Cision PR Newswire

EAGLE FINANCIAL SERVICES, INC. ANNOUNCES 2022 FIRST QUARTER FINANCIAL RESULTS

BERRYVILLE, Va., May 2, 2022 /PRNewswire/ -- Eagle Financial Services, Inc. (OTCQX: EFSI), the holding company for Bank of Clarke County, whose divisions include Eagle Investment Group, announced its first quarter 2022 results.  Select highlights for the first quarter include:

  • Net income of $3.3 million
  • Deposit growth of $54.1 million
  • Basic and diluted earnings per share of $0.94
  • Loan activity:
    • PPP forgiveness - $7.5 million
    • Sales - $36.5 million
    • Net growth - $35.2 million

Brandon Lorey, President and CEO, stated, "I am happy to report another strong quarter for the Company with a number of "1sts" for EFSI and the Bank. The Organization's loan portfolio breached the $1 billion dollar mark in the first quarter and posted a record annualized net income figure of $13.2 million. Annualized earnings per share also reached a record high of $3.80. Despite $7.5 million of PPP loan runoff, as that portfolio continues to shrink, and over $36.0 million in loan sales, the Bank's loan portfolio grew by $35.7 million which was more than matched by quarter's core deposit growth of $54.0 million resulting in annualized 5-year compound annual growth rates (CAGR) of 14.9% and 16.05%, respectively. We continue to strengthen diversified revenue streams as our non-interest income provides over 20% of the Bank's total income, driven primarily by our expanded Trust and Advisory Services and loan sales and servicing. I would like to thank our shareholders for their continued support as well as our employees for their tireless efforts to ensure we meet and exceed the needs of our customers every single day."

Income Statement Review

Net income for the quarter ended March 31, 2022 was $3.3 million reflecting an increase of 42.4% from the quarter ended December 31, 2021 and an increase of 13.6% from the quarter ended March 31, 2021. The increase from the quarter ended December 31, 2021 was mainly driven by increased legal expenses during the quarter ended December 31, 2021.  Net income was $2.3 million for the three-month period ended December 31, 2021 and $2.9 million for the quarter ended March 31, 2021.

Net interest income for the quarters ended March 31, 2022 and December 31, 2021 was $11.1 million. Net interest income was $9.5 million for the quarter ended March 31, 2021.  The increase in net interest income from the quarter March 31, 2021 resulted primarily from growth in the Company's loan portfolio.

Total loan interest income was $10.6 million and $10.7 million for the quarters ended March 31, 2022 and December 31, 2021, respectively.  Total loan interest income was $9.4 million for the quarter ended March 31, 2021. Total loan interest income increased $1.2 million or 12.9% from the quarter ended March 31, 2021 to the quarter ended March 31, 2022. Average loans for the quarter ended March 31, 2022 were $1.01 billion compared to $854.5 million for the quarter ended March 31, 2021.  The tax equivalent yield on average loans for the quarter ended March 31, 2022 was 4.25%, a decrease of 23 basis points from the 4.48% average yield for the same time period in 2021. The majority of this decrease in yield can be attributed to loans being originated at a rate lower than those that are paying off.

Interest and dividend income from the investment portfolio was $872 thousand for the quarter ended March 31, 2022 compared to $784 thousand for the quarter ended December 31, 2021. Interest income and dividend income from the investment portfolio was $596 thousand for the quarter ended March 31, 2021. The increase in interest and dividend income resulted from the increase in rates on securities purchased during the first quarter of 2022 as well as the increase in the balance of the investment portfolio. Average investments for the quarter ended March 31, 2022 were $198.0 million compared to $197.1 million for the quarter ended December 31, 2021. Average investments were $162.1 million for the quarter ended March 31, 2021. The tax equivalent yield on average investments for the quarter ended March 31, 2022 was 1.83%, up 19 basis points from 1.64% for the quarter ended December 31, 2021 and up 26 basis points from 1.57% for the quarter ended March 31, 2021.

Total interest expense was $370 thousand for the three months ended March 31, 2022 and $373 thousand and $487 thousand for three months ended December 31, 2021 and March 31, 2021, respectively. The decrease in interest expense resulted from the reduction in interest rates paid on deposit accounts. The average cost of interest-bearing liabilities decreased one and 11 basis points when comparing the quarter ended March 31, 2022 to the quarters ended December 31, 2021 and  March 31, 2021, respectively. The average balance of interest-bearing liabilities increased $26.4 million from the quarter ended December 31, 2021 to the quarter ended March 31, 2022. The average balance of interest-bearing liabilities increased $108.6 million from the quarter ended March 31, 2021 to the same period in 2022.

The net interest margin was 3.61% for the quarter ended March 31, 2022. For the quarters ended December 31, 2021 and March 31, 2021, the net interest margin was 3.67% and 3.62%, respectively. 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 $3.2 million for the quarter ended March 31, 2022, which represented a decrease of $119 thousand or 3.5% from the $3.4 million for the three months ended December 31, 2021. Noninterest income for the quarter ended March 31, 2021 was $2.4 million. The $816 thousand increase between the quarters ended March 31, 2022 and March 31, 2021 was driven by several factors including the gain on sale of loans held for sale. In addition, income from fiduciary activities increased $314 or 51.7% due to an increase in assets under management.

Noninterest expense decreased $2.0 million, or 16.5%, to $9.9 million for the quarter ended March 31, 2022 from $11.9 million for the quarter ended December 31, 2021. Legal expenses were higher during the fourth quarter of 2021 primarily from the expansion of the Bank's wealth management business line and also its build out of the marine lending division. Approximately $2.0 million of these fourth-quarter expenses are expected to be one-time fees. Noninterest expense was $7.9 million for the quarter ended March 31, 2021, representing an increase of $2.0 million or 25.4% when comparing to the quarter ended March 31, 2022 to the quarter ended March 31, 2021. An increase in salaries and benefits expenses was also noted between the first quarter of 2022 when compared to the same period in 2021. Annual pay increases, newly hired employees, incentive plan accruals and increased insurance costs have attributed to these increases. The number of full-time equivalent employees (FTEs) has increased from 195 at March 31, 2021, to 224 at March 31, 2022.

 Asset Quality and Provision for Loan 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 $2.8 million or 0.21% of total assets at December 31, 2021 to $2.6 million or 0.19% of total assets at March 31, 2022. Nonperforming assets were $4.8 million at March 31, 2021.  Total nonaccrual loans were $2.6 million at March 31, 2022 and $2.7 million at December 31, 2021. Nonaccrual loans were $4.3 million at March 31, 2021. 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 at zero at March 31, 2022 and December 31, 2021.

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 March 31, 2022, the Company had 17 troubled debt restructurings totaling $2.6 million. Approximately $2.5 million or 15 loans are performing loans, while the remaining loans are on non-accrual status. At December 31, 2021, the Company had 17 troubled debt restructurings totaling $2.7 million. Approximately $2.5 million or 15 loans were performing loans, while the remaining loans were on non-accrual status.

The Company realized $12 thousand in net charge-offs for the quarter ended March 31, 2022 versus $39 thousand in net recoveries for the three months ended December 31, 2021. During the three months ended March 31, 2021, $61 thousand in net recoveries were recognized. The amount of provision for loan losses reflects the results of the Bank's analysis used to determine the adequacy of the allowance for loan losses. The Company recorded a provision for loan losses of $540 thousand for the quarter ended March 31, 2022. The Company recognized provision for loan losses of $300 thousand and $599 thousand for the quarters ended December 31, 2021 and March 31, 2021, respectively. The provision for the quarters ended March 31, 2022, December 31, 2021 and March 31, 2021 resulted mostly from loan growth during the quarter. The ratio of allowance for loan losses to total loans was 0.91% at March 31, 2022 and 0.89% at December 31, 2021.  The ratio of allowance for loan losses to total loans was 0.88% at March 31, 2021. Excluding outstanding PPP loans, the allowance for loan losses as a percentage of total loans was 0.92% at March 31, 2022, 0.91% at December 31, 2021 and 0.98% as March 31, 2021. The ratio of allowance for loan losses to total nonaccrual loans was 357.47% at March 31, 2022.  The ratio of allowance for loan losses to total nonaccrual loans was 322.70% and 179.82% at December 31, 2021 and March 31, 2021, respectively. 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.

Total Consolidated Assets

Total consolidated assets of the Company at March 31, 2022 were $1.37 billion, which represented an increase of $71.3 million or 5.5% from total assets of $1.30 billion at December 31, 2021. At March 31, 2021 total consolidated assets were $1.18 billion. Total net loans increased $35.2 million from $976.9 million at December 31, 2021 to $1.01 billion at March 31, 2022. During the quarter, $7.5 million in SBA PPP loans were forgiven or paid down and $36.5 million in loans were sold. The Company sold $4.2 million in mortgage loans on the secondary market and $32.3 million of loans from the commercial and consumer loan portfolios. These loan sales resulted in gains of $285 thousand. Total securities increased $1.2 million from $193.4 million at December 31, 2021, to $194.6 million at March 31, 2022.  At March 31, 2021 total investment securities were $175.0 million and net loans were $867.2 million. The growth in total loans and total assets was largely due to organic loan portfolio growth as the Company expands lending types and markets.

 Deposits and Other Borrowings

Total deposits increased $54.1 million to $1.23 billion at March 31, 2022 from $1.18 billion at December 31, 2021. At March 31, 2021 total deposits were $1.07 billion.  The growth in deposits was mainly organic growth as the Company continues to expand and grow into newer market areas.

The Company had no outstanding borrowings from the Federal Home Loan Bank of Atlanta at March 31, 2022, December 31, 2021 or March 31, 2021.

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. The Company intends to use the net issuance proceeds for general corporate purposes, including a capital contribution to its wholly owned subsidiary, Bank of Clarke County, to support its continued organic growth.

Equity

Shareholders' equity was $102.1 million and $110.3 million at March 31, 2022 and December 31, 2021, respectively. Shareholders' equity was $105.1 million at March 31, 2021. The decrease in shareholder's equity at March 31, 2022 was driven by the other comprehensive loss from the unrealized loss on available for sale securities. The book value of the Company at March 31, 2022 was $29.37 per common share. Total common shares outstanding were 3,477,020 at March 31, 2022. On April 20, 2022, the board of directors declared a $0.28 per common share cash dividend for shareholders of record as of May 4, 2022 and payable on May 18, 2022.

COVID-19 Impacts

The COVID-19 crisis has changed our communities, both in the way we live and the way we do business. While circumstances continue to change, the Company is continuing to work steadfastly to meet and exceed the needs of its customers, employees, and the communities in which it does business. Customers' banking needs have continued to be fulfilled through multiple banking channels including mobile, digital, and adjusted-schedule physical.  In efforts to assist local businesses during this pandemic, the Company originated 1,372 PPP loans (through two rounds of lending), totaling $132.1 million, into the hands of our community's small businesses. During the quarter ended March 31, 2022, $7.5 million of PPP loans were forgiven or paid down. As of March 31, 2022, $8.4 million in PPP loans are still outstanding. In addition to local small businesses, the Company worked with its consumer and commercial customers through its loan deferral program whereby customers experiencing hardships due to COVID-19 were granted a deferral in loan payments for up to 90 days. During 2020 and through the quarter ended March 31, 2021, the Company approved 256 deferrals with loan balances totalling approximately $127.5 million for its customers experiencing hardships related to COVID-19. As of March 31, 2022, all loans had begun making payments on their loans after the deferral date had passed.

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 effects of the COVID-19 pandemic, including on the Company's credit quality and business operations, as well as its impact on general economic and financial market 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 requirements; 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, 2021 and other filings with the Securities and Exchange Commission.

EAGLE FINANCIAL SERVICES, INC.

KEY STATISTICS




For the Three Months Ended




1Q22



4Q21



3Q21



2Q21



1Q21


Net Income (dollars in thousands)


$

3,250



$

2,283



$

2,873



$

3,003



$

2,862


Earnings per share, basic


$

0.94



$

0.66



$

0.83



$

0.87



$

0.84


Earnings per share, diluted


$

0.94



$

0.66



$

0.83



$

0.87



$

0.84


Return on average total assets



0.99

%



0.70

%



0.92

%



1.01

%



1.02

%

Return on average total equity



12.08

%



8.20

%



10.48

%



11.47

%



11.04

%

Dividend payout ratio



29.79

%



42.42

%



33.73

%



31.03

%



32.14

%

Fee revenue as a percent of total revenue



15.32

%



15.16

%



16.40

%



15.79

%



15.62

%

Net interest margin(1)



3.61

%



3.67

%



3.56

%



3.56

%



3.62

%

Yield on average earning assets



3.73

%



3.79

%



3.69

%



3.71

%



3.81

%

Rate on average interest-bearing liabilities



0.21

%



0.22

%



0.23

%



0.27

%



0.32

%

Net interest spread



3.52

%



3.57

%



3.46

%



3.44

%



3.49

%

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


$

27



$

32



$

37



$

50



$

53


Non-interest income to average assets



0.99

%



1.04

%



0.92

%



0.89

%



0.86

%

Non-interest expense to average assets



3.02

%



3.66

%



3.05

%



2.95

%



2.82

%

Efficiency ratio(2)



68.87

%



81.53

%



71.31

%



67.83

%



66.25

%



(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




1Q22



4Q21



3Q21



2Q21



1Q21


BALANCE SHEET RATIOS





















     Loans to deposits



82.96

%



83.73

%



81.74

%



79.90

%



81.93

%

     Average interest-earning assets to average-interest
     bearing liabilities



173.69

%



173.49

%



173.86

%



176.80

%



174.95

%

PER SHARE DATA





















     Dividends


$

0.28



$

0.28



$

0.28



$

0.27



$

0.27


     Book value



29.37




32.22




32.21




31.59




30.92


     Tangible book value



29.37




32.22




32.21




31.59




30.92


SHARE PRICE DATA





















     Closing price


$

35.45



$

34.65



$

34.20



$

34.10



$

31.99


     Diluted earnings multiple(1)



9.43




13.13




10.30




9.80




9.52


     Book value multiple(2)



1.21




1.08




1.06




1.08




1.03


COMMON STOCK DATA





















     Outstanding shares at end of period



3,477,020




3,454,128




3,449,204




3,437,782




3,429,686


     Weighted average shares outstanding



3,472,332




3,451,383




3,448,352




3,433,057




3,426,839


     Weighted average shares outstanding, diluted



3,472,332




3,451,383




3,448,352




3,433,057




3,426,839


CAPITAL RATIOS





















     Total equity to total assets



7.43

%



8.46

%



8.76

%



8.83

%



8.87

%

CREDIT QUALITY





















     Net charge-offs to average loans



0.00

%



%



(0.01)

%



(0.01)

%



(0.01)

%

     Total non-performing loans to total loans



0.26

%



0.28

%



0.38

%



0.56

%



0.49

%

     Total non-performing assets to total assets



0.19

%



0.21

%



0.30

%



0.44

%



0.41

%

     Non-accrual loans to:





















          total loans



0.26

%



0.28

%



0.38

%



0.51

%



0.49

%

          total assets



0.19

%



0.21

%



0.28

%



0.36

%



0.36

%

     Allowance for loan losses to:





















          total loans



0.91

%



0.89

%



0.91

%



0.92

%



0.88

%

          non-performing assets



357.47

%



317.68

%



226.79

%



151.22

%



160.64

%

          non-accrual loans



357.47

%



322.70

%



239.18

%



182.71

%



179.82

%

NON-PERFORMING ASSETS:





















(dollars in thousands)





















          Loans delinquent over 90 days


$



$

43



$



$

500



$


          Non-accrual loans



2,606




2,723




3,532




4,432




4,313


          Other real estate owned and repossessed assets









193




423




515


NET LOAN CHARGE-OFFS (RECOVERIES):





















(dollars in thousands)





















          Loans charged off


$

47



$

42



$

45



$

19



$

5


          (Recoveries)



(35)




(81)




(95)




(77)




(66)


          Net charge-offs (recoveries)



12




(39)




(50)




(58)




(61)


PROVISION FOR LOAN LOSSES (dollars in thousands)


$

540



$

300



$

300



$

284



$

599


ALLOWANCE FOR LOAN LOSS SUMMARY





















(dollars in thousands)





















     Balance at the beginning of period


$

8,787



$

8,448



$

8,098



$

7,756



$

7,096


     Provision



540




300




300




284




599


     Net charge-offs (recoveries)



12




(39)




(50)




(58)




(61)


     Balance at the end of period


$

9,315



$

8,787



$

8,448



$

8,098



$

7,756




(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

03/31/2022



Audited

12/31/2021



Unaudited

09/30/2021



Unaudited

06/30/2021



Unaudited

03/31/2021


Assets





















     Cash and due from banks


$

86,965



$

63,840



$

68,168



$

104,229



$

86,916


     Federal funds sold



8,945




228




240




234




234


     Securities available for sale, at fair value



194,554




193,370




202,488




177,536




175,033


     Loans held for sale



843




876




1,148




1,073





     Loans, net of allowance for loan losses



1,012,144




976,933




914,628




869,271




867,195


     Bank premises and equipment, net



18,333




18,249




18,572




18,627




18,822


     Bank owned life insurance



23,415




23,236




23,076




22,931




12,814


     Other assets



29,096




26,306




24,433




25,243




23,943


               Total assets


$

1,374,295



$

1,303,038



$

1,252,753



$

1,219,144



$

1,184,957


Liabilities and Shareholders' Equity





















Liabilities





















     Deposits:





















          Noninterest bearing demand deposits


$

489,426



$

470,355



$

448,217



$

441,051



$

435,296


          Savings and interest bearing demand deposits



619,224




583,296




557,804




532,269




504,775


          Time deposits



122,673




123,584




124,644




126,078




127,918


               Total deposits


$

1,231,323



$

1,177,235



$

1,130,665



$

1,099,398



$

1,067,989


     Subordinated debt



29,327














     Other liabilities



11,542




15,523




12,286




12,144




11,904


     Commitments and contingent liabilities
















                    Total liabilities


$

1,272,192



$

1,192,758



$

1,142,951



$

1,111,542



$

1,079,893


Shareholders' Equity





















     Preferred stock, $10 par value
















     Common stock, $2.50 par value



8,586




8,556




8,521




8,515




8,495


     Surplus



12,260




12,115




11,750




11,426




11,021


     Retained earnings



92,040




89,764




88,446




86,539




84,462


     Accumulated other comprehensive (loss) income



(10,783)




(155)




1,085




1,122




1,086


                    Total shareholders' equity


$

102,103



$

110,280



$

109,802



$

107,602



$

105,064


                    Total liabilities and shareholders' equity


$

1,374,295



$

1,303,038



$

1,252,753



$

1,219,144



$

1,184,957


 

EAGLE FINANCIAL SERVICES, INC.

CONSOLIDATED STATEMENTS OF INCOME

(dollars in thousands)

Unaudited




3/31/2022



12/31/2021



9/30/2021



6/30/2021



3/31/2021


Interest and Dividend Income





















     Interest and fees on loans


$

10,620



$

10,665



$

10,049



$

9,749



$

9,408


     Interest on federal funds sold



2














     Interest and dividends on securities available
     for sale:





















          Taxable interest income



779




676




600




530




466


          Interest income exempt from federal
          income taxes



83




98




96




107




118


          Dividends



10




10




11




12




12


     Interest on deposits in banks



15




16




26




15




12


               Total interest and dividend income


$

11,509



$

11,465



$

10,782



$

10,413



$

10,016


Interest Expense





















     Interest on deposits


$

370



$

373



$

383



$

434



$

487


               Total interest expense


$

370



$

373



$

383



$

434



$

487


               Net interest income


$

11,139



$

11,092



$

10,399



$

9,979



$

9,529


Provision For Loan Losses



540




300




300




284




599


Net interest income after provision for loan losses


$

10,599



$

10,792



$

10,099



$

9,695



$

8,930


Noninterest Income





















     Wealth management fees


$

921



$

922



$

876



$

575



$

607


     Service charges on deposit accounts



374




366




338




278




253


     Other service charges and fees



909




903




964




1,141




1,007


     (Loss) gain on sales of AFS securities












(52)




76


     Gain on sale of loans HFS



478




813




486




359





     Officer insurance income



179




160




145




118




105


     Other operating income



382




198




72




231




379


               Total noninterest income


$

3,243



$

3,362



$

2,881



$

2,650



$

2,427


Noninterest Expenses





















     Salaries and employee benefits


$

5,952



$

5,881



$

5,947



$

5,310



$

4,716


     Occupancy expenses



518




484




450




413




456


     Equipment expenses



257




251




246




238




224


     Advertising and marketing expenses



111




185




168




198




108


     Stationery and supplies



35




30




27




60




38


     ATM network fees



286




288




285




312




250


     Other real estate owned expenses






4




32




6




(1)


     Loss on the sale of other real estate owned






73




26




92




10


     FDIC assessment



177




197




169




133




107


     Computer software expense



254




244




282




281




189


     Bank franchise tax



198




198




199




195




189


     Professional fees



464




2,642




289




369




460


     Data processing fees



480




348




418




373




402


     Other operating expenses



1,191




1,058




985




747




768


               Total noninterest expenses


$

9,923



$

11,883



$

9,523



$

8,727



$

7,916


               Income before income taxes


$

3,919



$

2,271



$

3,457



$

3,618



$

3,441


Income Tax Expense



669




(12)




584




615




579


               Net income


$

3,250



$

2,283



$

2,873



$

3,003



$

2,862


Earnings Per Share





















     Net income per common share, basic


$

0.94



$

0.66



$

0.83



$

0.87



$

0.84


     Net income per common share, diluted


$

0.94



$

0.66



$

0.83



$

0.87



$

0.84




(1)

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

 

EAGLE FINANCIAL SERVICES, INC.

Average Balances, Income and Expenses, Yields and Rates

(dollars in thousands)




March 31, 2022



December 31, 2021



March 31, 2021








Interest











Interest











Interest








Average



Income/



Average



Average



Income/



Average



Average



Income/



Average


Assets:


Balance



Expense



Rate



Balance



Expense



Rate



Balance



Expense



Rate


Securities:





































     Taxable


$

185,157



$

789




1.76

%


$

182,802



$

687




1.49

%


$

144,177



$

478




1.35

%

          Tax-Exempt (1)



12,846




105




3.32

%



14,318




124




3.46

%



17,897




149




3.38

%

               Total Securities


$

198,003



$

894




1.83

%


$

197,120



$

811




1.64

%


$

162,074



$

627




1.57

%

Loans:





































     Taxable


$

1,008,211



$

10,599




4.26

%


$

957,695



$

10,643




4.42

%


$

840,368



$

9,326




4.50

%

     Non-accrual



2,586







%



3,416







%



4,581







%

          Tax-Exempt (1)



2,751




26




3.80

%



2,804




27




3.80

%



9,560




104




4.43

%

               Total Loans


$

1,013,548



$

10,625




4.25

%


$

963,915



$

10,670




4.40

%


$

854,509



$

9,430




4.48

%

Federal funds sold



6,384




2




0.13

%



215







0.13

%



210







0.08

%

Interest-bearing deposits in
other banks



38,274




15




0.16

%



48,473




16




0.13

%



60,474




12




0.08

%

               Total earning assets


$

1,253,623



$

11,536




3.73

%


$

1,206,307



$

11,497




3.79

%


$

1,072,686



$

10,069




3.81

%

Allowance for loan losses



(8,973)












(8,583)












(7,253)










Total non-earning assets



88,766












90,757












73,143










Total assets


$

1,333,416











$

1,288,481











$

1,138,576










Liabilities and Shareholders'
Equity:





































Interest-bearing deposits:





































     NOW accounts


$

165,220



$

85




0.21

%


$

154,889



$

79




0.20

%


$

130,849



$

74




0.23

%

     Money market accounts



257,721




144




0.23

%



250,326




143




0.23

%



209,851




155




0.30

%

     Savings accounts



175,333




26




0.06

%



166,438




25




0.06

%



144,460




21




0.06

%

Time deposits:





































     $250,000 and more



65,053




60




0.37

%



65,670




66




0.40

%



68,478




153




0.90

%

     Less than $250,000



58,093




55




0.38

%



57,981




60




0.41

%



59,518




84




0.57

%

               Total interest-bearing
               deposits


$

721,420



$

370




0.21

%


$

695,304



$

373




0.21

%


$

613,156



$

487




0.32

%

Federal funds purchased









%



1







0.64

%









%

Subordinated debt



326







%









%









%

               Total interest-bearing
               liabilities


$

721,746



$

370




0.21

%


$

695,305



$

373




0.22

%


$

613,156



$

487




0.32

%

Noninterest-bearing liabilities:





































     Demand deposits



472,876












468,801












408,015










     Other Liabilities



29,688












13,892












12,309










               Total liabilities


$

1,224,310











$

1,177,998











$

1,033,480










Shareholders' equity



109,106












110,483












105,096










Total liabilities and
shareholders' equity


$

1,333,416











$

1,288,481











$

1,138,576










Net interest income






$

11,166











$

11,124











$

9,582






Net interest spread











3.52

%











3.57

%











3.49

%

Interest expense as a percent of
average earning assets











0.12

%











0.12

%











0.18

%

Net interest margin











3.61

%











3.67

%











3.62

%

 

EAGLE FINANCIAL SERVICES, INC.

Reconciliation of Tax-Equivalent Net Interest Income

(dollars in thousands)




Three Months Ended




3/31/2022



12/31/2021



9/30/2021



6/30/2021



3/31/2021


GAAP Financial Measurements:





















     Interest Income - Loans


$

10,620



$

10,665



$

10,049



$

9,749



$

9,408


     Interest Income - Securities and Other Interest-
     Earnings Assets



889




800




733




664




608


     Interest Expense - Deposits



370




373




383




434




487


Total Net Interest Income


$

11,139



$

11,092



$

10,399



$

9,979



$

9,529


Non-GAAP Financial Measurements:





















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


$

5



$

6



$

11



$

22



$

22


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



22




26




26




28




31


Total Tax Benefit on Tax-Exempt Interest Income


$

27



$

32



$

37



$

50



$

53


Tax-Equivalent Net Interest Income


$

11,166



$

11,124



$

10,436



$

10,029



$

9,582


 

 

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SOURCE Eagle Financial Services, Inc.