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Eagle Financial Services, Inc. Announces 2019 Second Quarter Dividend And Financial Results

BERRYVILLE, Va., July 17, 2019 /PRNewswire/ -- Eagle Financial Services, Inc. (OTCQX: EFSI) (the "Company"), the holding company for Bank of Clarke County, whose divisions include Eagle Investment Group, reported quarterly earnings and continued strong performance for the second quarter of 2019. Additionally, on July 17, 2019, the Board of Directors announced a quarterly common stock cash dividend of $0.25 per common share, payable on August 14, 2019, to shareholders of record on July 31, 2019. Select highlights for the second quarter include:  

  • Net Income of $2.1 million
  • Loan growth of $20.0 million
  • Deposit growth of $23.5 million
  • Net Interest Margin of 4.02%
  • Basic and diluted earnings per share of $0.62

Brandon Lorey, President and CEO stated, "The Company continued its strong financial performance for the second quarter of 2019.  Considering continued pressure on loan yields and the cost of deposits, we are focused on the maintenance of our net interest margin and dedicated to growing the balance sheet with new loan and deposit relationships and increasing net interest income levels. Although we have experienced increases in noninterest expenses, the Company is mindful of the need to maintain the current and improve future efficiency levels.  I'd like to add that I am extremely proud to be associated with the fifth oldest financial institution in the Commonwealth of Virginia as well as only the ninth president in its history. My sincere compliments and congratulations to John Milleson, the Company's recently retired President and CEO, for handing over such a successful organization."

Income Statement Review

Net income of $2.1 million for the quarter ended June 30, 2019 decreased $446,000 and $395,000, respectively, when compared to net income of $2.6 million for the quarter ended March 31, 2019 and net income of $2.5 million for the quarter ended June 30, 2018. Much of these decreases related to increases in noninterest expenses, the details of which are discussed below.

Net interest income increased $64,000 or 0.84% from the quarter ended March 31, 2019. This increase in net interest income was driven mostly by the increased loan volume experienced by the Bank during the quarter. Net interest income increased 3.61% or $268,000 from $7.4 million for the quarter ended June 30, 2018 to $7.7 million for the quarter ended June 30, 2019.  This increase is attributed to increased loan volume and yield.   

Total loan interest income was $7.7 million and $7.5 million for the quarters ended June 30 and March 31, 2019, respectively. For the quarter ended June 30, 2018, total loan interest income was $7.0 million. Average loans for the quarter ended June 30, 2019 were $626.6 million compared to $608.3 million for the quarter ended March 31, 2019.  Total average accruing loans were $622.6 million for the three months ended June 30, 2019 and $606.0 million for the quarter ended March 31, 2019.  For the second quarter of 2018, total average loans were $581.4 million and average accruing loans were $577.8 million. The tax equivalent yield on average loans for the quarters ended June 30 and March 31, 2019 was 4.94% and 5.03%, respectively.  The tax equivalent yield on loans for the quarter ended June 30, 2018 was 4.85%.  Interest income from the investment portfolio was $1.0 million for the quarters ended June 30, 2019 and March 31, 2019.  Average investments were $143.3 million for the quarter ended June 30, 2019 and $144.1 million for the quarter ended March 31, 2019.  Interest income from the investment portfolio was $953,000 for the quarter ended June 30, 2018 while average investments were $136.1 million for the same time period.

Total interest expense was $1.0 million for the three months ended June 30, 2019 and $967,000 for the quarter ended March 31, 2019. When compared to the quarter ended March 31, 2019, the average cost of interest-bearing liabilities increased five basis points to 0.92% for the quarter ended June 30, 2019.  The average balance of interest-bearing liabilities increased by $13.2 million from the quarter ended March 31, 2019. The net interest margin was 4.02% for the quarter ended June 30, 2019 and 4.14% for the quarter March 31, 2019.  For the quarter ended June 30, 2018, total interest expense was $573,000 and the net interest margin was 4.17%.

The Company's net interest margin is not a measurement under accounting principles generally accepted in the United States (GAAP), 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%. The table at the end of this document reconciles tax-equivalent net interest income, which is not a measurement under GAAP, to net interest income.

Non-interest income was $1.9 million and $1.8 million for the quarters ended June 30 and March 31, 2019, respectively. When comparing the quarter ended June 30, 2019 to the quarter ended March 31, 2019, fees from fiduciary activities increased $94,000 or 33.33%.  Fees from fiduciary activities increased $77,000 or 25.75% from the quarter ended June 30, 2018 to the same period in 2019. These increases resulted mostly from the collection of some one-time fees during the second quarter of 2019.  The amount of income from fiduciary activities is determined by the number of active accounts and total assets under management. Also, income fluctuated due to changes in market value.  These fluctuations do not necessarily indicate future results. Other service charges and fees increased $120,000 when comparing the three months ended June 30, 2019 to the same period ended March 31, 2019.  Other service charges and fees increased $143,000 when comparing the three months ended June 30, 2019 to the same period ended June 20, 2018. These increases were mostly driven by the increases in ATM fees and commissions from sales of non-deposit investments.  Other operating income decreased by $60,000 or 67.42% when comparing the three months ended June 30, 2019 to the three months ended March 31, 2019. The Company usually adjusts its ownership interest in Bankers Insurance, LLC in the first quarter of its calendar year based upon Bankers Insurance, LLC most recent schedule K-1. During the first quarter of 2019, the increase in ownership adjustment was $81,000 and resulted in an increase to other operating income.  Other operating income increased by $13,000 or 81.25% when comparing the quarter ended June 30, 2019 to the same period ended June 30, 2018.  This increase related to additional commissions and profit earned and recorded from the Bank's investment in Bankers Insurance, LLC and Plexus Fund IV during the quarter ended June 30, 2019. The Plexus Fund IV is a Small Business Investment Company fund.    

Noninterest expense increased $593,000 to $6.8 million when comparing the quarter ended March 31, 2019 to the quarter ended June 30, 2019.  This increase is mostly attributed to the increase in salaries and employee benefits expense, more specifically employee incentive expense. Based upon the status of employee incentive goals at June 30, 2019, an accrual of approximately $275,000 was recorded. When compared to the $6.2 million for the quarter ended June 30, 2018, noninterest expense was $658,000 or 10.67% higher for the quarter ended June 30, 2019. This increase also relates to increased employee incentive expense as well as increased data processing fees. Data processing fees increased $185,000 when comparing the three-month period ended June 30, 2019 to the same period in 2018.  The Company anticipated increased data processing fees when it moved its in-house core banking software to a service bureau environment. The Company migrated to a service bureau environment in late June 2018.

Asset Quality and Provision for Loan Losses

Nonperforming assets consist of loans 90 days past due and still accruing interest, nonaccrual loans, other real estate owned (foreclosed properties), and repossessed assets.  At June 30, 2019, nonperforming assets were $5.0 million or 0.61% of total assets, an increase of $1.7 million when compared to the $3.4 million at March 31, 2019.  During the second quarter of 2019, the Bank placed nine loans totaling approximately $2.3 million on non-accrual status while one non-accrual loan totaling approximately $133,000 has been paid off.  Over 80% of the $2.3 million added to non-accrual status during the quarter was comprised of two large real estate loans. One of these loans, a $1.3 million loan, has been paid off subsequent to June 30, 2019.   Other changes to non-accrual loan balances resulted from loan payments. Management regularly evaluates the financial condition of borrowers with loans on non-accrual status and the value of any collateral on these loans.  The results of these evaluations are used to estimate the amount of losses which may be realized on the disposition of these non-accrual loans.  The majority of the non-accrual loans are secured by real estate.  No real estate assets had been foreclosed upon during the second quarter of 2019 while one had been sold during the period.   Loans greater than 90 days past due and still accruing totaled $68,000 at June 30, 2019, an increase of $68,000 from March 31, 2019. At June 30, 2018, there were no loans greater than 90 days past due and still accruing.  Nonperforming assets were $4.1 million or 0.53% of total assets at June 30, 2018.

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 June 30, 2019, the Company had 19 troubled debt restructurings totaling $3.4 million, of which 13 loans, totaling $2.5 million, were considered performing loans. 

The Company realized $906,000 in net charge offs for the quarter ended June 30, 2019 compared to $35,000 in net recoveries for the three months ended March 31, 2019. For the quarter ended June 30, 2018, the Company realized net recoveries of $115,000. The Company recorded a provision for loan losses of $256,000 and $194,000 for the quarters ended June 30, 2019 and March 31, 2019, respectively.  For the quarter ended June 30, 2018, a negative provision for loan losses of $97,000 was recorded.  The allowance for loan losses was $5.0 million, or 0.79% of total outstanding loans at June 30, 2019 and $5.7 million or 0.92% of total outstanding loans at March 31, 2019.  At June 30, 2018, the allowance for loan losses was $4.5 million or 0.78% of total outstanding loans.  The amount of provision for loan losses during each quarter reflects the results of the Bank's analysis used to determine the adequacy of the allowance for loan losses.  The Company is committed to maintaining an allowance at a level that adequately reflects the risk inherent in the loan portfolio. 

Total Consolidated Assets

Total consolidated assets of the Company at June 30, 2019 were $833.5 million, which represented an increase of $24.8 million or 3.06% from total assets of $808.7 million at March 31, 2019. Total loans increased from $619.2 million at March 31, 2019 to $639.2 million at June 30, 2019.  Total securities available for sale decreased from $145.1 million at March 31, 2019 to $142.9 million at June 30, 2019. At June 30, 2018, total consolidated assets were $775.2 million while total loans were $586.8 million and total securities available for sale were $139.5 million.

Deposits and Other Borrowings

Total deposits were $730.9 million at June 30, 2019.  This reflects an increase of 3.32% or $23.5 million from $707.4 million at March 31, 2019.  At June 30, 2018, total deposits were $682.1 million.  There were no outstanding borrowings with the Federal Home Loan Bank of Atlanta at June 30, 2019 and 2018 as well as at March 31, 2019.  

Equity

Shareholders' equity at June 30, 2019 was $92.7 million, reflecting an increase of $1.6 million from $91.2 million at March 31, 2019.  At June 30, 2018 shareholders' equity was $84.8 million. The book value of the Company at June 30, 2019 was $27.22 per common share. Total common shares outstanding were 3,431,516 at June 30, 2019.  On July 17, 2019, the board of directors declared a $0.25 per common share cash dividend for shareholders of record as of July 31, 2019, and payable on August 14, 2019.

Certain information contained in this discussion may include "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements relate to the Company's future operations and are generally identified by phrases such as "the Company expects," "the Company believes" or words of similar import. Although the Company believes that its expectations with respect to the forward-looking statements are based upon reliable assumptions within the bounds of its knowledge of its business and operations, there can be no assurance that actual results, performance or achievements of the Company will not differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. For details on factors that could affect expectations, see the risk factors and other cautionary language included in the Company's Annual Report on Form 10-K for the year ended December 31, 2018, and other filings with the Securities and Exchange Commission.

 

EAGLE FINANCIAL SERVICES, INC.










KEY STATISTICS

For the Three Months Ended


2Q19


1Q19


4Q18


3Q18


2Q18











Net Income (dollars in thousands)

$          2,126


$          2,572


$          2,081


$          1,860


$          2,521

Earnings per share, basic

$            0.62


$            0.74


$            0.60


$            0.54


$            0.73

Earnings per share, diluted

$            0.62


$            0.74


$            0.60


$            0.54


$            0.73











Return on average total assets

1.04%


1.31%


1.05%


0.94%


1.31%

Return on average total equity

9.37%


11.74%


9.65%


8.68%


12.12%

Dividend payout ratio

40.32%


33.78%


40.00%


44.44%


31.51%

Fee revenue as a percent of total revenue

19.33%


17.30%


17.52%


19.39%


18.15%











Net interest margin(1)

4.02%


4.14%


4.05%


4.04%


4.17%

Yield on average earning assets

4.57%


4.67%


4.48%


4.42%


4.49%

Yield on average interest-bearing liabilities

0.92%


0.87%


0.73%


0.64%


0.53%

Net interest spread







3.78%


3.96%

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

$               88


$               93


$               98


$               99


$             102











Non-interest income to average assets

0.92%


0.94%


0.81%


0.91%


0.87%

Non-interest expense to average assets

3.34%


3.17%


3.06%


3.70%


3.21%











Efficiency ratio(2)

70.68%


65.18%


66.05%


78.36%


67.11%

 

(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 non-taxable 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












2Q19


1Q19


4Q18


3Q18


2Q18

BALANCE SHEET RATIOS











Loans to deposits

87.45%


87.53%


86.31%


86.32%


86.03%


Average interest-earning assets to











    average-interest bearing liabilities

167.00%


167.37%


168.35%


168.16%


166.67%

PER SHARE DATA











Dividends

$            0.25


$            0.25


$            0.24


$            0.24


$            0.23


Book value

27.22


26.50


25.58


24.58


24.57


Tangible book value

27.22


26.50


25.58


24.58


24.57

SHARE PRICE DATA











Closing price

$          31.00


$          30.55


$          30.99


$          37.30


$          35.99


Diluted earnings multiple(1)

12.50


10.32


12.91


17.27


12.33


Book value multiple(2)

1.14


1.15


1.21


1.52


1.46

COMMON STOCK DATA











Outstanding shares at end of period

3,431,516


3,459,549


3,445,914


3,473,833


3,473,555


Weighted average shares outstanding

3,425,305


3,458,213


3,469,048


3,474,246


3,465,601


Weighted average shares outstanding, diluted

3,425,305


3,458,213


3,469,048


3,474,246


3,465,601

CAPITAL RATIOS











Total equity to total assets

11.13%


11.28%


10.96%


10.79%


10.94%

CREDIT QUALITY











Net charge-offs to average loans

0.58%


-0.02%


-0.14%


-0.02%


-0.08%


Total non-performing loans to total loans

0.79%


0.53%


0.46%


0.19%


0.19%


Total non-performing assets to total assets

0.61%


0.42%


0.37%


0.40%


0.53%


Non-accrual loans to:











      total loans

0.78%


0.53%


0.35%


0.19%


0.19%


      total assets

0.60%


0.40%


0.26%


0.15%


0.14%


Allowance for loan losses to:











      total loans

0.79%


0.92%


0.90%


0.79%


0.78%


     non-performing assets

99.84%


168.39%


186.91%


148.30%


110.42%


     non-accrual loans

101.21%


173.85%


257.60%


411.62%


413.83%

NON-PERFORMING ASSETS:










(dollars in thousands)











    Loans delinquent over 90 days

$               68


$                -


$             695


$                -


$                -


    Non-accrual loans   

4,975


3,270


2,118


1,145


1,099


    Other real estate owned and repossessed assets

-


106


106


2,033


3,020

NET LOAN CHARGE-OFFS (RECOVERIES):










(dollars in thousands)











    Loans charged off

$             960


$               10


$               50


$               18


$               30


    (Recoveries)

(54)


(45)


(264)


(43)


(145)


Net charge-offs (recoveries)

906


(35)


(214)


(25)


(115)

PROVISION FOR LOAN LOSSES (dollars in thousands)

$             256


$             194


$             529


$             140


$             (97)

ALLOWANCE FOR LOAN LOSS SUMMARY










(dollars in thousands)











Balance at the beginning of period

$          5,685


$          5,456


$          4,713


$          4,548


$          4,530


Provision

256


194


529


140


(97)


Net charge-offs (recoveries)

906


(35)


(214)


(25)


(115)


Balance at the end of period

$          5,035


$          5,685


$          5,456


$          4,713


$          4,548

 

(1)

The diluted earnings multiple is calculated by dividing the period's closing market price per share by the annualized diluted earnings per share for the period. The diluted earnings multiple is a measure of how much an investor may be willing to pay for $1.00 of the Company's earnings.



(2)

The book value multiple (or price to book ratio) is calculated by dividing the period's closing market price per share by the period's book value per share. The book value multiple is a measure used to compare the Company's market value per share to its book value per share.

 

EAGLE FINANCIAL SERVICES, INC.










CONSOLIDATED BALANCE SHEETS










(dollars in thousands)











Unaudited


Unaudited


Audited


Unaudited


Unaudited


6/30/2019


3/31/2019


12/31/2018


9/30/2018


6/30/2018











Assets










Cash and due from banks

$        18,133


$        12,214


$        18,353


$        13,176


$        14,823

Federal funds sold

228


-


-


-


88

Securities available for sale, at fair value

142,864


145,145


145,468


141,566


139,491

Loans, net of allowance for loan losses

634,161


613,523


601,371


593,754


582,289

Bank premises and equipment, net

19,152


19,209


19,083


19,504


19,452

Other assets

18,966


18,626


15,342


18,074


19,048

              Total assets

$      833,504


$      808,717


$      799,617


$      786,074


$      775,191











Liabilities and Shareholders' Equity










Liabilities










    Deposits:










       Noninterest bearing demand deposits

$      253,751


$      255,567


$      251,184


$      256,738


$      246,141

       Savings and interest-bearing demand deposits

356,301


336,109


336,778


327,612


328,563

       Time deposits

120,872


115,763


115,142


108,987


107,403

          Total deposits

$      730,924


$      707,439


$      703,104


$      693,337


$      682,107

    Federal funds purchased and securities










        sold under agreements to repurchase

-


355


1,871


1,158


-

    Federal Home Loan Bank advances

-


-


-


-


-

    Other liabilities

9,838


9,739


7,043


6,749


8,285

    Commitments and contingent liabilities

-


-


-


-


-

              Total liabilities

$      740,762


$      717,533


$      712,018


$      701,244


$      690,392











Shareholders' Equity










    Preferred stock, $10 par value

$                -


$                -


$                -


$                -


$                -

    Common stock, $2.50 par value

8,519


8,603


8,573


8,629


8,628

    Surplus

11,183


12,116


11,992


12,680


12,491

    Retained earnings

71,599


70,328


68,587


67,340


66,313

    Accumulated other comprehensive income

1,441


137


(1,553)


(3,819)


(2,633)

              Total shareholders' equity

$        92,742


$        91,184


$        87,599


$        84,830


$        84,799

              Total liabilities and shareholders' equity

$      833,504


$      808,717


$      799,617


$      786,074


$      775,191

 

 

EAGLE FINANCIAL SERVICES, INC.










CONSOLIDATED STATEMENTS OF INCOME










(dollars in thousands)










Unaudited











Three Months Ended


6/30/2019


3/31/2019


12/31/2018


9/30/2018


6/30/2018











Interest and Dividend Income










        Interest and fees on loans

$          7,690


$          7,518


$          7,257


$          7,092


$          7,000

        Interest on federal funds sold

1


-


-


1


-

        Interest and dividends on securities available for sale:










              Taxable interest income

760


785


767


701


670

              Interest income exempt from federal income taxes

227


242


259


263


268

              Dividends

16


16


16


16


15

        Interest on deposits in banks

55


31


24


58


41

                    Total interest and dividend income

$          8,749


$          8,592


$          8,323


$          8,131


$          7,994

Interest Expense










        Interest on deposits

$          1,055


$             944


$             796


$             704


$             563

        Interest on federal funds purchased and securities










            sold under agreements to repurchase

5


23


15


1


10

        Interest on Federal Home Loan Bank advances

-


-


-


-


-

                   Total interest expense

$          1,060


$             967


$             811


$             705


$             573

                   Net interest income

$          7,689


$          7,625


$          7,512


$          7,426


$          7,421

Provision For Loan Losses

256


194


529


140


(97)

                   Net interest income after provision for loan losses

$          7,433


$          7,431


$          6,983


$          7,286


$          7,518

Noninterest Income










        Income from fiduciary activities

$             376


$             282


$             301


$             316


$             299

        Service charges on deposit accounts

282


285


305


302


302

        Other service charges and fees

1,191


1,071


992


1,172


1,048

        Gain on the sale of bank premises and equipment

-


120


-


-


-

        Gain (Loss) on sales of AFS securities

-


(3)


-


6


-

        Officer insurance income

-


-


(19)


(20)


-

        Other operating income

29


89


30


28


16

                    Total noninterest income

$          1,878


$          1,844


$          1,609


$          1,804


$          1,665

Noninterest Expenses










        Salaries and employee benefits

$          3,874


$          3,542


$          3,486


$          3,666


$          3,406

        Occupancy expenses

401


428


368


374


363

        Equipment expenses

217


202


229


233


234

        Advertising and marketing expenses

249


218


166


209


201

        Stationery and supplies

37


29


49


42


47

        ATM network fees

331


230


268


192


246

        Other real estate owned expenses

-


-


15


24


7

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

70


-


-


987


282

        FDIC assessment

53


53


56


56


55

       Computer software expense

110


110


110


114


112

       Bank franchise tax

164


146


152


152


145

       Professional fees

237


385


218


260


283

       Data processing fees

303


240


281


270


118

        Other operating expenses

778


648


691


731


667

                    Total noninterest expenses

$          6,824


$          6,231


$          6,089


$          7,310


$          6,166

                    Income before income taxes

2,487


3,044


$          2,503


1,780


3,017

Income Tax Expense

361


472


422


(80)


496

                    Net income

$          2,126


$          2,572


$          2,081


$          1,860


$          2,521

Earnings Per Share










        Net income per common share, basic

$            0.62


$            0.74


$            0.60


$            0.54


$            0.73

        Net income per common share, diluted

$            0.62


$            0.74


$            0.60


$            0.54


$            0.73

 

EAGLE FINANCIAL SERVICES, INC.










Average Balances, Income and Expenses, Yields and Rates










(dollars in thousands)


























For the Three Months Ended


June 30, 2019


March 31, 2019


June 30, 2018




Interest





Interest





Interest



Average


Income/

Average


Average


Income/

Average


Average


Income/

Average

Assets:

Balance


Expense

Yield


Balance


Expense

Yield


Balance


Expense

Yield

Securities:















        Taxable

$110,498


$    3,114

2.82%


$108,519


$    3,249

2.99%


$  97,433


$    2,744

2.82%

        Tax-Exempt (1)

32,841


1,150

3.50%


35,554


1,243

3.50%


38,678


1,357

3.51%

            Total Securities

$143,339


$    4,264

2.97%


$144,073


$    4,492

3.12%


$136,111


$    4,100

3.01%

Loans:















        Taxable

$610,621


$  30,418

4.98%


$593,870


$  30,056

5.06%


$569,442


$  27,612

4.85%

         Nonaccrual

3,949


-

0.00%


2,322


-

0.00%


3,624


-

0.00%

        Tax-Exempt (1)

12,020


541

4.50%


12,141


548

4.51%


8,378


586

6.99%

            Total Loans

$626,590


$  30,959

4.94%


$608,333


$  30,604

5.03%


$581,444


$  28,197

4.85%

Federal funds sold

206


5

2.27%


84


2

2.41%


83


1

1.78%

Interest-bearing deposits in other banks

9,232


221

2.39%


4,849


126

2.59%


9,437


172

1.83%

            Total earning assets

$775,418


$  35,448

4.57%


$755,017


$  35,223

4.67%


$723,451


$  32,471

4.49%

Allowance for loan losses

(5,773)





(5,545)





(4,651)




Total non-earning assets

50,957





46,534





50,895




Total assets

$820,602





$796,006





$769,695



















Liabilities and Shareholders' Equity:















Interest-bearing deposits:















        NOW accounts

$  88,052


$       480

0.55%


$  87,579


$       452

0.52%


$  92,079


$       294

0.32%

        Money market accounts

152,063


1,517

1.00%


140,737


1,308

0.93%


130,150


753

0.58%

        Savings accounts

105,330


212

0.20%


103,806


209

0.20%


104,375


160

0.15%

Time deposits:















        $100,000 and more

55,959


1,178

2.10%


51,768


1,048

2.02%


69,056


604

0.87%

        Less than $100,000

62,112


846

1.36%


63,727


810

1.27%


36,749


445

1.21%

            Total interest-bearing deposits

$463,516


$    4,233

0.91%


$447,617


$    3,827

0.85%


$432,409


$    2,257

0.52%

Federal funds purchased and securities















     sold under agreements to repurchase

812


22

2.67%


3,486


103

2.97%


1,645


39

2.39%

Federal Home Loan Bank advances

-


-

0.00%


-


-

0.00%


-


-

0.00%

Trust preferred capital notes

-


-

0.00%


-


-

0.00%


-


-

0.00%

            Total interest-bearing liabilities

$464,328


$    4,255

0.92%


$451,103


$    3,930

0.87%


$434,054


$    2,296

0.53%

Noninterest-bearing liabilities:















        Demand deposits

255,521





248,699





243,898




        Other Liabilities

9,715





7,384





8,253




            Total liabilities

$729,564





$707,186





$686,205




Shareholders' equity

91,038





88,820





83,490




Total liabilities and shareholders' equity

$820,602





$796,006





$769,695



















Net interest income



$  31,193





$  31,293





$  30,175

















Net interest spread




3.66%





3.79%





3.96%

Interest expense as a percent of















     average earning assets




0.55%





0.52%





0.32%

Net interest margin




4.02%





4.14%





4.17%
















(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


6/30/2019

3/31/2019

12/31/2018

9/30/2018

6/30/2018







GAAP Financial Measurements:






   Interest Income - Loans

$          7,690

$          7,518

$          7,257

$          7,092

$          7,000

   Interest Income - Securities and Other Interest-Earnings Assets

1,059

1,075

1066

1,039

994

   Interest Expense - Deposits

1,055

944

797

704

563

   Interest Expense - Other Borrowings

5

25

14

1

10

Total Net Interest Income

$          7,689

$          7,624

$          7,512

$          7,426

$          7,421







Non-GAAP Financial Measurements:






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

$               28

$               28

$               29

$               29

$               31

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

60

64

69

70

71

Total Tax Benefit on Tax-Exempt Interest Income

88

92

98

$               99

$             102

Tax-Equivalent Net Interest Income

$          7,777

$          7,716

$          7,610

$          7,525

$          7,523

 

 

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