EAGLE FINANCIAL SERVICES, INC. ANNOUNCES 2024 SECOND QUARTER FINANCIAL RESULTS AND QUARTERLY DIVIDEND

BERRYVILLE, Va., July 26, 2024 /PRNewswire/ — Eagle Financial Services, Inc. (OTCQX: EFSI), the holding company for Bank of Clarke, whose divisions include Bank of Clarke Wealth Management, announced its second quarter 2024 results. On July 24, 2024, the Board of Directors announced a quarterly common stock cash dividend of $0.30 per common share, payable on August 16, 2024, to shareholders of record on August 5, 2024. Select highlights for the second quarter (compared to the first quarter of 2024) include:

Noninterest income increased $824 thousand or 23.7% during the quarter.
Return on average total equity increased from 9.43% to 11.89%.
Earnings per share increased by $0.17 for the quarter to $0.89.

Brandon Lorey, President and CEO, stated, “Reflecting on our performance in the second quarter of 2024, we have demonstrated resilience and strategic agility in a dynamic economic landscape. Despite the challenges posed by market fluctuations and interest rate pressures, our focus on organic growth and operational excellence has allowed us to maintain a robust financial position. We remain optimistic about the future, as we continue to leverage our strengths and explore new opportunities for growth and innovation.”

Income Statement Review

Net income for the quarter ended June 30, 2024 was $3.2 million reflecting an increase of 25.0% from the quarter ended March 31, 2024 and an increase of 54.8% from the quarter ended June 30, 2023. The increase from the quarter ended March 31, 2024 was due mainly to the $824 thousand increase in total noninterest income. The increase of total noninterest income was due to increased sales activity in loans held for sale resulting in a $492 thousand gain on sale of loans held for sale for the quarter ended June 30, 2024 compared to $161 thousand for the quarter ended March 31, 2024. Other operating income also increased due to a $254 thousand bank owned life insurance (BOLI) payout. Net income was $2.4 million for the three-month period ended March 31, 2024 and $2.1 million for the quarter ended June 30, 2023.

Total loan interest income was $19.5 million and $20.0 million for the quarters ended June 30, 2024 and March 31, 2024, respectively.  Total loan interest income was $18.8 million for the quarter ended June 30, 2023. Total loan interest income increased $771 thousand or 4.1% from the quarter ended June 30, 2023 to the quarter ended June 30, 2024. Average loans remained stable at 1.44 billion for the quarters ended June 30, 2024 and June 30, 2023. The tax equivalent yield on average loans for the quarter ended June 30, 2024 was 5.46%, an increase of 22 basis points from the 5.24% average yield for the same time period in 2023. The decrease in loan interest income during the second quarter of 2024 compared to the first quarter of 2024 is mainly due to early payoffs in the marine portfolio which negatively impacted deferred fees, which are included in loan interest income. The majority of the increase compared to June 30, 2023 can be attributed to the current rising interest rate environment.

Interest and dividend income from the investment portfolio was $897 thousand for the quarter ended June 30, 2024 compared to $919 thousand for the quarter ended March 31, 2024. Interest income and dividend income from the investment portfolio was $926 thousand for the quarter ended June 30, 2023. The tax equivalent yield on average investments for the quarter ended June 30, 2024 was 2.62%, up four basis points from 2.58% for the quarter ended March 31, 2024 and up 23 basis points from 2.39% for the quarter ended June 30, 2023.

Total interest expense was $9.6 million for the three months ended June 30, 2024 and $9.5 million and $7.9 million for three months ended March 31, 2024 and June 30, 2023, respectively. The slight increase in interest expense between June 30, 2024 and March 31, 2024 was due mostly to deposit rate specials during the quarter. The increase in interest expense from June 30, 2023 to June 30, 2024 resulted from deposit rate specials during the year. The average cost of interest-bearing liabilities increased four and 43 basis points when comparing the quarter ended June 30, 2024 to the quarters ended March 31, 2024 and  June 30, 2023, respectively. The average balance of interest-bearing liabilities decreased $3.5 million from the quarter ended March 31, 2024 to the quarter ended June 30, 2024. The average balance of interest-bearing liabilities increased $51.9 million from the quarter ended June 30, 2023 to the same period in 2024. In addition to the growth in interest-bearing liabilities, there has been a shift in the mix of interest-bearing deposits towards higher interest-bearing deposits. 

Net interest income for the quarter ended June 30, 2024 was $12.2 million reflecting a decrease of 2.1% from the quarter ended March 31, 2024 and a decrease of 2.2% from the quarter ended June 30, 2023. Net interest income was $12.4 million for the quarters ended March 31, 2024 and June 30, 2023.

The net interest margin was 2.81% for the quarter ended June 30, 2024. For the quarters ended March 31, 2024 and June 30, 2023, the net interest margin was 2.91% and 2.99%, respectively. The net interest margin for the quarter ended June 30, 2024 was negatively impacted by recognizing additional deferred fees due to early loan payoffs, mainly in the Marine portfolio. The Company’s net interest margin is not a measurement under accounting principles generally accepted in the United States, but it is a common measure used by the financial services industry to determine how profitably earning assets are funded. The Company’s net interest margin is calculated by dividing tax equivalent net interest income by total average earning assets. Tax equivalent net interest income is calculated by grossing up interest income for the amounts that are non-taxable (i.e., municipal income) then subtracting interest expense. The tax rate utilized is 21%.

Noninterest income was $4.3 million for the quarter ended June 30, 2024, which represented an increase of $824 thousand or 23.7% from the $3.5 million for the three months ended March 31, 2024. Noninterest income for the quarter ended June 30, 2023 was $3.4 million. The increase from the quarter ended March 31, 2024 was mainly due to the increase of gains on loans held for sale and a $254 thousand BOLI payout. 

Noninterest expense increased $133 thousand, or 1.1%, to $12.5 million for the quarter ended June 30, 2024 from $12.4 million for the quarter ended March 31, 2024. Noninterest expense was $13.0 million for the quarter ended June 30, 2023, representing an decrease of $445 thousand or 3.4% when comparing the quarter ended June 30, 2024 to the quarter ended June 30, 2023. A $168 thousand or 2.3% increase in salaries and benefits expenses was noted between June 30, 2024 and March 31, 2024. This is mainly due to larger incentive accruals as employees reached certain goals. 

Asset Quality and Provision for Credit Losses

Nonperforming assets consist of nonaccrual loans, loans 90 days or more past due and still accruing, other real estate owned (foreclosed properties), and repossessed assets. Nonperforming assets decreased from $5.0 million or 0.28% of total assets at March 31, 2024 to $3.3 million or 0.18% of total assets at June 30, 2024. Nonperforming assets were $3.3 million at June 30, 2023.  Total nonaccrual loans were $2.7 million at June 30, 2024 and $4.2 million at March 31, 2024. Nonaccrual loans were $3.1 million at June 30, 2023. Nonperforming assets decreased between March 31, 2024 and June 30, 2024 mainly due to two large relationships paying off. Nonaccrual loans, and in turn nonperforming assets, decreased between June 30, 2023 and June 30, 2024 due to regular payments. The majority of all nonaccrual loans are secured by real estate and management evaluates the financial condition of these borrowers and the value of any collateral on these loans. The results of these evaluations are used to estimate the amount of losses which may be realized on the disposition of these nonaccrual loans.  Other real estate owned was zero at June 30, 2024, March 31, 2024 and June 30, 2023.

The Company realized $252 thousand in net recoveries for the quarter ended June 30, 2024 compared to $520 thousand for the three months ended March 31, 2024. During the three months ended June 30, 2023, $150 thousand in net recoveries were recognized.

The amount of provision for credit losses reflects the results of the Bank’s analysis used to determine the adequacy of the allowance for credit losses. The Company recorded $315 thousand in provision for credit loss for the quarter ended June 30, 2024. A small provision this quarter resulted from the net recoveries realized during the period. The Company recognized provision for credit losses of $475 thousand and $403 thousand for the quarters ended March 31, 2024 and June 30, 2023, respectively. The provision for the quarter ended March 31, 2024 was mainly needed due to the larger net charge-offs during the quarter. The provision for the quarter ended June 30, 2023 was mainly needed to keep pace with strong loan growth.

The ratio of allowance for credit losses to total loans was 1.04% and 1.00% at June 30, 2024 and March 31, 2024, respectively. The ratio of allowance for loan losses to total loans was 0.99% at June 30, 2023. The ratio of allowance for credit losses to total nonaccrual loans was 555.46% and 347.64% at June 30, 2024 and March 31, 2024, respectively.  The ratio of allowance for loan losses to total nonaccrual loans was 466.74% at June 30, 2023. Management’s judgment in determining the level of the allowance is based on evaluations of the collectability of loans while taking into consideration such factors as trends in delinquencies and charge-offs, changes in the nature and volume of the loan portfolio, current economic conditions that may affect a borrower’s ability to repay and the value of collateral, overall portfolio quality and review of specific potential losses. The Company is committed to maintaining an allowance at a level that adequately reflects the risk inherent in the loan portfolio.

Balance Sheet

Total consolidated assets of the Company at June 30, 2024 were $1.79 billion, which represented an increase of $7.5 million or 0.42% from total assets of $1.78 billion at March 31, 2024. At June 30, 2023, total consolidated assets were $1.78 billion. Consolidated assets remained stable during the quarter ended June 30, 2024.

Total cash and cash equivalents (including cash and due from banks and federal funds sold) decreased $4.0 million or 3.1% as of June 30, 2024, compared to March 31, 2024. Cash and cash equivalents decreased as a percentage of total assets to 6.9% as of June 30, 2024 as compared to 7.2% at March 31, 2024 and increased as compared to 4.4% at June 30, 2023. The prior quarter change was minimal. The year over year change was due mainly to deposit growth exceeding the change in net loans allowing for additional cash and cash equivalents.

At June 30, 2024, total securities available for sale were $138.3 million, a decrease of $2.8 million from March 31, 2024, and a decrease of $13.2 million from June 30, 2023. At  June 30, 2024, total net unrealized losses on the AFS securities portfolio were $23.8 million, a decrease in losses of $1.3 million from total net unrealized losses on AFS securities of $25.1 million at March 31, 2024 and a decrease in losses of $800 thousand from June 30, 2023.

Total net loans increased $9.3 million from $1.42 billion at March 31, 2024 to $1.43 billion at June 30, 2024. These increases were mainly in the commercial non-owner occupied and commercial and industrial loans during the second quarter of 2024. During the quarter ended June 30, 2024, through the normal course of business, $14.6 million in mortgage loans were sold on the secondary market. These loan sales resulted in net gains of $255 thousand. During the quarter ended March 31, 2024, $10.8 million in mortgage loans were sold on the secondary market. These loan sales resulted in net gains of $161 thousand.

On August 23, 2023, the Company completed the sale of its marine finance business, operating under the name LaVictoire Finance, to Axos Bank. Under the Asset Purchase Agreement, Axos Bank agreed to assume the servicing of Bank of Clarke’s retail marine loans and those of third parties, each of which were previously being serviced by Bank of Clarke. All LaVictoire Finance employees became employees of Axos Bank. Pursuant to the Loan Purchase Agreement, Axos Bank acquired all the marine vessel dealer floor plans loans currently held by Bank of Clarke at par value. The acquired loans had an aggregate principal balance of approximately $52.8 million as of the date of the Loan Purchase Agreement. All marine finance loans, with a balance of $236.9 million as of June 30, 2024, are still assets of Bank of Clarke. 

Total deposits increased to $1.49 billion as of June 30, 2024 when compared to March 31, 2024 deposits of $1.47 billion. At June 30, 2023 total deposits were $1.46 billion.  During the second quarter of 2024, total deposits increased $14.6 million. The majority of this increase was due to time deposit balances increasing by $43.9 million. Time deposits as a percentage of total deposits have increased from 26.0% at June 30, 2023 to 28.6% at June 30, 2024.  Time deposits as a percentage of total deposits increased from 25.9% at December 31, 2023. The increase in deposits between June 30, 2023 and  June 30, 2024 was mainly due to the growth of certificates of deposit over $250 thousand. At June 30, 2024, over 75% of deposits were fully FDIC insured.

The Company had $145.0 million and $155.0 million, respectively, in outstanding borrowings from the Federal Home Loan Bank of Atlanta at June 30, 2024 and March 31, 2024.  There was $170.0 million in outstanding borrowings from the Federal Home Loan Bank as of June 30, 2023.  The average rate paid on Federal Home Loan Bank advances as of June 30, 2024 and March 31, 2024 was 4.65% and 4.71%, respectively.  These borrowings were used mainly to fund the strong loan growth that occurred during 2023.

On March 31, 2022, the Company entered into Subordinated Note Purchase Agreements with certain qualified institutional buyers and accredited institutional investors, pursuant to which the Company issued 4.50% Fixed-to-Floating Rate Subordinated Notes due 2032, in the aggregate principal amount of $30.0 million.

Shareholders’ equity was $111.1 million and $107.7 million at June 30, 2024 and March 31, 2024, respectively. Shareholders’ equity was $104.0 million at June 30, 2023. Shareholders’ equity has been impacted by an accumulated other comprehensive loss related to securities available-for-sale. These unrealized losses are primarily a result of rapid increases in interest rates during 2022 and 2023 and continued high rates in 2024. The book value of the Company at June 30, 2024 was $31.24 per common share. Total common shares outstanding were 3,556,844 at June 30, 2024. On July 24, 2024, the Board of Directors announced a quarterly common stock cash dividend of $0.30 per common share, payable on July 16, 2024, to shareholders of record on July 5, 2024.

Cautionary Note Regarding Forward-Looking Statements

Certain information contained in this discussion may include “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements relate to the Company’s future operations and are generally identified by phrases such as “the Company expects,” “the Company believes” or words of similar import. Although the Company believes that its expectations with respect to the forward-looking statements are based upon reliable assumptions within the bounds of its knowledge of its business and operations, there can be no assurance that actual results, performance or achievements of the Company will not differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements.

Factors that could have a material adverse effect on the operations and future prospects of the Company include, but are not limited to: changes in interest rates and general economic conditions; the legislative and regulatory climate; monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and Federal Reserve; the quality or composition of the Company’s loan or investment portfolios; demand for loan products; deposit flows; competition; demand for financial services in the Company’s market area; acquisitions and dispositions; the Company’s ability to keep pace with new technologies; a failure in or breach of the Company’s operational or security systems or infrastructure, or those of third-party vendors or other service providers, including as a result of cyberattacks; the Company’s capital and liquidity; changes in tax and accounting rules, principles, policies and guidelines; and other factors included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 and other filings with the Securities and Exchange Commission.

EAGLE FINANCIAL SERVICES, INC

KEY STATISTICS

For the Three Months Ended

2Q24

1Q24

4Q23

3Q23

2Q23

Net Income (dollars in thousands)

$

3,185

$

2,548

$

2,395

$

2,319

$

2,058

Earnings per share, basic

$

0.89

$

0.72

$

0.69

$

0.66

$

0.58

Earnings per share, diluted

$

0.89

$

0.72

$

0.69

$

0.66

$

0.58

Return on average total assets

0.72

%

0.58

%

0.53

%

0.51

%

0.48

%

Return on average total equity

11.89

%

9.43

%

9.33

%

8.87

%

7.93

%

Dividend payout ratio

33.71

%

41.67

%

43.48

%

45.45

%

51.72

%

Fee revenue as a percent of total revenue

17.57

%

18.11

%

17.32

%

16.95

%

18.01

%

Net interest margin(1)

2.81

%

2.91

%

2.85

%

2.93

%

2.99

%

Yield on average earning assets

5.01

%

5.13

%

5.10

%

5.03

%

4.88

%

Rate on average interest-bearing liabilities

3.14

%

3.10

%

3.09

%

2.98

%

2.71

%

Net interest spread

1.87

%

2.03

%

2.01

%

2.05

%

2.17

%

Tax equivalent adjustment to net interest income (dollars
in thousands)

$

29

$

29

$

29

$

28

$

25

Non-interest income to average assets

0.98

%

0.78

%

0.80

%

0.93

%

0.78

%

Non-interest expense to average assets

2.85

%

2.80

%

2.92

%

3.13

%

3.00

%

Efficiency ratio(2)

77.00

%

77.73

%

83.01

%

84.71

%

81.91

%

 

(1)

The net interest margin is calculated by dividing tax equivalent net interest income by total average earning assets. Tax equivalent interest income is calculated by grossing up interest income for the amounts that are non-taxable (i.e., municipal income) then subtracting interest expense. The rate utilized is 21%. See the table below for the quarterly tax equivalent net interest income and the reconciliation of net interest income to tax equivalent net interest income. The Company’s net interest margin is a common measure used by the financial service industry to determine how profitable earning assets are funded. Because the Company earns a fair amount of nontaxable interest income due to the mix of securities in its investment security portfolio, net interest income for the ratio is calculated on a tax equivalent basis as described above.

(2)

The efficiency ratio is not a measurement under accounting principles generally accepted in the United States. It is calculated by dividing non-interest expense by the sum of tax equivalent net interest income and non-interest income excluding gains and losses on the investment portfolio and sales of repossessed assets. The tax rate utilized is 21%. See the table below for the quarterly tax equivalent net interest income and a reconciliation of net interest income to tax equivalent net interest income. The Company calculates this ratio in order to evaluate its overhead structure or how effectively it is operating. An increase in the ratio from period to period indicates the Company is losing a larger percentage of its income to expenses. The Company believes that the efficiency ratio is a reasonable measure of profitability.

EAGLE FINANCIAL SERVICES, INC

SELECTED FINANCIAL DATA BY QUARTER

2Q24

1Q24

4Q23

3Q23

2Q23

BALANCE SHEET RATIOS

Loans to deposits

97.34

%

97.63

%

97.10

%

96.17

%

100.89

%

Average interest-earning assets to average-interest
bearing liabilities

142.64

%

139.97

%

137.35

%

142.07

%

142.63

%

PER SHARE DATA

Dividends

$

0.30

$

0.30

$

0.30

$

0.30

$

0.30

Book value

31.24

30.28

30.78

28.74

29.47

Tangible book value

31.24

30.28

30.78

28.74

29.47

SHARE PRICE DATA

Closing price

$

32.99

$

29.85

$

30.00

$

31.90

$

30.50

Diluted earnings multiple(1)

9.27

10.36

11.03

12.08

13.15

Book value multiple(2)

1.06

0.99

0.97

1.11

1.04

COMMON STOCK DATA

Outstanding shares at end of period

3,556,844

3,557,229

3,520,894

3,520,894

3,528,240

Weighted average shares outstanding

3,556,935

3,557,203

3,520,894

3,523,943

3,526,934

Weighted average shares outstanding, diluted

3,556,935

3,557,203

3,520,894

3,523,943

3,526,934

CAPITAL RATIOS (BANK ONLY)

      Leverage ratio

8.86

%

8.77

%

8.48

%

8.36

%

8.61

%

CREDIT QUALITY

Net charge-offs to average loans

(0.02)

%

0.04

%

0.03

%

0.01

%

(0.01)

%

Total non-performing loans to total loans

0.20

%

0.32

%

0.40

%

0.40

%

0.23

%

Total non-performing assets to total assets

0.18

%

0.28

%

0.34

%

0.33

%

0.19

%

Non-accrual loans to:

total loans

0.19

%

0.29

%

0.39

%

0.40

%

0.21

%

total assets

0.15

%

0.23

%

0.31

%

0.32

%

0.17

%

Allowance for credit/loan losses to:

total loans

1.04

%

1.00

%

0.99

%

1.01

%

0.99

%

non-performing assets

458.72

%

290.00

%

236.43

%

242.83

%

433.94

%

non-accrual loans

555.46

%

347.64

%

256.74

%

255.80

%

466.74

%

NON-PERFORMING ASSETS:

(dollars in thousands)

Loans delinquent over 90 days

$

167

$

411

$

181

$

0

$

235

Non-accrual loans

2,703

4,156

5,645

5,697

3,109

Other real estate owned and repossessed assets

403

415

304

304

NET LOAN CHARGE-OFFS (RECOVERIES):

(dollars in thousands)

Loans charged off

$

172

$

705

$

427

$

187

$

52

(Recoveries)

(424)

(185)

(44)

(31)

(202)

Net charge-offs (recoveries)

(252)

520

383

156

(150)

PROVISION FOR CREDIT LOSSES (dollars in
thousands)

$

315

$

475

$

366

$

1,283

$

403

ALLOWANCE FOR CREDIT LOSSES (dollars in
thousands)

$

15,014

$

14,448

$

14,493

$

14,573

$

14,511

(1)

The diluted earnings multiple (or price earnings ratio) is calculated by dividing the period’s closing market price per share by total equity per weighted average shares outstanding, diluted for the period. The diluted earnings multiple is a measure of how much an investor may be willing to pay for $1.00 of the Company’s earnings.

(2)

The book value multiple (or price to book ratio) is calculated by dividing the period’s closing market price per share by the period’s book value per share. The book value multiple is a measure used to compare the Company’s market value per share to its book value per share.

EAGLE FINANCIAL SERVICES, INC.

CONSOLIDATED BALANCE SHEETS

(dollars in thousands)

Unaudited
06/30/2024

Unaudited
03/31/2024

Audited
12/31/2023

Unaudited
09/30/2023

Unaudited
06/30/2023

Assets

Cash and due from banks

$

61,179

$

68,280

$

112,066

$

63,239

$

48,907

Federal funds sold

62,476

59,353

26,287

78,799

29,988

Securities available for sale, at fair value

138,269

141,106

147,011

142,559

151,513

Loans held for sale

3,058

1,593

1,661

3,564

3,570

Loans, net of allowance for credit losses

1,433,920

1,424,604

1,448,193

1,426,412

1,456,459

Bank premises and equipment, net

18,114

17,954

18,108

18,421

18,064

Bank owned life insurance

30,103

29,843

29,575

24,404

24,219

Other assets

43,286

40,168

42,696

44,072

43,996

Total assets

$

1,790,405

$

1,782,901

$

1,825,597

$

1,801,470

$

1,776,716

Liabilities and Shareholders’ Equity

Liabilities

Deposits:

Noninterest bearing demand deposits

$

415,017

$

424,869

$

436,619

$

430,910

$

433,220

Savings and interest bearing demand deposits

647,358

666,730

656,439

656,111

645,834

Time deposits

426,209

382,343

413,264

411,359

378,954

Total deposits

$

1,488,584

$

1,473,942

$

1,506,322

$

1,498,380

$

1,458,008

Federal funds purchased

302

347

Federal Home Loan Bank advances, short-term

10,000

25,000

Federal Home Loan Bank advances, long-term

145,000

145,000

165,000

145,000

145,000

Subordinated debt

29,478

29,461

29,444

29,428

29,411

Other liabilities

15,926

16,446

16,452

27,479

15,327

Commitments and contingent liabilities

Total liabilities

$

1,679,290

$

1,675,196

$

1,717,218

$

1,700,287

$

1,672,746

Shareholders’ Equity

Preferred stock, $10 par value

Common stock, $2.50 par value

8,707

8,705

8,660

8,660

8,661

Surplus

14,604

14,368

14,280

13,970

13,881

Retained earnings

106,567

104,449

103,445

102,106

100,844

Accumulated other comprehensive (loss)

(18,763)

(19,817)

(18,006)

(23,553)

(19,416)

Total shareholders’ equity

$

111,115

$

107,705

$

108,379

$

101,183

$

103,970

Total liabilities and shareholders’ equity

$

1,790,405

$

1,782,901

$

1,825,597

$

1,801,470

$

1,776,716

EAGLE FINANCIAL SERVICES, INC

LOAN DATA

(dollars in thousands)

6/30/2024

3/31/2024

12/31/2023

9/30/2023

6/30/2023

Mortgage real estate loans:

   Construction & Secured by Farmland

$

81,609

$

82,692

$

84,145

$

80,012

$

95,433

   HELOCs

46,697

46,329

47,674

44,719

44,333

   Residential First Lien – Investment

112,790

113,813

117,431

120,547

117,265

   Residential First Lien – Owner Occupied

187,807

181,323

178,180

162,919

142,417

   Residential Junior Liens

12,387

12,690

12,831

12,284

11,869

   Commercial – Owner Occupied

257,675

254,744

251,456

244,088

243,610

   Commercial –  Non-Owner Occupied & Multifamily

352,892

344,192

348,879

355,122

350,210

Commercial and industrial loans:

   BHG loans

4,284

4,740

5,105

5,419

5,747

   SBA PPP loans

39

45

51

57

62

   Other commercial and industrial loans

102,345

95,327

102,672

91,411

95,012

Marine loans

236,890

247,042

251,168

260,518

299,304

Triad Loans

24,579

25,335

25,877

26,519

27,157

Consumer loans

9,497

9,194

16,542

16,019

16,486

Overdrafts

257

1,559

253

207

308

Other loans

11,951

12,466

12,895

13,089

13,805

Total loans

$

1,441,699

$

1,431,491

$

1,455,159

$

1,432,930

$

1,463,018

Net deferred loan costs and premiums

7,235

7,561

7,527

8,055

7,952

Allowance for credit/loan losses

(15,014)

(14,448)

(14,493)

(14,573)

(14,511)

Net loans

$

1,433,920

$

1,424,604

$

1,448,193

$

1,426,412

$

1,456,459

EAGLE FINANCIAL SERVICES, INC

CONSOLIDATED STATEMENTS OF INCOME

(dollars in thousands)

Unaudited

6/30/2024

3/31/2024

12/31/2023

9/30/2023

6/30/2023

Interest and Dividend Income

Interest and fees on loans

$

19,525

$

19,963

$

19,420

$

20,179

$

18,754

Interest on federal funds sold

68

39

71

51

28

Interest and dividends on securities available for sale:

Taxable interest income

739

758

771

781

785

Interest income exempt from federal income taxes

3

5

4

3

5

Dividends

155

156

157

147

136

Interest on deposits in banks

1,258

991

1,592

1,030

656

Total interest and dividend income

$

21,748

$

21,912

$

22,015

$

22,191

$

20,364

Interest Expense

Interest on deposits

$

7,515

$

7,424

$

7,658

$

6,978

$

5,535

Interest on federal funds purchased

Interest on Federal Home Loan Bank advances

1,712

1,710

1,714

1,943

2,032

Interest on subordinated debt

355

354

354

354

355

Total interest expense

$

9,582

$

9,488

$

9,726

$

9,275

$

7,922

Net interest income

$

12,166

$

12,424

$

12,289

$

12,916

$

12,442

Provision For Credit Losses

181

475

366

216

403

Net interest income after provision for credit losses

$

11,985

$

11,949

$

11,923

$

12,700

$

12,039

Noninterest Income

Wealth management fees

$

1,273

$

1,456

$

1,315

$

1,190

$

1,263

Service charges on deposit accounts

456

454

467

460

447

Other service charges and fees

1,164

969

979

1,252

1,135

(Loss) gain on the sale of marine finance business

(28)

463

(Loss) gain on the sale of bank premises and equipment

(11)

7

7

(Loss) on the sale of AFS securities

Gain on sale of loans HFS

492

161

515

265

192

Officer insurance income

269

268

171

184

179

Other operating income

652

163

234

388

134

Total noninterest income

$

4,295

$

3,471

$

3,653

$

4,209

$

3,357

Noninterest Expenses

Salaries and employee benefits

$

7,353

$

7,185

$

7,849

$

7,598

$

7,561

Occupancy expenses

470

569

581

570

533

Equipment expenses

401

373

320

341

315

Advertising and marketing expenses

245

237

291

228

342

Stationery and supplies

32

24

44

69

56

ATM network fees

373

380

421

426

365

FDIC assessment

351

409

478

495

346

Computer software expense

221

233

373

396

281

Bank franchise tax

338

331

339

340

313

Professional fees

511

506

577

497

753

Data processing fees

558

565

513

542

478

Other operating expenses

1,657

1,565

1,494

2,631

1,612

Total noninterest expenses

$

12,510

$

12,377

$

13,280

$

14,133

$

12,955

Income before income taxes

$

3,770

$

3,043

$

2,296

$

2,776

$

2,441

Income Tax Expense (Benefit)

585

495

(99)

457

383

Net income

$

3,185

$

2,548

$

2,395

$

2,319

$

2,058

Earnings Per Share

Net income per common share, basic

$

0.89

$

0.72

$

0.68

$

0.66

$

0.58

Net income per common share, diluted

$

0.89

$

0.72

$

0.68

$

0.66

$

0.58

EAGLE FINANCIAL SERVICES, INC

Average Balances, Income and Expenses, Yields and Rates

(dollars in thousands)

Three Months Ended

June 30, 2024

March 31, 2024

June 30, 2023

Interest

Interest

Interest

Average

Income/

Average

Average

Income/

Average

Average

Income/

Average

Assets:

Balance

Expense

Rate

Balance

Expense

Rate

Balance

Expense

Rate

Securities:

Taxable

$

137,588

$

893

2.61

%

$

142,700

$

914

2.58

%

$

155,347

$

922

2.38

%

Tax-Exempt (1)

492

5

4.13

%

499

6

4.84

%

510

5

4.11

%

Total Securities

$

138,080

$

898

2.62

%

$

143,199

$

920

2.58

%

$

155,857

$

927

2.39

%

Loans:

Taxable

$

1,424,304

$

19,421

5.48

%

$

1,433,871

$

19,858

5.57

%

$

1,425,873

$

18,659

5.25

%

Non-accrual

4,600

%

5,618

%

2,608

%

Tax-Exempt (1)

10,603

132

5.01

%

10,706

133

4.99

%

9,810

119

4.86

%

Total Loans

$

1,439,507

$

19,553

5.46

%

$

1,450,195

$

19,991

5.54

%

$

1,438,291

$

18,778

5.24

%

Federal funds sold and interest-bearing
deposits in other banks

170,858

1,326

3.12

%

127,205

1,030

3.26

%

80,251

684

3.42

%

Total earning assets

$

1,748,445

$

21,777

5.01

%

$

1,720,599

$

21,941

5.13

%

$

1,674,399

$

20,389

4.88

%

Allowance for loan losses

(14,604)

(14,536)

(14,201)

Total non-earning assets

33,281

53,112

73,702

Total assets

$

1,767,122

$

1,759,175

$

1,733,900

Liabilities and Shareholders’ Equity:

Interest-bearing deposits:

NOW accounts

$

258,965

$

1,538

2.39

%

$

256,282

$

1,497

2.35

%

$

240,401

$

1,247

2.08

%

Money market accounts

261,557

1,463

2.25

%

263,755

1,413

2.15

%

254,136

1,093

1.72

%

Savings accounts

136,370

39

0.12

%

138,737

41

0.12

%

153,659

46

0.12

%

Time deposits:

$250,000 and more

138,531

1,652

4.80

%

143,294

1,701

4.77

%

99,903

888

3.57

%

Less than $250,000

255,776

2,823

4.44

%

251,853

2,772

4.43

%

224,041

2,261

4.05

%

Total interest-bearing deposits

$

1,051,199

$

7,515

2.88

%

$

1,053,921

$

7,424

2.83

%

$

972,140

$

5,535

2.28

%

Federal funds purchased

15

%

11

%

178

%

Federal Home Loan Bank advances

145,110

1,712

4.74

%

145,879

1,710

4.72

%

172,198

2,032

4.73

%

Subordinated debt

29,467

355

4.84

%

29,450

354

4.84

%

29,400

355

4.83

%

Total interest-bearing liabilities

$

1,225,791

$

9,582

3.14

%

$

1,229,261

$

9,488

3.10

%

$

1,173,916

$

7,922

2.71

%

Noninterest-bearing liabilities:

Demand deposits

417,128

405,166

440,728

Other Liabilities

16,489

17,268

15,212

Total liabilities

$

1,659,408

$

1,651,695

$

1,629,856

Shareholders’ equity

107,714

107,480

104,044

Total liabilities and shareholders’ equity

$

1,767,122

$

1,759,175

$

1,733,900

Net interest income

$

12,195

$

12,453

$

12,467

Net interest spread

1.87

%

2.03

%

2.17

%

Interest expense as a percent of average
earning assets

2.20

%

2.22

%

1.90

%

Net interest margin

2.81

%

2.91

%

2.99

%

(1)

Income and yields are reported on tax-equivalent basis using a federal tax rate of 21%.

EAGLE FINANCIAL SERVICES, INC

Reconciliation of Tax-Equivalent Net Interest Income

(dollars in thousands)

Three Months Ended

6/30/2024

3/31/2024

12/31/2023

9/30/2023

6/30/2023

GAAP Financial Measurements:

Interest Income – Loans

$

19,525

$

19,963

$

19,420

$

20,179

$

18,754

Interest Income – Securities and Other Interest-Earnings Assets

2,223

1,949

2,595

2,012

1,610

Interest Expense – Deposits

7,515

7,424

7,658

6,978

5,535

Interest Expense – Other Borrowings

2,067

2,064

2,068

2,297

2,387

Total Net Interest Income

$

12,166

$

12,424

$

12,289

$

12,916

$

12,442

Non-GAAP Financial Measurements:

Add:  Tax Benefit on Tax-Exempt Interest Income – Loans

$

28

$

28

$

28

$

27

$

24

Add:  Tax Benefit on Tax-Exempt Interest Income – Securities

1

1

1

1

1

Total Tax Benefit on Tax-Exempt Interest Income

$

29

$

29

$

29

$

28

$

25

Tax-Equivalent Net Interest Income

$

12,195

$

12,453

$

12,318

$

12,944

$

12,467

SOURCE Eagle Financial Services, Inc.


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