2025-12-310001572334vabk:TwoThousandFourteenPlanMember2025-01-012025-12-310001572334us-gaap:UnusedLinesOfCreditMemberus-gaap:FederalHomeLoanBankBorrowingsMember2025-12-310001572334us-gaap:RestrictedStockMember2024-12-3100015723342024-01-012024-12-310001572334us-gaap:ConsumerLoanMemberus-gaap:DoubtfulMember2024-12-310001572334us-gaap:CoreDepositsMember2025-12-310001572334vabk:CommercialMortgagesMemberus-gaap:DoubtfulMember2025-12-310001572334vabk:AcquiredLoansPurchasedCreditDeterioratedMembervabk:FauquierBanksharesIncMembervabk:OneToFourFamilyResidentialPropertyMember2024-12-310001572334us-gaap:LandAndBuildingMember2024-12-310001572334us-gaap:FederalFundsPurchasedMember2024-12-310001572334vabk:ExercisePriceRangeOneMember2025-12-310001572334us-gaap:ConsumerLoanMembervabk:FauquierBanksharesIncMember2025-12-310001572334vabk:CommercialMortgagesMemberus-gaap:SpecialMentionMember2025-12-310001572334vabk:TwoThousandFourteenPlanMember2025-07-240001572334vabk:OwnerOccupiedMemberus-gaap:CreditConcentrationRiskMembervabk:CommercialMortgagesMember2025-12-310001572334vabk:IndividuallyEvaluatedLoansMemberus-gaap:MarketApproachValuationTechniqueMemberus-gaap:FairValueMeasurementsNonrecurringMember2024-12-310001572334us-gaap:CommercialLoanMembervabk:TermLoansMember2024-01-012024-12-310001572334us-gaap:MortgageBackedSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2025-12-310001572334us-gaap:CommercialLoanMembervabk:TermLoansMember2024-12-310001572334us-gaap:EmployeeStockOptionMember2025-01-012025-12-310001572334vabk:CommercialMortgagesMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2025-12-310001572334us-gaap:MortgageBackedSecuritiesMember2025-12-310001572334vabk:FauquierBanksharesIncMembervabk:AcquiredLoansNonPurchasedCreditDeterioratedMember2023-12-310001572334us-gaap:CommercialLoanMember2024-01-012024-12-310001572334vabk:OneToFourFamilyResidentialMortgagesMemberus-gaap:SpecialMentionMember2025-12-310001572334vabk:FauquierBanksharesIncMemberus-gaap:CommercialLoanMember2025-12-310001572334vabk:OneToFourFamilyResidentialMortgagesMember2024-01-012024-12-310001572334us-gaap:EmployeeStockOptionMember2024-01-012024-12-310001572334us-gaap:ConstructionLoansMembervabk:FauquierBanksharesIncMembervabk:AcquiredLoansNonPurchasedCreditDeterioratedMember2024-12-310001572334us-gaap:CommonStockMember2024-12-3100015723342023-12-310001572334us-gaap:CorporateMember2024-01-012024-12-310001572334us-gaap:ConstructionLoansMemberus-gaap:SpecialMentionMember2024-12-310001572334us-gaap:ConsumerLoanMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2024-12-310001572334us-gaap:MunicipalBondsMember2024-12-310001572334vabk:SecuritiesAvailableForSaleMember2025-12-310001572334us-gaap:SubstandardMemberus-gaap:CommercialLoanMembervabk:TermLoansMember2025-12-310001572334us-gaap:ConstructionLoansMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2024-12-3100015723342025-12-310001572334us-gaap:MunicipalBondsMember2024-12-31iso4217:USDxbrli:sharesxbrli:purexbrli:sharesvabk:Loanvabk:Employeeiso4217:USDvabk:Item

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)


☒	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2025


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO

Commission File Number 001-40305

VIRGINIA NATIONAL BANKSHARES CORPORATION

(Exact name of Registrant as specified in its Charter)


Virginia	46-2331578
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
404 People Place Charlottesville, VA	22911
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (434) 817-8621

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	VABK	The Nasdaq Capital Market

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES ☐ No ☒

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. YES ☐ No ☒

Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ NO ☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ☒ NO ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive oﬃcers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☐ NO ☒

The aggregate market value of the common stock held by non-affiliates of the Registrant, computed by reference to the last reported sale price of the common stock quoted on The NASDAQ Capital Market, on June 30, 2025 (the last business day of the Registrant’s most recently completed second fiscal quarter) was approximately $174.4 million.

The number of shares of Registrant’s Common Stock outstanding as of March 23, 2026 was 5,422,082.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s definitive Proxy Statement to be used in conjunction with the registrant’s 2026 Annual Meeting of Shareholders are incorporated into Part III of this Form 10-K.


	INDEX
		Page

	Part I

Item 1	Business	7

Item 1A	Risk Factors	19

Item 1B	Unresolved Staff Comments	30

Item 1C	Cybersecurity	31

Item 2	Properties	32

Item 3	Legal Proceedings	32

Item 4	Mine Safety Disclosures	32

	Part II

Item 5	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	33

Item 6	[Reserved]	33

Item 7	Management’s Discussion and Analysis of Financial Condition and Results of Operations	34

Item 7A	Quantitative and Qualitative Disclosures About Market Risk	54

Item 8	Financial Statements and Supplementary Data	55

Item 9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	107

Item 9A	Controls and Procedures	107

Item 9B	Other Information	108

Item 9C	Disclosure Regarding Foreign Jurisdictions That Prevent Inspections	108

	Part III

Item 10	Directors, Executive Officers and Corporate Governance	109

Item 11	Executive Compensation	109

Item 12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	109

Item 13	Certain Relationships and Related Party Transactions and Director Independence	109

Item 14	Principal Accountant Fees and Services	109

	Part IV

Item 15	Exhibits, Financial Statement Schedules	110

Item 16	Form 10-K Summary	110

Signatures		113

Glossary of Acronyms and Defined Terms


2014 Plan	-	2014 Stock Incentive Plan
2022 Plan	-	2022 Stock Incentive Plan
ACH	-	Automated Clearing House
ACL	-	Allowance for credit losses
Acquired Loans	-	Loans acquired from Fauquier
AFS	-	Available for sale
ALCO	-	Asset Liability Committee
ASC	-	Accounting Standards Codification
ASC 326	-	ASU 2016-13, Financial Instruments and Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments
ASC 350	-	ASC 350, Goodwill and Other Intangible Assets
ASC 718	-	ASC 718, Compensation - Stock Compensation
ASC 820	-	ASC 820, Fair Value Measurements and Disclosures
ASU	-	Accounting Standards Update
ATM	-	Automated teller machine
AUM	-	Assets under management
the Bank	-	Virginia National Bank
BHCA	-	Bank Holding Company Act of 1956
BOLI	-	Bank-owned life insurance
bps	-	Basis points
CAMELS	-	International rating system bank supervisory authorities use to rate financial institutions
CBBFC	-	Community Bankers' Bank Financial Corporation
CBLR	-	Community Bank Leverage Ratio
CDARS™	-	Certificates of Deposit Account Registry Service
CECL	-	Current expected credit losses
CET1	-	Common equity tier 1
CFPB	-	Consumer Financial Protection Bureau
CMO	-	Collateralized Mortgage Obligation
Code	-	Internal Revenue Code of 1986, as amended
CODM	-	Chief operating decision maker(s)
the Company	-	Virginia National Bankshares Corporation and its subsidiaries
CRA CRE	- -	Community Reinvestment Act of 1977 Commercial Real Estate
CTA	-	Corporate Transparency Act
DIF	-	Deposit Insurance Fund
Dodd-Frank Act	-	Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010
Effective Date	-	April 1, 2021
EGRRCPA	-	Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018
EPS	-	Earnings per common share
Exchange Act	-	Securities Exchange Act of 1934, as amended
Fauquier	-	Fauquier Bankshares, Inc. and its subsidiaries
FASB	-	Financial Accounting Standards Board
FDIA	-	Federal Deposit Insurance Act
FDIC	-	Federal Deposit Insurance Corporation
FDICIA	-	Federal Deposit Insurance Corporation Improvement Act
Federal Reserve	-	Board of Governors of the Federal Reserve System
Federal Reserve Act	-	Federal Reserve Act of 1913, as amended
Federal Reserve Bank or FRB	-	Federal Reserve Bank of Richmond
FHLB	-	Federal Home Loan Bank of Atlanta
FinCEN	-	Financial Crimes Enforcement Network
FOMC	-	Federal Reserve Board’s Federal Open Market Committee
Form 10-K	-	Annual Report on Form 10-K for the year ended December 31, 2025
FTE	-	Fully taxable equivalent
GAAP or U.S. GAAP	-	Accounting principles generally accepted in the United States


ICS®	-	Insured Cash Sweep®
LIHTC	-	Low-income housing tax credits
Masonry Capital	-	Masonry Capital Management, LLC
MBS	-	Mortgage-Backed Securities
Merger	-	Mergers of Fauquier Bankshares, Inc. and The Fauquier Bank with and into the Company and the Bank, respectively
Nasdaq	-	The Nasdaq Stock Market, LLC
NIST	-	National Institute of Standards and Technology
NOW	-	Negotiable order of withdrawal
NPA	-	Nonperforming assets
OCC	-	Office of the Comptroller of the Currency
OFAC	-	Office of Foreign Assets Control
PCA	-	Prompt Corrective Action
PCI	-	Purchased credit impaired
PCD		Purchased loans with credit deterioration
PII	-	Personally identifiable information
PPP	-	Paycheck Protection Program
Reorganization	-	Reorganization Agreement and Plan of Share Exchange dated March 6, 2013 between the Bank and the Company
SBA	-	Small Business Administration
SCC	-	Virginia State Corporation Commission
SEC	-	U.S. Securities and Exchange Commission
Securities Act	-	Securities Act of 1933, as amended
SOFR	-	Secured Overnight Funding Rate
TFB	-	The Fauquier Bank
VCDPA	-	Virginia Consumer Data Protection Act
VNBTrust	-	VNBTrust, National Association

Forward-Looking Statements and Factors that Could Affect Future Results

Certain statements contained or incorporated by reference in this annual report on Form 10-K are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including but not limited to, statements concerning future results of operations or financial position, borrowing capacity and future liquidity, future investment results, future credit exposure, future loan losses, plans and objectives for future operations, changes in laws and regulations applicable to the Company and its subsidiaries, adequacy of funding sources, actuarial expected benefit payments, valuation of foreclosed assets, regulatory requirements, economic environment and other statements contained herein regarding matters that are not historical facts. Such statements are often characterized by use of qualified words such as “expect,” “believe,” “estimate,” “project,” “anticipate,” “intend,” “will,” “should,” or words of similar meaning or their derivatives, or other statements concerning the opinions or judgment of the Company and its management about future events. These statements are not historical facts but instead are subject to numerous assumptions, risks and uncertainties, and represent only management’s belief regarding future events, many of which, by their nature, are inherently uncertain and outside management’s control. Although the Company believes that management’s expectations with respect to forward-looking statements are based upon reasonable assumptions within the bounds of its existing knowledge of the Company’s business and operations, there can be no assurance that actual future results, performance, or achievements of, or trends affecting, the Company will not differ materially from any projected future results, performance, achievements or trends expressed in or implied by such forward-looking statements. Any forward-looking statements made by the Company speak only as of the date on which such statements are made. The Company’s actual results and financial position may differ materially from the anticipated results and financial condition indicated in or implied by these forward-looking statements.

Factors that could cause the Company's actual results to differ materially from those in the forward-looking statements include, but are not limited to, the following:

•

inflation, interest rates, market and monetary fluctuations;

•

liquidity and capital requirements;

•

market disruptions including trade restrictions, tariffs, pandemics or significant health hazards, severe weather conditions, natural disasters, terrorist activities, financial crisis, political crises, war and other military conflicts or other major events, the governmental and societal responses thereto, or the prospect of these events;

•

changes, particularly declines, in general economic and market conditions in the local economies in which the Company operates, including the effects of declines in real estate values;

•

the effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Federal Reserve;

•

the impact of changes in laws, regulations and guidance related to financial services, including, but not limited to, taxes, banking, securities and insurance;

•

changes in accounting principles, standards, policies and guidelines;

•

the financial condition of the Company’s borrowers;

•

the Company's ability to attract, hire, train and retain qualified employees;

•

an increase in unemployment levels;

•

competitive pressures on loan and deposit pricing and demand;

•

fluctuation in asset quality;

•

assumptions that underlie the Company’s ACL;

•

the value of securities held in the Company's investment portfolio;

•

performance of assets under management;

•

cybersecurity threats or attacks and the development and maintenance of reliable electronic systems;

•

changes in technology and their impact on the marketing of new products and services and the acceptance of these products and services by new and existing customers;

•

the willingness of customers to substitute competitors’ products and services for the Company’s products and services;

•

the risks and uncertainties described from time-to-time in the Company’s press releases and filings with the SEC; and

•

the Company’s performance in managing the risks involved in any of the foregoing.

More information on factors that could affect the Company’s forward-looking statements is included under Item 1A. Risk Factors. All risk factors and uncertainties described herein and therein should be considered in evaluating forward-looking

statements, all forward-looking statements are expressly qualified by this cautionary statement, and undue reliance should not be placed on such forward-looking statements. The actual results or developments anticipated may not be realized or, even if substantially realized, may not have the expected consequences to or effects on the Company’s business or operations. Forward-looking statements speak only as of the date they are made, and the Company is not obligated to update, and does not intend to update, any forward-looking statement, whether written or oral, that may be made from time-to-time by or on behalf of the Company, whether as a result of new information, future events or otherwise, except as required by law.

Part I

Item 1. BUSINESS.

General

The Company was incorporated under the laws of the Commonwealth of Virginia on February 21, 2013 at the direction of the Board of Directors of the Bank for the purpose of acquiring all of the outstanding shares of the Bank and becoming the holding company of the Bank. On June 19, 2013, the shareholders of the Bank approved the Reorganization Agreement and Plan of Share Exchange, dated March 6, 2013, whereby the Bank would reorganize into a holding company structure. On December 16, 2013, when the Reorganization became effective, the Bank became a wholly-owned subsidiary of the Company, and each share of the Bank’s common stock was exchanged for one share of the Company’s common stock.

The Company is regulated under the BHCA and is subject to inspection, examination and supervision by the Federal Reserve. The Company is also under the jurisdiction of the SEC and is subject to the disclosure and regulatory requirements of the Exchange Act as administered by the SEC.

Virginia National Bank, the principal operating subsidiary of the Company, was organized in 1998 under federal law as a national banking association to engage in a general commercial and retail banking business. The Bank received its charter from the OCC and commenced operations on July 29, 1998. The Bank received fiduciary powers in January 2000. The Bank’s deposits are insured up to the maximum amount provided by the FDIC.

Prior to July 2018, the Bank had one wholly owned subsidiary, VNBTrust, a national trust bank formed in 2007. Effective July 1, 2018, VNBTrust was merged into the Bank. The Bank continues to offer trust and estate administration services under the name of VNB Trust and Estate Services.

The Bank, through its financial subsidiary Fauquier Bank Services, Inc., has equity ownership interests in Bankers Insurance, LLC, a Virginia independent insurance company, and Bankers Title Shenandoah, LLC, a title insurance company, both of which are owned by a consortium of Virginia community banks.

The Bank has another subsidiary, Special Properties Acquisition - VA, LLC, which was originally formed by Fauquier to hold other real estate owned; however, there are no assets currently held by this subsidiary.

The Bank is subject to the supervision, examination and regulations of the OCC and is also subject to regulations of the FDIC, the Federal Reserve and the CFPB.

During 2018, the Company formed Masonry Capital Management, LLC, a registered investment advisor, which offers investment advisory and management services to clients through separately managed accounts and a private investment fund. The membership interests in this business line were sold to an officer of the Company effective April 1, 2024. Per the terms of the sale agreement, the Company will receive an annual revenue-share amount for a period of six years. No expenses have been or will be incurred by the Company related to Masonry Capital subsequent to April 1, 2024.

In addition, the Company owns Fauquier Statutory Trust II (“Trust II”), which is an unconsolidated subsidiary. The subordinated debt owed to Trust II is reported as a liability of the Company.

The main offices of the Company, the Bank and VNB Trust and Estate Services, as well as corporate and Bank operations, are located in Charlottesville, Virginia.

Products and Services

The Bank offers a full range of banking and related financial services, including checking accounts, NOW accounts, money market deposit accounts, certificates of deposit, individual retirement accounts, CDARS™, ICS® and other depository services. The Bank actively solicits such accounts from individuals, businesses and charitable organizations within its trade areas. Other services offered by the Bank include ATMs, internet banking, treasury and cash management services and merchant card services. In addition, the Bank is affiliated with Visa®, which is accepted worldwide, and offers debit cards to consumer and business customers.

The Bank also offers short-to long-term commercial, real estate and consumer loans. The Bank is committed to being a reliable and consistent source of credit, providing loans that are priced based upon an overall banking relationship, easy access to the Bank’s local decision makers who possess strong local market knowledge, local delivery, fast response, and continuity in the banking relationship.

Trust and estate administration services are offered through VNB Trust and Estate Services.

The Company primarily serves the Virginia communities in and around the cities of Charlottesville, Winchester, Manassas and Richmond, and the counties of Albemarle, Fauquier, Frederick and Prince William. Refer to Item 2. Properties for additional information regarding locations. The Bank’s locations are well-positioned in attractive markets. Within its market areas, there are various types of industry including higher education, medical and professional services, research and development companies and retail.

Competition

The Company engages in highly competitive activities. Each activity involves competition with other banks, as well as with non-banking enterprises that offer financial products and services that compete directly with the Company’s product and service offerings. The Company actively competes with other banks in its efforts to obtain deposits and make loans, in the scope and types of services offered, in interest rates paid on time deposits and charged on loans, and in other aspects of banking.

In addition to competing with other community and commercial banks within and outside its primary service areas, the Company competes with other institutions engaged in the business of making loans or accepting deposits, such as credit unions, insurance companies, small loan companies, finance companies, fintech companies, certain governmental agencies and other enterprises. Competition for deposits and loans is affected by various factors including, without limitation, interest rates offered, the number and location of branches and types of products offered, digital capabilities, and the reputation of the institution. Credit unions increasingly have been allowed to expand their membership definitions, yet they continue to enjoy a favorable tax status.

The market areas served by the Company are highly competitive with respect to banking. Many of the Company’s competitors have substantially greater resources and lending limits than the Company and offer certain services such as extensive and established branch networks that the Company does not expect to match. Deposit competition is also very strong. Management believes, however, that a market exists for the personal and customized financial services an independent, community bank can offer.

Social

To develop young talent in the financial industry, the Company has created the Finance Career & Leadership Academy ("FCLA"), which is an instructional program designed to not only provide advanced personal finance and employment readiness training, but also a path to career opportunities in banking for high school juniors and seniors within the Company's communities. Currently held in Charlottesville, Virginia, the FCLA runs as an in-person series of classroom meetings.

This program is offered free-of-charge to those students accepted into the FCLA. Up to ten students are accepted into each session. The program provides quality financial training that gives young people the perspective and tools necessary to level the economic playing field and make responsible financial decisions. Also, included in the curriculum is a comprehensive study of employment readiness and professionalism concepts and strategies aimed to increase the marketability and employability of the participants. In order to begin a successful career and have a successful financial future, these young adults must be prepared to effectively communicate with a multi-generational workforce and have the skills necessary to manage their own finances intelligently and productively.

This program also offers the potential opportunity for training necessary to enter a lucrative career without incurring six-figure debt and four lost years of earning potential, as the most promising and top performing students from the Academy are considered for VNB’s College Program (the Commercial Banking/Staff Development Program). The Company's partnership with the Center for Financial Training and Education Alliance (CFTEA) has allowed the Company to create a credentialing program specifically designed to prepare students to meet the demands of the industry, and to do so without the prohibitive cost of a four-year degree. This bank-sponsored, comprehensive, free training program consists of 16 courses of which 13 are accredited college/university courses (39 credit hours that are transferable to a 2 or 4-year college/university) and work projects. Participants receive full-time pay with full fringe benefits (includes 401k with company match) while completing the program and, if successful in the program, have the potential opportunity for a career with VNB. Also, once employed, should they choose, they may go on to complete a 2 or 4-year degree at the Company’s expense.

Employees

The Company has a shared vision of guiding principles, core values and strategies that work and have guided the Company through both good and challenging times. The Company strives to ensure that its constituents, including its shareholders,

customers, Board of Directors ("Board"), executive management and high performing employees, believe in it as well. The Company believes that the shared vision, when properly aligned and communicated to all constituents, will produce more than above average performance in key metrics. As part of the shared vision, the Company is committed to its shareholders, customers, employees and communities. A critical part of this commitment is attracting and retaining high performing employees. To attract and retain high performing employees, the Company provides a competitive compensation and benefits program, including wellness benefits.

At December 31, 2025, the Company had 140 full-time employees and 8 part-time employees. None of its employees are represented by any collective bargaining unit. The Company considers relations with its employees to be good. We strive for the Company's workforce to reflect the diversity of the customers and communities we serve. The Company's selection and promotion process are without bias and include the active recruitment of minorities and women. At December 31, 2025, women represented 75% of the Company's employees and racial and ethnic minorities represented 22% of the Company's employees. At December 31, 2025, 35% of the Company's employees have been employed by the Company or its subsidiaries for at least 10 years.

The Company owns BOLI policies on each executive officer and certain other senior officers of the Company. BOLI is a bank-eligible asset designed to recover costs of providing pre- and post-retirement benefits and/or to finance general employee benefit expenses. Under BOLI policies, each executive officer and certain other senior officers of the Company are the insured, and the Company is the owner and beneficiary of the policies. The insured has no claim to the insurance policy or to the policy’s cash value. Under separate split dollar agreements, a portion of any death benefit may be paid to the beneficiaries of the insured officer, subject to the terms and restrictions of the split dollar endorsement agreement between the insured officer and the Company.

Supervision and Regulation

The Company and the Bank are extensively regulated under both federal and state laws. The following description briefly addresses certain historic and current provisions of federal and state laws and certain regulations, proposed regulations and the potential impacts on the Company and the Bank. To the extent statutory or regulatory provisions or proposals are described in this report, the description is qualified in its entirety by reference to the particular statutory or regulatory provisions or proposals.

The Company

General. As a bank holding company registered under the BHCA, the Company is subject to supervision, regulation, and examination by the Federal Reserve. The Company is also registered under the bank holding company laws of Virginia and is subject to supervision, regulation, and examination by the Bureau of Financial Institutions of the Virginia State Corporation Commission.

Regulatory Environment. Banking and other financial services statutes, regulations and policies are continually under review by Congress, state legislatures and federal and state regulatory agencies. The scope of the laws and regulations, and the intensity of the supervision to which the Company and its subsidiaries are subject, have increased in recent years, initially in response to the 2008 financial crisis, and more recently in light of other factors, including continued turmoil and stress in the financial markets, technological factors and market changes.

Proposals to change the laws, regulations and policies governing the banking industry are frequently raised at both the state and federal levels. The second Trump administration has implemented significantly different policies from the Biden administration, including new proposed regulations and rescissions or withdrawals of previous guidance, and sharply reduced the workforce at the federal banking agencies.

These regulatory changes could have significant effects on how the Company and the Bank conduct business. The specific impacts of regulatory reforms, and whether they will last, cannot yet be fully predicted. Further, a change in the manner in which laws, regulations and regulatory guidance are interpreted by regulatory agencies or courts may have a material impact on the Company’s business, operations and earnings.

Permitted Activities. The permitted activities of a bank holding company are limited to managing or controlling banks, furnishing services to or performing services for its subsidiaries, and engaging in other activities that the Federal Reserve determines by regulation or order to be so closely related to banking, or managing or controlling banks, as to be a proper incident thereto. In determining whether a particular activity is permissible, the Federal Reserve must consider whether the performance of such an activity reasonably can be expected to produce benefits to the public that outweigh possible adverse

effects. Possible benefits include greater convenience, increased competition, and gains in efficiency. Possible adverse effects include undue concentration of resources, decreased or unfair competition, conflicts of interest, and unsound banking practices. Despite prior approval, the Federal Reserve may order a bank holding company or its subsidiaries to terminate any activity or to terminate ownership or control of any subsidiary when the Federal Reserve has reasonable cause to believe that a serious risk to the financial safety, soundness or stability of any bank subsidiary of that bank holding company may result from such an activity.

Banking Acquisitions; Changes in Control. The BHCA and related regulations require, among other things, the prior approval of the Federal Reserve in any case where a bank holding company proposes to (i) acquire direct or indirect ownership or control more than 5% of the outstanding voting stock of any bank or bank holding company (unless it already owns a majority of such voting shares), (ii) acquire all or substantially all of the assets of another bank or bank holding company, or (iii) merge or consolidate with any other bank holding company. In determining whether to approve a proposed acquisition, the Federal Reserve will consider, among other factors, the following: the effect of the acquisition on competition; the public benefits expected to be received from the acquisition; any outstanding regulatory compliance issues of any institution that is a party to the transaction; the projected capital ratios and levels on a post-acquisition basis; the financial condition of each institution that is a party to the transaction and of the combined institution after the transaction; the parties’ managerial resources, as well as risk management and governance processes and systems; the parties’ compliance with the Bank Secrecy Act and anti-money laundering requirements; the acquiring institution’s performance under the CRA and its compliance with fair housing and other consumer protection laws; and the data security and cybersecurity infrastructure of the constituent organizations and the combined organization.

Subject to certain exceptions, the BHCA and the Change in Bank Control Act, together with the applicable regulations, require Federal Reserve approval (or, depending on the circumstances, no notice of disapproval) prior to any person or company’s acquiring “control” of a bank or bank holding company. A conclusive presumption of control exists if an individual or company acquires the power, directly or indirectly, to direct the management or policies of an insured depository institution or to vote 25% or more of any class of voting securities of any insured depository institution. A rebuttable presumption of control may exist if a person or company acquires 5% or more but less than 25% of any class of voting securities and certain other relationships are present between the investor and the bank holding company, or if certain other ownership thresholds for voting or total equity have been exceeded.

In addition, Virginia law requires the prior approval of the SCC for (i) the acquisition by a Virginia bank holding company of more than 5% of the voting shares of a Virginia bank or a Virginia bank holding company, or (ii) the acquisition by any other person of control of a Virginia bank holding company or a Virginia bank.

Source of Strength. Federal Reserve policy has historically required bank holding companies to act as a source of financial and managerial strength to their subsidiary banks. The Dodd-Frank Act codified this policy as a statutory requirement. Under this requirement, the Company is expected to commit resources to support the Bank, including at times when the Company may not be in a financial position to provide such resources. Any capital loans by a bank holding company to any of its subsidiary banks are subordinate in right of payment to depositors and to certain other indebtedness of such subsidiary banks. In the event of a bank holding company’s bankruptcy, any commitment by the bank holding company to a federal bank regulatory agency to maintain the capital of a subsidiary bank will be assumed by the bankruptcy trustee and entitled to priority of payment.

Safety and Soundness. There are a number of obligations and restrictions imposed on bank holding companies and their subsidiary banks by law and regulatory policy that are designed to minimize potential loss to the depositors of such depository institutions and the FDIC insurance fund in the event of a depository institution insolvency, receivership, or default. For example, under FDICIA, to avoid receivership of an insured depository institution subsidiary, a bank holding company is required to guarantee the compliance of any subsidiary bank that may become “undercapitalized” with the terms of any capital restoration plan filed by such subsidiary with its appropriate federal bank regulatory agency up to the lesser of (i) an amount equal to 5% of the institution’s total assets at the time the institution became undercapitalized, or (ii) the amount that is necessary (or would have been necessary) to bring the institution into compliance with all applicable capital standards as of the time the institution fails to comply with such capital restoration plan.

Under the FDIA, the federal bank regulatory agencies have adopted guidelines prescribing safety and soundness standards. These guidelines establish general standards relating to capital management, internal controls and information systems, internal audit systems, information systems, data security, loan documentation, credit underwriting, interest rate exposure and risk management, vendor management, corporate governance, and asset growth, as well as compensation, fees, and benefits. In general, the guidelines require, among other things, appropriate systems and practices to identify and manage the risk and exposures specified in the guidelines.

Capital Requirements. The Federal Reserve imposes certain capital requirements on bank holding companies under the BHCA, including a minimum leverage ratio and a minimum ratio of “qualifying” capital to risk-weighted assets. These requirements are described below under “The Bank – Capital Requirements.” Subject to its capital requirements and certain other restrictions, the Company is able to borrow money to make a capital contribution to the Bank, and such loans may be repaid from dividends paid by the Bank to the Company.

Limits on Dividends and Other Payments. The Company is a legal entity, separate and distinct from its subsidiaries. A significant portion of the revenues of the Company result from dividends paid to it by the Bank. There are various legal limitations applicable to the payment of dividends by the Bank to the Company and to the payment of dividends by the Company to its shareholders. The Bank is subject to various statutory and regulatory restrictions on its ability to pay dividends to the Company. The OCC has advised that a national bank should generally pay dividends only out of current operating earnings. Under current regulations, prior regulatory approval is required if cash dividends declared by the Bank in any given year exceed net income for that year, plus retained net profits of the two preceding years. The payment of dividends by the Bank or the Company may be limited by other factors, such as requirements to maintain capital above regulatory guidelines. Bank regulatory agencies have the authority to prohibit the Bank or the Company from engaging in an unsafe or unsound practice in conducting its respective business. The payment of dividends, depending on the financial condition of the Bank or the Company, could be deemed to constitute such an unsafe or unsound practice.

Under the FDIA, insured depository institutions, such as the Bank, are prohibited from making capital distributions, including the payment of dividends, if, after making such distributions, the institution would become “undercapitalized” (as such term is used in the statute). Based on the Bank’s current financial condition, the Company does not expect that this provision will have any impact on its ability to receive dividends from the Bank.

In addition, the Company’s ability to pay dividends is limited by restrictions imposed by the Virginia Stock Corporation Act on Virginia corporations. In general, dividends paid by a Virginia corporation may be paid only if, after giving effect to the distribution, (i) the corporation is still able to pay its debts as they become due in the usual course of business, or (ii) the corporation’s total assets are greater than or equal to the sum of its total liabilities plus (unless the corporation’s articles of incorporation permit otherwise) the amount that would be needed, if the corporation were to be dissolved at the time of the distribution, to satisfy the preferential rights, upon the dissolution, of shareholders whose preferential rights are superior to those receiving the distribution.

The Bank

General. The Bank is supervised and regularly examined by the OCC. The various laws and regulations administered by the OCC and the other bank regulatory agencies affect corporate practices, such as the payment of dividends, incurrence of debt, and acquisition of financial institutions and other companies; they also affect business practices, such as the payment of interest on deposits, the charging of interest on loans, types of business conducted and location of offices. Certain of these laws and regulations are referenced above under “The Company.”

Regulatory Capital Requirements. The OCC and the other federal bank regulatory agencies have issued risk-based and leverage capital guidelines applicable to U.S. banking organizations. Those regulatory agencies may from time-to-time require that a banking organization maintain capital above the minimum levels because of its financial condition or actual or anticipated growth.

The OCC and the other federal bank regulatory agencies have adopted rules to implement the Basel III capital framework as outlined by the Basel Committee on Banking Supervision and standards for calculating risk-weighted assets and risk-based capital measurements (collectively, the Basel III Final Rules) that apply to banking institutions they supervise. For the purposes of these capital rules, (i) CET1 capital consists principally of common stock (including surplus) and retained earnings; (ii) Tier 1 capital consists principally of CET1 plus non-cumulative preferred stock and related surplus, and certain grandfathered cumulative preferred stocks and trust preferred securities; and (iii) Tier 2 capital consists of other capital instruments, principally qualifying subordinated debt and preferred stock, and limited amounts of an institution’s ACL. Each regulatory capital classification is subject to certain adjustments and limitations, as implemented by the Basel III Final Rules. The Basel III Final Rules also establish risk weightings that are applied to many classes of assets held by community banks, importantly including applying higher risk weightings to certain commercial real estate loans. The Basel III Final Rules also include a requirement that banks maintain additional capital known as the “capital conservation buffer.”

The Basel III Final Rules and capital conservation buffer require banks and bank holding companies to maintain:

a minimum ratio of CET1 to risk-weighted assets of at least 4.5%, plus a 2.5% capital conservation buffer (which is added to the minimum CET1 ratio, effectively resulting in a required ratio of CET1 to risk-weighted assets of at least 7.0%);

ii.

a minimum ratio of Tier 1 capital to risk-weighted assets of at least 6.0%, plus the 2.5% capital conservation buffer (effectively resulting in a required Tier 1 capital ratio of 8.5%);

iii.

a minimum ratio of total (that is, Tier 1 plus Tier 2) capital to risk-weighted assets of at least 8.0%, plus the 2.5% capital conservation buffer (effectively resulting in a required total capital ratio of 10.5%), and

iv.

a minimum leverage ratio of 4.0%, calculated as the ratio of Tier 1 capital to average total assets, subject to certain adjustments and limitations.

The Basel III Final Rules provide deductions from and adjustments to regulatory capital measures, primarily to CET1, including deductions and adjustments that were not applied to reduce CET1 under historical regulatory capital rules. For example, mortgage servicing rights, deferred tax assets dependent upon future taxable income, and significant investments in non-consolidated financial entities must be deducted from CET1 to the extent that any one such category exceeds 25% of CET1.

The Basel III Final Rules permanently include in Tier 1 capital trust preferred securities issued prior to May 19, 2010 by bank holding companies with less than $15 billion in total assets, subject to a limit of 25% of Tier 1 capital. The Company expects that its trust preferred securities will be included in the Company’s regulatory capital as Tier 1 capital instruments until their maturity.

The Tier 1, CET1, total capital to risk-weighted assets, and leverage ratios of the Company were 19.60%, 19.60%, 20.42% and 12.52%, respectively, as of December 31, 2025, thus exceeding the minimum requirements. The Tier 1, CET1, total capital to risk-weighted assets, and leverage ratios of the Bank were 19.36%, 19.36%, 20.19% and 12.36%, respectively, as of December 31, 2025, also exceeding the minimum requirements.

With respect to the Bank, to be “well capitalized” under the revised “prompt corrective action” regulations, a bank must have the following minimum capital ratios: (i) a CET1 capital ratio of at least 6.5%; (ii) a Tier 1 capital to risk-weighted assets ratio of at least 8.0%; (iii) a total capital to risk-weighted assets ratio of at least 10.0%; and (iv) a leverage ratio of at least 5.0%. The Bank exceeds the thresholds to be considered well capitalized as of December 31, 2025. See “Prompt Corrective Action” below.

In July 2023, the Federal Reserve and the FDIC issued proposed rules to implement the final components of the Basel III agreement, often known as the “Basel III endgame.” These proposed rules contain provisions that apply to banks with $100 billion or more in total assets and that would significantly alter how those banks calculate risk-based assets. In light of the adverse reaction to the proposal, the Federal Reserve announced that it would publish a re-proposal of its regulations finalizing the Basel III standards. That re-proposal is expected in early 2026. The extent to which the re-proposal would impact institutions of the Company’s size is unknown since the original proposal applied to bank holding companies with assets of $100 billion or more.

Community Bank Leverage Ratio. As required by the EGRRCPA, qualifying banks with less than $10 billion in consolidated assets could elect to be subject to a 9% leverage ratio applied using less complex leverage calculations commonly referred to as the community bank leverage ratio CBLR. Banks that opt into the CBLR framework and maintain a leverage ratio of greater than 9% are not subject to other risk-based and leverage capital requirements and are deemed to meet Basel III Final Rules’ well capitalized ratio requirements. As of December 31, 2025, the Bank has not elected to apply the CBLR framework, but the Bank continues to assess the potential impact of opting in to the CBLR framework as part of its ongoing capital management and planning processes.

Small Bank Holding Company Policy Statement. Bank holding companies with less than $3 billion in assets may rely on the Federal Reserve Board’s Small Bank Holding Company Policy Statement. In addition to meeting the asset threshold, a bank holding company must not engage in significant nonbanking activities, not conduct significant off-balance sheet activities, and not have a material amount of debt or equity securities outstanding and registered with the SEC (subject to certain exceptions). The Federal Reserve Board may, in its discretion, exclude any bank holding company from the application of the Small Bank Holding Company Policy Statement if such action is warranted for supervisory purposes.

The policy statement, among other things, exempts certain bank holding companies from minimum consolidated regulatory capital ratios that apply to other bank holding companies. The Company expects that it will continue to be treated as a small bank holding company under the policy statement and will not be subject to regulatory capital requirements. The Bank remains subject to the regulatory capital requirements described above.

Prompt Corrective Action. Federal banking regulators are authorized, and under certain circumstances required, to take certain actions against banks that fail to meet their capital requirements. The federal bank regulatory agencies have additional enforcement authority with respect to undercapitalized depository institutions. “Well capitalized” institutions may generally operate without additional supervisory restriction. With respect to “adequately capitalized” institutions, such banks (i) cannot normally pay dividends or make any capital contributions that would leave them undercapitalized, (ii) cannot pay management fees to a controlling person if, after paying the fee, they would be undercapitalized, and (iii) cannot accept, renew, or roll over any brokered deposit unless they have applied for and been granted a waiver by the FDIC.

Immediately upon becoming “undercapitalized,” a depository institution becomes subject to the provisions of Section 38 of the FDIA, which: (i) restrict payment of capital distributions and management fees; (ii) require that the appropriate federal banking agency monitor the condition of the institution and its efforts to restore its capital; (iii) require submission of a capital restoration plan; (iv) restrict the growth of the institution’s assets; and (v) require prior approval of certain expansion proposals. The appropriate federal banking agency for an undercapitalized institution also may take any number of discretionary supervisory actions if the agency determines that any of these actions is necessary to resolve the problems of the institution at the least possible long-term cost to the DIF, subject in certain cases to specified procedures. These discretionary supervisory actions include: (i) requiring the institution to raise additional capital; (ii) restricting transactions with affiliates; (iii) requiring divestiture of the institution or the sale of the institution to a willing purchaser; and (iv) any other supervisory action that the agency deems appropriate. These and additional mandatory and permissive supervisory actions may be taken with respect to significantly undercapitalized and critically undercapitalized institutions. The Bank met the definition of being “well capitalized” as of December 31, 2025.

As described above in “The Bank – Regulatory Capital Requirements,” the capital rules issued by the OCC incorporate new requirements into the prompt corrective action framework.

Deposit Insurance. The deposits of the Bank are insured up to applicable limits by the Deposit Insurance Fund of the FDIC and are subject to deposit insurance assessments based on average total assets minus average tangible equity to maintain the DIF. The basic limit on FDIC deposit insurance coverage is $250 thousand per depositor. Under the FDIA, the FDIC may terminate deposit insurance upon a finding that the institution has engaged in unsafe or unsound practices, is in an unsafe or unsound condition to continue operations as an insured depository institution, or has violated any applicable law, regulation, rule, order or condition imposed by the FDIC, subject to administrative and potential judicial hearing and review processes. The FDIC may also suspend deposit insurance temporarily during the hearing process for the permanent termination of insurance if the institution has no tangible capital. If deposit insurance is terminated, the deposits at the institution at the time of termination, less subsequent withdrawals, shall continue to be insured for a period from six months to two years, as determined by the FDIC. Management is aware of no existing circumstances that could result in termination of the Bank’s deposit insurance.

Deposit Insurance Assessments. The DIF is funded by assessments on banks and other depository institutions calculated based on average consolidated total assets minus average tangible equity (defined as Tier 1 capital). As required by the Dodd-Frank Act, the FDIC has adopted a large-bank pricing assessment scheme, set a target “designated reserve ratio” (described in more detail below) of 2% for the DIF and, in lieu of dividends, provides for a lower assessment rate schedule when the reserve ratio reaches 2% and 2.5%. An institution's assessment rate is based on a statistical analysis of financial ratios that estimates the likelihood of failure over a three-year period, which considers the institution’s weighted average CAMELS composite rating, and is subject to further adjustments including those related to levels of unsecured debt and brokered deposits.

The Dodd-Frank Act transferred to the FDIC increased discretion with regard to managing the required amount of reserves for the DIF, or the “designated reserve ratio.” The FDIA requires that the FDIC consider the appropriate level for the designated reserve ratio on at least an annual basis. On October 18, 2022, the FDIC adopted a final rule to increase initial base deposit insurance assessment rate schedules uniformly by 2 basis points, beginning in the first quarterly assessment period of 2023. As a result of this final rule, the total base assessment rates beginning with the first quarter of 2023 for institutions with less than $10 billion in assets that have been insured for at least five years range from 2.5 bps to 32 bps. This increase in assessment rate schedules is intended to increase the likelihood that the reserve ratio reaches 1.35% by the statutory deadline of September 30, 2028. The new assessment rate schedules will remain in effect unless and until the reserve ratio meets or exceeds 2%. Progressively lower assessment rate schedules will take effect when the reserve ratio reaches 2%, and again when it reaches 2.5%

In November 2023, the FDIC issued a final rule to implement a special DIF assessment following the FDIC’s use of the “systemic risk” exception to the least-cost resolution test in connection with the failures and resolutions of Silicon Valley

Bank and Signature Bank. Banks with less than $5 billion of uninsured deposits, such as the Bank, are exempt from this special assessment.

In 2025 and 2024, the Company expensed $785 thousand and $700 thousand, respectively, in deposit insurance assessments.

Transactions with Affiliates. Pursuant to Sections 23A and 23B of the Federal Reserve Act and Regulation W, the authority of the Bank to engage in transactions with related parties or “affiliates” or to make loans to insiders is limited. Loan transactions with an affiliate generally must be collateralized and certain transactions between the Bank and its affiliates, including the sale of assets, the payment of money or the provision of services, must be on terms and conditions that are substantially the same, or at least as favorable to the Bank, as those prevailing for comparable nonaffiliated transactions. In addition, the Bank generally may not purchase securities issued or underwritten by affiliates.

Loans to executive officers, directors, or to any person who directly or indirectly, or acting through or in concert with one or more persons, owns, controls, or has the power to vote more than 10% of any class of voting securities of a bank, are subject to Sections 22(g) and 22(h) of the Federal Reserve Act and their corresponding regulations (Regulation O) and Section 13(k) of the Exchange Act relating to the prohibition on personal loans to executives (which exempts financial institutions in compliance with the insider lending restrictions of Section 22(h) of the Federal Reserve Act). Among other things, these loans must be made on terms substantially the same as those prevailing on transactions made to unaffiliated individuals and certain extensions of credit to those persons must first be approved in advance by a disinterested majority of the entire Board. Section 22(h) of the Federal Reserve Act prohibits loans to any of those individuals where the aggregate amount exceeds an amount equal to 15% of an institution’s unimpaired capital and surplus plus an additional 10% of unimpaired capital and surplus in the case of loans that are fully secured by readily marketable collateral, or when the aggregate amount on all of the extensions of credit outstanding to all of these persons would exceed the Bank’s unimpaired capital and unimpaired surplus. Section 22(g) of the Federal Reserve Act identifies limited circumstances in which the Bank is permitted to extend credit to executive officers.

Community Reinvestment Act. The Bank is subject to the requirements of the CRA. The CRA imposes on financial institutions an affirmative and ongoing obligation to meet the credit needs of the local communities, including low- and moderate-income neighborhoods. The CRA requires the appropriate federal banking agency, in connection with its examination of a bank, to assess the bank’s record in meeting such credit needs. In addition, in order for a bank holding company, like the Company, to commence any new activity permitted by the BHC Act, or to acquire any company engaged in any new activity permitted by the BHC Act, each insured depository institution subsidiary of the bank holding company must have received a rating of at least “satisfactory” in its most recent examination under the CRA. Under the CRA, institutions are assigned a rating of “outstanding,” “satisfactory,” “needs to improve,” or “substantial non-compliance.” The Bank received a “satisfactory” CRA rating in its most recent examination.

On October 24, 2023, the federal bank regulatory agencies issued a final rule to modernize their respective CRA regulations. The revised rules would have substantially altered the methodology for assessing compliance with the CRA, and likely would have made it more challenging and/or costly for the Bank to maintain its “satisfactory” rating. Following its finalization on March 29, 2024, the 2023 modernization rule became subject to an ongoing injunction. On July 16, 2025, the federal bank regulatory agencies issued a joint proposal to rescind the 2023 modernization rule. The agencies continue to apply the CRA rules as they existed before the 2023 modernization, considering the injunction and pending finalization of the rescission of the modernization rule.

Confidentiality of Customer Information. The Company and the Bank are subject to various laws and regulations that address the privacy of nonpublic personal financial information of customers. A financial institution must provide to its customers information regarding its policies and procedures with respect to the handling of customers’ personal information. Each institution must conduct an internal risk assessment of its ability to protect customer information. These privacy laws and regulations generally prohibit a financial institution from providing a customer’s personal financial information to unaffiliated parties without prior notice and approval from the customer.

The CFPB published its final rule to update Regulation P pursuant to the amended Gramm-Leach-Bliley Act in 2018. Under this rule, certain qualifying financial institutions are not required to provide annual privacy notices to customers. To qualify, a financial institution must not share nonpublic personal information about customers except as described in certain statutory exceptions which do not trigger a customer’s statutory opt-out right. In addition, the financial institution must not have changed its disclosure policies and practices from those disclosed in its most recent privacy notice. The rule sets forth timing requirements for delivery of annual privacy notices in the event that a financial institution that qualified for the annual notice exemption later changes its policies or practices in such a way that it no longer qualifies for the exemption.

Data privacy and data protection are areas of increasing state legislative focus. In March 2021, the Governor of Virginia signed into law the VCDPA, which went into effect on January 1, 2023. The VCDPA grants Virginia residents the right to access, correct, delete, know, and opt-out of the sale and processing for targeted advertising purposes of their personal information, similar to the protections provided by consumer data privacy laws in California and in Europe. The VCDPA also imposes data protection assessment requirements and authorizes the Attorney General of Virginia to enforce the VCDPA but does not provide a private right of action for consumers. The Bank is exempt from the VCDPA, but certain third-party vendors of the Company or the Bank are subject to the VCDPA, which could negatively impact the products or services that the Company obtains from those vendors.

In October 2023, the CFPB proposed a new rule that would require a provider of payment accounts or products, such as the Bank, to make certain data available to consumers upon request regarding the products or services they obtain from the provider. The proposed rule is intended to give consumers control over their financial data, including with whom it is shared, and encourage competition in the provision of consumer financial products and services. On the same day the final rule was released, certain industry participants filed a complaint against the CFPB challenging the final rule. The litigation is currently stayed while the CFPB considers revisions to the rule. Based on its expected asset size, the Company would have been required to comply with this rule in 2028 or 2029.

These laws and regulations impose compliance costs and create obligations and, in some cases, reporting obligations, and compliance with these laws, regulations, and obligations may require the Company to use significant resources.

Anti-Money Laundering Laws and Regulations. The Company is subject to several federal laws that are designed to combat money laundering, terrorist financing, and transactions with persons, companies or foreign governments designated by U.S. authorities (“AML laws”). This category of laws includes the Bank Secrecy Act of 1970, the Money Laundering Control Act of 1986, the USA PATRIOT Act of 2001, and the Anti-Money Laundering Act of 2020.

The AML laws and their implementing regulations require insured depository institutions, broker-dealers, and certain other financial institutions to have policies, procedures, and controls to detect, prevent, and report money laundering and terrorist financing. The AML laws and their regulations also provide for information sharing, subject to conditions, between federal law enforcement agencies and financial institutions, as well as among financial institutions, for counter-terrorism purposes. Federal banking regulators are required, when reviewing bank holding company acquisition and bank merger applications, to take into account the effectiveness of the anti-money laundering activities of the applicants. To comply with these obligations, the Company has implemented appropriate internal practices, procedures, and controls.

Office of Foreign Assets Control. OFAC, which is a division of the U.S. Treasury, is responsible for helping to ensure that United States entities do not engage in transactions with “enemies” of the United States, as defined by various Executive Orders and Acts of Congress. If the Bank finds a name of an “enemy” of the United States on any transaction, account, or wire transfer that is on an OFAC list, it must freeze such account or place transferred funds into a blocked account, and report it to OFAC. Failure to comply with OFAC requirements could have serious legal, financial and reputational consequences for the Company. To comply with these obligations, the Company has implemented appropriate internal practices, procedures, and controls.

Cybersecurity. The federal banking agencies have adopted guidelines for establishing information security standards and cybersecurity programs for implementing safeguards under the supervision of a financial institution’s board of directors. These guidelines, along with related regulatory materials, increasingly focus on risk management and processes related to information technology and the use of third parties in the provision of financial products and services. The federal banking agencies expect financial institutions to establish lines of defense and ensure that their risk management processes also address the risk posed by compromised customer credentials, and also expect financial institutions to maintain sufficient business continuity planning processes to ensure rapid recovery, resumption and maintenance of the institution’s operations after a cyber-attack. If the Company or the Bank fails to meet the expectations set forth in this regulatory guidance, the Company or the Bank could be subject to various regulatory actions and any remediation efforts may require significant resources of the Company or the Bank. In addition, all federal and state banking agencies continue to increase focus on cybersecurity programs and risks as part of regular supervisory exams.

On November 18, 2021, the federal bank regulatory agencies issued a final rule to improve the sharing of information about cybersecurity incidents that may affect the U.S. banking system. The rule requires a banking organization to notify its primary federal regulator of any significant computer-security incident as soon as possible and no later than 36 hours after the banking organization determines that a cybersecurity incident has occurred. Notification is required for incidents that have materially affected or are reasonably likely to materially affect the viability of a banking organization’s operations, its ability

to deliver banking products and services, or the stability of the financial sector. In addition, the rule requires a bank service provider to notify affected banking organization customers as soon as possible when the provider determines that it has experienced a computer-security incident that has materially affected or is reasonably likely to materially affect banking organization customers for four or more hours. The rule became effective on May 1, 2022.

Stress Testing. The federal banking agencies have implemented stress testing requirements for certain large or risky financial institutions, including bank holding companies and state-chartered banks and they emphasize that all banking organizations, regardless of size, should have the capacity to analyze the potential effect of adverse market conditions or outcomes on the organization’s financial condition. Based on existing regulatory guidance, the Company and the Bank are expected to consider the institution’s interest rate risk management, commercial real estate loan concentrations and other credit-related information, and funding and liquidity management during this analysis of adverse market conditions or outcomes.

Call Reports and Examination Cycle. All institutions, regardless of size, submit a quarterly call report that includes data used by federal banking agencies to monitor the condition, performance, and risk profile of individual institutions and the industry as a whole. The EGRRCPA contained provisions expanding the number of regulated institutions eligible to use streamlined call report forms. In June 2019, the federal banking agencies issued a final rule to permit insured depository institutions with total assets of less than $5 billion, such as the Bank, that do not engage in certain complex or international activities to file the most streamlined version of the quarterly call report, and to reduce data reportable on certain streamlined call report submissions.

Federal Home Loan Bank of Atlanta. The Bank is a member of the FHLB of Atlanta, which is one of 11 regional FHLBs that provide funding to their members for making housing loans as well as for affordable housing and community development loans. Each regional FHLB serves as a reserve, or central bank, for the members within its assigned region. Each FHLB makes loans to members in accordance with policies and procedures established by the Board of Directors of the FHLB. As a member, the Bank must purchase and maintain stock in the FHLB. At December 31, 2025, the Bank owned $2.1 million of FHLB stock.

Consumer Financial Protection. The CFPB is the federal regulatory agency that is responsible for implementing, examining and enforcing compliance with federal consumer financial laws for institutions with more than $10 billion of assets and, to a lesser extent, smaller institutions. The CFPB supervises and regulates providers of consumer financial products and services, and has rulemaking authority in connection with numerous federal consumer financial protection laws (for example, but not limited to, the Truth-in-Lending Act (TILA), the Real Estate Settlement Procedures Act (RESPA), the Electronic Funds Transfer Act (EFTA), the Equal Credit Opportunity Act (ECOA), the Home Ownership and Equity Protection Act (HOEPA), the Fair Credit and Reporting Act (FCRA), the Fair Debt Collection Practices Act (FDCPA) and the Home Mortgage Disclosure Act (HMDA)). To comply with these obligations, the Company has implemented appropriate internal practices, procedures, and controls.

Because the Company and the Bank are smaller institutions (i.e., with assets of $10 billion or less), most consumer protection aspects of the Dodd-Frank Act will continue to be applied to the Company by the Federal Reserve Board and to the Bank by the OCC. However, the CFPB may include its own examiners in regulatory examinations by a smaller institution’s principal regulators and may require smaller institutions to comply with certain CFPB reporting requirements. In addition, regulatory positions taken by the CFPB and administrative and legal precedents established by CFPB enforcement activities, including in connection with supervision of larger bank holding companies and banks, could influence how the Federal Reserve Board and OCC apply consumer protection laws and regulations to financial institutions that are not directly supervised by the CFPB. The precise effect of the CFPB’s consumer protection activities on the Company and the Bank cannot be determined with certainty.

During 2025, the CFPB reduced its staff by over 80%. The reduction in force is the subject of litigation, and the staffing cuts are currently stayed pending the federal circuit court’s rehearing of the case. The impact of these developments on banking organizations is uncertain. States and state attorneys general may increase regulatory, investigative and enforcement activity with respect to consumer protection, in response to changes in regulation, supervision and enforcement of consumer protection laws by federal regulators.

Notwithstanding ongoing, legal, budgetary and structural challenges affecting the CFPB, the CFPB remains an active federal regulatory agency with continuing supervisory and enforcement authority and retains its broad authority to pursue enforcement actions, including investigations, civil actions and cease and desist proceedings. The CFPB may also refer civil and criminal findings to the Department of Justice for prosecution. The Bank is also subject to other federal and state

consumer protection laws and regulations that, among other things, prohibit unfair, deceptive and abusive, corrupt or fraudulent business practices, untrue or misleading advertising and unfair competition.

Mortgage Banking Regulation. In connection with making mortgage loans, the Company and the Bank are subject to rules and regulations that, among other things, establish standards for loan origination, prohibit discrimination, provide for inspections and appraisals of property, require credit reports on prospective borrowers, in some cases restrict certain loan features and fix maximum interest rates and fees, require the disclosure of certain basic information to mortgagors concerning credit and settlement costs, limit payment for settlement services to the reasonable value of the services rendered, and require the maintenance and disclosure of information regarding the disposition of mortgage applications based on race, gender, geographical distribution and income level. The Company and the Bank are also subject to rules and regulations that require the collection and reporting of significant amounts of information with respect to mortgage loans and borrowers.

The Company’s and the Bank’s mortgage origination activities are subject to Regulation Z, which implements the TILA. Certain provisions of Regulation Z require creditors to make a reasonable and good faith determination based on verified and documented information that a consumer applying for a mortgage loan has a reasonable ability to repay the loan according to its terms. Creditors are required to determine consumers’ ability to repay in one of two ways. The first alternative requires the creditor to consider the following eight underwriting factors when making the credit decision: (i) current or reasonably expected income or assets; (ii) current employment status; (iii) the monthly payment on the covered transaction; (iv) the monthly payment on any simultaneous loan; (v) the monthly payment for mortgage-related obligations; (vi) current debt obligations, alimony, and child support; (vii) the monthly debt-to-income ratio or residual income; and (viii) credit history. Alternatively, the creditor can originate “qualified mortgages,” which are entitled to a presumption that the creditor making the loan satisfied the ability-to-repay requirements. In general, a “qualified mortgage” is a mortgage loan without negative amortization, interest-only payments, balloon payments, or terms exceeding 30 years. In addition, to be a qualified mortgage, the points and fees paid by a consumer cannot exceed 3% of the total loan amount, and the consumer’s debt-to-income ratio (“DTI”) must be below the prescribed threshold. Qualified mortgages that are “higher-priced” (e.g. subprime loans) garner a rebuttable presumption of compliance with the ability-to-repay rules, while qualified mortgages that are not “higher-priced” (e.g. prime loans) are given a safe harbor of compliance. Small creditors, as described below, may originate qualified mortgages that are not restricted by the specific DTI threshold (however, the DTI must still be considered). Small creditors are those financial institutions that meet the following requirements: (i) have assets below $2 billion (adjustable annually by CFPB); (ii) originated no more than 2 thousand first-lien, closed-end residential mortgages subject to the ability-to-repay requirements in the preceding calendar year; and (iii) hold the qualified mortgage loan in its portfolio after origination. The Company, as a small creditor, does comply with the “qualified mortgage rules” and the other applicable TILA requirements.

Incentive Compensation. The federal banking agencies have issued guidance on sound incentive compensation policies that applies to all banking organizations supervised by the agencies including the Company and the Bank. Pursuant to the guidance, to be consistent with safety and soundness principles, a banking organization’s incentive compensation arrangements should: (i) provide employees with incentives that appropriately balance risk and reward; (ii) be compatible with effective controls and risk management; and (iii) be supported by strong corporate governance including active and effective oversight by the banking organization’s board of directors. Monitoring methods and processes used by a banking organization should be commensurate with the size and complexity of the organization and its use of incentive compensation.

The Dodd-Frank Act required the federal banking agencies and the SEC to establish joint regulations or guidelines for financial institutions, such as the Bank, to prohibit incentive-based payment arrangements that encourage inappropriate risk taking by providing an executive officer, employee, director or principal shareholder with excessive compensation, fees, or benefits or that could lead to material financial loss to the entity. Despite numerous proposals, no regulation has been finalized.

Pursuant to SEC regulations, the Company adopted a “clawback” policy with respect to the recovery of incentive-based compensation paid to current or former executive officers in the event of material noncompliance with any financial reporting requirement under the securities laws. A copy of our clawback policy is included as Exhibit 97 to this Annual Report on 10-K.

The Federal Reserve will review, as part of its standard, risk-focused examination process, the incentive compensation arrangements of financial institutions, such as the Company. These reviews will be tailored to each organization based on the scope and complexity of the organization’s activities and the prevalence of incentive compensation arrangements. Deficiencies will be incorporated into the organization’s supervisory ratings, which can affect the organization’s ability to

make acquisitions and take other actions. Enforcement actions may be taken against a banking organization if its incentive compensation arrangements, or related risk-management control or governance processes, pose a risk to the organization’s safety and soundness and the organization is not taking prompt and effective measures to correct the deficiencies.

Fair Access to Financial Services. In August 2025, President Trump signed Executive Order 14331, “Guaranteeing Fair Banking Access for All Americans,” which states that it is the policy of the United States that no American should be denied access to financial services because of their constitutionally or statutorily protected beliefs, affiliations, or political views. The Executive Order directs the Treasury Secretary and federal banking regulators to address politicized or unlawful debanking activities. In recent years, certain states have also enacted, or have proposed to enact, statutes, regulations or policies that prohibit financial institutions from denying or canceling products or services to a person or business, or otherwise discriminating against a person or business in making available products or services, on the basis of certain social or political factors or other activities.

Artificial Intelligence. The CFPB and other federal regulatory guidance reiterates that creditors are not excused from the adverse action notice requirements under the Equal Credit Opportunity Act if they rely on complex algorithmic underwriting models. States have also started to regulate the use of artificial intelligence technologies. In July 2024, the federal banking agencies, including the OCC, the Federal Reserve, and the FDIC, issued a final rule that requires, among other things, financial institutions to ensure that their automated valuation models for property valuation follow certain quality control standards, including a requirement that such valuation models comply with nondiscrimination laws.

Future Regulation

From time-to-time, various legislative and regulatory initiatives are introduced in Congress and state legislatures, as well as by regulatory agencies. Such initiatives may include proposals to expand or contract the powers of bank holding companies and depository institutions or proposals to substantially change the financial institution regulatory system. Such legislation could change banking statutes and the operating environment of the Company and the Bank in substantial and unpredictable ways. If enacted, such legislation could increase or decrease the cost of doing business, limit or expand permissible activities, or affect the competitive balance among banks, savings associations, credit unions, and other financial institutions. The Company cannot predict whether any such legislation will be enacted, and, if enacted, the effect that it, or any implementing regulations, would have on the financial condition or results of operations of the Company or the Bank.

Effect of Governmental Monetary Policies

The Company’s operations are affected not only by general economic conditions but also by the policies of various regulatory authorities. In particular, the Federal Reserve uses monetary policy tools to impact money market and credit market conditions and interest rates to influence general economic conditions. These policies have a significant impact on overall growth and distribution of loans, investments, and deposits; they affect market interest rates charged on loans or paid for time and savings deposits. Federal Reserve monetary policies have had a significant effect on the operating results of commercial banks, including the Company, in the past and are expected to do so in the future.

Reporting Obligations under Securities Laws; Availability of Information

The Company is subject to the periodic and other reporting requirements of the Exchange Act, including the filing of annual, quarterly and other reports with the SEC. Prior to the Reorganization in 2013, the Bank filed the periodic and annual reports required under the Exchange Act with the OCC. Annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, plus any amendments to these reports, are available, free of charge, on the company's website at www.vnb.com. The Company’s SEC filings are posted and available as soon as reasonably practicable after the reports are filed electronically with the SEC. The information on the Company’s website is not incorporated into this report or any other filing the Company makes with the SEC. The SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov.

Item 1A. RISK FACTORS.

The Company’s business is subject to risk. The following discussion, along with management’s discussion and analysis, the information contained in “Forward-Looking Statements and Factors that Could Affect Future Results,” and the financial statements and footnotes, sets forth the most significant risks and uncertainties that management believes could adversely affect the Company’s future business, financial condition or results of operations, and that investors in the Company’s securities should carefully consider. References to past events in these risk factors are provided by way of example only and are not intended to be a complete listing or a representation as to whether or not such factors have occurred in the past or their likelihood of occurring in the future. Additional risks and uncertainties that management is not aware of or that management currently deems immaterial may also have a material adverse effect on the Company’s business, financial condition or results of operations. There is no assurance that this discussion covers all potential risks that the Company may face.

Credit Risks

The Company’s credit standards and its on-going credit assessment processes might not protect it from significant credit losses.

The Company assumes credit risk by virtue of making loans and extending loan commitments and letters of credit. The Company manages credit risk through a program of underwriting standards, the review of certain credit decisions and a continuous quality assessment process of credit already extended. The Company’s exposure to credit risk is managed through the use of consistent underwriting standards that emphasize local lending while avoiding highly leveraged transactions, as well as excessive industry and other concentrations. The Company’s credit administration function employs risk management techniques to help ensure that problem loans are promptly identified. While these procedures are designed to provide the Company with the information needed to implement policy adjustments where necessary and to take appropriate corrective actions, there can be no assurance that such measures will be effective in avoiding undue credit risk.

The Company’s ACL may be insufficient and any increases in the ACL may have a material adverse effect on the Company’s financial condition and results of operations.

On January 1, 2023, the Company adopted ASC 326, more commonly referred to as "CECL," which replaced prior accounting principles for the recognition of loan losses based on losses that have been incurred with a requirement to record an allowance for credit losses that represents expected credit losses over the lifetime of all loans in the Company’s portfolio. Under ASC 326, the Company’s estimate of expected credit losses is based on reasonable and supportable forecasts of future economic conditions and loan performance.

The level of the ACL reflects management’s evaluation of the level of loans outstanding, the level of nonperforming loans, historical loan loss experience, delinquency trends, underlying collateral values, the amount of actual losses charged to the reserve in a given period and assessment of present and anticipated economic conditions. The determination of the appropriate level of the ACL inherently involves a high degree of subjectivity and requires the Company to make significant estimates of credit risks and future trends, all of which could undergo material changes. Although the Company believes the ACL is a reasonable estimate of known and inherent losses in the loan portfolio, it cannot precisely predict such losses or be certain that the ACL will be adequate in the future. Deterioration of economic conditions affecting borrowers, new information regarding existing loans, identification of additional problem loans and other factors, both within and outside the Company’s control, may require an increase in the ACL. In addition, bank regulatory agencies and the Company’s auditors periodically review its ACL and may require an increase in the provision for credit losses or the recognition of further loan charge-offs, based on judgments different from those of management.

The Company’s focus on lending to small to mid-sized community-based businesses may increase its credit risk.

Most of the Company’s commercial business and commercial real estate loans are made to small and mid-sized businesses and 501(c)3 organizations. These businesses generally have fewer financial resources in terms of capital or borrowing capacity than larger entities and have a heightened vulnerability to economic conditions. If general economic conditions in the market areas in which the Company operates negatively impact this important customer sector, the Company’s results of operations and financial condition may be adversely affected. Moreover, a portion of these loans have been made by the Company in recent years and the borrowers may not have experienced a complete business or economic cycle. Any deterioration of the borrowers’ businesses may hinder their ability to repay their loans with the Company, which could have a material adverse effect on its financial condition and results of operations. Steps to mitigate such risks include underwriting multiple sources of repayment, including but not limited to, business cash flow, personal guarantees, collateral, and government guarantees, where applicable. Although the Company has taken these mitigation steps, there is no guarantee that such practices will be effective to prevent the increased credit risk.

The Company’s concentration in loans secured by real estate may increase its future credit losses, which would negatively affect the Company’s financial results.

The Company offers a variety of secured loans, including commercial lines of credit, commercial term loans, real estate, construction, home equity, consumer and other loans. Credit risk and credit losses can increase if its loans are concentrated to borrowers who, as a group, may be uniquely or disproportionately affected by economic or market conditions. As of December 31, 2025, approximately 76.4% of the Company’s loans are secured by real estate, both residential and commercial. The Company has established concentration limits that are regularly monitored by management and reported to the Board. A major change in the real estate market in the regions in which the Company operates, resulting in a deterioration in real estate values, or in the local or national economy, could adversely affect the Company’s customers’ ability to pay these loans, which in turn could adversely impact the Company. Risk of loan defaults and foreclosures are inherent in the banking industry, and the Company tries to limit its exposure to this risk by carefully underwriting and monitoring its extensions of credit. The Company cannot fully eliminate credit risk, and as a result, credit losses may occur in the future.

The Company has a moderate concentration of credit exposure in commercial real estate and loans with this type of collateral are viewed as having higher risk of default.

As of December 31, 2025, the Company had approximately $496.5 million in loans secured by non-owner occupied commercial real estate, which represented approximately 40.1% of total loans outstanding at that date and 247% of regulatory capital. Such category of loans consists of $333.7 million of non-owner occupied commercial real estate, $127.8 million of multifamily and $35.0 million of construction, land development and other land loans. These types of loans are generally viewed as having higher risk of default than residential real estate loans. They are also typically larger than residential real estate loans and consumer loans and depend on cash flows from the property to service the debt, successful completion of construction projects and, for development loans, sale of the underlying asset. It may be more difficult for commercial real estate borrowers to repay their loans in a timely manner, as commercial real estate borrowers’ abilities to repay their loans frequently depend on the successful rental of their properties. Some degree of instability in the commercial real estate markets is expected in the coming quarters as loans are refinanced in markets with higher vacancy rates under current economic conditions. The outlook for commercial real estate remains dependent on the broader economic environment and, specifically, how major subsectors respond to a higher interest rate environment and higher prices for commodities, goods and services. Cash flows may be affected significantly by general economic conditions, and a sustained downturn in the local economy or in occupancy rates in the local economy where the property is located could increase the likelihood of default. Because the Company’s loan portfolio contains a number of commercial real estate loans with relatively large balances, the deterioration of one or a few of these loans could cause a significant increase in its percentage of nonperforming loans. An increase in nonperforming loans could result in a loss of earnings from these loans, an increase in the provision for credit losses and an increase in charge-offs, all of which could have a material adverse effect on the Company’s financial condition. The Company’s banking regulators generally give commercial real estate lending greater scrutiny and may require banks with higher levels of commercial real estate loans to implement improved underwriting, internal controls, risk management policies and portfolio stress testing, as well as possibly higher levels of ACL and capital as a result of commercial real estate lending growth and exposures, which could have a material adverse effect on the Company’s results of operations. Steps to mitigate such risks include underwriting multiple sources of repayment, including but not limited to, business cash flow, personal guarantees, collateral, and government guarantees, where applicable. In addition, the Company has established concentration limits that are regularly monitored by management and reported to

the Board. Although the Company has taken these mitigation steps, there is no guarantee that such practices will be effective to prevent the increased credit risk.

The Company’s results of operations are significantly affected by the ability of borrowers to repay their loans.

A significant source of risk for the Company is the possibility that losses will be sustained because borrowers, guarantors and related parties may fail to perform in accordance with the terms of their loan agreements. Most of the Company’s loans are secured but some loans are unsecured. With respect to the secured loans, the collateral securing the repayment of these loans may be insufficient to cover the obligations owed under such loans. Collateral values may be adversely affected by changes in economic, environmental and other conditions, declines in the value of real estate, changes in interest rates, changes in monetary and fiscal policies of the federal government, terrorist activity, environmental contamination and other external events. In addition, collateral appraisals that are out of date or that do not meet industry-recognized standards may create the impression that a loan is adequately collateralized when it is not. The Company has adopted underwriting and credit monitoring procedures and policies, including regular reviews of appraisals and borrower financial statements, that management believes are appropriate to mitigate the risk of loss. An increase in nonperforming loans could result in a net loss of earnings from these loans, an increase in the provision for credit losses and an increase in loan charge-offs, all of which could have a material adverse effect on the Company’s financial condition and results of operations.

Market Risks

The Company may be adversely impacted by changes in market conditions.

The Company is directly and indirectly affected by changes in market conditions. Market risk generally represents the risk that values of assets and liabilities or revenues will be adversely affected by changes in market conditions. As a financial institution, market risk is inherent in the financial instruments associated with the Company’s operations and activities, including loans, deposits, securities, and short-term borrowings. A few of the market conditions that may shift from time-to-time, thereby exposing the Company to market risk, include fluctuations in interest rates, equity and futures prices, and price deterioration or changes in value due to changes in market perception or actual credit quality of issuers. The Company’s investment securities portfolio, in particular, may be impacted by market conditions beyond its control, including rating agency downgrades of the securities, defaults of the issuers of the securities, lack of market pricing of the securities, and inactivity or instability in the credit markets. Any changes in these conditions, in current accounting principles or interpretations of these principles could impact the Company’s assessment of fair value and thus the determination of the need for an allowance for credit loss on securities in the investment securities portfolio, which could adversely affect the Company’s earnings and capital ratios.

Weaknesses in economic or market conditions, or adverse developments in the financial services industry, could pose challenges for the Company and could adversely affect the results of operations, liquidity, and financial condition.

Deterioration in, or uncertain, economic conditions could adversely affect the Company’s business which is directly affected by general economic and market conditions; broad trends in industry and finance; legislative and regulatory changes; changes in governmental monetary and fiscal policies, including trade policies and tariffs; and inflation, all of which are beyond the Company’s control. Prolonged periods of inflation may impact profitability by negatively impacting fixed costs and expenses, including increasing funding costs and expense related to talent acquisition and retention, and negatively impacting the demand for products and services. Additionally, inflation may lead to a decrease in consumer and commercial purchasing power and an increase in default rates on loans. Any deterioration in economic conditions, in particular a prolonged economic slowdown within the Company’s geographic region or a broader disruption in the economy, possibly as a result of a pandemic or other widespread public health emergency, acts of terrorism, or outbreak of domestic or international hostilities (including the ongoing military conflicts between Russia and Ukraine and in the Middle East), or unanticipated events in the banking industry, such as high-profile bank failures in 2023, could result in the following consequences, any of which could hurt business materially: declines in real estate values and home sales and increases in the financial stress on borrowers and unemployment rates, all of which could lead to increases in loan delinquencies, problem assets and foreclosures, and a deterioration in the value of collateral for loans made by the Company's various business segments; an increase in the level of loan losses exceeding the level the Company has provided in its ACL, which would reduce the Company’s earnings; a decline in demand for the Company's products and services; changes in the fair value of financial instruments held by the Company or its subsidiaries; or declines in available sources or amounts of liquidity and funding. Events in the financial services industry, such as the high-profile bank failures in 2023, may also cause concern and uncertainty about the financial services industry generally, which may result in sudden deposit outflows, increased

borrowing and funding costs, and increased competition for liquidity, any of which could have a material adverse impact on the Company’s business, financial condition, and results of operations.

Inflation can have an adverse impact on the Company’s business and on its customers.

During 2022, the United States experienced the highest level of inflation since the 1980s. In response, the Federal Reserve increased the federal funds target rate at the fastest pace in over 40 years, increasing 425 bps during 2022 and an additional 100 bps in 2023, before declining during 2024 and 2025. Price-wage inflation may cause the Company to give higher than normal raises to employees and start new employees at a higher wage. Furthermore, the Company’s customers are also affected by inflation and the rising costs of goods and services used in their households and businesses, which could have a negative impact on their ability to repay their loans with the Company. As market interest rates rise, the value of the Company’s investment securities generally decreases, although this effect can be less pronounced for floating rate instruments. Higher interest rates reduce the demand for loans and increase the attractiveness of alternative investment and savings products, like U.S. Treasury securities and money market funds, which can make it difficult to attract and retain deposits.

The Company’s business is subject to interest rate risk, and variations in interest rates and inadequate management of interest rate risk may negatively affect financial performance.

Changes in the interest rate environment may reduce the Company’s profits. It is expected that the Company will continue to realize income from the differential or “spread” between the interest earned on loans, securities, and other interest-earning assets, and interest paid on deposits, borrowings and other interest bearing liabilities. Net interest spreads are affected by the difference between the maturities and repricing characteristics of interest-earning assets and interest bearing liabilities. In addition, loan volume and yields are affected by market interest rates on loans, and the current interest rate environment encourages extreme competition for new loan originations from qualified borrowers. The Company’s management cannot ensure that it can minimize interest rate risk. If the interest rates paid on deposits and other borrowings increase at a faster rate than the interest rates received on loans and other investments, the Company’s net interest income, and therefore earnings, could be adversely affected. Earnings could also be adversely affected if the interest rates received on loans and other investments fall more quickly than the interest rates paid on deposits and other borrowings. Accordingly, changes in levels of market interest rates could materially and adversely affect the net interest spread, asset quality, loan origination volume and the Company’s overall profitability.

The Company relies upon independent appraisals to determine the value of the real estate that secures a significant portion of its loans and the value of any foreclosed properties that may be carried on its books, and the values indicated by such appraisals may not be realizable if it is forced to foreclose upon such loans or liquidate such foreclosed property.

As indicated above, a significant portion of the Company’s loan portfolio consists of loans secured by real estate and it may also hold foreclosed properties from time-to-time. The Company relies upon independent appraisers to estimate the value of such real estate. Appraisals are only estimates of value and the independent appraisers may make mistakes of fact or judgment that adversely affect the reliability of their appraisals. In addition, events occurring after the initial appraisal may cause the value of the real estate to increase or decrease. As a result of any of these factors, the real estate securing some of the Company’s loans and any foreclosed properties that may be held by the Company may be more or less valuable than anticipated. If a default occurs on a loan secured by real estate that is less valuable than originally estimated, the Company may not be able to recover the outstanding balance of the loan. It may also be unable to sell any foreclosed properties for the values estimated by their appraisals. The Company had no foreclosed property as of December 31, 2025 or December 31, 2024.

Liquidity Risks

The Company’s liquidity needs could adversely affect results of operations and financial condition.

The Company’s primary sources of funds are deposits and loan repayments. While scheduled loan repayments are a relatively stable source of funds, they are subject to the ability of borrowers to repay the loans. The ability of borrowers to repay loans can be adversely affected by a number of factors, including, but not limited to, changes in economic conditions, adverse trends or events affecting business industry groups, reductions in real estate values or markets, availability of, and/or access to, sources of refinancing, business closings or lay-offs, pandemics or endemics, inclement weather, natural disasters and international instability. Deposit levels may be affected by a number of factors, including, but not limited to, rates paid by competitors, general interest rate levels, regulatory capital requirements, returns available to customers on alternative investments and general economic conditions. Additionally, negative news about the Company or the banking industry in general could negatively impact market and/or customer perceptions of the Company, which could lead to a loss of depositor confidence and an increase in deposit withdrawals, particularly among those with uninsured deposits. Furthermore, as many regional banking organizations experienced in 2023, the failure of other financial institutions may cause deposit outflows as customers spread deposits among several different banks so as to maximize their amount of FDIC insurance, move deposits to banks deemed “too big to fail” or remove deposits from the banking system entirely. As of December 31, 2025, approximately 27.4% of the Company's deposits were uninsured and the Company relies on these deposits for liquidity. Accordingly, the Company may be required from time-to-time to rely on secondary sources of liquidity to meet withdrawal demands or otherwise fund operations. Such sources include FHLB advances, sales of securities and loans, federal funds lines of credit from correspondent banks and borrowings from the Federal Reserve Discount Window, as well as additional out-of-market time deposits and brokered deposits. While the Company believes that these sources are currently adequate, there can be no assurance they will be sufficient or available to meet future liquidity demands, particularly if the Company continues to grow and experiences increasing loan demand. The Company may be required to slow or discontinue loan growth, capital expenditures or other investments, or liquidate assets should such sources not be adequate.

The Company may need to raise additional capital in the future and may not be able to do so on acceptable terms, or at all.

Access to sufficient capital is critical in order to enable the Company to implement its business plan, support its business, expand its operations and meet applicable capital requirements. The inability to have sufficient capital, whether internally generated through earnings or raised in the capital markets, could adversely impact the Company’s ability to support and to grow its operations. If the Company grows its operations faster than it generates capital internally, it will need to access the capital markets. The Company may not be able to raise additional capital in the form of additional debt or equity on acceptable terms, or at all. The Company’s ability to raise additional capital, if needed, will depend on, among other things, conditions in the capital markets at that time, the Company’s financial condition and its results of operations. Economic conditions and a loss of confidence in financial institutions may increase the Company’s cost of capital and limit access to some sources of capital. Further, if the Company needs to raise capital in the future, it may have to do so when many other financial institutions are also seeking to raise capital and would then have to compete with those institutions for investors. An inability to raise additional capital on acceptable terms when needed could have a material adverse impact on the Company’s business, financial condition and results of operations.

Strategic Risks

The Company faces strong and growing competition from financial institutions and other companies that offer banking and other financial services, which could negatively affect the Company’s business.

The Company encounters substantial competition from other financial institutions in its market area and competition is increasing. Ultimately, the Company may not be able to compete successfully against current and future competitors. Many competitors offer the same banking services that the Company offers in its service area. These competitors include national, regional and community banks. The Company also faces competition from many other types of financial services companies, including finance companies, mutual and money market fund providers, brokerage firms, insurance companies, credit unions, financial subsidiaries of certain industrial corporations and financial technology companies. Increased competition may result in reduced business for the Company.

Additionally, banks and other financial institutions with larger capitalization and financial intermediaries not subject to bank regulatory restrictions have larger lending limits and are thereby able to serve the credit needs of larger customers. Areas of competition include interest rates for loans and deposits, efforts to obtain loans and deposits, and range and quality of products and services provided, including new technology-driven products and services. If the Company is unable to attract and retain banking customers, it may be unable to continue to grow loan and deposit portfolios and its results of operations and financial condition may otherwise be adversely affected.

The Company may not be able to successfully manage its long-term growth, which may adversely affect its results of operations and financial condition.

The Company’s ability to continue to grow depends, in part, upon its ability to (i) open new branch offices or acquire existing branches or other financial institutions, (ii) attract deposits to those locations, and (iii) identify attractive loan and investment opportunities.

The Company may not be able to successfully implement its growth strategy if it is unable to identify attractive markets, locations or opportunities to expand in the future, or if the Company is subject to regulatory restrictions on growth or expansion of its operations. The Company’s ability to manage its growth successfully also will depend on whether it can maintain capital levels adequate to support its growth, maintain cost controls and asset quality and successfully integrate any businesses the Company acquires into its organization. As the Company identifies opportunities to implement its growth strategy by opening new branches or acquiring branches or other banks, it may incur increased personnel, occupancy and other operating expenses. In the case of new branches, the Company must absorb those higher expenses while it begins to generate new deposits, and there is a further time lag involved in redeploying new deposits into attractively priced loans and other higher yielding assets.

The Company may consider acquiring other businesses or expanding into new product lines that it believes will help it fulfill its strategic objectives. The Company expects that other banking and financial companies, some of which have significantly greater resources, will compete with it to acquire financial services businesses. This competition could increase prices for potential acquisitions that the Company believes are attractive. Acquisitions may also be subject to various regulatory approvals. If the Company fails to receive the appropriate regulatory approvals, it will not be able to consummate acquisitions that it believes are in its best interests.

When the Company enters into new markets or new lines of business, its lack of history and familiarity with those markets, customers and lines of business may lead to unexpected challenges or difficulties that inhibit its success. The Company’s plans to expand could depress earnings in the short run, even if it efficiently executes a growth strategy leading to long-term financial benefits.

Operational Risks

The Company is subject to a variety of operational risks, including reputational risk, legal and compliance risk, and the risk of fraud or theft by employees or outsiders.

The Company is exposed to many types of operational risks, including reputational risk, legal and compliance risk, the risk of fraud or theft by employees or outsiders, unauthorized transactions by employees, operational errors, clerical or record-keeping errors, and errors resulting from faulty or disabled computer or communications systems.

Reputational risk, or the risk to the Company’s earnings and capital from negative public opinion, could result from the Company’s actual or alleged conduct in any number of activities, including lending practices, corporate governance, and from actions taken by government regulators and community organizations in response to those activities. Negative public opinion can adversely affect the Company’s ability to attract and keep customers and employees and can expose it to litigation and regulatory action.

Further, if any of the Company’s financial, accounting, or other data processing systems fail or have other significant issues, the Company could be adversely affected. The Company depends on internal systems and outsourced technology to support these data storage and processing operations. The Company’s inability to use or access these information systems at critical points in time could unfavorably impact the timeliness and efficiency of the Company’s business operations. It could be adversely affected if one of its employees causes a significant operational break-down or failure, either as a result of human error or where an individual purposefully sabotages or fraudulently manipulates its operations or systems. The Company is also at risk of the impact of natural disasters, terrorism and international hostilities on its systems and from the effects of outages or other failures involving power or communications systems operated by others. The Company may also be subject to disruptions of its operating systems arising from events that are wholly or partially beyond its control (for example, computer viruses or electrical or communications outages), which may give rise to disruption of service to customers and to financial loss or liability. In addition, there have been instances where financial institutions have been victims of fraudulent activity in which criminals pose as customers to initiate wire and automated clearinghouse transactions out of customer accounts. Although the Company has policies and procedures in place to verify the authenticity of its customers, it cannot guarantee that such policies and procedures will prevent all fraudulent transfers. Such activity can result in financial liability and harm to the Company’s reputation. If any of the foregoing risks materialize, it could have a material adverse effect on the Company’s business, financial condition and results of operations.

Failure to maintain effective systems of internal and disclosure control could have a material adverse effect on the Company’s results of operation and financial condition.

Effective internal and disclosure controls are necessary for the Company to provide reliable financial reports and effectively prevent fraud and to operate successfully as a public company. The Company is also required to establish and maintain an adequate internal control structure over financial reporting pursuant to regulations of the FDIC. As a public company, the Company is required by the Sarbanes-Oxley Act to design and maintain a system of internal control over financial reporting and include management’s assessment regarding internal control over financial reporting. If the Company cannot provide reliable financial reports or prevent fraud, its reputation and operating results would be harmed. As part of the Company’s ongoing monitoring of internal control, it may discover material weaknesses or significant deficiencies in its internal control that require remediation. A “material weakness” is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company’s annual or interim financial statements will not be prevented or detected on a timely basis.

The Company’s inability to maintain the operating effectiveness of the controls described above could result in a material misstatement to the Company’s financial statements or other disclosures, which could have an adverse effect on its business, financial condition or results of operations. In addition, any failure to maintain effective controls or to timely effect any necessary improvement of the Company’s internal and disclosure controls could, among other things, result in losses from fraud or error, harm the Company’s reputation or cause investors to lose confidence in its reported financial information, all of which could have a material adverse effect on its results of operation and financial condition.

The Company depends on the accuracy and completeness of information about customers and counterparties, and the Company’s financial condition could be adversely affected if it relies on misleading or incorrect information.

In deciding whether to extend credit or to enter into other transactions with customers and counterparties, the Company may rely on information furnished to it by or on behalf of customers and counterparties, including financial statements and other financial information, which it does not independently verify. The Company also may rely on representations of customers and counterparties as to the accuracy and completeness of that information and, with respect to financial statements, on reports of independent auditors. For example, in deciding whether to extend credit to customers, the Company may assume that a customer’s audited financial statements conform with GAAP and present fairly, in all material respects, the financial condition, results of operations and cash flows of that customer. The Company’s financial condition and results of operations could be negatively impacted to the extent it relies on financial statements that do not comply with GAAP or are materially misleading.

The Company’s success depends on its management team, and the unexpected loss of any of these personnel could adversely affect operations.

The Company’s success is, and is expected to remain, highly dependent on its management team. This is particularly true because, as a community bank, the Company depends on the management team’s ties to the community and customer relationships to generate business. The Company’s growth will continue to place significant demands on management, and the loss of any such person’s services may have an adverse effect upon growth and profitability. If the Company fails to retain or continue to recruit qualified employees, growth and profitability could be adversely affected.

The Company relies on other companies to provide key components of its business infrastructure.

Third parties provide key components of the Company’s business operations such as data processing, recording and monitoring transactions, online banking interfaces and services, internet connections and network access. While the Company has performed due diligence and selected these third-party vendors carefully, it does not control their actions. Any problem caused by these third parties, including poor performance of services, failure to provide services, disruptions in communication services provided by a vendor and failure to handle current or higher volumes, could adversely affect the Company’s ability to deliver products and services to its customers and otherwise conduct its business, and may harm its reputation. Financial or operational difficulties of a third-party vendor could also hurt the Company’s operations if those difficulties interfere with the vendor’s ability to serve the Company. Replacing these third-party vendors could also create significant delay and expense. Accordingly, use of such third-parties creates an unavoidable inherent risk to the Company’s business operations.

The soundness of other financial institutions could adversely affect the Company.

The Company’s ability to engage in routine funding transactions could be adversely affected by the actions and commercial soundness of other financial institutions. Financial services institutions are interrelated as a result of trading, clearing, counterparty or other relationships. The Company has exposure to many different industries and counterparties, and routinely executes transactions with counterparties in the financial industry. As a result, defaults by, or even rumors or questions about, one or more financial services institutions, or the financial services industry generally, have led to market-wide liquidity problems and could lead to losses or defaults by the Company or by other institutions. Many of these transactions expose the Company to credit risk in the event of default of its counterparty or customer. In addition, credit risk may be exacerbated when the collateral held cannot be realized upon or is liquidated at prices insufficient to recover the full amount of the financial instrument exposure due. There is no assurance that any such losses would not materially and adversely affect results of operations.

The Company’s operations may be adversely affected by cybersecurity risks.

In the ordinary course of business, the Company collects and stores sensitive data, including proprietary business information and personally identifiable information related to its customers and employees in systems and on networks. The secure processing, maintenance, and use of this information is critical to operations and the Company’s business strategy. The Company has invested in accepted technologies, and continually reviews processes and practices that are designed to protect its networks, computers, and data from damage or unauthorized access. Despite these security measures, the Company’s computer systems and infrastructure may be vulnerable to attacks by hackers or breached due to employee error, malfeasance or other disruptions. A breach of any kind could compromise systems and the information stored there could be accessed, damaged or disclosed. A breach in security could result in legal claims, regulatory penalties, disruption in operations, and damage to the Company’s reputation, which could adversely affect its business and financial condition. Furthermore, as cyber threats continue to evolve and increase, the Company may be required to expend significant

additional financial and operational resources to modify or enhance its protective measures, or to investigate and remediate any identified information security vulnerabilities.

In addition, multiple major U.S. retailers have experienced data systems incursions reportedly resulting in the thefts of credit and debit card information, online account information and other financial or privileged data. Retailer incursions affect cards issued and deposit accounts maintained by many banks, including the Bank. Although the Company’s systems are not breached in retailer incursions, these events can cause it to reissue a significant number of cards and take other costly steps to avoid significant theft loss to the Company and its customers. In some cases, the Company may be required to reimburse customers for the losses they incur. Other possible points of intrusion or disruption not within the Company’s control include internet service providers, electronic mail portal providers, social media portals, distant-server (cloud) service providers, electronic data security providers, data processing service providers, telecommunications companies, and smart phone manufacturers.

Consumers may increasingly decide not to directly use banks to complete their financial transactions, which would have a material adverse impact on the Company’s financial condition and operations.

Technology and other changes are allowing parties to complete financial transactions through alternative methods that historically have involved banks. For example, consumers can now maintain funds that would have historically been held as bank deposits in brokerage accounts, mutual funds, general-purpose reloadable prepaid cards, or in other types of assets, including cryptocurrencies or other digital assets. Consumers can also complete transactions such as paying bills or transferring funds directly without the assistance of banks. The process of eliminating banks as intermediaries, known as “disintermediation,” could result in the loss of fee income, as well as the loss of customer deposits and the related income generated from those deposits. The loss of these revenue streams and the loss of deposits as a lower cost source of funds could have a material adverse effect on the Company's financial condition and results of operations.

The Company’s ability to operate profitably may be dependent on its ability to integrate or introduce various technologies into its operations.

The market for financial services, including banking and consumer finance services, is increasingly affected by advances in technology, including developments in telecommunications, data processing, computers, automation, online banking and tele-banking. The Company’s ability to compete successfully in its market may depend on the extent to which it is able to implement or exploit such technological changes. If the Company is not able to afford such technologies, properly or timely anticipate or implement such technologies, or effectively train its staff to use such technologies, its business, financial condition or operating results could be adversely affected.

The development and use of Artificial Intelligence (“AI”) presents risks and challenges that may adversely impact the Company’s business.

The Company or its third-party vendors, clients, or counterparties may develop or incorporate AI technology in certain business processes, services, or products. The development and use of AI presents a number of risks and challenges to the Company’s business. The legal and regulatory environment relating to AI is uncertain and rapidly evolving, and includes regulatory schemes targeted specifically at AI as well as provisions in intellectual property, privacy, consumer protection, employment, and other laws applicable to the use of AI. These evolving laws and regulations could require changes in the Company’s implementation of AI technology and increase the Company’s compliance costs and the risk of non-compliance. AI models, particularly generative AI models, may produce output or take action that is incorrect, that reflects biases included in the data on which they are trained, that results in the release of private, confidential, or proprietary information, that infringes on the intellectual property rights of others, or that is otherwise harmful. In addition, the complexity of many AI models makes it difficult to understand why they are generating particular outputs. This limited transparency increases the challenges associated with assessing the proper operation of AI models, understanding and monitoring the capabilities of the AI models, reducing erroneous outputs, eliminating bias, and complying with regulations that require documentation or explanation of the basis on which decisions are made. Further, the Company may rely on AI models developed by third parties, and, to that extent, would be dependent in part on the manner in which those third parties develop and train their models, including risks arising from the inclusion of any unauthorized material in the training data for their models and the effectiveness of the steps these third parties have taken to limit the risks associated with the output of their models, matters over which the Company may have limited visibility. Any of these risks could expose the Company to liability or adverse legal or regulatory consequences and harm the Company’s reputation and the public perception of its business or the effectiveness of its security measures.

Legal, Regulatory and Compliance Risks

The Company operates in a highly regulated industry and the laws and regulations that govern the Company’s operations, corporate governance, executive compensation and financial accounting, or reporting, including changes in them or the Company’s failure to comply with them, may adversely affect the Company.

The Company is subject to extensive regulation and supervision that govern almost all aspects of its operations. These laws and regulations, among other matters, prescribe minimum capital requirements, impose limitations on the Company’s business activities, limit the dividends or distributions that it can pay, restrict the ability of institutions to guarantee its debt and impose certain specific accounting requirements that may be more restrictive and may result in greater or earlier charges to earnings or reductions in its capital than GAAP. Compliance with laws and regulations can be difficult and costly, and changes to laws and regulations often impose additional compliance costs.

The Dodd-Frank Act instituted major changes to the banking and financial institutions regulatory regimes. Other changes to statutes, regulations or regulatory policies or supervisory guidance, including changes in interpretation or implementation of statutes, regulations, policies or supervisory guidance, could affect the Company in substantial and unpredictable ways. Additional regulation and supervision has increased, and may continue to increase, the Company’s costs and limit its ability to pursue business opportunities. Further, the Company’s failure to comply with these laws and regulations, even if the failure was inadvertent or reflects a difference in interpretation, could subject it to restrictions on its business activities, fines and other penalties, any of which could adversely affect the Company’s results of operations, capital base and the price of its securities. Further, any new laws, rules and regulations could make compliance more difficult or expensive or otherwise adversely affect the Company’s business and financial condition.

Changes in accounting standards could impact reported earnings.

The authorities that promulgate accounting standards, including the FASB, the SEC and other regulatory authorities, periodically change the financial accounting and reporting standards that govern the preparation of the Company’s Consolidated Financial Statements. These changes are difficult to predict and can materially impact how the Company records and reports its financial condition and results of operations. In some cases, the Company could be required to apply a new or revised standard retroactively, resulting in the restatement of financial statements for prior periods. Such changes could also require the Company to incur additional personnel or technology costs.

The Company is subject to laws regarding the privacy, information security and protection of personal information and any violation of these laws or another incident involving personal, confidential or proprietary information of individuals could damage the Company’s reputation and otherwise adversely affect its business.

The Company’s business requires the collection and retention of large volumes of customer data, including PII in various information systems that the Company maintains and in those maintained by third party service providers. The Company also maintains important internal company data such as PII about its employees and information relating to its operations. The Company is subject to complex and evolving laws and regulations governing the privacy and protection of PII of individuals (including customers, employees and other third-parties). For example, the Company’s business is subject to the Gramm-Leach-Bliley Act of 1999, which, among other things: (i) imposes certain limitations on the Company’s ability to share nonpublic PII about its customers with nonaffiliated third parties; (ii) requires that the Company provides certain disclosures to customers about its information collection, sharing and security practices and affords customers the right to “opt out” of any information sharing by it with nonaffiliated third parties (with certain exceptions); and (iii) requires that the Company develops, implements and maintains a written comprehensive information security program containing appropriate safeguards based on the Company’s size and complexity, the nature and scope of its activities, and the sensitivity of customer information it processes, as well as plans for responding to data security breaches. Various federal and state banking regulators and states have also enacted data breach notification requirements with varying levels of individual, consumer, regulatory or law enforcement notification in the event of a security breach. Ensuring that the Company’s collection, use, transfer and storage of PII complies with all applicable laws and regulations can increase the Company’s costs. Furthermore, the Company may not be able to ensure that customers and other third parties have appropriate controls in place to protect the confidentiality of the information that they exchange with the Company, particularly where such information is transmitted by electronic means. If personal, confidential or proprietary information of customers or others were to be mishandled or misused, the Company could be exposed to litigation or regulatory sanctions under privacy and data protection laws and regulations. Concerns regarding the effectiveness of the Company’s measures to safeguard PII, or even the perception that such measures are inadequate, could cause the Company to lose customers or potential customers and thereby reduce its revenues. Accordingly, any failure, or perceived failure, to comply with applicable privacy or data protection laws and regulations may subject the Company to inquiries, examinations and

investigations that could result in requirements to modify or cease certain operations or practices or in significant liabilities, fines or penalties, and could damage the Company’s reputation and otherwise adversely affect its operations, financial condition and results of operations.

The Company’s business and earnings are impacted by governmental, fiscal and monetary policy over which it has no control.

The Company is affected by domestic monetary policy. The Federal Reserve regulates the supply of money and credit in the United States, and its policies determine in large part the Company’s cost of funds for lending, investing and capital raising activities and the return it earns on those loans and investments, both of which affect the Company’s net interest margin. The actions of the Federal Reserve also can materially affect the value of financial instruments that the Company holds, such as loans and debt securities, and also can affect the Company’s borrowers, potentially increasing the risk that they may fail to repay their loans. The Company’s business and earnings also are affected by the fiscal or other policies that are adopted by various regulatory authorities of the United States. Changes in fiscal or monetary policy are beyond the Company’s control and hard to predict.

Risks Related to the Company’s Common Stock

The Company is not obligated to pay dividends and its ability to pay dividends is limited.

The Company’s ability to make dividend payments on its common stock depends primarily on certain regulatory considerations and the receipt of dividends and other distributions from the Bank. There are various regulatory restrictions on the ability of banks, such as the Bank, to pay dividends or make other payments to their holding companies. The Company is currently paying a quarterly cash dividend to holders of its common stock at a rate of $0.36 per share. Although the Company has paid a quarterly cash dividend to the holders of its common stock since July 2013, holders of its common stock are not entitled to receive dividends, and the Company is not obligated to pay dividends in any particular amounts or at any particular times. Regulatory, economic and other factors may cause the Company’s Board to consider, among other things, the reduction of dividends paid on its common stock.

Future issuances of the Company’s common stock could adversely affect the market price of the common stock and could be dilutive.

The Company’s Board, without the approval of shareholders, could from time-to-time decide to issue additional shares of common stock or shares of preferred stock, which may adversely affect the market price of the shares of common stock and could be dilutive to the Company’s shareholders. Any sale of additional shares of the Company’s common stock may be at prices lower than the current market value of the Company’s shares. In addition, new investors may have rights, preferences and privileges that are senior to, and that could adversely affect, the Company’s existing shareholders. For example, preferred stock would be senior to common stock in right of dividends and as to distributions in liquidation. The Company cannot predict or estimate the amount, timing, or nature of its future offerings of equity securities. Thus, the Company’s shareholders bear the risk of future offerings diluting their stock holdings, adversely affecting their rights as shareholders, and/or reducing the market price of the Company’s common stock.

An investment in the Company’s common stock is not an insured deposit.

The Company’s common stock is not a bank deposit and, therefore, it is not insured against loss by the FDIC or by any other public or private entity. An investment in the Company’s common stock is inherently risky for the reasons described in this “Risk Factors” section and elsewhere in this report and is subject to the same market forces that affect the price of common stock in any company and, as a result, shareholders may lose some or all of their investment.

The Company qualifies as a “smaller reporting company,” and the reduced disclosure obligations applicable to smaller reporting companies may make its common stock less attractive to investors.

The Company is a “smaller reporting company” as defined in federal securities laws. Smaller reporting companies have reduced disclosure obligations, such as an exemption from providing selected financial data and an ability to provide simplified executive compensation information and only two years of audited financial statements. If some investors find the Company’s common stock less attractive because the Company may rely on these reduced disclosure obligations, there may be a less active trading market for its common stock and its stock price may be more volatile.

While the Company’s common stock is currently listed on the Nasdaq Capital Market, it has less liquidity than stocks for larger companies listed on national securities exchanges.

The trading volume in the Company’s common stock on the Nasdaq Capital Market has been relatively low when compared with larger companies listed on national securities exchanges. There is no assurance that a more active and liquid trading market for the common stock will exist in the future. Consequently, shareholders may not be able to sell a substantial number of shares for the same price at which shareholders could sell a smaller number of shares. In addition, the Company cannot predict the effect, if any, that future sales of its common stock in the market, or the availability of shares of common stock for sale in the market, will have on the market price of the common stock. Sales of substantial amounts of common stock in the market, or the potential for large amounts of sales in the market, could cause the price of the Company’s common stock to decline, or reduce the Company’s ability to raise capital through future sales of common stock.

General Risk Factors

The Company is exposed to risk of environmental liabilities with respect to properties to which it takes title.

In the course of its business, the Company may foreclose and take title to real estate, potentially becoming subject to environmental liabilities associated with the properties. The Company may be held liable to a governmental entity or to third parties for property damage, personal injury, investigation and clean-up costs or the Company may be required to investigate or clean up hazardous or toxic substances or chemical releases at a property. Costs associated with investigation or remediation activities can be substantial. If the Company is the owner or former owner of a contaminated site, it may be subject to common law claims by third parties based on damages and costs resulting from environmental contamination emanating from the property. These costs and claims could adversely affect the Company’s business.

Severe weather, earthquakes, other natural disasters, pandemics, endemics, acts of war or terrorism and other external events could significantly impact the Company's business.

Severe weather, earthquakes, other natural disasters, pandemics, acts of war or terrorism and other adverse external events could have a significant impact on the Company's ability to conduct business. Such events could affect the stability of the deposit base, impair the ability of borrowers to repay outstanding loans, impair the value of collateral securing loans, cause significant property damage, results in loss of revenue and/or cause the Company to incur additional expenses. Although management has established disaster recovery policies and procedures, the occurrence of any such events could have a material adverse effect on the Company's business, financial condition and results of operations.

Item 1B. UNRESOLVED STAFF COMMENTS.

None

Item 1C. CYBERSECURITY.

Cybersecurity Risk Management and Strategy

As a corporation committed to maintaining the integrity, confidentiality, and availability of the Company's digital assets and sensitive information, the Company recognizes the critical importance of cybersecurity in today's interconnected business landscape. The Company's cybersecurity measures are designed to safeguard the Company's systems, networks, data, and information from unauthorized access, disruption, or misuse.

The Company recognizes that cybersecurity is fundamental to maintaining trust with shareholders, customers, and other stakeholders. By prioritizing cybersecurity as a strategic imperative, the Company strives to safeguard business operations, sensitive information, and integrity which preserves the value delivered to all the Company's constituents.

Key components of the Company's cybersecurity program:

•

Risk Management: The Company continuously assesses and mitigates cybersecurity risks across the organization by leveraging industry best practices and frameworks such as NIST Cybersecurity Framework.

•

Governance and Oversight: The Company's Board regularly reviews cybersecurity matters, ensuring alignment with business objectives and regulatory requirements. A designated Information Technology Strategic Committee, which includes many subject matter experts from the Board and executive management, meets quarterly to provide additional focus and expertise in this area.

•

Security Controls: The Company has implemented robust technical and procedural controls to protect information assets, including firewalls, intrusion detection systems, encryption, access controls, and multifactor authentication. These controls are tested periodically by external technology audit firms with penetration tests and security audits.

•

Policy Controls: Annually all employees sign off on the Company’s data and device controls. The Company ensures that all information access points are the Company’s assets and all data passing through these access points are accessible by the Company and can be deleted whenever the Company deems necessary.

•

Employee Training and Awareness: Ongoing cybersecurity training and awareness programs are implemented to educate employees about potential threats, phishing attacks, social engineering tactics, and best practices for safeguarding company information.

•

Incident Response: The Company maintains a comprehensive incident response plan to promptly detect, contain, and recover from cybersecurity incidents. Regular testing and simulation exercises ensure readiness and effectiveness of response capabilities.

•

Third-Party Risk Management: The Company regularly evaluates and monitors the cybersecurity posture of third-party vendors and partners with whom data is shared or relied upon for critical services, to ensure they meet the Company's security standards.

•

Continuous Improvement: The Company regularly reviews and makes enhancements to the cybersecurity program to adapt to emerging threats, technological advancements, and changes in regulatory requirements. Implementation of new technologies, practices, and infrastructures to target security vulnerabilities is ongoing.

•

Compliance and Reporting: The Company adheres to relevant cybersecurity regulations and standards applicable to the Company's industry and maintains transparency by disclosing material cybersecurity incidents or risks in accordance with regulatory obligations.

The Company had no material cybersecurity incidents in 2025.

Item 2. PROPERTIES.

The Company and its subsidiaries currently occupy twelve full-service and one limited-service banking facilities in the cities of Charlottesville, Manassas, Richmond and Winchester, and the counties of Albemarle, Fauquier and Prince William. The Company’s main office, a full-service banking facility and operations center, is located at 404 People Place, Charlottesville, Virginia. VNB Trust and Estate Services is located at 103 Third Street, SE, Charlottesville, Virginia. Of the thirteen locations used as bank branches, five of the buildings are owned by the Company, six are leased from nonaffiliates and two are leased from affiliates described below. Leases with affiliates are described below.

The five-story building located at 404 People Place, Charlottesville, Virginia, just east of the Charlottesville city limits on Pantops Mountain, was constructed by the Bank on a pad site leased in 2005 from Pantops Park, LLC for a term of twenty years, with seven five-year renewal options. During the second quarter of 2025, the Company extended the ground lease associated with the Pantops headquarters for an additional five-year period. William D. Dittmar, Jr., a director of the Company and the Bank, is the manager and indirect owner of Pantops Park, LLC. The building, consisting of approximately 43,000 square feet, was completed in early 2008, and the Bank opened this full-service office in April 2008. In addition to the Company’s use of this building as outlined in the preceding paragraph, a portion of the additional space is leased to tenants.

The drive-through location at 301 East Water Street, Charlottesville, which is a limited-service banking facility, and the adjoining office space located at 112 Third Street, SE, Charlottesville Virginia is leased from East Main Investments, LLC. Hunter E. Craig, a director of the Company and the Bank, serves as manager of East Main Investments, LLC, which is owned by Mr. Craig and his spouse.

See Note 6 – Premises and Equipment and Note 7 – Leases in the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data for information with respect to the amounts at which the Company’s premises and equipment are carried and commitments under long-term leases. The Company believes its properties are in good operating condition and are adequate for the Company's present and anticipated future needs.

Item 3. LEGAL PROCEEDINGS.

In the ordinary course of its operations, the Company and/or its subsidiaries are parties to various legal proceedings from time-to-time. Based on the information presently available, and after consultation with legal counsel, management believes that the ultimate outcome of such proceedings, in the aggregate, will not have a material adverse effect on the business or financial condition of the Company and its subsidiaries.

Item 4. MINE SAFETY DISCLOSURES.

Not applicable

Part II

Common Stock Performance and Dividends

Virginia National Bankshares Corporation’s common stock is listed for trading on the Nasdaq Capital Market under the symbol VABK. As of December 31, 2025, the Company had issued and outstanding 5,393,140 shares of common stock, which included 62,468 shares of restricted stock that have not yet vested. As of March 26, 2025, there were approximately 541 shareholders of record.

The payment of dividends is at the discretion of the Company’s Board of Directors and is subject to various federal and state regulatory limitations. As a bank holding company, the ability to pay dividends is dependent upon the overall performance and capital requirements of the Bank. Dividends of $1.41 and $1.32 per share were paid for the years ended December 31, 2025 and 2024, respectively.

On June 28, 2023, the Company's Board of Directors approved a share repurchase plan of up to 5% of outstanding common stock. The program was announced in a Current Report on Form 8-K on July 17, 2023 with an expiration date of July 31, 2025. The first repurchases of stock under this plan occurred in February 2024. There were no shares of the Company's common stock repurchased during the three months or year ended December 31, 2025.

Equiniti Trust Company, LLC (formerly American Stock Transfer and Trust Company) is the Company’s stock transfer agent and registrar.

Recent Issuances of Unregistered Securities

No unregistered shares were issued in 2025 or 2024.

Item 6. [RESERVED].

Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following discussion provides information about the major components of the results of operations and financial condition, liquidity, and capital resources of Virginia National Bankshares Corporation. This discussion and analysis should be read in conjunction with the Consolidated Financial Statements and Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data.

Application of Critical Accounting Policies and Critical Accounting Estimates

The accounting and reporting policies followed by the Company conform, in all material respects, to GAAP and to general practices within the financial services industry. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. While the Company bases estimates on historical experience, current information, and other factors deemed to be relevant, actual results could differ from those estimates.

The Company considers accounting estimates to be critical to reported financial results if (i) the accounting estimate requires management to make assumptions about matters that are highly uncertain and (ii) different estimates that management reasonably could have used for the accounting estimate in the current period, or changes in the accounting estimate that are reasonably likely to occur from period to period, could have a material impact on the Company’s financial statements. The Company’s accounting policies are fundamental to understanding management’s discussion and analysis of financial condition and results of operations.

Following are the accounting policies and estimates that the Company considers as critical:

•

Allowance for credit losses - The Company establishes the ACL through charges to earnings in the form of a provision for credit losses. Loan losses are charged against the ACL for the difference between the carrying value of the loan and the estimated net realizable value or fair value of the collateral, if collateral dependent, when management believes that the collectability of the principal is unlikely. Subsequent recoveries, if any, are credited to the ACL. The ACL represents management’s current estimate of expected credit losses over the contractual term of loans held for investment, and is recorded at an amount that, in management’s judgment, reduces the recorded investment in loans to the net amount expected to be collected. Management’s judgment in determining the level of the ACL is based on evaluations of historical loan losses, current conditions and reasonable and supportable forecasts relevant to the collectability of loans. Various national economic variables are utilized in the development of the ACL, including the national unemployment rate and national gross domestic product. In addition, management’s estimate of expected credit losses is based on the remaining life of certain consumer loans held for investment, and changes in expected prepayment behavior may result in changes in the remaining life of loans and expected credit losses. Management also assesses the risk of credit losses arising from changes in general market, economic and business conditions; the nature and volume of the loan portfolio; the volume and severity of delinquencies and adversely classified loan balances and the value of underlying collateral in determining the recorded balance of the ACL. This evaluation is inherently subjective because it requires estimates that are susceptible to significant revision as more information becomes available. In evaluating the level of the ACL, the Company considers a range of possible assumptions and outcomes related to the various factors identified above. The level of the ACL is particularly sensitive to changes in the actual and forecasted national unemployment rate and changes in current conditions or reasonably expected future conditions affecting the collectability of loans.

Non-GAAP Presentations

The accounting and reporting policies of the Company conform to GAAP and prevailing practices in the banking industry. However, certain non-GAAP measures are used by management to supplement the evaluation of the Company’s performance. These include tangible book value per share and the following fully-taxable equivalent measures: net interest income-FTE, efficiency ratio-FTE and net interest margin-FTE. Interest on tax-exempt loans and securities is presented on a taxable-equivalent basis (which converts the income on loans and investments for which no income taxes are paid to the equivalent yield as if income taxes were paid) using the federal corporate income tax rate of 21% that was applicable for all periods presented.

Management believes that the use of these non-GAAP measures provides meaningful information about operating performance by enhancing comparability with other financial periods, other financial institutions, and between different

sources of interest income. The non-GAAP measures used by management enhance comparability by excluding the effects of (1) balances of intangible assets, including goodwill, that vary significantly between institutions and (2) tax benefits that are not consistent across different opportunities for investment. These non-GAAP financial measures should not be considered an alternative to, or more important than, GAAP-basis financial statements, and other banks and bank holding companies may define or calculate these or similar measures differently. Net income is discussed in Management’s Discussion and Analysis on a GAAP basis unless noted as “non-GAAP.”

A reconcilement of the non-GAAP financial measures used by the Company to evaluate and measure the Company's performance to the most directly comparable GAAP financial measures is presented below:


(Dollars in thousands, except per share data)
Reconcilement of Non-GAAP Measures:	Year Ended December 31
	2025			2024
Fully taxable-equivalent measures
Net interest income (GAAP)	$	51,509		$	46,376
Fully taxable-equivalent adjustment		342			347
Net interest income (FTE) 1 (non-GAAP)	$	51,851		$	46,723

Efficiency ratio 2 (GAAP)		58.0	%		62.4	%
Impact of FTE adjustment		-0.4	%		-0.4	%
Efficiency ratio (FTE) 3 (non-GAAP)		57.6	%		62.0	%

Net interest margin (GAAP)		3.38	%		3.08	%
Fully tax-equivalent adjustment		0.02	%		0.02	%
Net interest margin (FTE) 1 (non-GAAP)		3.40	%		3.10	%

Other financial measures
Book value per share (GAAP)	$	34.15		$	29.85
Impact of intangible assets		(1.94	)		(2.15	)
Tangible book value per share (non-GAAP)	$	32.21		$	27.70

1 FTE calculations use a Federal income tax rate of 21%.

2 The efficiency ratio, GAAP basis, is computed by dividing noninterest expense by the sum of net interest income and noninterest income.

3 The efficiency ratio, FTE, is computed by dividing noninterest expense by the sum of net interest income (FTE) and noninterest income.

Results of Operations

Consolidated Return on Assets and Equity and Other Key Ratios

The ratio of net income to average total assets and average shareholders' equity and certain other ratios for the years indicated are as follows:


	2025			2024
Return on average assets		1.19	%		1.06	%
Return on average equity		11.19	%		10.78	%
Average equity to average assets		10.60	%		9.80	%
Cash dividend payout ratio		39.48	%		41.80	%
Efficiency ratio (FTE) (non-GAAP)		57.60	%		62.00	%

Net income for the year ended December 31, 2025 was $19.3 million, or $3.55 per diluted share, a 13.5% increase compared to $17.0 million, or $3.15 per diluted share for the year ended December 31, 2024. This increase was the result of a $5.1 million increase in net interest income and a $1.5 million decrease in noninterest income, offset by a $282.0 thousand decrease in noninterest expense. Each component of such year-over-year changes are described in more detail below.

The efficiency ratio (FTE) (non-GAAP) was 57.6% for the year ended December 31, 2025, compared to 62.0% for the same period of 2024, increasing due to the fluctuations in net interest income, noninterest income and noninterest expense noted above.

The Company had two reportable segments during the 2025 period: the Bank and VNB Trust and Estate Services and three in the 2024 period: the Bank, VNB Trust and Estate Services and Masonry Capital.

•

Bank - The Bank’s commercial banking activities involve making loans, taking deposits and offering related services to individuals, businesses and charitable organizations. Loan fee income, service charges from deposit accounts, and other non-interest-related revenue, such as fees for debit cards and ATM usage and fees for treasury management services, generate additional income for this segment.

•

VNB Trust and Estate Services - This segment offers corporate trustee services, trust and estate administration, IRA administration and custody services and offers in-house investment management services. Revenue for this segment is generated from administration, service and custody fees, as well as management fees which are derived from Assets Under Management. Investment management services currently are offered through affiliated and third-party managers.

•

Masonry Capital (Masonry) - Masonry Capital offers investment management services for separately managed accounts and a private investment fund employing a value-based, catalyst-driven investment strategy. Revenue for this segment is generated from management fees which are derived from Assets Under Management and incentive income which is based on the investment returns generated on performance-based Assets Under Management. Note that the membership interests in this business line were sold to an officer of Masonry effective April 1, 2024. Subsequent to the date of sale, the Company will receive an annual revenue-share amount for a period of six years. No expenses have been or will be incurred by the Company related to Masonry subsequent to April 1, 2024.

The Bank segment earned net income of $19.6 million in 2025, a $2.3 million increase compared to the $17.2 million netted in 2024. VNB Trust and Estate Services realized a net loss of $306 thousand in 2025, compared to a net loss of $275 thousand in 2024. Masonry Capital realized a net loss of $2 thousand in 2024.

Details of the changes in the various components of net income are further discussed below.

Net Interest Income

Net interest income is computed as the difference between the interest income on earning assets and the interest expense on deposits and other interest bearing liabilities. Net interest income represents the principal source of revenue for the Company and accounted for 89.4% of the total revenue in 2025. Net interest margin (FTE) (non-GAAP) is the ratio of taxable-equivalent net interest income to average earning assets for the period. The level of interest rates and the volume and mix of earning assets and interest bearing liabilities impact net interest income (FTE) (non-GAAP) and net interest margin (FTE) (non-GAAP).

The following table details the average balance sheet, including an analysis of net interest income (FTE) (non-GAAP) for earning assets and interest bearing liabilities, for the years ended December 31, 2025, 2024, and 2023.

Consolidated Average Balance Sheets and Analysis of Net Interest Income (FTE) (non-GAAP)


	2025								2024								2023
				Interest		Average						Interest		Average						Interest		Average
(Dollars in thousands)	Average Balance			Income Expense		Yield/ Cost			Average Balance			Income Expense		Yield/ Cost			Average Balance			Income Expense		Yield/ Cost
ASSETS
Interest earning assets:
Securities
Taxable securities	$	198,401		$	5,379		2.71	%	$	249,858		$	7,120		2.85	%	$	400,189		$	11,921		2.98	%
Tax exempt securities 1		65,364			1,629		2.49	%		66,399			1,649		2.48	%		66,895			1,655		2.47	%
Total securities 1		263,765			7,008		2.66	%		316,257			8,769		2.77	%		467,084			13,576		2.91	%
Loans:
Real estate		943,389			55,119		5.84	%		908,356			51,532		5.67	%		839,326			47,996		5.72	%
Commercial		258,713			12,418		4.80	%		220,276			12,430		5.64	%		100,122			5,121		5.11	%
Consumer		30,015			2,034		6.78	%		37,013			2,572		6.95	%		41,140			2,936		7.14	%
Total Loans		1,232,117			69,571		5.65	%		1,165,645			66,534		5.71	%		980,588			56,053		5.72	%
Fed funds sold		19,957			835		4.18	%		14,663			765		5.22	%		3,825			207		5.41	%
Other interest bearing deposits		8,099			174		2.15	%		8,220			206		2.51	%		15,489			501		3.23	%
Total earning assets		1,523,938			77,588		5.09	%		1,504,785			76,274		5.07	%		1,466,986			70,337		4.79	%
Less: Allowance for credit losses		(8,516	)							(8,350	)							(7,907	)
Total non-earning assets		109,084								109,500								114,393
Total assets	$	1,624,506							$	1,605,935							$	1,573,472

LIABILITIES AND SHAREHOLDERS' EQUITY
Interest bearing liabilities:
Interest bearing deposits:
Interest checking	$	267,222		$	270		0.10	%	$	269,136		$	272		0.10	%	$	321,154		$	346		0.11	%
Money market and savings deposits		467,612			12,014		2.57	%		425,386			11,803		2.77	%		421,083			9,673		2.30	%
Time deposits		296,218			11,264		3.80	%		333,139			15,410		4.63	%		220,348			8,617		3.91	%
Total interest bearing deposits		1,031,052			23,548		2.28	%		1,027,661			27,485		2.67	%		962,585			18,636		1.94	%
Borrowings		40,005			1,860		4.65	%		36,111			1,691		4.68	%		37,286			1,934		5.19	%
Federal funds purchased		569			28		4.92	%		489			29		5.93	%		2,632			138		5.24	%
Junior subordinated debt		3,529			301		8.53	%		3,482			346		9.94	%		3,436			313		9.11	%
Total interest bearing liabilities		1,075,155			25,737		2.39	%		1,067,743			29,551		2.77	%		1,005,939			21,021		2.09	%
Non-interest bearing liabilities:
Demand deposits		367,066								370,178								418,091
Other liabilities		10,134								10,597								9,989
Total liabilities		1,452,355								1,448,518								1,434,019
Shareholders' equity		172,151								157,417								139,453
Total liabilities & shareholders' equity	$	1,624,506							$	1,605,935							$	1,573,472
Net interest income (FTE) (non-GAAP)				$	51,851							$	46,723							$	49,316
Interest rate spread 2							2.70	%							2.30	%							2.70	%
Cost of funds							1.78	%							2.06	%							1.48	%
Interest expense as a percentage of average earning assets							1.69	%							1.96	%							1.43	%
Net interest margin (FTE) 3 (non-GAAP)							3.40	%							3.10	%							3.36	%

(1)

Tax-exempt income for investment securities has been adjusted to a fully tax-equivalent basis (FTE), using a Federal income tax rate of 21%. Refer to the Reconcilement of Non-GAAP Measures table within the Non-GAAP Presentations earlier in this section.

(2)

Interest rate spread is the average yield earned on earning assets less the average rate paid on interest bearing liabilities.

(3)

Net interest margin (FTE) is net interest income (FTE) expressed as a percentage of average earning assets.

The purpose of the volume and rate analysis below is to describe the impact on the net interest income (FTE) (non-GAAP) of the Company resulting from changes in average balances and average interest rates for the periods indicated. The change in interest due to both volume and rate has been allocated to volume and rate changes in proportion to the relationship of the absolute dollar amounts of the change in each. Interest income is reported on a tax-equivalent basis.

Volume and Rate Analysis

2025 compared to 2024


	Change due to:						Increase/
(Dollars in thousands)	Volume			Rate			(Decrease)
Assets:
Securities	$	(1,434	)	$	(327	)	$	(1,761	)
Loans:
Real estate		2,021			1,566			3,587
Commercial		1,994			(2,006	)		(12	)
Consumer		(476	)		(62	)		(538	)
Total loans		3,539			(502	)		3,037
Federal funds sold		241			(171	)		70
Other interest bearing deposits		(3	)		(29	)		(32	)
Total earning assets	$	2,343		$	(1,029	)	$	1,314
Liabilities and Shareholders' equity:
Interest bearing deposits:
Interest checking	$	(2	)		-		$	(2	)
Money market and savings		1,122			(911	)		211
Time deposits		(1,591	)		(2,555	)		(4,146	)
Total interest bearing deposits		(471	)		(3,466	)		(3,937	)
Borrowings		181			(12	)		169
Federal funds purchased		4			(5	)		(1	)
Junior subordinated debt		5			(50	)		(45	)
Total interest bearing liabilities		(281	)		(3,533	)		(3,814	)
Change in net interest income	$	2,624		$	2,504		$	5,128

2024 compared to 2023


	Change due to:						Increase/
(Dollars in thousands)	Volume			Rate			(Decrease)
Assets:
Securities	$	(4,316	)	$	(491	)	$	(4,807	)
Loans:
Real estate		3,919			(383	)		3,536
Commercial		6,730			579			7,309
Consumer		(288	)		(76	)		(364	)
Total loans		10,361			120			10,481
Federal funds sold		566			(8	)		558
Other interest bearing deposits:		(170	)		(125	)		(295	)
Total earning assets	$	6,441		$	(504	)	$	5,937
Liabilities and Shareholders' equity:
Interest bearing deposits:
Interest checking	$	(54	)		(20	)	$	(74	)
Money market and savings		100			2,030			2,130
Time deposits		5,005			1,788			6,793
Total interest bearing deposits		5,051			3,798			8,849
Borrowings		(59	)		(184	)		(243	)
Federal funds purchased		(125	)		16			(109	)
Junior subordinated debt		4			29			33
Total interest bearing liabilities		4,871			3,659			8,530
Change in net interest income	$	1,570		$	(4,163	)	$	(2,593	)

For 2025, net interest income (FTE) (non-GAAP) of $51.9 million was recognized, an increase of $5.1 million over 2024. Net interest income (FTE) (non-GAAP) for 2024 totaled $46.7 million, a $2.6 million decrease over the 2023 total of $49.3 million. Average earning assets increased $19.2 million or 1.3% in 2025 compared to 2024 and increased $37.8 million or 2.6% in 2024 compared to 2023. The increase in the average balance of loans in the real estate and commercial categories was the primary driver of the increase in interest income from 2024 to 2025, whereas the 2023 to 2024 change in interest

income was primarily driven by interest rate changes. The average balance for loans as a percentage of earnings assets for 2025 was 80.9%, compared to 77.5% and 66.8% in 2024 and 2023, respectively.

The 2025 net interest margin (FTE) (non-GAAP) improved 30 bps to 3.40% from 3.10% in 2024. The 2024 net interest margin (FTE) (non-GAAP) declined 26 bps from 3.36% in 2023. The tax-equivalent yield on average earning assets for 2025 of 5.09% was 2 bps higher than the 2024 yield of 5.07%. The 2024 tax-equivalent yield on average earning assets was 28 bps higher than the comparable 2023 yield of 4.79%. Loan yields for 2025 were 5.65%, declining 6 bps from the loan yield of 5.71% for 2024. Average loans for 2025 of $1.2 billion were $66.5 million higher than the 2024 average of $1.2 billion.

The decrease in rates paid on deposits in 2025 compared to 2024 positively impacted net interest income. Interest expense as a percentage of average earning assets decreased to 169 bps for 2025. Net interest margin will be impacted by future changes in short-term and long-term interest rate levels on deposits, as well as the impact from the competitive environment. A continuing primary driver of the Company’s low cost of funds compared to peers is the Company’s level of non-interest bearing demand deposits and low-cost deposit accounts. Following is a table illustrating the average balances of deposit accounts as a percentage of total deposit account balances.


(Dollars in thousands)	2025		2024
	Average Balance	% of Total Deposits	Average Balance	% of Total Deposits
Non-interest demand deposits	$367,066	26.3%	$370,178	26.5%
Interest checking accounts	267,222	19.1%	269,136	19.3%
Money market and savings deposit accounts	467,612	33.4%	425,386	30.4%
Total non-interest and low-cost deposit accounts	$1,101,900	78.8%	$1,064,700	76.2%

Part I

Part II

Part III

Part IV

Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

Common Stock Performance and Dividends

Virginia National Bankshares Corp 10-K