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

Rhea-AI Summary

Eagle Financial Services, Inc. (EFSI) reported its fourth quarter 2022 results with a net income of $3.2 million, a 21.7% decrease from Q3 2022 but a 40% increase from Q4 2021. The company achieved record loan growth of $338 million (25.5%) for the year, with earnings per share reaching a record $4.17. Net interest income rose to $13.3 million, up 2.8% from Q3 2022. Total consolidated assets grew to $1.62 billion, reflecting a 9.75% increase. Despite a $930 thousand provision for loan losses and rising interest expenses totaling $2.9 million, the Trust and Wealth Management division contributed significantly to the company’s after-tax revenue.

Positive

• Record annual loan growth of $338 million (25.5%).
• Net income increased 40% year-over-year.
• Earnings per share hit a record $4.17.
• Trust and Wealth Management division's after-tax revenue increased over three times historical contributions.

Negative

• Net income decreased by 21.7% from Q3 2022.
• Provision for loan losses increased to $930 thousand.
• Total interest expenses rose to $2.9 million.

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.

FAQ

What were Eagle Financial Services, Inc.'s net income results for Q4 2022?

Eagle Financial Services, Inc. reported a net income of $3.2 million for Q4 2022.

How much did earnings per share increase for EFSI in 2022?

Earnings per share for EFSI reached a record $4.17 in 2022.

What was the loan growth percentage for Eagle Financial Services in 2022?

Eagle Financial Services achieved a loan growth of 25.5%, totaling $338 million for the year.

What is the total consolidated asset value for EFSI as of December 31, 2022?

EFSI's total consolidated assets were $1.62 billion as of December 31, 2022.

When will the dividend be payable for EFSI shareholders?

A $0.30 per common share cash dividend will be payable on February 17, 2023.