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

Rhea-AI Summary

Eagle Financial Services, Inc. (EFSI) reported first quarter 2022 net income of $3.3 million, a 42.4% increase from Q4 2021. Basic and diluted earnings per share were $0.94. Loan portfolio surpassed $1 billion with a net growth of $35.2 million, despite a $7.5 million reduction from PPP loans. Total deposits grew by $54.1 million to $1.23 billion. The company achieved annualized earnings per share of $3.80.

Shareholders' equity decreased to $102.1 million due to unrealized losses. The company declared a cash dividend of $0.28 per share payable on May 18, 2022.

Positive

• Net income increased by 42.4% from Q4 2021.
• Annualized earnings per share reached a record high of $3.80.
• Deposits grew by $54.1 million, indicating strong liquidity.
• Loan portfolio exceeded $1 billion with substantial net growth.
• Non-interest income represented over 20% of total income.

Negative

• Shareholders' equity declined from $110.3 million to $102.1 million.
• Non-interest income decreased by $119 thousand or 3.5% from Q4 2021.

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.

FAQ

What were Eagle Financial Services' Q1 2022 earnings results?

Eagle Financial Services reported a net income of $3.3 million for Q1 2022, with earnings per share of $0.94.

How did Eagle Financial Services' loan portfolio perform in Q1 2022?

The loan portfolio surpassed $1 billion with a net growth of $35.2 million despite $7.5 million in PPP loan reductions.

What was the status of Eagle Financial Services' deposits in Q1 2022?

Total deposits increased by $54.1 million to $1.23 billion as of March 31, 2022.

What is the future outlook for Eagle Financial Services regarding dividends?

Eagle Financial Services declared a cash dividend of $0.28 per share, payable on May 18, 2022.

How much did shareholders' equity change for Eagle Financial Services in Q1 2022?

Shareholders' equity decreased from $110.3 million at the end of 2021 to $102.1 million at the end of Q1 2022.