EX-99.1 2 d640971dex991.htm EX-99.1 EX-99.1

EXHIBIT 99.1

EAGLE FINANCIAL SERVICES, INC. ANNOUNCES

2018 THIRD QUARTER FINANCIAL RESULTS

AND QUARTERLY DIVIDEND

 

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

BERRYVILLE, VIRGINIA (October 18, 2018) – Eagle Financial Services, Inc. (OTCQX: EFSI), the holding company for Bank of Clarke County, whose divisions include Eagle Investment Group, reported quarterly earnings and continued solid financial performance. The Board of Directors announced a quarterly common stock cash dividend of $0.24 per common share, payable on November 16, 2018, to shareholders of record on November 2, 2018. Select highlights for the third quarter include:

 

   

Net income of $1.9 million

 

   

Net interest margin of 4.04%

 

   

ALLL 0.79% of total loans

 

   

Net loan growth of $11.6 million

 

   

Deposit growth of $11.2 million

John R. Milleson, President and CEO, stated “Unfortunately our third quarter earnings were negatively impacted with a recognized loss on other real estate owned. Thankfully this is a onetime event and we remain confident that the Company is on pace for another year of solid performance and strong, steady growth. New customers continue to develop relationships with us as our defined trade area experiences more institutional upheaval. We are thankful that we have put much thought and strategy in not only our products and services but also our physical locations, making the decision to switch financial institutions easier for consumers. Loans and deposits continue to grow at a stable rate and we remain diligently focused on our net interest margin and efficiency ratio.

Income Statement Review

Net income was $1.9 million for the third quarter of 2018, down $147,000 from the same period one year ago and down $661,000 from the previous quarter ended June 30, 2018. These decreases were driven primarily by the $987,000 loss that was accrued for the sale of other real estate owned. During the third quarter of 2018, the Company entered into a contract to sell a residential property it held as other real estate owned. On February 14, 2018, the Bank took ownership of this approximate 38-acre residential property located in Northern Loudoun County, Virginia. At that time, the property was recorded at $3.2 million and the Bank recognized $397,000 gain upon the foreclosure. During the quarter ended June 30, 2018, the Bank recorded a $282,000 valuation allowance for this real estate owned asset and reduced the previously recognized gain accordingly. The Bank has agreed on a sales price for the property of $2.0 million and after estimated selling costs, expects to receive net proceeds of approximately $1.9 million. The sale is scheduled to settle on October 15, 2018.

Net interest income remained unchanged at $7.4 million for the quarter ended September 30, 2018 when compared to the quarter ended June 30, 2018. Net interest income increased $319,000 from the $7.1 million for the quarter ended September 30, 2017. This increase resulted mostly from the increase in loan income.

Total loan interest income was $7.1 million for the quarter ended September 30, 2018 and $7.0 million for the quarter ended June 30, 2018. Total loan interest income increased $544,000 from $6.5 million for the quarter ended September 30, 2017. These increases are mostly due to increased loan volume.

Average loans for the quarter ended September 30, 2018 were $588.9 million compared to $581.4 million for the quarter ended June 30, 2018. Total average accruing loans were $587.8 million for the three months ended September 30, 2018 and $577.8 million for the quarter ended June 30, 2018. For the third quarter of 2017, total average loans were $550.8 million and average accruing loans were $545.8 million. The tax equivalent yield on average loans for the quarter ended September 30, 2018 was 4.80%, down five basis points from 4.85% for the quarter ended June 30, 2018 and up six basis points from 4.74% for the same quarter in 2017. Interest income from the investment portfolio was $980,000 for the quarter ended September 30, 2018 and $953,000 for the quarter ended June 30, 2018.


Average investments were $140.0 million for the quarter ended September 30, 2018 and $136.1 million for the quarter ended June 30, 2018. Interest income from the investment portfolio was $839,000 while average investments were $130.5 million for the quarter ended September 30, 2017. The tax equivalent yield on average investments for the quarter ended September 30, 2018 was 2.98%, down three basis points from 3.01% for the quarter ended June 30, 2018 and up three basis points from 2.95% for the same quarter in 2017.

Total interest expense was $705,000 for the three months ended September 30, 2018 and $573,000 for the same period ended June 30, 2018. This increase resulted mostly from the increased cost of interest bearing liabilities. The average cost of interest bearing liabilities increased 11 basis points when comparing the quarter ended September 30, 2018 to the quarter ended June 30, 2018. The average balance of interest bearing liabilities increased $5.6 million from the quarter ended June 30, 2018. The net interest margin was 4.04% for the quarter ended September 30, 2018 and 4.17% for the quarter ended June 30, 2018. For the quarter ended September 30, 2017, total interest expense was $351,000 and the net interest margin was 4.12%.

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 for periods in 2018 is 21% and 34% for periods in 2017.

Noninterest income was $1.8 million for the three months ended September 30, 2018 and $1.7 million for the quarter ended June 30, 2018. Noninterest income was $1.6 million for the quarter ended September 30, 2017. Nominal increases in ATM fees, safe deposit box fees and commissions from non-deposit investment sales collectively contributed to the increases between the quarter ended September 30, 2018 and the three-month periods ended June 30, 2018 and September 30, 2017.

Noninterest expense was $7.3 million for the quarter ended September 30, 2018. This represents an increase of $1.1 million or 18.55% from $6.2 million for the quarter ended June 30, 2018. Much of this increase resulted from the $987,000 loss accrued for the sale of other real estate owned. Salaries and employee benefits increased $259,000 from the quarter ended June 30, 2018 to September 30, 2018. This increase resulted mostly from an accrual made for anticipated employee incentive plan expense. Data processing fees increased $152,000 when comparing the quarter ended June 30, 2018 to the quarter ended September 30, 2018. Much of this increase is related to the Company moving its in-house core banking software to a service bureau environment. The Company migrated to a service bureau environment in late June 2018. Noninterest expense increased $1.4 million or 23.71% from the quarter ended September 30, 2018 when compared to $5.9 million for the quartered ended September 30, 2017. This $1.4 million increase is also related to the increases in the previously mentioned expense categories.

Income tax expense decreased $576,000 when comparing the quarter ended September 30, 2018 to the quarter ended June 30, 2018. Income tax expense decreased $890,000 when comparing the quarter ended September 30, 2018 to the same period in 2017. These decreases resulted from the recognition of a $316,000 estimated tax credit related to the Company’s investment in a qualified affordable housing project. For additional details regarding the Company’s qualified affordable housing project investments, please see the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, and other filings with the Securities and Exchange Commission.

Asset Quality and Provision for Loan Losses

Nonperforming assets consist of loans 90 days past due and still accruing interest, nonaccrual loans, other real estate owned (foreclosed properties), and repossessed assets. Nonperforming assets decreased from $4.1 million or 0.53% of total assets at June 30, 2018 to $3.2 million or 0.40% of total assets at September 30, 2018. This decrease resulted from the recording of a $987,000 valuation allowance for other real estate owned during the quarter. During the third quarter of 2018, the Company entered into a contract to sell a residential property it held as other real estate owned. Based on the sales contract and estimated selling costs of the transaction, a loss of $987,000 had been accrued and added to the valuation allowance for other real estate owned. The sale is scheduled to settle on October 15, 2018. During the quarter ended September 30, 2018, two loans totaling $88,000 were placed on nonaccrual status. Most of the non-accrual loans at September 30, 2018 are secured by real estate. Management regularly evaluates the financial condition of borrowers with loans on non-accrual status 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 non-accrual loans. No real estate assets had been foreclosed upon during the third quarter of 2018. There were no loans greater than 90 days past due and still accruing at September 30 and June 30, 2018. At September 30, 2017, there were $19,000 in loans that were greater than 90 days past due and still accruing. Nonperforming assets were $5.2 million or 0.71% of total assets at September 30, 2017.

The Company may, under certain circumstances, restructure loans in troubled debt restructurings as a concession to a borrower when the borrower is experiencing financial distress. Formal, standardized loan restructuring programs are not utilized by the Company. Each


loan considered for restructuring is evaluated based on customer circumstances and may include modifications to one or more loan provision. Such restructured loans are included in impaired loans, but may not necessarily be nonperforming loans. At September 30, 2018, the Company had 20 troubled debt restructurings totaling $4.3 million and all but two loans, totaling $122,000, are performing loans.

The Company realized $25,000 in net recoveries for the quarter ended September 30, 2018 and $115,000 in net recoveries for the three months ended June 30, 2018. Net charge recoveries for the quarter ended September 30, 2017 were $32,000.

The Company recorded a provision for loan losses of $140,000 for the quarter ended September 30, 2018. Negative provisions for loan losses of $97,000 and $2,000 were recorded for the quarters ended June 30, 2018 and September 30, 2017, respectively. The allowance for loan losses was $4.7 million, or 0.79% of total outstanding loans, at September 30, 2018. At June 30, 2018, the allowance for loan losses was $ 4.5 or 0.78% of total outstanding loans. The allowance for loan losses was $4.4 million or 0.80% of total assets at September 30, 2017. The amount of provision for loan losses during each quarter reflects the results of the Bank’s analysis used to determine the adequacy of the allowance for loan losses. The Company is committed to maintaining an allowance at a level that adequately reflects the risk inherent in the loan portfolio.

Total Consolidated Assets

Total consolidated assets of the Company at September 30, 2018 were $786.1 million, which represented an increase of $10.9 million or 1.40% from total assets of $775.2 million at June 30, 2018. This increase resulted mostly from the increases in the loan portfolio. At September 30, 2017, total consolidated assets were $738.6 million. Total loans increased from $586.8 million at June 30, 2018 to $598.5 million at September 30, 2018. Total loans were $552.2 million at September 30, 2017.

Deposits and Other Borrowings

Total deposits increased $11.2 million to $693.3 million at September 30, 2018 from $682.1 million at June 30, 2018. At September 30, 2017, total deposits were $645.2 million.

Equity

Shareholders’ equity was $84.8 million at September 30 and June 30, 2018. At September 30, 2017 shareholders’ equity was $83.6 million. The book value of the Company at September 30, 2018 was $24.58 per common share. Total common shares outstanding were 3,473,833 at September 30, 2018. On October 17, 2018, the board of directors declared a $0.24 per common share cash dividend for shareholders of record as of November 2, 2018 and payable on November 16, 2018.

 

 

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, 2017, and other filings with the Securities and Exchange Commission.


EAGLE FINANCIAL SERVICES, INC.

KEY STATISTICS

 

     For the Three Months Ended  
     3Q18     2Q18     1Q18     4Q17     3Q17  

Net Income (dollars in thousands)

   $ 1,860     $ 2,521     $ 2,539     $ 1,709     $ 2,007  

Earnings per share, basic

   $ 0.54     $ 0.73     $ 0.73     $ 0.49     $ 0.58  

Earnings per share, diluted

   $ 0.54     $ 0.73     $ 0.73     $ 0.49     $ 0.58  

Return on average total assets

     0.94     1.31     1.36     0.91     1.07

Return on average total equity

     8.68     12.12     12.40     8.11     9.56

Dividend payout ratio

     44.44     31.51     31.51     44.90     37.93

Fee revenue as a percent of total revenue

     19.39     18.15     19.36     18.40     18.37

Net interest margin(1)

     4.04     4.17     4.05     4.03     4.12

Yield on average earning assets

     4.42     4.49     4.29     4.23     4.32

Yield on average interest-bearing liabilities

     0.64     0.53     0.40     0.33     0.32

Net interest spread

     3.78     3.96     3.88     3.90     4.00

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

   $ 99     $ 102     $ 89     $ 155     $ 159  

Non-interest income to average assets

     0.91     0.87     0.96     1.01     0.86

Non-interest expense to average assets

     3.70     3.21     3.01     3.14     3.15

Efficiency ratio(2)

     78.36     67.11     63.19     65.52     66.52

 

(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 nontaxable (i.e., municipal income) then subtracting interest expense. The rate utilized for periods in 2018 is 21% and 34% for periods in 2017. 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 34%. 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

 

     3Q18     2Q18     1Q18     4Q17     3Q17  

BALANCE SHEET RATIOS

          

Loans to deposits

     86.32     86.03     84.83     85.74     85.57

Average interest-earning assets to average-interest bearing liabilities

     168.16     166.67     166.80     165.83     162.10

PER SHARE DATA

          

Dividends

   $ 0.24     $ 0.23     $ 0.23     $ 0.22     $ 0.22  

Book value

     24.58       24.57       24.12       24.40       24.31  

Tangible book value

     24.58       24.57       24.12       24.40       24.31  

SHARE PRICE DATA

          

Closing price

   $ 37.30     $ 35.99     $ 32.80     $ 32.00     $ 29.25  

Diluted earnings multiple(1)

     17.27       12.33       11.23       16.33       12.61  

Book value multiple(2)

     1.52       1.46       1.36       1.31       1.20  

COMMON STOCK DATA

          

Outstanding shares at end of period

     3,473,833       3,473,555       3,466,117       3,449,027       3,456,430  

Weighted average shares outstanding

     3,474,246       3,465,601       3,463,118       3,468,275       3,469,372  

Weighted average shares outstanding, diluted

     3,474,246       3,465,601       3,463,118       3,468,275       3,469,372  

CAPITAL RATIOS

          

Total equity to total assets

     10.79     10.94     10.71     10.95     11.31

CREDIT QUALITY

          

Net charge-offs to average loans

     -0.02     -0.08     0.06     0.07     -0.03

Total non-performing loans to total loans

     0.19     0.19     0.31     1.11     0.92

Total non-performing assets to total assets

     0.40     0.53     0.66     0.84     0.71

Non-accrual loans to:

          

total loans

     0.19     0.19     0.31     1.11     0.92

total assets

     0.15     0.14     0.23     0.83     0.69

Allowance for loan losses to:

          

total loans

     0.79     0.78     0.78     0.78     0.80

non-performing assets

     148.30     110.42     88.48     68.44     85.30

non-accrual loans

     411.62     413.83     251.67     69.59     87.40

NON-PERFORMING ASSETS:

          

(dollars in thousands)

          

Loans delinquent over 90 days

   $ —       $ —       $ 18     $ —       $ 19  

Non-accrual loans

     1,145       1,099       1,800       6,339       5,086  

Other real estate owned and repossessed assets

     2,033       3,020       3,302       106       106  

NET LOAN CHARGE-OFFS (RECOVERIES):

          

(dollars in thousands)

          

Loans charged off

   $ 18     $ 30     $ 138     $ 160     $ 70  

(Recoveries)

     (43     (145     (52     —         (102

Net charge-offs (recoveries)

     (25     (115     86       160       (32

PROVISION FOR LOAN LOSSES (dollars in thousands)

   $ 140     $ (97   $ 205     $ 134     $ (2

ALLOWANCE FOR LOAN LOSS SUMMARY

          

(dollars in thousands)

          

Balance at the beginning of period

   $ 4,548     $ 4,530     $ 4,411     $ 4,437     $ 4,407  

Provision

     140       (97     205       134       (2

Net charge-offs (recoveries)

     (25     (115     86       160       (32

Balance at the end of period

   $ 4,713     $ 4,548     $ 4,530     $ 4,411     $ 4,437  

 

(1)

The diluted earnings multiple is calculated by dividing the period’s closing market price per share by the annualized diluted earnings per share 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     Unaudited     Unaudited     Audited      Unaudited  
     9/30/2018     6/30/2018     3/31/2018     12/31/2017      9/30/2017  

Assets

           

Cash and due from banks

   $ 13,176     $ 14,823     $ 33,032     $ 32,672      $ 30,593  

Federal funds sold

     —         88       152       3,176        144  

Securities available for sale, at fair value

     141,566       139,491       129,986       133,673        125,685  

Loans, net of allowance for loan losses

     593,754       582,289       577,075       564,406        547,716  

Bank premises and equipment, net

     19,504       19,452       19,474       19,579        19,740  

Other assets

     18,074       19,048       16,145       12,245        14,686  
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Total assets

   $ 786,074     $ 775,191     $ 775,864     $ 765,751      $ 738,564  
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Liabilities and Shareholders’ Equity

           

Liabilities

           

Deposits:

           

Noninterest bearing demand deposits

   $ 256,738     $ 246,141     $ 252,144     $ 234,990      $ 224,353  

Savings and interest-bearing demand deposits

     327,612       328,563       328,655       322,948        314,599  

Time deposits

     108,987       107,403       104,847       105,476        106,293  
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Total deposits

   $ 693,337     $ 682,107     $ 685,646     $ 663,414      $ 645,245  

Federal funds purchased and securities sold under agreements to repurchase

     1,158       —         —         —          —    

Federal Home Loan Bank advances

     —         —         —         —          —    

Other liabilities

     6,749       8,285       7,147       18,520        9,768  

Commitments and contingent liabilities

     —         —         —         —          —    
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Total liabilities

   $ 701,244     $ 690,392     $ 692,793     $ 681,934      $ 655,013  
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Shareholders’ Equity

           

Preferred stock, $10 par value

   $ —       $ —       $ —       $ —        $ —    

Common stock, $2.50 par value

     8,629       8,628       8,611       8,587        8,593  

Surplus

     12,680       12,491       12,155       12,075        12,193  

Retained earnings

     67,340       66,313       64,588       62,845        61,946  

Accumulated other comprehensive income

     (3,819     (2,633     (2,283     310        819  
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Total shareholders’ equity

   $ 84,830     $ 84,799     $ 83,071     $ 83,817      $ 83,551  
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Total liabilities and shareholders’ equity

   $ 786,074     $ 775,191     $ 775,864     $ 765,751      $ 738,564  
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 


EAGLE FINANCIAL SERVICES, INC.

CONSOLIDATED STATEMENTS OF INCOME

(dollars in thousands)

Unaudited

 

     Three Months Ended  
     9/30/2018     6/30/2018     3/31/2018     12/31/2017     9/30/2017  

Interest and Dividend Income

          

Interest and fees on loans

   $ 7,092     $ 7,000     $ 6,541     $ 6,429     $ 6,548  

Interest on federal funds sold

     1       —         1       —         —    

Interest and dividends on securities available for sale:

          

Taxable interest income

     701       670       606       573       564  

Interest income exempt from federal income taxes

     263       268       262       253       258  

Dividends

     16       15       13       20       17  

Interest on deposits in banks

     58       41       52       48       71  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total interest and dividend income

   $ 8,131     $ 7,994     $ 7,475     $ 7,323     $ 7,458  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Interest Expense

          

Interest on deposits

   $ 704     $ 563     $ 426     $ 352     $ 311  

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

     1       10       —         —         —    

Interest on Federal Home Loan Bank advances

     —         —         —         —         40  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total interest expense

   $ 705     $ 573     $ 426     $ 352     $ 351  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net interest income

   $ 7,426     $ 7,421     $ 7,049     $ 6,971     $ 7,107  

Provision For Loan Losses

     140       (97     205       134       (2
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net interest income after provision for loan losses

   $ 7,286     $ 7,518     $ 6,844     $ 6,837     $ 7,109  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Noninterest Income

          

Income from fiduciary activities

   $ 316     $ 299     $ 444     $ 402     $ 236  

Service charges on deposit accounts

     302       302       308       318       310  

Other service charges and fees

     1,172       1,048       961       911       1,057  

Gain on the sale of bank premises and equipment

     —         —         —         —         (2

Gain (Loss) on sales of AFS securities

     6       —         11       (87     26  

Officer insurance income

     (20     —         —         288       —    

Other operating income

     28       16       77       60       (10
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total noninterest income

   $ 1,804     $ 1,665     $ 1,801     $ 1,892     $ 1,617  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Noninterest Expenses

          

Salaries and employee benefits

   $ 3,666     $ 3,406     $ 3,526     $ 3,417     $ 3,513  

Occupancy expenses

     374       363       371       371       358  

Equipment expenses

     233       234       219       236       222  

Advertising and marketing expenses

     209       201       185       187       190  

Stationery and supplies

     42       47       56       36       49  

ATM network fees

     192       246       206       209       203  

Other real estate owned expenses

     24       7       130       —         (3

(Gain) loss on foreclosure and sale of other real estate

     987       282       (397     —         —    

FDIC assessment

     56       55       58       58       57  

Computer software expense

     114       112       139       142       151  

Bank franchise tax

     152       145       134       138       138  

Professional fees

     260       283       275       237       213  

Data processing fees

     270       118       125       143       165  

Other operating expenses

     731       667       603       649       653  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total noninterest expenses

   $ 7,310     $ 6,166     $ 5,630     $ 5,823     $ 5,909  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

     1,780       3,017       3,015       2,906       2,817  

Income Tax Expense

     (80     496       476       1,197       810  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

   $ 1,860     $ 2,521     $ 2,539     $ 1,709     $ 2,007  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Earnings Per Share

          

Net income per common share, basic

   $ 0.54     $ 0.73     $ 0.73     $ 0.49     $ 0.58  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income per common share, diluted

   $ 0.54     $ 0.73     $ 0.73     $ 0.49     $ 0.58  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 


EAGLE FINANCIAL SERVICES, INC .

Average Balances, Income and Expenses, Yields and Rates

(dollars in thousands)

 

    For the Three Months Ended  
    September 30, 2018     June 30, 2018     September 30, 2017  
Assets:   Average
Balance
    Interest
Income/
Expense
    Average
Yield
    Average
Balance
    Interest
Income/
Expense
    Average
Yield
    Average
Balance
    Interest
Income/
Expense
    Average
Yield
 

Securities:

                 

Taxable

  $ 101,045     $ 2,846       2.82   $ 97,433     $ 2,744       2.82   $ 91,635     $ 2,302       2.51

Tax-Exempt (1)

    38,935       1,320       3.39     38,678       1,357       3.51     38,900       1,548       3.98
 

 

 

   

 

 

     

 

 

   

 

 

     

 

 

   

 

 

   

Total Securities

  $ 139,980     $ 4,166       2.98   $ 136,111     $ 4,100       3.01   $ 130,535     $ 3,850       2.95

Loans:

                 

Taxable

  $ 575,231     $ 27,698       4.82   $ 569,442     $ 27,612       4.85   $ 540,001     $ 25,780       4.77

Nonaccrual

    1,135       —         0.00     3,624       —         0.00     5,005       —         0.00

Tax-Exempt (1)

    12,531       556       4.44     8,378       586       6.99     5,765       303       5.25
 

 

 

   

 

 

     

 

 

   

 

 

     

 

 

   

 

 

   

Total Loans

  $ 588,897     $ 28,254       4.80   $ 581,444     $ 28,197       4.85   $ 550,771     $ 26,083       4.74

Federal funds sold

    173       3       2.01     83       1       1.78     —         —         0.00

Interest-bearing deposits in other banks

    11,440       229       2.00     9,437       172       1.83     22,752       285       1.25
 

 

 

   

 

 

     

 

 

   

 

 

     

 

 

   

 

 

   

Total earning assets

  $ 739,355     $ 32,652       4.42   $ 723,451     $ 32,471       4.49   $ 699,053     $ 30,218       4.32

Allowance for loan losses

    (4,629         (4,651         (4,451    

Total non-earning assets

    48,952           50,895           48,584      
 

 

 

       

 

 

       

 

 

     

Total assets

  $ 783,678         $ 769,695         $ 743,186      
 

 

 

       

 

 

       

 

 

     

Liabilities and Shareholders’ Equity:

                 

Interest-bearing deposits:

                 

NOW accounts

  $ 93,694     $ 339       0.36   $ 92,079     $ 294       0.32   $ 84,107     $ 174       0.21

Money market accounts

    133,045       953       0.72     130,150       753       0.58     125,803       329       0.26

Savings accounts

    104,772       183       0.17     104,375       160       0.15     101,590       73       0.07

Time deposits:

                 

$100,000 and more

    71,282       759       1.06     69,056       604       0.87     67,356       248       0.37

Less than $100,000

    36,760       561       1.53     36,749       445       1.21     39,131       411       1.05
 

 

 

   

 

 

     

 

 

   

 

 

     

 

 

   

 

 

   

Total interest-bearing deposits

  $ 439,553     $ 2,795       0.64   $ 432,409     $ 2,257       0.52   $ 417,987     $ 1,235       0.30

Federal funds purchased and securities sold under agreements to repurchase

    122       2       1.61     1,645       39       2.39     —         —         0.00

Federal Home Loan Bank advances

    —         —         0.00     —         —         0.00     13,261       157       1.18

Trust preferred capital notes

    —         —         0.00     —         —         0.00     —         —         0.00
 

 

 

   

 

 

     

 

 

   

 

 

     

 

 

   

 

 

   

Total interest-bearing liabilities

  $ 439,675     $ 2,797       0.64   $ 434,054     $ 2,296       0.53   $ 431,248     $ 1,392       0.32
 

 

 

   

 

 

     

 

 

   

 

 

     

 

 

   

 

 

   

Noninterest-bearing liabilities:

                 

Demand deposits

    250,068           243,898           219,180      

Other Liabilities

    8,877           8,253           9,505      
 

 

 

       

 

 

       

 

 

     

Total liabilities

  $ 698,620         $ 686,205         $ 659,933      

Shareholders’ equity

    85,058           83,490           83,253      
 

 

 

       

 

 

       

 

 

     

Total liabilities and shareholders’ equity

  $ 783,678         $ 769,695         $ 743,186      
 

 

 

       

 

 

       

 

 

     

Net interest income

    $ 29,855         $ 30,175         $ 28,827    
   

 

 

       

 

 

       

 

 

   

Net interest spread

        3.78         3.96         4.00

Interest expense as a percent of average earning assets

        0.38         0.32         0.20

Net interest margin

        4.04         4.17         4.12

 

(1)

Income and yields are reported on a tax equivalent basis using a federal tax rate of 21% for periods in 2018 and 34% for periods in 2017.


EAGLE FINANCIAL SERVICES, INC.

Reconciliation of Tax-Equivalent Net Interest Income

(dollars in thousands)

 

     Three Months Ended  
     9/30/2017      6/30/2018      3/31/2018      12/31/2017      9/30/2017  

GAAP Financial Measurements:

              

Interest Income - Loans

   $ 7,092      $ 7,000      $ 6,541      $ 6,429      $ 6,548  

Interest Income - Securities and Other Interest-Earnings Assets

     1,039        994        934        894        910  

Interest Expense - Deposits

     704        563        426        352        311  

Interest Expense - Other Borrowings

     1        10        —          —          40  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total Net Interest Income

   $ 7,426      $ 7,421      $ 7,049      $ 6,971      $ 7,107  

Non-GAAP Financial Measurements:

              

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

   $ 29      $ 31      $ 19      $ 25      $ 26  

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

     70        71        70        130        133  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total Tax Benefit on Tax-Exempt Interest Income

   $ 99      $ 102      $ 89      $ 155      $ 159  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Tax-Equivalent Net Interest Income

   $ 7,525      $ 7,523      $ 7,138      $ 7,126      $ 7,266