Virginia National Bankshares Corp Income Taxes Disclosure
Note 11 – Income Taxes
Principal components of income tax expense as reflected in the Consolidated Statements of Income are as follows:
(Dollars in thousands) |
|
2025 |
|
|
2024 |
|
||
Current tax expense |
|
$ |
4,469 |
|
|
$ |
3,923 |
|
Deferred tax expense |
|
|
352 |
|
|
|
10 |
|
Provision for income taxes |
|
$ |
4,821 |
|
|
$ |
3,933 |
|
Income tax expense for the years ended December 31, 2025 and December 31, 2024 differed from the federal statutory rate applied to income before income taxes for the following reasons:
(Dollars in thousands) |
|
2025 |
|
|
2024 |
|
||||||||||
Federal statutory rate |
|
Amount |
|
|
Percent |
|
|
Amount |
|
|
Percent |
|
||||
|
$ |
5,057 |
|
|
|
21.00 |
% |
|
$ |
4,389 |
|
|
|
21.00 |
% |
|
State income taxes, net of federal income tax effect |
|
|
- |
|
|
|
0.00 |
% |
|
|
- |
|
|
|
0.00 |
% |
Investments in qualified housing projects |
|
|
(51 |
) |
|
|
-0.21 |
% |
|
|
(141 |
) |
|
|
-0.67 |
% |
Nontaxable or nondeductible items |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Tax exempt income net of interest expense disallowance |
|
|
(70 |
) |
|
|
-0.29 |
% |
|
|
(38 |
) |
|
|
-0.18 |
% |
Bank-owned life insurance |
|
|
(261 |
) |
|
|
-1.08 |
% |
|
|
(243 |
) |
|
|
-1.16 |
% |
Stock options |
|
|
6 |
|
|
|
0.02 |
% |
|
|
35 |
|
|
|
0.17 |
% |
Other items, net |
|
|
140 |
|
|
|
0.58 |
% |
|
|
(69 |
) |
|
|
-0.33 |
% |
Total |
|
$ |
4,821 |
|
|
|
20.02 |
% |
|
$ |
3,933 |
|
|
|
18.82 |
% |
The Company paid $4.4 million and $3.6 million respectively, in Federal income taxes for the years ended 2025 and 2024. No payments were made to state or local jurisdictions.
The Corporation's net deferred income taxes totaled $12.1 million and $15.4 million at December 31, 2025 and December 31, 2024 respectively. The tax effects of each type of significant item that gave rise to deferred taxes are:
|
|
December 31, |
|
|||||
(Dollars in thousands) |
|
2025 |
|
|
2024 |
|
||
Deferred tax assets |
|
|
|
|
|
|
||
Allowance for credit losses |
|
$ |
1,851 |
|
|
$ |
1,874 |
|
Acquisition accounting |
|
|
998 |
|
|
|
1,425 |
|
Fixed assets |
|
|
845 |
|
|
|
971 |
|
Nonaccrual loan interest |
|
|
48 |
|
|
|
30 |
|
Stock option/grant expense |
|
|
119 |
|
|
|
125 |
|
Home equity closing costs |
|
|
106 |
|
|
|
93 |
|
Deferred loan fees |
|
|
609 |
|
|
|
652 |
|
Securities available for sale unrealized loss |
|
|
8,152 |
|
|
|
11,128 |
|
Total deferred tax assets |
|
$ |
12,728 |
|
|
$ |
16,298 |
|
Deferred tax liabilities |
|
|
|
|
|
|
||
Goodwill and other intangible assets |
|
$ |
501 |
|
|
$ |
721 |
|
Trust preferred |
|
|
120 |
|
|
|
130 |
|
Right-of-use assets |
|
|
34 |
|
|
|
34 |
|
Equity in earnings of subsidiaries |
|
|
(6 |
) |
|
|
6 |
|
Total deferred tax liabilities |
|
|
649 |
|
|
|
891 |
|
Net deferred tax assets |
|
$ |
12,079 |
|
|
$ |
15,407 |
|
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 27, 2026 | Showing above |
| 2024 | Mar 28, 2025 | |
| 2023 | Mar 28, 2024 | |
| 2022 | Mar 29, 2023 | |
| 2021 | Mar 25, 2022 | |
| 2020 | Mar 19, 2021 | |
| 2019 | Mar 12, 2020 | |
| 2018 | Mar 15, 2019 | |
| 2017 | Mar 27, 2018 | |
| 2016 | Mar 27, 2017 | |
| 2015 | Mar 30, 2016 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.