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

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

PR Newswire

BERRYVILLE, Va., Jan. 31, 2023 /PRNewswire/ -- Eagle Financial Services, Inc. (OTCQX: EFSI), the holding company for Bank of Clarke, whose divisions include Bank of Clarke Wealth Management, announced its fourth quarter 2022 results. Select highlights for the fourth quarter include:

  • Net income of $3.2 million

  • Basic and diluted earnings per share of $0.92

  • Loan activity:

    • Sales - $58.6 million

    • Net growth - $121.5 million

Brandon Lorey, President and CEO, stated, "The Bank of Clarke and its employees delivered a number of records for Eagle Financial Services, Inc. in 2022, including loan growth, earnings, earnings per share, and revenue, despite a significantly higher interest rate environment driving increased competition for core deposits. For the year, the Bank's commercial and residential lending team along with our niche marine division, LV Finance, delivered loan growth of $338.0 million or 25.5%. The Bank also reached a new after-tax earnings record of $14.5 million translating to a record EPS of $4.17 per share and top line revenue of $62.6 million. Additionally, the Bank's Trust and Wealth Management division broke through the $500 million threshold in Assets Under Management (AUM) over the year and contributed over $1 million in after tax-revenue to the company, more than three times its historical contribution. We continue to remain focused on our customers, community, and shareholders by providing the customer service of Main Street with the product set of Wall Street. Thanks to our phenomenal staff for their continued and tireless work in putting our customers in the center of everything we do, as we work to earn the moniker of being the trusted financial partners for all we serve in the Valley and Northern Virginia."

Income Statement Review

Net income for the quarter ended December 31, 2022 was $3.2 million reflecting a decrease of 21.7% from the quarter ended September 30, 2022 and an increase of 40.0% from the quarter ended December 31, 2021. The decrease from the quarter ended September 30, 2022 was primarily due to the $930 thousand provision for loan losses that was expensed during the fourth quarter of 2022 to keep pace with loan growth.  The increase from the quarter ended December 31, 2021 was mainly driven by increased net interest income led by strong loan growth.  Net income was $4.1 million for the three-month period ended September 30, 2022 and $2.3 million for the quarter ended December 31, 2021.

Net interest income for the quarter ended December 31, 2022 was $13.3 million reflecting an increase of 2.8% from the quarter ended September 30, 2022 and an increase of 19.5% from the quarter ended December 31, 2021. Net interest income was $12.9 million and $11.1 million for the quarters ended September 30, 2022 and December 31, 2021, respectively.  The increase in net interest income from the quarters ended September 30, 2022 and December 31, 2021 resulted primarily from growth in the Company's loan portfolio along with the rising interest rate environment.

Total loan interest income was $15.1 million and $13.3 million for the quarters ended December 31, 2022 and September 30, 2022, respectively.  Total loan interest income was $10.7 million for the quarter ended December 31, 2021. Total loan interest income increased $4.4 million or 41.7% from the quarter ended December 31, 2021 to the quarter ended December 31, 2022. Average loans for the quarter ended December 31, 2022 were $1.26 billion compared to $963.9 million for the quarter ended December 31, 2021.  The tax equivalent yield on average loans for the quarter ended December 31, 2022 was 4.78%, an increase of 38 basis points from the 4.40% average yield for the same time period in 2021. The majority of this increase in yield can be attributed to the current rising interest rate environment.

Interest and dividend income from the investment portfolio was $879 thousand for the quarter ended December 31, 2022 compared to $932 thousand for the quarter ended September 30, 2022. Interest income and dividend income from the investment portfolio was $784 thousand for the quarter ended December 31, 2021. The decrease in interest and dividend income between the third and fourth quarters of 2022 resulted from the sale of securities during the third quarter of 2022. The increase in interest and dividend income between the quarters ended December 31, 2022 and December 31, 2021 resulted from the increase in yields on securities purchased during 2022. Average investments for the quarter ended December 31, 2022 were $154.3 million compared to $197.1 million for the quarter ended December 31, 2021. The tax equivalent yield on average investments for the quarter ended December 31, 2022 was 2.26%, up 19 basis points from 2.07% for the quarter ended September 30, 2022 and up 62 basis points from 1.64% for the quarter ended December 31, 2021.

Total interest expense was $2.9 million for the three months ended December 31, 2022 and $1.5 million and $373 thousand for three months ended September 30, 2022 and December 31, 2021, respectively. The increase in interest expense resulted from increases on rates paid on deposit accounts, the subordinated notes that the Company issued on March 31, 2022, which are currently paying a 4.5% fixed rate, and Federal Home Loan Bank advances of $175 million entered into during the third and fourth quarters of 2022. The average cost of interest-bearing liabilities increased 57 and 103 basis points when comparing the quarter ended December 31, 2022 to the quarters ended September 30, 2022 and December 31, 2021, respectively. The average balance of interest-bearing liabilities increased $65.6 million from the quarter ended September 30, 2022 to the quarter ended December 31, 2022. The average balance of interest-bearing liabilities increased $225.6 million from the quarter ended December 31, 2021 to the same period in 2022.

The net interest margin was 3.68% for the quarter ended December 31, 2022. For the quarters ended September 30, 2022 and December 31, 2021, the net interest margin was 3.72% and 3.67%, 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 $3.1 million for the quarter ended December 31, 2022, which represented a decrease of $75 thousand or 2.4% from the $3.2 million for the three months ended September 30, 2022. Noninterest income for the quarter ended December 31, 2021 was $3.4 million. The $273 thousand or 8.1% decrease between the quarters ended December 31, 2021 and December 31, 2022 was driven mainly by lower gains on the sale of loans held for sale which were largely impacted by the rising interest rate environment.

Noninterest expense increased $490 thousand, or 4.4%, to $11.5 million for the quarter ended December 31, 2022 from $11.1 million for the quarter ended September 30, 2022. The largest increase was in other operating expenses, which includes loan expense.  This increase was due mainly to the high loan volume experienced during the fourth quarter of 2022. Noninterest expense was $11.9 million for the quarter ended December 31, 2021, representing a decrease of $335 thousand or 2.8% when comparing the quarter ended December 31, 2022 to the quarter ended December 31, 2021. An increase in salaries and benefits expenses was noted between the fourth quarter of 2022 and 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 221 at December 31, 2021, to 241 at December 31, 2022. This increase was offset by a large decrease in professional fees and more specifically, legal expenses. Legal expenses were higher in 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 those expenses were one-time fees.

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 increased from $2.4 million or 0.16% of total assets at September 30, 2022 to $2.6 million or 0.16% of total assets at December 31, 2022. Nonperforming assets were $2.8 million at December 31, 2021.  Total nonaccrual loans were $2.2 million at December 31, 2022 and $2.4 million at September 30, 2022. Nonaccrual loans were $2.7 million at December 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 $108 thousand and zero at December 31, 2022 and September 30, 2022, respectively.

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 December 31, 2022, the Company had 28 troubled debt restructurings totaling $4.6 million. Approximately $4.4 million or 26 loans are performing loans, while the remaining loans are on non-accrual status. At September 30, 2022, the Company had 26 troubled debt restructurings totaling $4.4 million. Approximately $4.2 million or 24 loans were performing loans, while the remaining loans were on non-accrual status.

The Company realized $454 thousand in net charge-offs for the quarter ended December 31, 2022 versus $895 thousand in net recoveries for the three months ended September 30, 2022. During the three months ended December 31, 2021, $39 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 $930 thousand in provision for loan loss for the quarter ended December 31, 2022 due to the significant growth of the loan portfolio during the quarter. The Company recognized provision for loan losses of zero and $300 thousand for the quarters ended September 30, 2022 and December 31, 2021, respectively. The lack of provision for the quarter ended September 30, 2022 was due to the large net recovery that was recognized during the quarter.  The provision for the quarter ended December 31, 2021 resulted mostly from loan growth during the quarter. The ratio of allowance for loan losses to total loans was 0.85% at December 31, 2022 and 0.89% at September 30, 2022.  The ratio of allowance for loan losses to total loans was 0.89% at December 31, 2021. The decrease in the ratio of the allowance for loan losses to total loans is mainly attributable to the type of new loans that are being originated in the portfolio. The majority of growth has been in the commercial real estate and marine loan pools, which have a lower allocation percentage than the overall portfolio. The ratio of allowance for loan losses to total nonaccrual loans was 518.86% at December 31, 2022.  The ratio of allowance for loan losses to total nonaccrual loans was 442.59% and 488.85% at September 30, 2022 and December 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 December 31, 2022 were $1.62 billion, which represented an increase of $143.6 million or 9.75% from total assets of $1.47 billion at September 30, 2022. At December 31, 2021, total consolidated assets were $1.30 billion. Total net loans increased $121.5 million from $1.19 billion at September 30, 2022 to $1.31 billion at December 31, 2022. During the quarter ended December 31, 2022, $58.6 million in loans were sold. The Company sold $961 thousand in mortgage loans on the secondary market and $57.7 million of loans from the commercial and consumer loan portfolios. These loan sales resulted in net gains of $55 thousand. Total securities increased $2.0 million from $156.4 million at September 30, 2022, to $158.4 million at December 31, 2022.  At December 31, 2021, total investment securities were $193.4 million and net loans were $976.9 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 to $1.26 billion as of December 31, 2022 when compared to September 30, 2022 deposits of $1.25 billion. At December 31, 2021 total deposits were $1.18 billion.  The growth in deposits was mainly organic growth as the Company continues to expand and grow into newer market areas.

The Company had $175.0 million and $75.0 million, respectively, in outstanding borrowings from the Federal Home Loan Bank of Atlanta at December 31, 2022 and September 30, 2022.  There were no outstanding borrowings from the Federal Home Loan Bank as of December 31, 2021. At December 31, 2022, the Company had $33.0 million outstanding in fed funds purchased. There were no outstanding fed funds purchased as of September 30, 2022 or December 31, 2021.  These borrowings were used mainly to fund the strong loan growth that occurred during the quarter ended December 31, 2022.

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.

Equity

Shareholders' equity was $101.7 million and $98.5 million at December 31, 2022 and September 30, 2022, respectively. Shareholders' equity was $110.3 million at December 31, 2021. The decrease in shareholder's equity at December 31, 2022 in comparison to December 31, 2021 was driven by the other comprehensive loss from the unrealized loss on available for sale securities. The book value of the Company at December 31, 2022 was $29.15 per common share. Total common shares outstanding were 3,490,086 at December 31, 2022. On January 25, 2023, the board of directors declared a $0.30 per common share cash dividend for shareholders of record as of February 6, 2023 and payable on February 17, 2023.

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




4Q22



3Q22



2Q22



1Q22



4Q21


Net Income (dollars in thousands)


$

3,197



$

4,082



$

3,992



$

3,250



$

2,283


Earnings per share, basic


$

0.92



$

1.17



$

1.14



$

0.94



$

0.66


Earnings per share, diluted


$

0.92



$

1.17



$

1.14



$

0.94



$

0.66


Return on average total assets



0.83

%



1.12

%



1.16

%



0.99

%



0.70

%

Return on average total equity



12.70

%



15.93

%



15.86

%



12.08

%



8.20

%

Dividend payout ratio



32.61

%



24.79

%



24.56

%



29.79

%



42.42

%

Fee revenue as a percent of total revenue



14.92

%



16.11

%



15.73

%



15.32

%



15.16

%

Net interest margin(1)



3.68

%



3.72

%



3.70

%



3.61

%



3.67

%

Yield on average earning assets



4.48

%



4.14

%



3.93

%



3.73

%



3.79

%

Rate on average interest-bearing liabilities



1.25

%



0.68

%



0.38

%



0.21

%



0.22

%

Net interest spread



3.23

%



3.46

%



3.55

%



3.52

%



3.57

%

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


$

20



$

32



$

25



$

27



$

32


Non-interest income to average assets



0.80

%



0.87

%



1.12

%



0.99

%



1.04

%

Non-interest expense to average assets



2.99

%



3.04

%



3.07

%



3.02

%



3.66

%

Efficiency ratio(2)



70.53

%



65.73

%



66.62

%



68.87

%



81.53

%



(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




4Q22



3Q22



2Q22



1Q22



4Q21


BALANCE SHEET RATIOS
















Loans to deposits



104.72

%



95.83

%



91.01

%



82.96

%



83.73

%

Average interest-earning assets to average-interest
bearing liabilities



155.58

%



161.11

%



166.35

%



173.69

%



173.49

%

PER SHARE DATA
















Dividends


$

0.30



$

0.29



$

0.28



$

0.28



$

0.28


Book value



29.15




28.28




28.58




29.37




32.22


Tangible book value



29.15




28.28




28.58




29.37




32.22


SHARE PRICE DATA
















Closing price


$

35.95



$

36.92



$

35.44



$

35.45



$

34.65


Diluted earnings multiple(1)



9.77




7.89




7.77




9.43




13.13


Book value multiple(2)



1.23




1.31




1.24




1.21




1.08


COMMON STOCK DATA
















Outstanding shares at end of period



3,490,086




3,483,571




3,481,188




3,477,020




3,454,128


Weighted average shares outstanding



3,489,764




3,487,555




3,479,573




3,472,332




3,451,383


Weighted average shares outstanding, diluted



3,489,764




3,482,820




3,479,591




3,472,332




3,451,383


CAPITAL RATIOS
















Common equity Tier 1 capital ratio



8.80

%



9.35

%



9.67

%



10.19

%



10.72

%

Tier 1 risk-based capital ratio



8.80

%



9.35

%



9.67

%



10.19

%



10.72

%

Total risk-based capital ratio



10.34

%



10.98

%



11.33

%



11.94

%



11.58

%

Tier 1 leverage ratio



7.84

%



8.09

%



8.34

%



8.44

%



8.57

%

Total equity to total assets



6.29

%



6.69

%



7.09

%



7.43

%



8.46

%

CREDIT QUALITY
















Net charge-offs to average loans



0.04

%



(0.08)

%



(0.02)

%



0.00

%



%

Total non-performing loans to total loans



0.19

%



0.20

%



0.19

%



0.26

%



0.28

%

Total non-performing assets to total assets



0.16

%



0.16

%



0.15

%



0.19

%



0.21

%

Non-accrual loans to:
















total loans



0.16

%



0.20

%



0.18

%



0.26

%



0.28

%

total assets



0.13

%



0.16

%



0.14

%



0.19

%



0.21

%

Allowance for loan losses to:
















total loans



0.85

%



0.89

%



0.88

%



0.91

%



0.89

%

non-performing assets



433.45

%



442.59

%



472.67

%



357.47

%



317.68

%

non-accrual loans



518.86

%



442.59

%



488.85

%



357.47

%



322.70

%

NON-PERFORMING ASSETS:
















(dollars in thousands)
















Loans delinquent over 90 days


$

318



$



$

69



$



$

43


Non-accrual loans



2,162




2,427




2,015




2,606




2,723


Other real estate owned and repossessed assets



108














NET LOAN CHARGE-OFFS (RECOVERIES):
















(dollars in thousands)
















Loans charged off


$

491



$

80



$

41



$

47



$

42


(Recoveries)



(37)




(975)




(213)




(35)




(81)


Net charge-offs (recoveries)



454




(895)




(172)




12




(39)


PROVISION FOR LOAN LOSSES (dollars in
thousands)


$

930



$



$

360



$

540



$

300


ALLOWANCE FOR LOAN LOSS SUMMARY
















(dollars in thousands)
















Balance at the beginning of period


$

10,742



$

9,847



$

9,315



$

8,787



$

8,448


Provision



930







360




540




300


Net charge-offs (recoveries)



454




(895)




(172)




12




(39)


Balance at the end of period


$

11,218



$

10,742



$

9,847



$

9,315



$

8,787




(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
12/31/2022



Unaudited
09/30/2022



Unaudited
06/30/2022



Unaudited
03/31/2022



Audited
12/31/2021


Assets
















Cash and due from banks


$

66,531



$

30,782



$

31,457



$

86,965



$

63,840


Federal funds sold



363




5,153




680




8,945




228


Securities available for sale, at fair value



158,389




156,361




181,162




194,554




193,370


Loans held for sale



153




90




399




843




876


Loans, net of allowance for loan losses



1,312,565




1,191,099




1,110,993




1,012,144




976,933


Bank premises and equipment, net



18,064




17,972




18,155




18,333




18,249


Bank owned life insurance



23,862




23,731




23,593




23,415




23,236


Other assets



36,790




47,932




36,074




29,096




26,306


Total assets


$

1,616,717



$

1,473,120



$

1,402,513



$

1,374,295



$

1,303,038


Liabilities and Shareholders' Equity
















Liabilities
















Deposits:
















Noninterest bearing demand deposits


$

478,750



$

491,184



$

477,540



$

489,426



$

470,355


Savings and interest-bearing demand
deposits



627,431




632,081




638,951




619,224




583,296


Time deposits



157,894




130,849




115,022




122,673




123,584


Total deposits


$

1,264,075



$

1,254,114



$

1,231,513



$

1,231,323



$

1,177,235


Federal funds purchased



32,980







28,575








Federal Home Loan Bank advances



175,000




75,000











Subordinated debt



29,377




29,360




29,343




29,327





Other liabilities



13,556




16,146




13,592




11,542




15,523


Commitments and contingent liabilities
















Total liabilities


$

1,514,988



$

1,374,620



$

1,303,023



$

1,272,192



$

1,192,758


Shareholders' Equity
















Preferred stock, $10 par value
















Common stock, $2.50 par value



8,619




8,600




8,594




8,586




8,556


Surplus



13,278




13,003




12,594




12,260




12,115


Retained earnings



100,278




98,128




95,058




92,040




89,764


Accumulated other comprehensive (loss)



(20,446)




(21,231)




(16,756)




(10,783)




(155)


Total shareholders' equity


$

101,729



$

98,500



$

99,490



$

102,103



$

110,280























Total liabilities and shareholders'
equity


$

1,616,717



$

1,473,120



$

1,402,513



$

1,374,295



$

1,303,038


 

EAGLE FINANCIAL SERVICES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands)
Unaudited




Three Months Ended



Year Ended




December 31,



December 31,




2022



2021



2022



2021


Interest and Dividend Income













Interest and fees on loans


$

15,117



$

10,665



$

50,682



$

39,871


Interest on federal funds sold



15







30





Interest and dividends on securities available for sale:













Taxable interest income



815




676




3,292




2,272


Interest income exempt from federal income taxes



4




98




221




419


Dividends



60




10




109




45


Interest on deposits in banks



153




16




352




69


Total interest and dividend income


$

16,164



$

11,465



$

54,686



$

42,676


Interest Expense













Interest on deposits


$

1,474



$

373



$

2,941



$

1,677


Interest on federal funds purchased



151







170





Interest on Federal Home Loan Bank advances



891







1,295





Interest on subordinated debt



392







1,067





Total interest expense


$

2,908



$

373



$

5,473



$

1,677


Net interest income


$

13,256



$

11,092



$

49,213



$

40,999


Provision For Loan Losses



930




300




1,830




1,483


Net interest income after provision for loan losses


$

12,326



$

10,792



$

47,383



$

39,516


Noninterest Income













Income from fiduciary activities


$

1,072



$

922



$

4,149



$

1,891


Service charges on deposit accounts



423




366




1,618




1,087


Other service charges and fees



944




903




3,943




5,252


(Loss) on the sale of bank premises and equipment



(8)







(11)





(Loss) gain on sales of AFS securities









(737)




24


Gain on sale of loans HFS



331




813




1,875




1,658


Officer insurance income



219




160




714




527


Other operating income



108




198




1,794




881


Total noninterest income


$

3,089



$

3,362



$

13,345



$

11,320


Noninterest Expenses













Salaries and employee benefits


$

6,857



$

5,881



$

25,730



$

21,854


Occupancy expenses



506




484




2,068




1,803


Equipment expenses



307




251




1,121




959


Advertising and marketing expenses



332




185




770




659


Stationery and supplies



64




30




199




155


ATM network fees



233




288




1,210




1,135


Other real estate owned expenses



34




4




34




41


Loss on the sale of other real estate owned






73







201


FDIC assessment



184




197




614




606


Computer software expense



270




244




960




996


Bank franchise tax



233




198




886




781


Professional fees



409




2,642




2,019




3,760


Data processing fees



393




348




1,779




1,541


Other operating expenses



1,726




1,058




5,667




3,558


Total noninterest expenses


$

11,548



$

11,883



$

43,057



$

38,049


Income before income taxes


$

3,867



$

2,271



$

17,671



$

12,787


Income Tax Expense



670




(12)




3,150




1,766


Net income


$

3,197



$

2,283



$

14,521



$

11,021


Earnings Per Share













Net income per common share, basic


$

0.92



$

0.66



$

4.17



$

3.20


Net income per common share, diluted


$

0.92



$

0.66



$

4.17



$

3.20


 

EAGLE FINANCIAL SERVICES, INC.
Average Balances, Income and Expenses, Yields and Rates
(dollars in thousands)






















For the Year Ended




December 31, 2022



December 31, 2021







Interest









Interest







Average



Income/



Average



Average



Income/



Average


Assets:


Balance



Expense



Yield



Balance



Expense



Yield


Securities:



















Taxable


$

172,501



$

3,401




1.97

%


$

162,717



$

2,317




1.42

%

Tax-Exempt (1)



8,305




280




3.37

%



15,936




530




3.33

%

Total Securities


$

180,806



$

3,681




2.04

%


$

178,653



$

2,847




1.59

%

Loans:



















Taxable


$

1,121,429



$

50,509




4.50

%


$

889,035



$

39,643




4.46

%

Non-accrual



2,350







%



4,024







%

Tax-Exempt (1)



5,671




218




3.85

%



6,734




289




4.29

%

Total Loans


$

1,129,450



$

50,727




4.49

%


$

899,793



$

39,932




4.44

%

Federal funds sold



5,311




30




0.57

%



223







0.10

%

Interest-bearing deposits in other banks



27,251




352




1.29

%



68,868




69




0.10

%

Total earning assets


$

1,340,468



$

54,790




4.09

%


$

1,143,513



$

42,848




3.75

%

Allowance for loan losses



(9,852)










(7,980)








Total non-earning assets



95,639










83,146








Total assets


$

1,426,255









$

1,218,679








Liabilities and Shareholders' Equity:



















Interest-bearing deposits:



















NOW accounts


$

173,843



$

663




0.38

%


$

145,652



$

312




0.21

%

Money market accounts



270,725




1,155




0.43

%



225,960




583




0.26

%

Savings accounts



179,709




130




0.07

%



156,861




92




0.06

%

Time deposits:



















$250,000 and more



62,757




560




0.89

%



67,287




411




0.61

%

Less than $250,000



62,907




433




0.69

%



58,565




279




0.48

%

Total interest-bearing deposits


$

749,941



$

2,941




0.39

%


$

654,325



$

1,677




0.26

%

Federal funds purchased



7,882




170




2.16

%



1







0.36

%

Federal Home Loan Bank advances



39,589




1,295




3.27

%









%

Subordinated debt



22,193




1,067




4.81

%










Total interest-bearing liabilities


$

819,605



$

5,473




0.67

%


$

654,326



$

1,677




0.26

%

Noninterest-bearing liabilities:



















Demand deposits



485,061










443,662








Other Liabilities



18,293










12,521








Total liabilities


$

1,322,959









$

1,110,509








Shareholders' equity



103,296










108,170








Total liabilities and shareholders' equity


$

1,426,255









$

1,218,679








Net interest income





$

49,317









$

41,171





Net interest spread









3.42

%









3.49

%

Interest expense as a percent of average earning
assets









0.41

%









0.15

%

Net interest margin









3.68

%









3.60

%

(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)




For the Three Months Ended




December 31, 2022



December 31, 2021







Interest









Interest







Average



Income/



Average



Average



Income/



Average


Assets:


Balance



Expense



Yield



Balance



Expense



Yield


Securities:



















Taxable


$

153,747



$

875




2.26

%


$

182,802



$

687




1.49

%

Tax-Exempt (1)



533




5




4.15

%



14,318




124




3.46

%

Total Securities


$

154,280



$

880




2.26

%


$

197,120



$

811




1.64

%

Loans:



















Taxable


$

1,245,038



$

15,045




4.79

%


$

957,695



$

10,643




4.42

%

Non-accrual



2,311







%



3,416







%

Tax-Exempt (1)



9,492




91




3.82

%



2,804




27




3.80

%

Total Loans


$

1,256,841



$

15,136




4.78

%


$

963,915



$

10,670




4.40

%

Federal funds sold



3,609




15




1.70

%



215







0.13

%

Interest-bearing deposits in other banks



20,305




153




2.98

%



48,473




16




0.13

%

Total earning assets


$

1,432,724



$

16,184




4.48

%


$

1,206,307



$

11,497




3.79

%

Allowance for loan losses



(10,657)










(8,583)








Total non-earning assets



108,753










90,757








Total assets


$

1,530,820









$

1,288,481








Liabilities and Shareholders' Equity:



















Interest-bearing deposits:



















NOW accounts


$

177,190



$

318




0.71

%


$

154,889



$

79




0.20

%

Money market accounts



280,439




578




0.82

%



250,326




143




0.23

%

Savings accounts



177,565




40




0.09

%



166,438




25




0.06

%

Time deposits:



















$250,000 and more



64,223




296




1.83

%



65,670




66




0.40

%

Less than $250,000



75,395




242




1.27

%



57,981




60




0.41

%

Total interest-bearing deposits


$

774,812



$

1,474




0.75

%


$

695,304



$

373




0.21

%

Federal funds purchased



26,476




151




2.26

%



1







0.64

%

Federal Home Loan Bank advances



90,217




891




3.92

%









%

Subordinated debt



29,366




392




5.29

%










Total interest-bearing liabilities


$

920,871



$

2,908




1.25

%


$

695,305



$

373




0.22

%

Noninterest-bearing liabilities:



















Demand deposits



493,373










468,801








Other Liabilities



16,737










13,892








Total liabilities


$

1,430,981









$

1,177,998








Shareholders' equity



99,839










110,483








Total liabilities and shareholders' equity


$

1,530,820









$

1,288,481








Net interest income





$

13,276









$

11,124





Net interest spread









3.23

%









3.57

%

Interest expense as a percent of average earning
assets









0.81

%









0.12

%

Net interest margin









3.68

%









3.67

%

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

 

EAGLE FINANCIAL SERVICES, INC.
Reconciliation of Tax-Equivalent Net Interest Income
(dollars in thousands)




Three Months Ended




12/31/2022



9/30/2022



6/30/2022



3/31/2022



12/31/2021


GAAP Financial Measurements:
















Interest Income - Loans


$

15,117



$

13,282



$

11,663



$

10,620



$

10,665


Interest Income - Securities and Other Interest-Earnings
Assets



1,047




1,084




984




889




800


Interest Expense - Deposits



1,474




714




383




370




373


Interest Expense - Other Borrowings



1,434




753




345








Total Net Interest Income


$

13,256



$

12,899



$

11,919



$

11,139



$

11,092


Non-GAAP Financial Measurements:
















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


$

19



$

16



$

5



$

5



$

6


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



1




16




20




22




26


Total Tax Benefit on Tax-Exempt Interest Income


$

20



$

32



$

25



$

27



$

32


Tax-Equivalent Net Interest Income


$

13,276



$

12,931



$

11,944



$

11,166



$

11,124


 

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SOURCE Eagle Financial Services, Inc.

Copyright CNW Group 2023


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