Proxy Statement - Merger or Acquistion (definitive) (defm14a)

SUMMARY

This summary highlights selected information from this joint proxy statement/prospectus. It does not contain all of the information that may be important to you. We urge you to read carefully the entire document and the other documents we refer you to so that you may fully understand the merger and the related transactions. Each item in this summary refers to the page of this joint proxy statement/prospectus on which that subject is discussed in more detail.

The Parties

Virginia National Bankshares Corporation (see page 106)

Virginia National is a bank holding company headquartered in Charlottesville, Virginia, providing a wide array of financial services through its wholly-owned subsidiaries, Virginia National Bank, a national banking association, and Masonry Capital Management, LLC (“Masonry Capital”), a registered investment advisor. Virginia National Bank currently operates four full-service banking offices in central Virginia and one full-service office in Winchester, Virginia. As of September 30, 2020, Virginia National had total consolidated assets of approximately $821.0 million, total consolidated loans of approximately $636.9 million, total consolidated deposits of approximately $694.5 million, and consolidated shareholders’ equity of approximately $80.5 million.

The principal executive offices of Virginia National are located at 404 People Place, Charlottesville, Virginia 22911, and its telephone number is (434) 817-8621. Virginia National’s website can be accessed at http://www.vnbcorp.com. Information contained on Virginia National’s website does not constitute part of, and is not incorporated into, this joint proxy statement/prospectus. Virginia National’s common stock is traded on the OTC Markets Group’s OTCQX marketplace under the symbol “VABK.”

Fauquier Bankshares, Inc. (see page 157)

Fauquier is a bank holding company headquartered in Warrenton, Virginia, providing a wide array of financial services through its wholly-owned subsidiary, The Fauquier Bank, a Virginia-chartered commercial bank and member of the Board of Governors of the Federal Reserve System (the “Federal Reserve”). Fauquier currently operates eleven full-service banking offices in Fauquier and Prince William Counties in Virginia. As of September 30, 2020, Fauquier had total consolidated assets of approximately $840.3 million, total consolidated loans of approximately $638.1 million, total consolidated deposits of approximately $739.8 million, and consolidated shareholders’ equity of approximately $72.2 million.

The principal executive offices of Fauquier are located at 10 Courthouse Square, Warrenton, Virginia 20186, and its telephone number is (540) 347-2700. Fauquier’s website can be accessed at http://investor.tfb.bank. Information contained on Fauquier’s website does not constitute part of, and is not incorporated into, this joint proxy statement/prospectus. Fauquier’s common stock is traded on The Nasdaq Capital Market under the symbol “FBSS.”

The Merger (see page 58)

The terms and conditions of the merger are contained in the merger agreement, which is attached to this joint proxy statement/prospectus as Appendix A and is incorporated in this joint proxy statement/prospectus by reference. You should read the merger agreement carefully and in its entirety, as it, along with its ancillary documents, is the legal document that governs the merger.

In the merger, Fauquier will merge with and into Virginia National, with Virginia National being the surviving corporation in the merger, pursuant to the terms and conditions of the merger agreement. Under the terms of the merger agreement, each share of Fauquier common stock will be converted into the right to receive 0.675 shares of Virginia National common stock, plus cash in lieu of any fractional shares of Virginia National common stock. The merger agreement also calls for The Fauquier Bank to be merged with and into Virginia National Bank as soon as practicable after the merger of Fauquier into Virginia National.

Closing and Effective Time of the Merger (see page 96)

The merger is currently expected to close in the first half of 2021. The merger will close on either the fifth business day following the completion of the conditions to closing set forth in the merger agreement, or another mutually agreed upon date. The merger will become effective upon the issuance of a certificate of merger by the Virginia State Corporation Commission, or such other date and time as may be set forth in the articles of merger filed with the Virginia State Corporation Commission. Neither Virginia National nor Fauquier can predict, however, the actual date on which the merger will be completed because it is subject to factors beyond each company’s control, including whether or when the parties’ respective shareholders’ approvals and regulatory approvals will be received, if at all.

Merger Consideration (see page 96)

If the merger is completed, each share of Fauquier common stock will be converted into the right to receive 0.675 shares of Virginia National common stock, plus cash in lieu of fractional shares. The exchange ratio is fixed and will not be adjusted to reflect stock price changes prior to the closing of the merger.

Virginia National’s shareholders will continue to own their existing shares of Virginia National common stock. Each share of Virginia National common stock will continue to represent one share of common stock of Virginia National following the merger.

Based on the current number of shares of Fauquier common stock outstanding, Virginia National expects to issue approximately 2,564,028 shares of common stock in the aggregate upon completion of the merger, with current Virginia National shareholders owning approximately 51.4% of Virginia National’s outstanding common stock and former Fauquier shareholders owning approximately 48.6% of Virginia National’s outstanding common stock immediately following the merger.

Treatment of Fauquier Equity-Based Awards (see page 97)

As of January 22, 2021, Fauquier had 8,621 shares of restricted stock outstanding that were unvested or contingent, and 17,705 restricted stock units outstanding that were unvested and contingent, in each case granted under an equity or equity-based compensation plan of Fauquier.

Each share of Fauquier restricted stock outstanding immediately prior to the effective time of the merger, which was issued after the date of the merger agreement to a director of Fauquier that will be appointed as a director of Virginia National in connection with the merger, will convert into a fully vested share of restricted stock of Virginia National, and any transferability restrictions on such share of Fauquier restricted stock prior to the effective time will continue to apply after the effective time. Each other share of Fauquier restricted stock outstanding immediately prior to the effective time of the merger will vest and convert into the right to receive the merger consideration payable under the merger agreement.

Each Fauquier restricted stock unit outstanding 10 business days prior to the effective time of the merger will vest and convert into, at the election of the holder, either cash or shares of Fauquier common stock. Any shares of Fauquier common stock issued in settlement of a Fauquier restricted stock unit will be converted at the effective time into the right to receive the merger consideration payable under the merger agreement.

Virginia National Board Recommendations (see page 50)

After careful consideration, the Virginia National Board unanimously recommends that Virginia National shareholders vote “FOR” the Virginia National merger proposal, “FOR” the Virginia National compensation proposal and “FOR” the Virginia National adjournment proposal.

For a more complete description of Virginia National’s reasons for the merger and the recommendation of the Virginia National Board, please see “The Merger – Virginia National’s Reasons for the Merger; Recommendation of the Virginia National Board” beginning on page 64.

Fauquier Board Recommendations (see page 54)

After careful consideration, the Fauquier Board unanimously recommends that Fauquier shareholders vote “FOR” the Fauquier merger proposal, “FOR” the Fauquier compensation proposal and “FOR” the Fauquier adjournment proposal.

For a more complete description of Fauquier’s reasons for the merger and the recommendation of the Fauquier Board, please see “The Merger – Fauquier’s Reasons for the Merger; Recommendation of the Fauquier Board” beginning on page 72.

Opinion of Virginia National’s Financial Advisor (see page 66 and Appendix B)

On September 30, 2020, the Virginia National Board received a written fairness opinion from Performance Trust Capital Partners, LLC (“Performance Trust”), Virginia National’s financial advisor, to the effect that, as of such date and subject to the procedures followed, assumptions made, matters considered and qualifications and limitations on the review undertaken by Performance Trust as set forth in its opinion, the per share merger consideration pursuant to the merger agreement was fair, from a financial point of view, to holders of Virginia National’s common stock. The full text of Performance Trust’s written opinion is attached as Appendix B to this joint proxy statement/prospectus. Virginia National shareholders should read the entire opinion carefully for a discussion of, among other things, the assumptions made, matters considered and qualifications and limitations on the review undertaken by Performance Trust in rendering its opinion. The references to Performance Trust’s

opinion in this joint proxy statement/prospectus are qualified in their entirety by reference to the full text of Performance Trust’s written opinion.

Performance Trust’s opinion speaks only as of the date of the opinion. The opinion was directed to Virginia National’s board of directors in connection with its consideration of the merger agreement and the merger and does not constitute a recommendation to any shareholder of Virginia National as to how any such shareholder should act or vote at any meeting of shareholders called to consider and vote upon the approval of the merger or in connection with any related matter. Performance Trust’s opinion was directed only to the fairness, from a financial point of view, of the per share merger consideration to holders of Virginia National’s common stock and does not address the underlying business decision of Virginia National to engage in the merger, the form or structure of the merger or any other transactions contemplated in the merger agreement, the relative merits of the merger as compared to any other alternative transactions or business strategies that might exist for Virginia National or the effect of any other transaction in which Virginia National might engage. Performance Trust will not be deemed to have any fiduciary duty to Virginia National’s board of directors, Virginia National or any security holder or creditor of Virginia National or any other person, regardless of any prior or ongoing advice or relationships.

For further information, please see “The Merger – Opinion of Virginia National’s Financial Advisor” beginning on page 66.

Opinion of Fauquier’s Financial Advisor (see page 75 and Appendix C)

At the September 28, 2020 meeting of the Fauquier Board, representatives of Piper Sandler & Co. (“Piper Sandler”) rendered its opinion, dated September 28, 2020, to the Fauquier Board (in its capacity as such), to the effect that, as of such date, the exchange ratio was fair to the holders of Fauquier common stock from a financial point of view. The full text of Piper Sandler’s opinion is attached as Appendix C to this joint proxy statement/prospectus. The opinion outlines the procedures followed, assumptions made, matters considered and qualifications and limitations on the review undertaken by Piper Sandler in rendering its opinion. The description of the opinion set forth herein is qualified in its entirety by reference to the full text of the opinion. Holders of Fauquier common stock are urged to read the entire opinion carefully in connection with their consideration of the merger.

Piper Sandler’s opinion was directed to the Fauquier Board in connection with its consideration of the merger and the merger agreement and does not constitute a recommendation to any shareholder of Fauquier as to how any such shareholder should vote at any meeting of shareholders called to consider and vote upon the approval of the merger and the merger agreement. Piper Sandler’s opinion was directed only to the fairness, from a financial point of view, of the exchange ratio to the holders of Fauquier common stock and did not address the underlying business decision of Fauquier to engage in the merger, the form or structure of the merger or any other transactions contemplated in the merger agreement, the relative merits of the merger as compared to any other alternative transactions or business strategies that might exist for Fauquier or the effect of any other transaction in which Fauquier might engage.

For further information, please see “The Merger – Opinion of Fauquier’s Financial Advisor” beginning on page 75.

Interests of Virginia National Directors and Executive Officers in the Merger (see page 85)

Each non-employee director of Virginia National owns unvested shares of restricted stock of Virginia National that will vest if the director ceases to serve on the Virginia National Board within one year following the merger. In addition, certain of Virginia National’s executive officers are parties to management continuity agreements that provide for cash severance payments if the officer’s employment is involuntarily terminated without cause or voluntarily terminated for good reason within two years following the merger. The Virginia National Board was aware of these interests and considered them, among other matters, in approving the merger agreement and making its recommendation on the Virginia National merger proposal.

These interests are discussed in more detail in the “The Merger – Interests of Virginia National Directors and Executive Officers in the Merger” section beginning on page 85.

Interests of Fauquier Directors and Executive Officers in the Merger (see page 86)

In addition to the receipt of merger consideration on the same terms as all other Fauquier shareholders, six of Fauquier’s directors will be appointed to serve on the Virginia National Board and Virginia National Bank board, certain of Fauquier’s executive officers are expected to continue with Virginia National following completion of the merger, certain of Fauquier’s executive officers are expected to receive cash severance payments related to change in control provisions in existing agreements with Fauquier, certain of Fauquier’s executive officers hold restricted stock awards or restricted stock units that will vest on an accelerated basis in connection with the merger, certain of Fauquier’s directors hold shares of Fauquier common stock for which transfer restrictions will lapse at the effective time of the merger, certain of Fauquier’s executive officers have received cash payouts on an accelerated basis for accrued but unused paid time off and certain of Fauquier’s executive officers have received accelerated vesting of restricted stock awards and accelerated vesting and settlement of restricted stock units, and Marc J. Bogan, Fauquier’s president and chief executive officer, has

entered into an employment agreement with Virginia National that will be effective at the closing of the merger. The Fauquier Board was aware of these interests and considered them, among other matters, in approving the merger agreement and making its recommendation on the Fauquier merger proposal.

These interests are discussed in more detail in the “The Merger – Interests of Fauquier Directors and Executive Officers in the Merger” section beginning on page 86.

Material U.S. Federal Income Tax Consequences of the Merger (see page 93)

The merger will qualify as a tax-free “reorganization” within the meaning of Section 368 of the Code. Accordingly, holders of Fauquier common stock generally will not recognize any gain or loss for U.S. federal income tax purposes on the exchange of Fauquier common stock for Virginia National common stock in the merger, except to the extent of any cash received in lieu of the issuance of a fractional share of Virginia National common stock.

The U.S. federal income tax consequences described above may not apply to all holders of Fauquier common stock. Your tax consequences will depend on your individual situation. Accordingly, we strongly urge you to consult your own tax advisor to determine the particular tax consequences of the merger to you.

For further information, please see “The Merger – Material United States Federal Income Tax Consequences” beginning on page 93.

No Appraisal or Dissenters’ Rights (page 92)

Under Virginia law, the shareholders of each of Virginia National and Fauquier are not entitled to appraisal or dissenters’ rights in connection with the merger.

Accounting Treatment (see page 93)

The merger will be accounted for under the acquisition method of accounting for business combinations under accounting principles generally accepted in the United States of America (“GAAP”).

Regulatory Approvals (see page 92)

The merger requires various approvals or waivers from bank regulatory authorities, including the Federal Reserve, the Office of the Comptroller of the Currency (the “OCC”) and the Virginia Bureau of Financial Institutions. Approval of the regulators does not constitute an endorsement of the merger or a determination that the terms of the merger are fair to Virginia National shareholders or Fauquier shareholders. As of the date of this joint proxy statement/prospectus, we have received the approval of the Federal Reserve but the other required regulatory approvals have not yet been received. While we do not know of any reason why we would not be able to obtain the necessary regulatory approvals in a timely manner, we cannot be certain when or if we will receive them or, if obtained, whether they will contain terms, conditions or restrictions not currently contemplated that will be detrimental to the combined company after completion of the merger.

For a more complete description of the regulatory approvals, please see “The Merger – Regulatory Approvals Required for the Merger” beginning on page 92.

Conditions to Complete the Merger (see page 102)

Virginia National’s and Fauquier’s respective obligations to complete the merger are subject to the fulfillment or waiver of certain conditions, including the following:

Where the merger agreement and/or law permits, Virginia National and Fauquier could choose to waive a condition to its obligation to complete the merger even if that condition has not been satisfied. Any determination whether to waive any condition to the merger or whether to amend this joint proxy statement/prospectus and resolicit shareholder approval as a result of any such waiver (for example, in the case of a waiver of a material condition such that disclosure previously provided would be materially misleading) will be made by Virginia National or Fauquier, as applicable, at the time of such waiver based on the facts and circumstances as they exist at that time. Virginia National and Fauquier cannot be certain when, or if, the conditions to the merger will be satisfied or waived or that the merger will be completed.

No Solicitation (see page 101)

Virginia National and Fauquier have each agreed that, while the merger agreement is in effect, it will not directly or indirectly:

The merger agreement does not, however, prohibit Virginia National or Fauquier from considering an unsolicited bona fide written acquisition proposal from a third party if certain specified conditions are met.

Termination of the Merger Agreement (see page 103)

The merger agreement may be terminated, and the merger abandoned, by Virginia National and Fauquier at any time before the merger is completed if the parties mutually agree to do so. In addition, the merger agreement may be terminated, and the merger abandoned, under the following circumstances:

Termination by Virginia National or Fauquier. The merger agreement may be terminated by either party if:

Termination by Virginia National. The merger agreement may be terminated by Virginia National if:

Termination by Fauquier. The merger agreement may be terminated by Fauquier if:

Termination Fees and Expenses (see page 104)

If either Virginia National or Fauquier takes certain specified, limited actions and the merger agreement is terminated on that basis, that party will immediately owe the other party a $2.5 million termination fee. In addition, a $2.5 million termination fee is payable in certain other circumstances if (i) the merger agreement is terminated for certain specified, limited reasons and (ii) within 12 months of such termination one of the parties enters into a definitive agreement with respect to an acquisition proposal. The termination and payment circumstances are more fully described elsewhere in this joint proxy statement/prospectus.

In general, whether or not the merger is completed, Virginia National and Fauquier will each pay its respective expenses incident to preparing, entering into and carrying out the terms of the merger agreement. The parties will share the costs of printing this joint proxy statement/prospectus all filing fees to the SEC and other governmental authorities.

Virginia National’s Board of Directors and Management Following Completion of the Merger (see page 91)

Pursuant to the merger agreement, at or prior to the effective time of the merger, the Virginia National Board will cause the number of directors that comprise the full Virginia National Board to be fixed at no more than 13 directors. Following the effective time of the merger, the Virginia National Board will consist of (i) seven current Virginia National directors to be designated by

Virginia National (after consultation with Fauquier), including the chairman of the Virginia National Board, William D. Dittmar, Jr., and the president and chief executive officer of Virginia National, Glenn W. Rust (the “Virginia National Directors”), and (ii) six current Fauquier directors to be designated by Fauquier (after consultation with Virginia National), including the chairman of the Fauquier Board, John B. Adams, Jr., and the president and chief executive officer of Fauquier, Marc J. Bogan (the “Fauquier Directors”). Following the merger, Mr. Dittmar will continue to serve as chairman and Mr. Adams will serve as vice chairman of the Virginia National Board. Mr. Adams will also be appointed to the strategic planning committee of the Virginia National Board.

At or prior to the effective time of the merger, the number of directors that comprise the full Virginia National Bank board of directors will also be fixed at 13 and will be composed of the same directors that will be appointed to the Virginia National Board.

Virginia National currently intends to designate Steven W. Blaine, Hunter E. Craig, James T. Holland, Linda M. Houston, and Gregory L. Wells as the remaining five Virginia National directors that will continue as directors of Virginia National and Virginia National Bank following the merger, in addition to Messrs. Dittmar and Rust. Fauquier currently intends to designate Kevin T. Carter, Randolph D. Frostick, Jay B. Keyser and Sterling T. Strange, III as the remaining four Fauquier directors to be appointed as directors of Virginia National and Virginia National Bank following the merger, in addition to Messrs. Adams and Bogan.

Virginia National has agreed to appoint Mr. Bogan as president and chief executive officer of Virginia National Bank effective as of the effective time of the merger. Mr. Rust will continue to serve as president and chief executive officer of Virginia National after the merger. The other executive officers of Virginia National immediately prior to the merger will continue serving in their current positions as the executive officers of Virginia National after the merger.

Amendments to Virginia National’s and Virginia National Bank’s Bylaws (page 92)

In connection with entering into the merger agreement, Virginia National agreed to amend its bylaws to facilitate the change in size and composition of the Virginia National Board following the merger. As described above, the number of directors that will comprise the Virginia National Board is to be fixed at no more than 13 directors, seven of which will be the Virginia National Directors and six of which will be the Fauquier Directors. The bylaws, as amended, will provide that until the second anniversary of the merger, all vacancies on the Virginia National Board created by the cessation of service of a Virginia National Director must be filled by a nominee proposed to the nominating committee of the Virginia National Board by a majority of the remaining Virginia National Directors, and all vacancies on the Virginia National Board created by the cessation of service of a Fauquier Director shall be filled by a nominee proposed to the nominating committee of the Virginia National Board by a majority of the remaining Fauquier Directors. Such bylaw provision may not be modified, amended or repealed during such two-year period other than by a majority of the Fauquier Directors and a majority of the Virginia National Directors. Virginia National Bank’s bylaws will be amended to include similar provisions.

The forms of the above-described bylaw amendments are set forth in their entirety in Exhibits 1.4(a) and 1.4(b) to the merger agreement, which is attached to this joint proxy statement/prospectus as Appendix A.

Virginia National Special Meeting (see page 50)

The Virginia National special meeting is scheduled to take place on Thursday, March 25, 2021 at 10:00 a.m., Eastern Time. The special meeting will be held in a virtual-only meeting format via live webcast that may be accessed by visiting www.proxydocs.com/VABK. To attend and vote online during the special meeting, you will need to register in advance at www.proxydocs.com/VABK prior to the deadline of March 23, 2021 at 5:00 p.m., Eastern Time. Upon completing your registration, you will receive further instructions via email, including your unique links that will allow you access to the meeting and will also permit you to submit questions. If you are a beneficial owner, in addition to registering at www.proxydocs.com/VABK prior to the deadline, you must also obtain a legal proxy, executed in your favor, from the broker, bank or other custodian that holds your shares, to be able to vote online during the special meeting. At the special meeting, Virginia National shareholders will be asked to vote on:

Holders of Virginia National common stock as of the close of business on January 22, 2021, are entitled to notice of and to vote at the Virginia National special meeting. As of the record date, there were 2,714,273 shares of Virginia National common stock outstanding and entitled to vote held by approximately 438 holders of record. Each Virginia National shareholder can cast one vote for each share of Virginia National common stock owned on the record date.

Each of Virginia National’s directors has agreed, subject to several conditions and exceptions, to vote all of his or her shares of Virginia National common stock over which the director has the sole right and power to vote or direct the disposition in favor of the Virginia National merger proposal. As of the record date, directors of Virginia National beneficially owned and are entitled to vote 518,659 such shares of Virginia National common stock, or approximately 19.11% of the total voting power of the shares of Virginia National common stock outstanding on that date.

Fauquier Special Meeting (see page 54)

The Fauquier special meeting is scheduled to take place on Thursday, March 25, 2021 at 10:00 a.m., Eastern Time. The special meeting will be held in a virtual-only meeting format via live webcast that may be accessed by visiting www.proxydocs.com/FBSS. To attend and vote online during the special meeting, you will need to register in advance at www.proxydocs.com/FBSS prior to the deadline of March 23, 2021 at 5:00 p.m., Eastern Time. Upon completing your registration, you will receive further instructions via email, including your unique links that will allow you access to the meeting and will also permit you to submit questions. If you are a beneficial owner, in addition to registering at www.proxydocs.com/FBSS prior to the deadline, you must also obtain a legal proxy, executed in your favor, from the broker, bank or other custodian that holds your shares, to be able to vote online during the special meeting. At the special meeting, Fauquier shareholders will be asked to vote on:

Holders of Fauquier common stock as of the close of business on January 22, 2021, are entitled to notice of and to vote at the Fauquier special meeting. As of the record date, there were 3,798,561 shares of Fauquier common stock outstanding and entitled to vote held by approximately 307 holders of record. Each Fauquier shareholder can cast one vote for each share of Fauquier common stock owned on the record date.

Each of Fauquier’s directors has agreed, subject to several conditions and exceptions, to vote all of his or her shares of Fauquier common stock over which the director has the sole right and power to vote or direct the disposition in favor of the Fauquier merger proposal. As of the record date, directors of Fauquier and their affiliates beneficially owned and are entitled to vote 150,143 such shares of Fauquier common stock, or approximately 3.95% of the total voting power of the shares of Fauquier common stock outstanding on that date.

Required Shareholder Votes (see pages 51 and 55)

Approval of the Virginia National merger proposal requires the affirmative vote of at least a majority of the outstanding shares of Virginia National common stock entitled to vote on the merger as of the close of business on January 22, 2021, the record date for the Virginia National special meeting. If you (1) fail to submit a proxy or vote during the Virginia National special meeting, (2) mark “ABSTAIN” on your proxy or (3) fail to instruct your broker, bank or other custodian how to vote with respect to the proposal to approve the merger agreement, it will have the same effect as a vote “AGAINST” the proposal.

Approval of each of the Virginia National compensation proposal and the Virginia National adjournment proposal requires that the votes cast for such proposal exceed the votes cast against such proposal. If you (1) fail to submit a proxy or vote during the Virginia National special meeting, (2) mark “ABSTAIN” on your proxy or (3) fail to instruct your broker, bank or other custodian how to vote with respect to the Virginia National compensation proposal or the Virginia National adjournment proposal, it will have no effect on the outcome of the vote on that proposal.

Approval of the Fauquier merger proposal requires the affirmative vote of more than two-thirds of the outstanding shares of Fauquier common stock entitled to vote on the merger as of the close of business on January 22, 2021, the record date for the Fauquier special meeting. If you (1) fail to submit a proxy or vote during the Fauquier special meeting, (2) mark “ABSTAIN” on your proxy or (3) fail to instruct your broker, bank or other custodian how to vote with respect to the proposal to approve the merger agreement, it will have the same effect as a vote “AGAINST” the proposal.

Approval of each of the Fauquier compensation proposal and the Fauquier adjournment proposal requires that the votes cast for such proposal exceed the votes cast against such proposal. If you (1) fail to submit a proxy or vote during the Fauquier special meeting, (2) mark “ABSTAIN” on your proxy or (3) fail to instruct your broker, bank or other custodian how to vote with respect to the Fauquier compensation proposal or the Fauquier adjournment proposal, it will have no effect on the outcome of the vote on that proposal.

No Restrictions on Resale of Virginia National Common Stock Received by Fauquier Shareholders (see page 93)

All shares of Virginia National common stock received by Fauquier shareholders in the merger will be freely tradable, except (i) any restricted shares of Virginia National to be issued to current directors of Fauquier, who will join the Virginia National Board after the merger, in exchange for restricted shares Fauquier issued after September 30, 2020 will be subject to transfer restrictions, and (ii) shares of Virginia National received by persons who are or become affiliates of Virginia National for purposes of Rule 144 under the Securities Act may be resold by them only in transactions permitted by Rule 144, or as otherwise permitted under the Securities Act.

Comparative Rights of Shareholders (see page 196)

The rights of Fauquier shareholders who continue as Virginia National shareholders after the merger will be governed by Virginia law and the articles of incorporation and bylaws of Virginia National, which are different from Fauquier’s existing articles of incorporation and bylaws. For more information, please see “Comparison of Shareholders’ Rights” beginning on page 196.

Risk Factors (see page 32)

Before voting at the shareholder meetings, you should carefully consider all of the information contained in this joint proxy statement/prospectus, including the risk factors set forth in the “Risk Factors” section beginning on page 32.

Recent Financial Developments

Virginia National. For the three months ended December 31, 2020, net income for Virginia National was $2.6 million, or $0.96 per diluted common share, compared to net income of $1.4 million, or $0.53 per diluted common share, for the same period in 2019. For the year ended December 31, 2020, net income for Virginia National was $8.0 million, or $2.94 per diluted common share, compared to $6.7 million, or $2.49 per diluted common share, for 2019. At December 31, 2020, Virginia National had total assets of $848.4 million, net loans of $604.0 million and total deposits of $730.8 million.

Fauquier. For the three months ended December 31, 2020, net income for Fauquier was $1.4 million, or $0.36 per diluted common share, compared to net income of $1.5 million, or $0.41 per diluted common share, for the same period in 2019. For the year ended December 31, 2020, net income for Fauquier was $5.9 million, or $1.55 per diluted common share, compared to $6.8 million, or $1.80 per diluted common share, for 2019. At December 31, 2020, Fauquier had total assets of $867.2 million, net loans of $609.9 million and total deposits of $766.1 million.

SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA OF VIRGINIA NATIONAL

The following table sets forth certain of Virginia National’s consolidated financial data as of the end of and for the fiscal years ended December 31, 2019 and 2018 and as of and for the nine months ended September 30, 2020 and 2019. The historical consolidated financial information as of the end of and for the fiscal years ended December 31, 2019 and 2018 is derived from Virginia National’s audited consolidated financial statements. The consolidated financial information as of and for the nine-month periods ended September 30, 2020 and 2019 is derived from Virginia National’s unaudited consolidated financial statements. In Virginia National’s opinion, such unaudited consolidated financial statements include all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of its financial position and results of operations for such periods. Interim results for the nine months ended September 30, 2020 are not necessarily indicative of, and are not projections for, the results to be expected for the full year ending December 31, 2020.

The selected historical financial data below is only a summary and should be read in conjunction with Virginia National’s consolidated financial statements and their accompanying notes that are included elsewhere in this joint proxy statement/prospectus (dollars in thousands, except per share data).

SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA OF FAUQUIER

The following table sets forth certain of Fauquier’s consolidated financial data as of the end of and for the fiscal years ended December 31, 2019 and 2018 and as of and for the nine months ended September 30, 2020 and 2019. The historical consolidated financial information as of the end of and for the fiscal years ended December 31, 2019 and 2018 is derived from Fauquier’s audited consolidated financial statements. The consolidated financial information as of and for the nine-month periods ended September 30, 2020 and 2019 is derived from Fauquier’s unaudited consolidated financial statements. In Fauquier’s opinion, such unaudited consolidated financial statements include all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of its financial position and results of operations for such periods. Interim results for the nine months ended September 30, 2020 are not necessarily indicative of, and are not projections for, the results to be expected for the full year ending December 31, 2020.

The selected historical financial data below is only a summary and should be read in conjunction with Fauquier’s consolidated financial statements and their accompanying notes that are included elsewhere in this joint proxy statement/prospectus (dollars in thousands, except per share data).

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The following unaudited pro forma condensed combined financial information combines the historical consolidated financial position and results of operations of Virginia National and Fauquier, as an acquisition by Virginia National of Fauquier using the acquisition method of accounting and giving effect to the related pro forma adjustments described in the accompanying notes. Under the acquisition method of accounting, the assets and liabilities of Fauquier will be recorded by Virginia National at their respective fair values as of the date the merger is completed. Certain reclassifications have been made to the historical financial statements of Fauquier to conform to the presentation in Virginia National’s financial statements.

The unaudited pro forma condensed combined balance sheet gives effect to the merger as if the transaction had occurred on September 30, 2020. The unaudited pro forma condensed combined income statements for the nine months ended September 30, 2020 and the year ended December 31, 2019 give effect to the merger as if the transaction had occurred on January 1, 2019.

A final determination of the fair values of Fauquier’s assets and liabilities, which cannot be made prior to the completion of the merger, will be based on the actual net tangible and intangible assets of Fauquier that exist as of the date of completion of the transaction. Consequently, fair value adjustments and amounts preliminarily allocated to a bargain purchase value or goodwill and identifiable intangibles could change significantly from those allocations used in the unaudited pro forma combined condensed consolidated financial statements presented herein and could result in a material change in amortization of acquired intangible assets.

In connection with the plan to integrate the operations of Virginia National and Fauquier following the completion of the merger, Virginia National anticipates that nonrecurring charges, such as costs associated with systems implementation, severance, and other costs related to exit or disposals activities, will be incurred. Virginia National is not able to determine the timing, nature and amount of these charges as of the date of the joint proxy statement/prospectus, and accordingly, has not included any such costs and changes in the unaudited combined condensed pro forma statements of income except those actually incurred through September 30, 2020. However, these charges will affect the results of operations of Virginia National and Fauquier, as well as those of the combined company following the completion of the merger, in the period in which they are recorded. The unaudited pro forma combined condensed statements of income do not include the effects of the costs associated with any restructuring or integration activities resulting from the merger, as they are nonrecurring in nature and not factually supportable at this time. Additionally, the unaudited pro forma adjustments do not give effect to any nonrecurring or unusual restructuring charges that may be incurred as a result of the integration of the two companies or any anticipated disposition of assets that may result from such integration.

The unaudited pro forma condensed combined financial information included herein is presented for informational purposes only and does not necessarily reflect the financial results of the combined companies had the companies actually been combined at the beginning of the periods presented. The adjustments included in this unaudited pro forma condensed combined financial information are preliminary and may be revised and may not agree to actual amounts recorded by Virginia National upon consummation of the merger. This financial information does not reflect the benefits of the expected cost savings and expense efficiencies, opportunities to earn additional revenue, potential impacts of current market conditions on revenues or asset dispositions, among other factors, and includes various preliminary estimates and may not necessarily be indicative of the financial position or results of operations that would have occurred if the merger had been consummated on the date or at the beginning of the period indicated or which may be attained in the future.

The unaudited pro forma condensed combined financial information should be read in conjunction with and is qualified in its entirety by reference to the historical consolidated financial statements and related notes thereto of Virginia National and its subsidiaries, which are included elsewhere in this joint proxy statement/prospectus, and the historical consolidated financial statements and related notes thereto of Fauquier and its subsidiaries, which are also included elsewhere in this joint proxy statement/prospectus.