Attached files
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| 8-K - FORM 8-K - EAGLE FINANCIAL SERVICES INC | d867051d8k.htm |
Exhibit 99.1
EAGLE FINANCIAL SERVICES, INC.
ANNOUNCES 2014 FOURTH QUARTER
AND ANNUAL EARNINGS
| Contact: | Kathleen J. Chappell, Vice President and CFO | 540-955-2510 | ||
| kchappell@bankofclarke.com |
BERRYVILLE, VIRGINIA (February 6, 2015) – Eagle Financial Services, Inc. (OTC BULLETIN BOARD: EFSI), the holding company for Bank of Clarke County, whose divisions include Eagle Investment Group, announces its 2014 fourth quarter and annual profits. The Company’s common stock is listed for trading on the Over-the-Counter (OTC) Bulletin Board under the ticker symbol EFSI.
Fourth Quarter and Annual 2014 Highlights:
| Q4 | Annual | |||||||
| Net income (000’s) |
$ | 2,434 | $ | 7,140 | ||||
| Diluted EPS |
$ | 0.70 | $ | 2.07 | ||||
| Dividend, per common share |
$ | 0.20 | $ | 0.78 | ||||
| Net Interest Margin |
4.00 | % | 4.20 | % | ||||
| Net Loan Growth (000’s) |
$ | 4,752 | $ | 25,547 | ||||
| Allowance for loan losses to total loans |
1.08 | % | ||||||
John R. Milleson, President and CEO, stated, “I am again pleased to report a year with near record earnings and strong asset growth. I’m also very proud of our ability to increase the shareholder dividend for the 28th consecutive year. As our Winchester, Frederick, and Clarke County Virginia markets mature and we expand into Loudoun County, an emerging market full of opportunity for us in 2015 and beyond, we recognize the need to continually assess our growth strategies so that all our markets receive the attention they deserve. The current needs of our customers are first and foremost in our minds as we consider new and improved products, services and delivery channels as well as physical locations.”
Income Statement Review
Net income for the quarter ended December 31, 2014 was $2.4 million reflecting an increase of 31.6% from the quarter ended December 31, 2013. This increase resulted mostly from gains realized on the sales of investment securities during the fourth quarter of 2014. Net income was $7.1 million for the year ended December 31, 2014 which represented a decrease of .3% when compared to net income in 2013.
Net interest income for the quarters ended December 31, 2014 and December 31, 2103 was $5.6 million. Net interest income for the year ended December 31, 2014 was $22.9 million which represented an increase of 2.2% when compared to $22.5 million in 2013. This increase in net interest income for the year resulted mainly from the loan growth experienced by the Company during the year.
Total loan interest income was $5.4 million for the quarters ended December 31, 2014 and 2013. Total loan interest income was $21.7 million for the year ended December 31, 2014, reflecting an increase of $165,000 from the year ended December 31, 2013. Average loans for the quarter ended December 31, 2014 were $470.6 million compared to $441.1 million for the same period in 2013. Average loans for the year ended December 31, 2014 were $461.8 million compared to $430.0 million for 2013. The tax equivalent yield on average loans for the quarter ended December 31, 2014 was 4.57%, down 32 basis points from the same time period in 2013. The tax equivalent yield on average loans for the year ended December 31, 2014 was 4.72%, down 31 basis points from 2013. Interest income from the investment portfolio was $665,000 thousand for the quarter ended December 31, 2014, reflecting a decrease of 19.5% when compared to $826,000 for the same period in 2013. Interest income from the investment portfolio was $3.1 million for the year ended December 31, 2014 and $3.5 million for the same period in 2013.
Total interest expense was $448,000 for the three months ended December 31, 2014 and $614,000 for three months ended December 31, 2013. Total interest expense for the year ended December 31, 2014 was $1.9 million, representing a decrease of $674,000 or 26.1% from the year ended December 31, 2013. The average cost of interest bearing liabilities decreased 19 basis points when comparing the quarter ended December 31, 2014 to the same time period in 2013. The average cost of interest bearing liabilities decreased 19 basis points when comparing the year ended December 31, 2014 to the same time period in 2013. The average balance
of interest bearing liabilities increased $7.6 million from the quarter ended December 31, 2013 to the same period in 2014. The average balance of interest bearing liabilities increased $3.9 million from the year ended December 31, 2013 to the same period in 2014. These increases resulted from the growth in interest bearing non-maturity deposits.
The net interest margin was 4.00% for the quarter ended December 31, 2014. When compared to the quarter ended December 31, 2013, the net interest margin decreased 17 basis points. The net interest margin was 4.20% for the year ended December 31, 2014. When compared to the year ended December 31, 2013, the net interest margin decreased four basis points. This decrease was attributable to the decreased yield on interest earning assets as higher yielding assets had been repriced or replaced at lower current market rates.
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 34%.
Noninterest income was $2.2 million for the quarter ended December 31, 2014 and $1.5 million for the same period in 2013. Noninterest income was $6.6 million for the year ended December 31, 2014 and $7.5 million for the same period in 2013. During the fourth quarter of 2014, the Company realized $897,000 in net gains on the sales of investment securities. During 2013, the Company incurred several one-time events, including the sale of the Bank’s merchant processing business. The sale of the merchant portfolio resulted in a net gain of $399,000. Total proceeds from the transaction of $450,000 are reflected in other service charges and fees while broker, legal and other related expenses are reflected in non-interest expense. Additionally, in April of 2013, the Company received a signing bonus of $121,000 from its current debit card vendor for extending its contract and remaining exclusive to this provider. This income is also reflected in the other service charges and fees line item. Also during 2013, the Company recorded $254,000 of income related to the termination of a bank owned life insurance policy. Net gains of $990,000 and $465,000 were recognized on the sales investment securities for the years ended December 31 2014 and December 31, 2013, respectively.
Noninterest expense was $4.8 million for the quarter ended December 31, 2014 and $5.7 million for the quarter ended December 31, 2013. Noninterest expense was $20.0 million and $20.4 million for the years ended December 31, 2014 and 2013, respectively. In 2013, noninterest expense was negatively impacted by the Company’s election to prepay a $10.0 million outstanding advance with the Federal Home Loan Bank of Atlanta. A $612,000 prepayment fee was incurred by the Company in December 2013 in conjunction with the repayment of the advance.
Asset Quality and Provision for Loan Losses
The Company recorded a $350,000 provision for loan losses for the three months ended December 31, 2014, while net recoveries of $767,000 were realized for the quarter ended December 31, 2013. The provision for loan losses made for the year ended December 31, 2014 was $350,000, compared to none recorded for the year ended December 31, 2013. The ratio of allowance for loan losses to total loans was 1.08% at December 31, 2014 and 1.24% at December 31, 2013. The ratio of allowance for loan losses to total nonaccrual loans was 47.45% at December 31, 2014 and 124.36% at December 31, 2013. 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. Because specific allocations for impaired loans had decreased during 2014, the provision for the quarter and the year mostly stemmed from required general allocations resulting from the growth of the overall loan portfolio. Throughout 2014, updated appraisals had been obtained for several of the collateral dependent impaired loans thereby reducing or eliminating the loans’ required specific allocations. At December 31, 2014, impaired loans totaled $17.0 million and had related specific allocations of $643,000. At December 31, 2013, impaired loans totaled $13.7 million and had related specific allocations of $1.5 million.
Nonperforming assets increased from $6.1 million or 1.04% of total assets at December 31, 2013 to $12.8 million or 2.04% of total assets at December 31, 2014. This increase resulted mostly from the increase in nonaccrual loans. Total nonaccrual loans totaled $10.7 million at December 31, 2014 and $4.4 million at December 31, 2013. During the fourth quarter of 2014, the Bank placed 14 loans totaling $3.7 million on nonaccrual status. The majority of the 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. Loans greater than 90 days past due and still accruing decreased from $11,000 at December 31, 2013 to $6,000 at December 31, 2014. Other real estate owned increased from $1.6 million at December 31, 2013 to $2.1 million at December 31, 2014. During 2014, the Company sold five pieces of other real estate owned totaling $1.2 million.
The Company realized $857,000 in net charge-offs for the quarter ended December 31, 2014 versus $463,000 for the same period in 2013. The Company realized $758,000 in net charge-offs for the year ended December 31, 2014 versus $1.1 million for 2013. Like the loan charge offs in 2013, the 2014 loan charge offs were also concentrated in residential real estate loans. The Company continues to
operate a troubled credit group to monitor past due loans, identify potential problem credits, and develop action plans to work through its troubled loans as promptly as possible. Asset quality remains a primary concern of the Company. Necessary resources continue to be devoted to the ongoing review of the loan portfolio and the workouts of problem assets to minimize any losses to the Company. Management will continue to monitor delinquencies, risk rating changes, charge-offs, market trends and other indicators of risk in the Company’s portfolio, particularly those tied to residential and commercial real estate, and adjust the allowance for loan losses accordingly.
Total Consolidated Assets
Total consolidated assets of the Company at December 31, 2014 were $626.8 million, which represented an increase of $40.4 million or 6.9% from total assets of $586.4 million at December 31, 2013. Total loans increased $25.5 million from $444.3 million at December 31, 2013 to $469.8 million at December 31, 2014. Total cash and due from banks increased $20.3 million from $14.2 million at December 31 2013, to $34.6 million at December 31, 2014.
Deposits and Other Borrowings
Total deposits, which include brokered deposits, increased $16.2 million to $503.8 million at December 31, 2014 from $487.6 million at December 31, 2013. The Company held $11.0 million and $9.9 million in brokered deposits at December 31, 2014 and 2013. Borrowings with the Federal Home Loan Bank of Atlanta were $40.0 million at December 31, 2014 and $22.3 million at December 31, 2013.
Equity
Shareholders’ equity was $73.1 million at December 31, 2014 and $66.4 million at December 31, 2013. The book value of the Company at December 31, 2014 was $21.01 per common share. Total common shares outstanding were 3,463,665 at December 31, 2014. On January 21, 2015, the board of directors declared a $0.20 per common share cash dividend for shareholders of record as of February 3, 2015 and payable on February 17, 2015.
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, 2013, and other filings with the Securities and Exchange Commission.
EAGLE FINANCIAL SERVICES, INC.
KEY STATISTICS
| For the Three Months Ended | ||||||||||||||||||||
| 4Q14 | 3Q14 | 2Q14 | 1Q14 | 4Q13 | ||||||||||||||||
| Net Income (dollars in thousands) |
$ | 2,434 | $ | 1,386 | $ | 1,958 | $ | 1,363 | $ | 1,849 | ||||||||||
| Earnings per share, basic |
$ | 0.71 | $ | 0.40 | $ | 0.57 | $ | 0.40 | $ | 0.54 | ||||||||||
| Earnings per share, diluted |
$ | 0.70 | $ | 0.40 | $ | 0.57 | $ | 0.40 | $ | 0.54 | ||||||||||
| Return on average total assets |
1.57 | % | 0.91 | % | 1.31 | % | 0.95 | % | 1.25 | % | ||||||||||
| Return on average total equity |
13.43 | % | 7.77 | % | 11.37 | % | 8.22 | % | 11.13 | % | ||||||||||
| Dividend payout ratio |
28.17 | % | 50.00 | % | 33.33 | % | 47.50 | % | 35.19 | % | ||||||||||
| Fee revenue as a percent of total revenue |
15.90 | % | 18.92 | % | 20.19 | % | 18.34 | % | 19.29 | % | ||||||||||
| Net interest margin(1) |
4.00 | % | 4.18 | % | 4.32 | % | 4.29 | % | 4.17 | % | ||||||||||
| Yield on average earning assets |
4.31 | % | 4.51 | % | 4.67 | % | 4.65 | % | 4.61 | % | ||||||||||
| Yield on average interest-bearing liabilities |
0.46 | % | 0.50 | % | 0.51 | % | 0.54 | % | 0.65 | % | ||||||||||
| Net interest spread |
3.85 | % | 4.01 | % | 4.16 | % | 4.11 | % | 3.96 | % | ||||||||||
| Tax equivalent adjustment to net interest income (dollars in thousands) |
$ | 173 | $ | 171 | $ | 164 | $ | 169 | $ | 174 | ||||||||||
| Non-interest income to average assets |
1.43 | % | 0.97 | % | 1.04 | % | 0.94 | % | 1.00 | % | ||||||||||
| Non-interest expense to average assets |
3.12 | % | 3.27 | % | 3.32 | % | 3.37 | % | 3.82 | % | ||||||||||
| Efficiency ratio(2) |
60.57 | % | 71.91 | % | 65.09 | % | 67.50 | % | 77.75 | % | ||||||||||
| (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 34%. 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 34%. 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
| 4Q14 | 3Q14 | 2Q14 | 1Q14 | 4Q13 | ||||||||||||||||
| BALANCE SHEET RATIOS |
||||||||||||||||||||
| Loans to deposits |
92.24 | % | 93.93 | % | 94.36 | % | 94.49 | % | 91.12 | % | ||||||||||
| Average interest-earning assets to average-interest bearing liabilities |
166.86 | % | 148.74 | % | 147.29 | % | 147.83 | % | 147.11 | % | ||||||||||
| PER SHARE DATA |
||||||||||||||||||||
| Dividends |
$ | 0.20 | $ | 0.20 | $ | 0.19 | $ | 0.19 | $ | 0.19 | ||||||||||
| Book value |
$ | 21.01 | $ | 20.74 | $ | 20.51 | $ | 19.97 | $ | 19.57 | ||||||||||
| Tangible book value |
$ | 21.01 | $ | 20.74 | $ | 20.51 | $ | 19.97 | $ | 19.57 | ||||||||||
| SHARE PRICE DATA |
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| Closing price |
$ | 23.30 | $ | 23.65 | $ | 23.60 | $ | 23.00 | $ | 22.50 | ||||||||||
| Diluted earnings multiple(1) |
8.32 | 14.78 | 10.35 | 14.38 | 10.42 | |||||||||||||||
| Book value multiple(2) |
1.11 | 1.14 | 1.15 | 1.15 | 1.15 | |||||||||||||||
| COMMON STOCK DATA |
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| Outstanding shares at end of period |
3,463,665 | 3,454,336 | 3,445,727 | 3,417,832 | 3,409,831 | |||||||||||||||
| Weighted average shares outstanding |
3,459,096 | 3,451,041 | 3,428,699 | 3,413,920 | 3,405,215 | |||||||||||||||
| Weighted average shares outstanding, diluted |
3,468,904 | 3,460,186 | 3,436,903 | 3,420,933 | 3,416,841 | |||||||||||||||
| CAPITAL RATIOS |
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| Total equity to total assets |
11.67 | % | 11.76 | % | 11.67 | % | 11.42 | % | 11.36 | % | ||||||||||
| CREDIT QUALITY |
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| Net charge-offs to average loans |
0.72 | % | 0.24 | % | -0.38 | % | 0.05 | % | 0.10 | % | ||||||||||
| Total non-performing loans to total loans |
2.30 | % | 1.86 | % | 1.37 | % | 1.50 | % | 1.00 | % | ||||||||||
| Total non-performing assets to total assets |
2.04 | % | 1.70 | % | 1.38 | % | 1.45 | % | 1.04 | % | ||||||||||
| Non-accrual loans to: |
||||||||||||||||||||
| total loans |
2.30 | % | 1.86 | % | 1.37 | % | 1.50 | % | 0.99 | % | ||||||||||
| total assets |
1.71 | % | 1.42 | % | 1.06 | % | 1.15 | % | 0.76 | % | ||||||||||
| Allowance for loan losses to: |
||||||||||||||||||||
| total loans |
1.08 | % | 1.20 | % | 1.26 | % | 1.25 | % | 1.24 | % | ||||||||||
| non-performing assets |
39.64 | % | 54.31 | % | 70.56 | % | 66.08 | % | 90.41 | % | ||||||||||
| non-accrual loans |
47.45 | % | 64.75 | % | 92.40 | % | 83.77 | % | 124.36 | % | ||||||||||
| NON-PERFORMING ASSETS: |
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| (dollars in thousands) |
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| Loans delinquent over 90 days |
$ | 6 | $ | 16 | $ | — | $ | 18 | $ | 11 | ||||||||||
| Non-accrual loans |
10,706 | 8,628 | 6,354 | 6,825 | 4,413 | |||||||||||||||
| Other real estate owned and repossessed assets |
2,102 | 1,644 | 1,967 | 1,809 | 1,646 | |||||||||||||||
| NET LOAN CHARGE-OFFS (RECOVERIES): |
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| (dollars in thousands) |
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| Loans charged off |
$ | 967 | $ | 310 | $ | 114 | $ | 91 | $ | 493 | ||||||||||
| (Recoveries) |
(110 | ) | (26 | ) | (551 | ) | (37 | ) | (30 | ) | ||||||||||
| Net charge-offs (recoveries) |
857 | 284 | (437 | ) | 54 | 463 | ||||||||||||||
| PROVISION FOR LOAN LOSSES (dollars in thousands) |
$ | 350 | $ | — | $ | (283 | ) | $ | 283 | $ | (767 | ) | ||||||||
| ALLOWANCE FOR LOAN LOSS SUMMARY |
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| (dollars in thousands) |
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| Balance at the beginning of period |
$ | 5,587 | $ | 5,871 | $ | 5,717 | $ | 5,488 | $ | 6,718 | ||||||||||
| Provision |
350 | — | (283 | ) | 283 | (767 | ) | |||||||||||||
| Net charge-offs (recoveries) |
857 | 284 | (437 | ) | 54 | 463 | ||||||||||||||
| Balance at the end of period |
$ | 5,080 | $ | 5,587 | $ | 5,871 | $ | 5,717 | $ | 5,488 | ||||||||||
| (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 12/31/2014 |
Unaudited 9/30/2014 |
Unaudited 6/30/2014 |
Unaudited 3/31/2014 |
Audited 12/31/2013 |
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| Assets |
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| Cash and due from banks |
$ | 34,564 | $ | 15,338 | $ | 12,405 | $ | 10,440 | $ | 14,243 | ||||||||||
| Federal funds sold |
— | — | — | — | — | |||||||||||||||
| Securities available for sale, at fair value |
96,973 | 101,380 | 102,644 | 106,308 | 104,790 | |||||||||||||||
| Loans, net of allowance for loan losses |
464,740 | 459,481 | 458,447 | 450,755 | 438,785 | |||||||||||||||
| Bank premises and equipment, net |
19,015 | 18,529 | 17,115 | 17,132 | 17,214 | |||||||||||||||
| Other assets |
11,538 | 11,488 | 11,129 | 11,003 | 11,412 | |||||||||||||||
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| Total assets |
$ | 626,830 | $ | 606,216 | $ | 601,740 | $ | 595,638 | $ | 586,444 | ||||||||||
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| Liabilities and Shareholders’ Equity |
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| Liabilities |
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| Deposits: |
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| Noninterest bearing demand deposits |
$ | 159,352 | $ | 151,961 | $ | 147,992 | $ | 146,517 | $ | 147,698 | ||||||||||
| Savings and interest bearing demand deposits |
249,305 | 248,736 | 248,123 | 239,285 | 240,749 | |||||||||||||||
| Time deposits |
95,159 | 94,439 | 95,931 | 97,302 | 99,140 | |||||||||||||||
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| Total deposits |
$ | 503,816 | $ | 495,136 | $ | 492,046 | $ | 483,104 | $ | 487,587 | ||||||||||
| Federal funds purchased and securities sold under agreements to repurchase |
— | — | — | 4,589 | — | |||||||||||||||
| Federal Home Loan Bank advances |
40,000 | 30,000 | 30,000 | 30,000 | 22,250 | |||||||||||||||
| Trust preferred capital notes |
7,217 | 7,217 | 7,217 | 7,217 | 7,217 | |||||||||||||||
| Other liabilities |
2,665 | 2,602 | 2,255 | 2,706 | 2,984 | |||||||||||||||
| Commitments and contingent liabilities |
— | — | — | — | — | |||||||||||||||
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| Total liabilities |
$ | 553,698 | $ | 534,955 | $ | 531,518 | $ | 527,616 | $ | 520,038 | ||||||||||
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| Shareholders’ Equity |
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| Preferred stock, $10 par value |
$ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
| Common stock, $2.50 par value |
8,621 | 8,588 | 8,561 | 8,517 | 8,482 | |||||||||||||||
| Surplus |
12,618 | 12,312 | 11,995 | 11,693 | 11,537 | |||||||||||||||
| Retained earnings |
50,578 | 48,834 | 48,104 | 46,797 | 46,082 | |||||||||||||||
| Accumulated other comprehensive income |
1,315 | 1,527 | 1,562 | 1,015 | 305 | |||||||||||||||
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| Total shareholders’ equity |
$ | 73,132 | $ | 71,261 | $ | 70,222 | $ | 68,022 | $ | 66,406 | ||||||||||
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| Total liabilities and shareholders’ equity |
$ | 626,830 | $ | 606,216 | $ | 601,740 | $ | 595,638 | $ | 586,444 | ||||||||||
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EAGLE FINANCIAL SERVICES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands)
Unaudited
| Three Months Ended | Year Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||||
| Interest and Dividend Income |
||||||||||||||||
| Interest and fees on loans |
$ | 5,377 | $ | 5,410 | $ | 21,695 | $ | 21,530 | ||||||||
| Interest on federal funds sold |
— | — | — | — | ||||||||||||
| Interest and dividends on securities available for sale: |
||||||||||||||||
| Taxable interest income |
378 | 490 | 1,824 | 2,055 | ||||||||||||
| Interest income exempt from federal income taxes |
261 | 296 | 1,096 | 1,241 | ||||||||||||
| Dividends |
26 | 40 | 222 | 187 | ||||||||||||
| Interest on deposits in banks |
8 | 5 | 12 | 23 | ||||||||||||
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| Total interest and dividend income |
$ | 6,050 | $ | 6,241 | $ | 24,849 | $ | 25,036 | ||||||||
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| Interest Expense |
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| Interest on deposits |
$ | 194 | $ | 259 | $ | 924 | $ | 1,142 | ||||||||
| Interest on federal funds purchased and securities sold under agreements to repurchase |
— | — | 20 | 31 | ||||||||||||
| Interest on Federal Home Loan Bank advances |
174 | 275 | 650 | 1,094 | ||||||||||||
| Interest on trust preferred capital notes |
80 | 80 | 317 | 318 | ||||||||||||
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|||||||||
| Total interest expense |
$ | 448 | $ | 614 | $ | 1,911 | $ | 2,585 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net interest income |
$ | 5,602 | $ | 5,627 | $ | 22,938 | $ | 22,451 | ||||||||
| Provision For Loan Losses |
350 | (767 | ) | 350 | — | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net interest income after provision for loan losses |
$ | 5,252 | $ | 6,394 | $ | 22,588 | $ | 22,451 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Noninterest Income |
||||||||||||||||
| Income from fiduciary activities |
$ | 290 | $ | 257 | $ | 1,162 | $ | 1,186 | ||||||||
| Service charges on deposit accounts |
338 | 367 | 1,323 | 1,453 | ||||||||||||
| Other service charges and fees |
687 | 747 | 2,995 | 3,864 | ||||||||||||
| (Loss) Gain on the sale of bank premises and equipment |
(14 | ) | — | (14 | ) | (1 | ) | |||||||||
| Gain on sales of AFS securities |
897 | 65 | 990 | 465 | ||||||||||||
| Other operating income |
23 | 44 | 150 | 495 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total noninterest income |
$ | 2,221 | $ | 1,480 | $ | 6,606 | $ | 7,462 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Noninterest Expenses |
||||||||||||||||
| Salaries and employee benefits |
$ | 2,660 | $ | 2,974 | $ | 11,427 | $ | 11,451 | ||||||||
| Occupancy expenses |
317 | 355 | 1,280 | 1,291 | ||||||||||||
| Equipment expenses |
174 | 169 | 720 | 666 | ||||||||||||
| Advertising and marketing expenses |
155 | 127 | 571 | 548 | ||||||||||||
| Stationery and supplies |
69 | 71 | 306 | 274 | ||||||||||||
| ATM network fees |
180 | 159 | 712 | 616 | ||||||||||||
| Other real estate owned expenses |
12 | 10 | 27 | 40 | ||||||||||||
| FDIC assessment |
95 | 90 | 357 | 375 | ||||||||||||
| Computer software expense |
208 | 160 | 872 | 664 | ||||||||||||
| Professional fees |
226 | 223 | 988 | 1,013 | ||||||||||||
| Other operating expenses |
747 | 1,323 | 2,726 | 3,429 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total noninterest expenses |
$ | 4,843 | $ | 5,661 | $ | 19,986 | $ | 20,367 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income before income taxes |
$ | 2,630 | $ | 2,213 | $ | 9,208 | $ | 9,546 | ||||||||
| Income Tax Expense |
196 | 364 | 2,068 | 2,388 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net income |
$ | 2,434 | $ | 1,849 | $ | 7,140 | $ | 7,158 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Earnings Per Share |
||||||||||||||||
| Net income per common share, basic |
$ | 0.71 | $ | 0.54 | $ | 2.08 | $ | 2.11 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net income per common share, diluted |
$ | 0.70 | $ | 0.54 | $ | 2.07 | $ | 2.10 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
EAGLE FINANCIAL SERVICES, INC.
Average Balances, Income and Expenses, Yields and Rates
(dollars in thousands)
| For the Three Months Ended | ||||||||||||||||||||||||
| December 31, 2014 | December 31, 2013 | |||||||||||||||||||||||
| Average Balance |
Interest Income/ Expense |
Average Rate |
Average Balance |
Interest Income/ Expense |
Average Rate |
|||||||||||||||||||
| Assets: |
||||||||||||||||||||||||
| Securities: |
||||||||||||||||||||||||
| Taxable |
$ | 62,502 | $ | 1,599 | 2.56 | % | $ | 69,686 | $ | 2,100 | 3.01 | % | ||||||||||||
| Tax-Exempt (1) |
33,170 | 1,572 | 4.74 | % | 35,577 | 1,782 | 5.01 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total Securities |
$ | 95,672 | $ | 3,171 | 3.31 | % | $ | 105,263 | $ | 3,882 | 3.69 | % | ||||||||||||
| Loans: |
||||||||||||||||||||||||
| Taxable |
$ | 453,699 | $ | 21,039 | 4.64 | % | $ | 432,857 | $ | 21,300 | 4.92 | % | ||||||||||||
| Non-accrual |
8,982 | — | 0.00 | % | 3,972 | — | 0.00 | % | ||||||||||||||||
| Tax-Exempt (1) |
7,918 | 447 | 5.64 | % | 4,222 | 249 | 5.89 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total Loans |
$ | 470,599 | $ | 21,486 | 4.57 | % | $ | 441,051 | $ | 21,549 | 4.89 | % | ||||||||||||
| Federal funds sold |
— | — | 0.00 | % | — | — | 0.00 | % | ||||||||||||||||
| Interest-bearing deposits in other banks |
15,400 | 32 | 0.21 | % | 9,393 | 21 | 0.23 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total earning assets |
$ | 572,689 | $ | 24,688 | 4.31 | % | $ | 551,735 | $ | 25,452 | 4.61 | % | ||||||||||||
| Allowance for loan losses |
(5,564 | ) | (6,694 | ) | ||||||||||||||||||||
| Total non-earning assets |
48,061 | 42,670 | ||||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| Total assets |
$ | 615,186 | $ | 587,711 | ||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| Liabilities and Shareholders’ Equity: |
||||||||||||||||||||||||
| Interest-bearing deposits: |
||||||||||||||||||||||||
| NOW accounts |
$ | 79,159 | $ | 79 | 0.10 | % | $ | 82,926 | $ | 88 | 0.11 | % | ||||||||||||
| Money market accounts |
98,633 | 111 | 0.11 | % | 90,733 | 115 | 0.13 | % | ||||||||||||||||
| Savings accounts |
70,036 | 40 | 0.06 | % | 61,901 | 32 | 0.05 | % | ||||||||||||||||
| Time deposits: |
||||||||||||||||||||||||
| $100,000 and more |
35,548 | 171 | 0.48 | % | 36,777 | 206 | 0.56 | % | ||||||||||||||||
| Less than $100,000 |
59,846 | 369 | 0.62 | % | 63,363 | 590 | 0.96 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total interest-bearing deposits |
$ | 343,222 | $ | 770 | 0.22 | % | $ | 335,700 | $ | 1,031 | 0.31 | % | ||||||||||||
| Federal funds purchased and securities sold under agreements to repurchase |
— | — | 0.00 | % | 1 | — | 0.00 | % | ||||||||||||||||
| Federal Home Loan Bank advances |
32,174 | 690 | 2.15 | % | 32,141 | 1,090 | 0.39 | % | ||||||||||||||||
| Trust preferred capital notes |
7,217 | 317 | 4.40 | % | 7,217 | 317 | 0.44 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total interest-bearing liabilities |
$ | 382,613 | $ | 1,777 | 0.46 | % | $ | 375,059 | $ | 2,438 | 0.65 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Noninterest-bearing liabilities: |
||||||||||||||||||||||||
| Demand deposits |
157,652 | 142,203 | ||||||||||||||||||||||
| Other Liabilities |
3,032 | 4,535 | ||||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| Total liabilities |
$ | 543,297 | $ | 521,797 | ||||||||||||||||||||
| Shareholders’ equity |
71,889 | 65,914 | ||||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| Total liabilities and shareholders’ equity |
$ | 615,186 | $ | 587,711 | ||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
|
|
||||||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| Net interest income |
$ | 22,911 | $ | 23,014 | ||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| Net interest spread |
3.85 | % | 3.96 | % | ||||||||||||||||||||
| Interest expense as a percent of average earning assets |
0.31 | % | 0.44 | % | ||||||||||||||||||||
| Net interest margin |
4.00 | % | 4.17 | % | ||||||||||||||||||||
| (1) | Income and yields are reported on a tax equivalent basis using a federal tax rate of 34%. |
EAGLE FINANCIAL SERVICES, INC.
Average Balances, Income and Expenses, Yields and Rates
(dollars in thousands)
| For the Year Ended | ||||||||||||||||||||||||
| December 31, 2014 | December 31, 2013 | |||||||||||||||||||||||
| Average Balance |
Interest Income/ Expense |
Average Rate |
Average Balance |
Interest Income/ Expense |
Average Rate |
|||||||||||||||||||
| Assets: |
||||||||||||||||||||||||
| Securities: |
||||||||||||||||||||||||
| Taxable |
$ | 68,119 | $ | 2,060 | 3.02 | % | $ | 72,630 | $ | 2,242 | 3.09 | % | ||||||||||||
| Tax-Exempt (1) |
33,652 | 1,659 | 4.93 | % | 36,692 | 1,881 | 5.13 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total Securities |
$ | 101,771 | $ | 3,719 | 3.65 | % | $ | 109,322 | $ | 4,123 | 3.77 | % | ||||||||||||
| Loans: |
||||||||||||||||||||||||
| Taxable |
$ | 449,247 | $ | 21,465 | 4.78 | % | $ | 422,692 | $ | 21,352 | 5.05 | % | ||||||||||||
| Non-accrual |
6,811 | — | 0.00 | % | 2,921 | — | 0.00 | % | ||||||||||||||||
| Tax-Exempt (1) |
5,789 | 330 | 5.71 | % | 4,423 | 269 | 6.09 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total Loans |
$ | 461,847 | $ | 21,795 | 4.72 | % | $ | 430,036 | $ | 21,621 | 5.03 | % | ||||||||||||
| Federal funds sold |
— | — | 0.00 | % | — | — | 0.00 | % | ||||||||||||||||
| Interest-bearing deposits in other banks |
6,075 | 12 | 0.20 | % | 10,048 | 23 | 0.23 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total earning assets |
$ | 562,882 | $ | 25,526 | 4.53 | % | $ | 546,485 | $ | 25,767 | 4.72 | % | ||||||||||||
| Allowance for loan losses |
(5,839 | ) | (6,957 | ) | ||||||||||||||||||||
| Total non-earning assets |
43,008 | 40,573 | ||||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| Total assets |
$ | 600,051 | $ | 580,101 | ||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| Liabilities and Shareholders’ Equity: |
||||||||||||||||||||||||
| Interest-bearing deposits: |
||||||||||||||||||||||||
| NOW accounts |
$ | 82,821 | $ | 88 | 0.11 | % | $ | 83,889 | $ | 103 | 0.12 | % | ||||||||||||
| Money market accounts |
94,650 | 108 | 0.11 | % | 87,809 | 120 | 0.12 | % | ||||||||||||||||
| Savings accounts |
67,515 | 35 | 0.05 | % | 59,114 | 30 | 0.05 | % | ||||||||||||||||
| Time deposits: |
||||||||||||||||||||||||
| $100,000 and more |
35,341 | 181 | 0.51 | % | 38,232 | 241 | 0.63 | % | ||||||||||||||||
| Less than $100,000 |
61,136 | 512 | 0.84 | % | 65,900 | 648 | 0.98 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total interest-bearing deposits |
$ | 341,463 | $ | 924 | 0.27 | % | $ | 334,944 | $ | 1,142 | 0.34 | % | ||||||||||||
| Federal funds purchased and securities sold under agreements to repurchase |
1,865 | 20 | 1.07 | % | 1,064 | 31 | 2.91 | % | ||||||||||||||||
| Federal Home Loan Bank advances |
28,818 | 650 | 2.26 | % | 32,223 | 1,094 | 3.40 | % | ||||||||||||||||
| Trust preferred capital notes |
7,217 | 317 | 4.39 | % | 7,217 | 317 | 4.39 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total interest-bearing liabilities |
$ | 379,363 | $ | 1,911 | 0.50 | % | $ | 375,448 | $ | 2,584 | 0.69 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Noninterest-bearing liabilities: |
||||||||||||||||||||||||
| Demand deposits |
149,026 | 136,242 | ||||||||||||||||||||||
| Other Liabilities |
1,981 | 3,581 | ||||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| Total liabilities |
$ | 530,370 | $ | 515,271 | ||||||||||||||||||||
| Shareholders’ equity |
69,681 | 64,830 | ||||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| Total liabilities and shareholders’ equity |
$ | 600,051 | $ | 580,101 | ||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
|
|
||||||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| Net interest income |
$ | 23,615 | $ | 23,183 | ||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| Net interest spread |
4.03 | % | 4.03 | % | ||||||||||||||||||||
| Interest expense as a percent of average earning assets |
0.34 | % | 0.47 | % | ||||||||||||||||||||
| Net interest margin |
4.20 | % | 4.24 | % | ||||||||||||||||||||
| (1) | Income and yields are reported on a tax equivalent basis using a federal tax rate of 34%. |
EAGLE FINANCIAL SERVICES, INC.
Reconciliation of Tax-Equivalent Net Interest Income
(dollars in thousands)
| Three Months Ended | ||||||||||||||||||||
| 12/31/2014 | 9/30/2014 | 6/30/2014 | 3/31/2014 | 12/31/2013 | ||||||||||||||||
| GAAP Financial Measurements: |
||||||||||||||||||||
| Interest Income - Loans |
$ | 5,377 | $ | 5,397 | $ | 5,589 | $ | 5,331 | $ | 5,410 | ||||||||||
| Interest Income - Securities and Other Interest-Earnings Assets |
673 | 857 | 806 | 819 | 831 | |||||||||||||||
| Interest Expense - Deposits |
194 | 242 | 244 | 244 | 259 | |||||||||||||||
| Interest Expense - Other Borrowings |
254 | 239 | 245 | 251 | 355 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total Net Interest Income |
$ | 5,602 | $ | 5,773 | $ | 5,906 | $ | 5,655 | $ | 5,627 | ||||||||||
| Non-GAAP Financial Measurements: |
||||||||||||||||||||
| Add: Tax Benefit on Tax-Exempt Interest Income - Loans |
$ | 38 | $ | 32 | $ | 21 | $ | 21 | $ | 21 | ||||||||||
| Add: Tax Benefit on Tax-Exempt Interest Income - Securities |
135 | 139 | 143 | 148 | 153 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total Tax Benefit on Tax-Exempt Interest Income |
$ | 173 | $ | 171 | $ | 164 | $ | 169 | $ | 174 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Tax-Equivalent Net Interest Income |
$ | 5,775 | $ | 5,944 | $ | 6,070 | $ | 5,824 | $ | 5,801 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||