EX-99.1 2 dex991.htm PRESS RELEASE Press release

Exhibit 99.1

EAGLE FINANCIAL SERVICES, INC. ANNOUNCES 2009

ANNUAL AND FOURTH QUARTER FINANCIAL RESULTS

 

Contact:    Kathleen J. Chappell, Vice President and CFO    540-955-2510
      kchappell@bankofclarke.com

BERRYVILLE, VIRGINIA (January 29, 2010) – Eagle Financial Services, Inc. (OTC BULLETIN BOARD: EFSI), the holding company for Bank of Clarke County, whose divisions include Eagle Investment Group, announces annual and fourth quarter 2009 financial results. The Company’s common stock is listed for trading on the Over-the-Counter (OTC) Bulletin Board under the ticker symbol EFSI.

Fourth Quarter and Annual 2009 Financial Highlights:

 

     Q4     Annual  

Net income (000’s)

    $ 792      $ 3,441   

Diluted EPS

    $ 0.25      $ 1.08   

Net Interest Margin

      4.52 %      4.31 % 

Total equity to assets

        9.65 % 

Allowance for loan losses to total loans

        1.48 % 

Total loan growth (000’s)

      $ 14.0   

Retail deposit growth (000’s)

      $ 27.2   

John R. Milleson, President and CEO, stated “Although 2009 earnings were not at a desired level of performance, the Bank’s annual results compare favorably to those of its peers. Our 2009 earnings were adversely affected mostly because of two matters: the increase in the Bank’s provision for loan losses and the increase in the Bank’s FDIC premium. Challenging times remain for our economy and the banking industry. The Company will continue its focus on providing sound financial services to the communities it serves while sustaining its conservative approach to banking principles as it has during the past 129 years. I take comfort and pride in the fact that we are an independent, community bank.”

Net Interest Income and Net Interest Margin

Net interest income for the quarter ended December 31, 2009 was $5.5 million which represented an increase of 16.7% when compared to $4.7 million for the same period in 2008. Net interest income for the year ended December 31, 2009 was $20.7 million which represented an increase of 9.2% when compared to $18.9 million in 2008. This increase in net interest income resulted mostly from the decline in the Company’s funding costs.

Total loan interest income was $5.9 million for the quarter ended December 31, 2009, reflecting a decrease of $38,000 from the quarter ended December 31, 2008. Total loan interest income was $23.0 million for the year ended December 31, 2009, reflecting a decrease of $1.8 million from the year ended December 31, 2008. Average loans for the quarter ended December 31, 2009 were $400.0 million compared to $390.4 million for the same period in 2008. Average loans for the year ended December 31, 2009 were $391.4 million compared to $389.9 million for the same period in 2008. The tax equivalent yield on average loans for the quarter ended December 31, 2009 was 5.92%, down 18 basis points from the same time period in 2008. The tax equivalent yield on average loans for the year ended December 31, 2009 was 5.91%, down 48 basis points from the same time period in 2008. Interest income from the investment portfolio was $617,000 for the quarter ended December 31, 2009 and $1.2 million for the same period in 2008. Interest income from the investment portfolio was $4.4 million for the year ended December 31, 2009 and $4.6 million for the same period in 2008.

Total interest expense for the three months ended December 31, 2009 decreased $1.0 million when compared to the three months ended December 31, 2008. Total interest expense for the year ended December 31, 2009 decreased $3.7 million when compared to the year ended December 31, 2008. The average cost of interest bearing liabilities decreased 98 basis points when comparing the quarter ended December 31, 2009 to the same time period in 2008. The average cost of interest bearing liabilities decreased 97 basis points when comparing the year ended December 31, 2009 to the same time period in 2008. The average balance of interest bearing liabilities decreased $1.1 million from the quarter ended December 31, 2008 to the same period in 2009. The average balance of interest bearing liabilities increased $2.9 million from the year ended December 31, 2008 to the same period in 2009.

The net interest margin was 4.52% for the quarter December 31, 2009. When compared to the quarter ended December 31, 2008, the net interest margin increased 54 basis points. The net interest margin was 4.31% for the year ended December 31, 2009. When compared to the year ended December 31, 2008, the net interest margin increased 29 basis points. This increase was attributable to the decreased balance and cost of interest bearing liabilities.

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 34%.

Asset Quality and Provision for Loan Losses

Provisions for loan losses were $1.5 million for the three months ended December 31, 2009, compared to $1.1 million for the quarter ended December 31, 2008. Provisions for loan losses were $4.4 million for the year ended December 31, 2009, compared to $2.3 million for the year ended December 31, 2008. Given the level of problem loans and continued uncertainty in the economy, the Company deemed it prudent to increase its allowance for loan losses.

Non performing assets increased from $4.6 million or .88% of total assets at December 31, 2008 to $7.9 million or 1.48% of total assets at December 31, 2009. This increase mostly resulted from additions to non accrual loans and other real estate owned. During the fourth quarter of 2009, the Bank placed approximately 21 loans on non accrual status. The majority of these loans is secured by real estate and has allocated specific allowances. Two real estate assets valued at $456,000 had been foreclosed upon during the fourth quarter of 2009 while the Bank also sold two pieces of other real estate owned recorded at $293,000 during the same period. Additionally, an allowance for other real estate owned of $198,000 was established during the fourth quarter of 2009.

Loans greater than 90 days past due decreased from $510,000 at December 31, 2008 to $13,000 at December 31, 2009. The Company realized $376,000 in net charge-offs for the quarter ended December 31, 2009 versus $490,000 for the same period in 2008. The Company realized $2.9 million in net charge-offs for the year ended December 31, 2009 versus $980,000 for the same period in 2008. Early in 2009, the Company developed a troubled credit group to monitor past due loans, identify potential problem credits, and develop action plans to work through its troubled loans as promptly as possible.

Given the current economic environment, it is anticipated there could be an increase in past due loans, non performing loans and other real estate owned. However, the increase is not expected to be as significant as that experienced during 2009. The Company believes that the allowance for loan losses will be maintained at a level adequate to mitigate any negative impact resulting from such increases.

Noninterest Income and Noninterest Expense

Noninterest income was $1.3 million for the quarters ended December 31, 2009 and 2008. Noninterest income was $4.6 million for the years ended December 31, 2009 and 2008. Noninterest expense was $4.4 million and $3.7 million for the quarters ended December 31, 2009 and 2008, respectively. Noninterest expense was $16.5 million and $15.8 million for the years ended December 31, 2009 and 2008, respectively. Despite the impact of the increase in FDIC insurance premiums of $604,000 and the loss provision for other real estate owned of $198,000 for the year ended December 31, 2009, the Company has diligently managed and monitored its other operating expenses.

Total Consolidated Assets

Total consolidated assets of the Company at December 31, 2009 were $535.4 million, which represented an increase of $7.3 million or 1.4% from total assets of $528.1 million at December 31, 2008. Total loans increased $14.0 million from $390.1 million at December 31, 2008 to $404.1 million at December 31, 2009. Considering the current interest rate and competitive market environment, the Company has been conscientious about maintaining both its underwriting standards and its net interest margin and thereby cautious about the growth it has accepted in the loan portfolio.

Deposits and Other Borrowings

Total deposits, which include brokered deposits, increased $11.6 million to $398.1 million at December 31, 2009 from $386.5 million at December 31, 2008. The Company held $9.9 million in brokered deposits at December 31, 2009. At December 31, 2008 brokered deposits were $25.5 million.

Securities sold under agreement to repurchase were $14.0 million at December 31, 2009 and $14.7 million at December 31, 2008. Borrowings with the Federal Home Loan Bank of Atlanta were $62.3 million at December 31, 2009 and $70.0 million at December 31, 2008.

Equity

Shareholders’ equity at December 31, 2009 and December 31, 2008 was $51.6 million and $46.8 million, respectively. The book value of the Company at December 31, 2009 was $16.14 per common share. Total common shares outstanding were 3,199,636 at December 31, 2009. On January 20, 2010, the board of directors declared a $0.17 per common share cash dividend for shareholders of record as of February 1, 2010 and payable on February 16, 2010.

 

 

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. For details on factors that could affect expectations, see the risk factors and other cautionary language included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2008, and other filings with the Securities and Exchange Commission.

EAGLE FINANCIAL SERVICES, INC.

KEY STATISTICS

 

     For the Three Months Ended  
     4Q09     3Q09     2Q09     1Q09     4Q08  

Net Income (dollars in thousands)

    $ 792      $ 790      $ 904      $ 955      $ 1,715   

Earnings per share, basic

    $ 0.25      $ 0.25      $ 0.29      $ 0.30      $ 0.54   

Earnings per share, diluted

    $ 0.25      $ 0.25      $ 0.28      $ 0.30      $ 0.54   

Return on average total assets

      0.59 %      0.60 %      0.71 %      0.74 %      1.31 % 

Return on average total equity

      6.15 %      6.33 %      7.80 %      8.27 %      15.00 % 

Dividend payout ratio

      68.00 %      68.00 %      58.62 %      56.67 %      31.48 % 

Fee revenue as a percent of total revenue

      18.06 %      11.35 %      15.44 %      15.13 %      20.91 % 

Net interest margin(1)

      4.52 %      4.51 %      4.24 %      3.98 %      3.98 % 

Yield on average earning assets

      5.67 %      5.73 %      5.67 %      5.66 %      5.94 % 

Yield on average interest-bearing liabilities

      1.49 %      1.56 %      1.82 %      2.12 %      2.47 % 

Net interest spread

      4.18 %      4.17 %      3.85 %      3.54 %      3.47 % 

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

    $ 191      $ 195      $ 187      $ 182      $ 171   

Non-interest income to average assets

      0.96 %      0.67 %      0.95 %      0.92 %      0.96 % 

Non-interest expense to average assets

      3.26 %      3.20 %      3.10 %      2.92 %      2.87 % 

Efficiency ratio(2)

      62.43 %      60.82 %      62.88 %      63.04 %      60.86 % 

 

(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 34%. For the quarters ended December 31, 2009 and December 31, 2008 net interest income on a tax equivalent basis was $5.7 million and $4.9 million, respectively. For the quarters ended September 30, June 30 and March 31, 2009 net interest income on a tax equivalent basis was $5.6 million, $5.3 million and $4.9 million, respectively. See the table below for a 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 non taxable 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. The tax rate utilized is 34%. For the quarters ended December 31, 2009 and December 31, 2008 net interest income on a tax equivalent basis was $5.7 million and $4.9 million, respectively. For the quarters ended September 30, June 30 and March 31, 2009 net interest income on a tax equivalent basis was $5.6 million, $5.3 million and $4.9 million, respectively. See the table below for a reconciliation of net interest income to tax equivalent net interest income. Total non interest income, excluding gains and losses on the investment portfolio, for the quarters ended December 31, 2009 and December 31, 2008, was $1.3 million. Total non interest income, excluding gains and losses on the investment portfolio, for the quarters ended September 30, June 30, and March 31, 2009, was $1.3 million, $1.3 million and $1.2 million, respectively. 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

 

     4Q09     3Q09     2Q09     1Q09     4Q08  

BALANCE SHEET RATIOS

           

Loans to deposits

      101.50 %      104.31 %      102.20 %      96.85 %      100.79 % 

Average interest-earning assets to average-interest bearing liabilities

      129.55 %      136.59 %      126.56 %      125.56 %      125.86 % 

PER SHARE DATA

           

Dividends

    $ 0.17      $ 0.17      $ 0.17      $ 0.17      $ 0.17   

Book value

    $ 16.14      $ 15.88      $ 15.28      $ 14.74      $ 14.79   

Tangible book value

    $ 16.13      $ 15.88      $ 15.26      $ 14.71      $ 14.76   

SHARE PRICE DATA

           

Closing price

    $ 15.75      $ 15.35      $ 15.00      $ 14.60      $ 16.10   

Diluted earnings multiple(1)

      0.98        0.97        0.98        0.99        1.09   

Book value multiple(2)

      0.98        0.97        0.98        0.99        1.09   

COMMON STOCK DATA

           

Outstanding shares at end of period

      3,199,636        3,190,304        3,180,899        3,167,250        3,166,530   

Weighted average shares outstanding

      3,194,970        3,185,806        3,169,197        3,162,666        3,148,570   

Weighted average shares outstanding, diluted

      3,202,595        3,193,758        3,172,659        3,166,620        3,156,646   

CAPITAL RATIOS

           

Total equity to total assets

      9.65 %      9.72 %      9.30 %      8.72 %      8.87 % 

CREDIT QUALITY

           

Net charge-offs to average loans

      0.37 %      0.14 %      0.43 %      0.08 %      0.13 % 

Total non-performing loans to total loans

      1.27 %      0.34 %      0.54 %      1.52 %      1.00 % 

Total non-performing assets to total assets

      1.48 %      0.81 %      0.82 %      1.30 %      0.88 % 

Non-accrual loans to:

           

total loans

      1.26 %      0.27 %      0.53 %      1.10 %      0.87 % 

total assets

      0.95 %      0.20 %      0.39 %      0.80 %      0.64 % 

Allowance for loan losses to:

           

total loans

      1.48 %      1.25 %      1.13 %      1.29 %      1.16 % 

non-performing assets

      75.46 %      116.68 %      102.74 %      72.12 %      97.67 % 

non-accrual loans

      117.08 %      458.66 %      213.60 %      116.66 %      133.56 % 

NON-PERFORMING ASSETS:

           

(dollars in thousands)

           

Loans delinquent over 90 days

    $ 13      $ 284      $ 50      $ 1,624      $ 510   

Non-accrual loans

      5,099        1,067        2,052        4,293        3,385   

Other real estate owned and repossessed assets

      2,799        2,845        2,164        1,027        734   

NET LOAN CHARGE-OFFS (RECOVERIES):

           

(dollars in thousands)

           

Loans charged off

    $ 448      $ 617      $ 1,727      $ 361      $ 521   

(Recoveries)

      (72 )      (79 )      (52 )      (48 )      (31 ) 

Net charge-offs (recoveries)

      376        537        1,675        313        490   

PROVISION FOR LOAN LOSSES (dollars in thousands)

    $ 1,450      $ 1,050      $ 1,050      $ 800      $ 1,100   

ALLOWANCE FOR LOAN LOSS SUMMARY

           

(dollars in thousands)

           

Balance at the beginning of period

    $ 4,896      $ 4,383      $ 5,008      $ 4,521      $ 3,911   

Provision

      1,450        1,050        1,050        800        1,100   

Net charge-offs (recoveries)

      376        537        1,675        313        490   

Balance at the end of period

    $ 5,970      $ 4,896      $ 4,383      $ 5,008      $ 4,521   

 

(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
12/31/2009		    Audited
12/31/2008		  

Assets

      

Cash and due from banks

    $ 7,353    $ 7,287   

Federal funds sold

      179      11,052   

Securities available for sale, at fair value

      101,210      98,919   

Loans, net of allowance for loan losses

      398,096      385,565   

Bank premises and equipment, net

      14,778      15,377   

Other assets

      13,816      9,942   
               

Total assets

    $ 535,432    $ 528,142   
               

Liabilities and Shareholders’ Equity

      

Liabilities

      

Deposits:

      

Noninterest bearing demand deposits

    $ 90,575    $ 81,340   

Savings and interest bearing demand deposits

      170,485      154,622   

Time deposits

      137,047      150,565   
               

Total deposits

    $ 398,107    $ 386,527   

Federal funds purchased and securities sold under agreements to repurchase

      14,016      14,693   

Federal Home Loan Bank advances

      62,250      70,000   

Trust preferred capital notes

      7,217      7,217   

Other liabilities

      2,198      2,876   

Commitments and contingent liabilities

      —        —     
               

Total liabilities

    $ 483,788    $ 481,313   
               

Shareholders’ Equity

      

Preferred stock, $10 par value

    $ —      $ —     

Common stock, $2.50 par value

      7,999      7,888   

Surplus

      8,504      7,796   

Retained earnings

      34,049      32,779   

Accumulated other comprehensive income

      1,092      (1,634 ) 
               

Total shareholders’ equity

    $ 51,644    $ 46,829   
               

Total liabilities and shareholders’ equity

    $ 535,432    $ 528,142   
               

EAGLE FINANCIAL SERVICES, INC.

CONSOLIDATED STATEMENTS OF INCOME

(dollars in thousands)

 

     Three Months Ended
December 31,		     Year Ended
December 31, 		 
     2009     2008     2009     2008  
     Unaudited     Unaudited     Unaudited     Audited  

Interest and Dividend Income

         

Interest and fees on loans

    $ 5,934      $ 5,972      $ 23,001      $ 24,790   

Interest on federal funds sold

      1        2        10        45   

Interest and dividends on securities available for sale:

         

Taxable interest income

      617        757        2,784        2,766   

Interest income exempt from federal income taxes

      304        271        1,194        1,142   

Dividends

      113        141        461        691   

Interest on deposits in banks

      —          1        3        5   
                                

Total interest and dividend income

    $ 6,969      $ 7,144      $ 27,453      $ 29,439   
                                

Interest Expense

         

Interest on deposits

    $ 806      $ 1,551      $ 4,040      $ 6,978   

Interest on federal funds purchased and securities sold under agreements to repurchase

      98        113        392        482   

Interest on Federal Home Loan Bank advances

      464        670        2,042        2,706   

Interest on trust preferred capital notes

      80        80        319        346   
                                

Total interest expense

    $ 1,448      $ 2,414      $ 6,793      $ 10,512   
                                

Net interest income

    $ 5,521      $ 4,730      $ 20,660      $ 18,927   

Provision For Loan Losses

      1,450        1,100        4,350        2,310   
                                

Net interest income after provision for loan losses

    $ 4,071      $ 3,630      $ 16,310      $ 16,617   
                                

Noninterest Income

         

Income from fiduciary activities

    $ 174      $ 211      $ 818      $ 911   

Service charges on deposit accounts

      522        567        2,053        2,333   

Other service charges and fees

      534        473        2,148        2,565   

Gain on the sale of loans

      —          —          —          376   

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

      (5 )      —          (5 )      742   

(Loss) on the sale of repossessed assets

      15        28        (35 )      (42 ) 

(Loss) on sales of AFS securities

      20        —          (419 )      (2,488 ) 

Other operating income

      29        (26 )      66        212   
                                

Total noninterest income

    $ 1,289      $ 1,253      $ 4,626      $ 4,609   
                                

Noninterest Expenses

         

Salaries and employee benefits

    $ 2,312      $ 2,122      $ 9,262      $ 9,069   

Occupancy expenses

      134        288        1,069        1,189   

Equipment expenses

      153        181        666        700   

Advertising and marketing expenses

      85        115        409        406   

Stationery and supplies

      94        82        311        326   

ATM network fees

      20        (18 )      104        323   

FDIC assessment

      216        62        801        197   

Provision for other real estate owned

      198        —          198        —     

Other operating expenses

      1,152        913        3,660        3,604   
                                

Total noninterest expenses

    $ 4,364      $ 3,745      $ 16,480      $ 15,814   
                                

Income before income taxes

    $ 996      $ 1,138      $ 4,456      $ 5,412   

Income Tax Expense

      204        (577 )      1,015        1,357   
                                

Net income

    $ 792      $ 1,715      $ 3,441      $ 4,055   
                                

Earnings Per Share

         

Net income per common share, basic

    $ 0.25      $ 0.54      $ 1.09      $ 1.29   
                                

Net income per common share, diluted

    $ 0.25      $ 0.54      $ 1.08      $ 1.29   
                                

EAGLE FINANCIAL SERVICES, INC.

Average Balances, Income and Expenses, Yields and Rates

(dollars in thousands)

 

     For the Three Months Ended December,  
     2009     2008  
     Average
Balance		     Interest
Income/
Expense		    Average
Rate		     Average
Balance		     Interest
Income/
Expense		    Average
Rate		  

Assets:

               

Securities:

               

Taxable

    65,116      2,897    4.45 %    66,448      3,563    5.36 % 

Tax-Exempt (1)

    32,872      1,827    5.56 %    29,820      1,629    5.46 % 
                          

Total Securities

    97,988      4,724    4.82 %    96,268      5,192    5.39 % 

Loans:

               

Taxable

    394,194      23,271    5.90 %    385,022      23,451    6.09 % 

Tax-Exempt (1)

    5,808      410    7.06 %    5,348      364    6.81 % 
                          

Total Loans

    400,002      23,681    5.92 %    390,370      23,815    6.10 % 

Federal funds sold

    3,073      4    0.13 %    1,623      8    0.49 % 

Interest-bearing deposits in other banks

    177      —      0.00 %    124      4    3.23 % 
                          

Total earning assets

    501,240      28,408    5.67 %    488,385      29,019    5.94 % 
                  

Allowance for loan losses

    (5,222 )         (3,856 )      

Total non-earning assets

    34,881           33,380        
                      

Total assets

    530,899           517,909        
                      

Liabilities and Shareholders’ Equity:

               

Interest-bearing deposits:

               

NOW accounts

    66,525      307    0.46 %    56,762      554    0.98 % 

Money market accounts

    61,233      443    0.72 %    55,341      942    1.70 % 

Savings accounts

    36,927      72    0.19 %    33,855      193    0.57 % 

Time deposits:

               

$100,000 and more

    46,328      755    1.62 %    61,083      1,881    3.08 % 

Less than $100,000

    90,998      1,621    1.78 %    82,106      2,582    3.14 % 
                          

Total interest-bearing deposits

    302,011      3,198    1.06 %    289,147      6,152    2.13 % 

Federal funds purchased and securities sold under agreements to repurchase

    15,426      390    5.23 %    17,584      451    2.56 % 

Federal Home Loan Bank advances

    62,250      1,843    2.96 %    74,076      2,658    3.59 % 

Trust preferred capital notes

    7,217      317    4.40 %    7,217      317    4.39 % 
                          

Total interest-bearing liabilities

    386,904      5,747    1.49 %    388,024      9,578    2.47 % 
                          

Noninterest-bearing liabilities:

               

Demand deposits

    89,016           81,802        

Other Liabilities

    3,910           2,715        
                      

Total liabilities

    479,830           472,541        

Shareholders’ equity

    51,069           45,368        
                      

Total liabilities and shareholders’ equity

    530,899           517,909        
                      
              
                  

Net interest income

      22,661        19,441   
                  

Net interest spread

         4.18 %         3.47 % 

Interest expense as a percent of average earning assets

         1.15 %         1.96 % 

Net interest margin

         4.52 %         3.98 % 

 

(1) Income and yields are reported on a tax equivalent basis using a federal tax rate of 34%.

EAGLE FINANCIAL SERVICES, INC.

Average Balances, Income and Expenses, Yields and Rates

(dollars in thousands)

 

     For the Year Ended December,  
     2009     2008  
     Average
Balance		     Interest
Income/
Expense		    Average
Rate		     Average
Balance		     Interest
Income/
Expense		    Average
Rate		  

Assets:

               

Securities:

               

Taxable

    67,341      3,246    4.82 %    65,099      3,457    5.31 % 

Tax-Exempt (1)

    32,460      1,809    5.57 %    30,566      1,731    5.67 % 
                          

Total Securities

    99,801      5,055    5.06 %    95,665      5,188    5.42 % 

Loans:

               

Taxable

    385,423      22,729    5.90 %    385,214      24,575    6.38 % 

Tax-Exempt (1)

    5,974      413    6.92 %    4,651      325    6.99 % 
                          

Total Loans

    391,397      23,142    5.91 %    389,865      24,900    6.39 % 

Federal funds sold

    4,937      10    0.21 %    2,195      45    2.05 % 

Interest-bearing deposits in other banks

    222      3    1.20 %    198      5    2.53 % 
                          

Total earning assets

    496,357      28,209    5.68 %    487,923      30,138    6.18 % 
                  

Allowance for loan losses

    (4,673 )         (3,466 )      

Total non-earning assets

    34,649           31,714        
                      

Total assets

    526,333           516,171        
                      

Liabilities and Shareholders’ Equity:

               

Interest-bearing deposits:

               

NOW accounts

    60,338      306    0.51 %    60,774      680    1.12 % 

Money market accounts

    60,001      543    0.90 %    52,464      975    1.86 % 

Savings accounts

    36,160      108    0.30 %    33,748      214    0.63 % 

Time deposits:

               

$100,000 and more

    51,455      1,941    3.77 %    68,732      2,451    3.57 % 

Less than $100,000

    94,523      1,142    1.21 %    74,445      2,658    3.57 % 
                          

Total interest-bearing deposits

    302,477      4,040    1.34 %    290,163      6,978    2.40 % 

Federal funds purchased and securities sold under agreements to repurchase

    15,736      392    2.49 %    17,119      482    2.82 % 

Federal Home Loan Bank advances

    63,709      2,042    3.21 %    71,762      2,706    3.77 % 

Trust preferred capital notes

    7,217      319    4.42 %    7,217      346    4.79 % 
                          

Total interest-bearing liabilities

    389,139      6,793    1.75 %    386,261      10,512    2.72 % 
                          

Noninterest-bearing liabilities:

               

Demand deposits

    84,876           81,033        

Other Liabilities

    3,478           2,823        
                      

Total liabilities

    477,492           470,117        

Shareholders’ equity

    48,841           46,054        
                      

Total liabilities and shareholders’ equity

    526,333           516,171        
                      
              
                  

Net interest income

      21,416        19,626   
                  

Net interest spread

         3.93 %         3.46 % 

Interest expense as a percent of average earning assets

         1.37 %         2.15 % 

Net interest margin

         4.31 %         4.02 % 

 

(1) Income and yields are reported on a tax equivalent basis using a federal tax rate of 34%.

EAGLE FINANCIAL SERVICES, INC.

Reconciliation of Tax-Equivalent Net Interest Income

(dollars in thousands)

 

     Three Months Ended
     12/31/2009    9/30/2009    6/30/2009    3/31/2009    12/31/2008

GAAP Financial Measurements:

               

Interest Income - Loans

    $ 5,934    $ 5,765    $ 5,698    $ 5,604    $ 5,972

Interest Income - Securities and Other Interest-Earnings Assets

      1,035      1,092      1,170      1,155      1,172

Interest Expense - Deposits

      806      826      1,080      1,328      1,551

Interest Expense - Other Borrowings

      642      668      704      739      863
                                  

Total Net Interest Income

    $ 5,521    $ 5,363    $ 5,084    $ 4,692    $ 4,730

Non-GAAP Financial Measurements:

               

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

    $ 35    $ 37    $ 33    $ 35    $ 31

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

      156      158      154      147      140
                                  

Total Tax Benefit on Tax-Exempt Interest Income

    $ 191    $ 195    $ 187    $ 182    $ 171
                                  

Tax-Equivalent Net Interest Income

    $ 5,712    $ 5,558    $ 5,271    $ 4,874    $ 4,901