Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - EAGLE FINANCIAL SERVICES INC | d68400d8k.htm |
Exhibit 99.1
EAGLE FINANCIAL SERVICES, INC. ANNOUNCES
2015 SECOND QUARTER FINANCIAL RESULTS
| Contact: | Kathleen J. Chappell, Vice President and CFO | 540-955-2510 | ||
| kchappell@bankofclarke.com |
BERRYVILLE, VIRGINIA (July 23, 2015) – Eagle Financial Services, Inc. (OTCQX: EFSI), the holding company for Bank of Clarke County, whose divisions include Eagle Investment Group, today announced second quarter net income and overall strong financial performance. Select highlights for the second quarter 2015 include:
| • | Loan growth of $24.6 million |
| • | Deposit growth of $13.1 million |
| • | Net income of $798,000 |
| • | Net Interest Margin of 4.13% |
John R. Milleson, President and CEO, stated “We are extremely pleased with the strong balance sheet growth experienced in the second quarter and are encouraged by the potential our newer retail branches provide. Although the quarter’s income was negatively impacted by the purchase of the property on which one of our Winchester, VA retail branches is located, we expect the future benefit of ownership of this property will offset this current expense. We continue to expand our footprint in Loudoun County, VA and anticipate opening our fourth retail branch in Leesburg, VA during the third quarter of 2015. We believe that the new growth in Loudoun County and the extensive presence that we have in our existing markets will allow the Company to continue to provide its shareholders a positive return and consistent dividends.”
Income Statement Review
Net income for the quarter ended June 30, 2015 decreased 45.15% to $798,000 when compared to the $1.5 million for the quarter ended March 31, 2015. Net income for the quarter ended June 30, 2015 was $1.2 million below net income for the same period in 2014. Much of the decrease related to the June 2015 purchase of land on which one of the Company’s retail branches is located. While the Company owns the branch building, the land had previously been leased. On June 10, 2015, the Company purchased the land, subject to the existing lease, and recorded it at market value, resulting in a $520,000 write down of the total purchase price.
Net interest income increased $254,000 or 4.58% from $5.5 million for the quarter ended March 31, 2015 to $5.8 million for the quarter ended June 30, 2015. This increase in net interest income was driven primarily by the increased loan volume experienced by the Bank.
Net interest income decreased 1.93% or $114,000 from $5.9 million for the quarter ended June 30, 2014 to $5.8 million for the quarter ended June 30, 2015. This decrease is attributed to declining asset yields.
Total loan interest income was $5.4 and $5.3 million for the quarters ended June 30 and March 31, 2015, respectively. For the quarter ended June 30, 2014, total loan interest income was $5.6 million. Average loans for the quarter ended June 30, 2015 were $470.6 million compared to $466.1 million for the quarter ended March 31, 2015. Total average accruing loans were $463.8 million for the three months ended June 30, 2015 and $458.5 million for the quarter ended March 31, 2015. For the second quarter of 2014, total average loans were $463.8 million and average accruing loans were $457.3 million. The tax equivalent yield on average loans for the quarters ended June 30 and March 31, 2015 was 4.65% and 4.64%, respectively. The tax equivalent yield on loans for the quarter ended June 30, 2014 was 4.85%. Interest income from the investment portfolio was $678,000 for the quarter ended June 30, 2015 and $626,000 for the same period ended March 31, 2015. Average investments were $103.0 million for the quarter ended June 30, 2015 and $96.3 million for the quarter ended March 31, 2015. Interest income from the investment portfolio was $806,000 for the quarter ended June 30, 2014 while average investments were $103.9 million for the same time period. Although the Company has higher levels of average investments due to the excess cash balances being deployed into the investment portfolio during the first few months of 2015, income from the investment portfolio has declined due to declining investment yields.
Total interest expense was $327,000 for the three months ended June 30, 2015 and $398,000 for the quarter ended March 31, 2015. The average cost of interest bearing liabilities decreased seven basis points when comparing the quarter ended June 30, 2015 to the quarter ended March 31, 2015. The average balance of interest bearing liabilities decreased $5.1 million from the quarter ended March 31, 2015. The net interest margin was 4.13% for the quarter ended June 30, 2015 and 4.02% for the quarter March 31, 2015.
For the quarter ended June 30, 2014, total interest expense was $488,000 and the net interest margin was 4.32%. Managing excess cash and continued monitoring of other funding costs has helped stabilize the Company’s net interest margin in the face of declining asset yields.
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%. The table at the end of this document reconciles tax-equivalent net interest income, which is not a measurement under accounting principles generally accepted in the United States of America (GAAP), to net interest income.
Non-interest income was $1.6 million for the quarters ended June 30 and March 31, 2015. Other service charges and fees increased $174,000 or 23.02% when comparing the three months ended June 30 to March 31, 2015. The majority of this increase resulted from the increase in fees from ATMs and non-deposit investment sales. When comparing the quarter ended June 30 2015 to the same period in 2014, other service charges and fees increased $103,000 or 12.45%. When comparing the quarter ended June 30, 2015 to the quarter ended March 31, 2015, fees from fiduciary activities decreased $72,000 or 16.82%. This decrease results mostly from some one time fees collected during the quarter ended March 31, 2015. Fees from fiduciary activities decreased $6,000 or 1.66% from the quarter ended June 30, 2015 to the same period in 2014. Noninterest income for the three months ended June 30, 2014 was $1.6 million.
Noninterest expense was $6.1 million for the quarter ended June 30, 2015. This represents an increase of $1.1 million or 21.24% and $1.2 million or 23.46% from the quarters ended March 31, 2015 and June 30, 2014, respectively. Much of these increases resulted from the adjustment to the purchase price of land acquired in June 2015. On June 10, 2015, the Company purchased the land, subject to the existing lease, and recorded it at market value, resulting in a $520,000 write down of the total purchase price. Other components of non-interest expense, including salaries and employees’ benefits, occupancy expenses and advertising and marketing expenses have also increased with the Company’s hiring of additional employees for and the opening of new facilities in Loudoun County, Virginia.
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, 2015, nonperforming asset remained relatively unchanged at $9.1 million. During the second quarter of 2015, the Bank placed two loans on non-accrual status. 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. One real estate asset had been foreclosed upon during the second quarter of 2015 and the Bank sold three pieces of other real estate owned recorded at a net value of $366,000 during the same period. Loans greater than 90 days past due and still accruing increased from $63,000 at March 31, 2015 to $68,000 at June 30, 2015. Nonperforming assets were $8.3 million or 1.38% of total assets at June 30, 2014.
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, 2015, the Company had 25 troubled debt restructurings totaling $7.6 million, of which 21 loans, totaling $6.7 million, were considered performing loans.
The Company realized $64,000 in net recoveries for the quarter ended June 30, 2015 compared to $41,000 in net charge offs for the three months ended March 31, 2015. Net recoveries for the quarter ended June 30, 2014 were $437,000. 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 focus 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.
The Company recorded a provision for loan losses of $300,000 for the quarter ended June 30, 2015. Provisions for loan losses were $133,000 and negative $283,000 for the three months ended March 31, 2015 and June 30, 2014, respectively. The allowance for loan losses was $5.5 million, or 1.14% of total outstanding loans, at June 30, 2015. At March 31, 2015 and June 30, 2014, the allowance for loan losses was $5.2 million and $5.9 million, respectively. 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, 2015 were $634.3 million, which represented an increase of $20.6 million or 3.35% from total assets of $613.7 million at March 31, 2015. This increase was driven by the increased volume of the loan portfolio. Total loans increased from $461.4 million at March 31, 2015 to $486.0 at June 30, 2015. At June 30, 2014, total consolidated assets were $601.7 million and total loans were $464.3 million.
Deposits and Other Borrowings
Total deposits, which include brokered deposits, were $522.8 million at June 30, 2015. This reflects an increase of 2.57% or $13.1 million from $509.7 at March 31, 2015. At June 30, 2014, total deposits were $492.0 million. The Company held $11.0 million in brokered deposits at June 30, 2015 and March 31, 2015. The Company held $9.9 million in brokered deposits at June 30, 2014.
Fed funds purchased and securities sold under agreement to repurchase were $8.3 million at June 30, 2015. At March 31, 2015 and June 30, 2014, fed funds purchased and securities sold under agreement to repurchase were $0. Borrowings with the Federal Home Loan Bank of Atlanta have remained unchanged at $20.0 million when comparing June 30 and March 31, 2015. Borrowings with the Federal Home Loan Bank of Atlanta were $30.0 million at June 30, 2014.
Equity
Shareholders’ equity at June 30, 2015 was $73.9 million, reflecting a decrease of $604,000 from $74.5 million at March 31, 2015. At June 30, 2014 shareholders’ equity was $70.2 million. The book value of the Company at June 30, 2015 was $21.30 per common share. Total common shares outstanding were 3,495,800 at June 30, 2015. On July 15, 2015, the board of directors declared a $0.20 per common share cash dividend for shareholders of record as of July 30, 2015 and payable on August 12, 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, 2014, and other filings with the Securities and Exchange Commission.
EAGLE FINANCIAL SERVICES, INC.
KEY STATISTICS
| For the Three Months Ended | ||||||||||||||||||||
| 2Q15 | 1Q15 | 4Q14 | 3Q14 | 2Q14 | ||||||||||||||||
| Net Income (dollars in thousands) |
$ | 798 | $ | 1,455 | $ | 2,434 | $ | 1,386 | $ | 1,958 | ||||||||||
| Earnings per share, basic |
$ | 0.23 | $ | 0.42 | $ | 0.71 | $ | 0.40 | $ | 0.57 | ||||||||||
| Earnings per share, diluted |
$ | 0.23 | $ | 0.42 | $ | 0.70 | $ | 0.40 | $ | 0.57 | ||||||||||
| Return on average total assets |
0.51 | % | 0.96 | % | 1.57 | % | 0.91 | % | 1.31 | % | ||||||||||
| Return on average total equity |
4.31 | % | 8.03 | % | 13.43 | % | 7.77 | % | 11.37 | % | ||||||||||
| Dividend payout ratio |
86.96 | % | 47.80 | % | 28.17 | % | 50.00 | % | 33.33 | % | ||||||||||
| Fee revenue as a percent of total revenue |
21.42 | % | 20.56 | % | 15.90 | % | 18.92 | % | 20.19 | % | ||||||||||
| Net interest margin(1) |
4.13 | % | 4.02 | % | 4.00 | % | 4.18 | % | 4.32 | % | ||||||||||
| Yield on average earning assets |
4.35 | % | 4.30 | % | 4.31 | % | 4.51 | % | 4.67 | % | ||||||||||
| Yield on average interest-bearing liabilities |
0.35 | % | 0.42 | % | 0.46 | % | 0.50 | % | 0.51 | % | ||||||||||
| Net interest spread |
4.00 | % | 3.88 | % | 3.85 | % | 4.01 | % | 4.16 | % | ||||||||||
| Tax equivalent adjustment to net interest income (dollars in thousands) |
$ | 152 | $ | 161 | $ | 173 | $ | 171 | $ | 164 | ||||||||||
| Non-interest income to average assets |
1.06 | % | 1.07 | % | 1.43 | % | 0.97 | % | 1.04 | % | ||||||||||
| Non-interest expense to average assets |
3.95 | % | 3.32 | % | 3.12 | % | 3.27 | % | 3.32 | % | ||||||||||
| Efficiency ratio(2) |
80.78 | % | 68.98 | % | 60.57 | % | 71.91 | % | 65.09 | % | ||||||||||
| (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 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 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
| 2Q15 | 1Q15 | 4Q14 | 3Q14 | 2Q14 | ||||||||||||||||
| BALANCE SHEET RATIOS |
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| Loans to deposits |
92.97 | % | 90.52 | % | 93.25 | % | 93.93 | % | 94.36 | % | ||||||||||
| Average interest-earning assets to average-interest bearing liabilities |
154.14 | % | 151.49 | % | 166.86 | % | 148.74 | % | 147.29 | % | ||||||||||
| PER SHARE DATA |
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| Dividends |
$ | 0.20 | $ | 0.20 | $ | 0.20 | $ | 0.20 | $ | 0.19 | ||||||||||
| Book value |
$ | 21.30 | $ | 21.49 | $ | 21.01 | $ | 20.74 | $ | 20.51 | ||||||||||
| Tangible book value |
$ | 21.30 | $ | 21.49 | $ | 21.01 | $ | 20.74 | $ | 20.51 | ||||||||||
| SHARE PRICE DATA |
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| Closing price |
$ | 23.50 | $ | 24.50 | $ | 23.30 | $ | 23.65 | $ | 23.60 | ||||||||||
| Diluted earnings multiple(1) |
25.54 | 14.58 | 8.32 | 14.78 | 10.35 | |||||||||||||||
| Book value multiple(2) |
1.10 | 1.14 | 1.11 | 1.14 | 1.15 | |||||||||||||||
| COMMON STOCK DATA |
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| Outstanding shares at end of period |
3,495,800 | 3,481,774 | 3,463,665 | 3,454,336 | 3,445,727 | |||||||||||||||
| Weighted average shares outstanding |
2,487,215 | 3,477,249 | 3,459,096 | 3,451,041 | 3,428,699 | |||||||||||||||
| Weighted average shares outstanding, diluted |
3,497,065 | 3,485,450 | 3,468,904 | 3,460,186 | 3,436,903 | |||||||||||||||
| CAPITAL RATIOS |
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| Total equity to total assets |
11.66 | % | 12.15 | % | 11.67 | % | 11.76 | % | 11.67 | % | ||||||||||
| CREDIT QUALITY |
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| Net charge-offs to average loans |
-0.05 | % | 0.04 | % | 0.72 | % | 0.24 | % | -0.38 | % | ||||||||||
| Total non-performing loans to total loans |
1.41 | % | 1.44 | % | 2.28 | % | 1.86 | % | 1.37 | % | ||||||||||
| Total non-performing assets to total assets |
1.44 | % | 1.47 | % | 2.04 | % | 1.70 | % | 1.38 | % | ||||||||||
| Non-accrual loans to: |
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| total loans |
1.39 | % | 1.43 | % | 2.28 | % | 1.86 | % | 1.37 | % | ||||||||||
| total assets |
1.07 | % | 1.07 | % | 1.71 | % | 1.42 | % | 1.06 | % | ||||||||||
| Allowance for loan losses to: |
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| total loans |
1.14 | % | 1.12 | % | 1.08 | % | 1.20 | % | 1.26 | % | ||||||||||
| non-performing assets |
60.79 | % | 57.17 | % | 39.64 | % | 54.31 | % | 70.56 | % | ||||||||||
| non-accrual loans |
81.68 | % | 78.45 | % | 47.45 | % | 64.75 | % | 92.40 | % | ||||||||||
| NON-PERFORMING ASSETS: |
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| (dollars in thousands) |
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| Loans delinquent over 90 days |
$ | 68 | $ | 63 | $ | 6 | $ | 16 | $ | — | ||||||||||
| Non-accrual loans |
6,778 | 6,593 | 10,706 | 8,628 | 6,354 | |||||||||||||||
| Other real estate owned and repossessed assets |
2,261 | 2,391 | 2,102 | 1,644 | 1,967 | |||||||||||||||
| NET LOAN CHARGE-OFFS (RECOVERIES): |
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| (dollars in thousands) |
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| Loans charged off |
$ | 190 | $ | 131 | $ | 967 | $ | 310 | $ | 114 | ||||||||||
| (Recoveries) |
(254 | ) | (90 | ) | (110 | ) | (26 | ) | (551 | ) | ||||||||||
| Net charge-offs (recoveries) |
(64 | ) | 41 | 857 | 284 | (437 | ) | |||||||||||||
| PROVISION FOR LOAN LOSSES (dollars in thousands) |
$ | 300 | $ | 133 | $ | 350 | $ | — | $ | (283 | ) | |||||||||
| ALLOWANCE FOR LOAN LOSS SUMMARY |
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| (dollars in thousands) |
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| Balance at the beginning of period |
$ | 5,172 | $ | 5,080 | $ | 5,587 | $ | 5,871 | $ | 5,717 | ||||||||||
| Provision |
300 | 133 | 350 | — | (283 | ) | ||||||||||||||
| Net charge-offs (recoveries) |
(64 | ) | 41 | 857 | 284 | (437 | ) | |||||||||||||
| Balance at the end of period |
$ | 5,536 | $ | 5,172 | $ | 5,080 | $ | 5,587 | $ | 5,871 | ||||||||||
| (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 6/30/2015 |
Unaudited 3/31/2015 |
Unaudited 12/31/2014 |
Unaudited 9/30/2014 |
Unaudited 6/30/2014 |
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| Assets |
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| Cash and due from banks |
$ | 12,145 | $ | 26,374 | $ | 34,564 | $ | 15,338 | $ | 12,405 | ||||||||||
| Federal funds sold |
— | — | — | — | — | |||||||||||||||
| Securities available for sale, at fair value |
107,682 | 99,092 | 96,973 | 101,380 | 102,644 | |||||||||||||||
| Loans, net of allowance for loan losses |
480,492 | 456,221 | 464,740 | 459,481 | 458,447 | |||||||||||||||
| Bank premises and equipment, net |
20,805 | 20,071 | 19,015 | 18,529 | 17,115 | |||||||||||||||
| Other assets |
13,191 | 11,983 | 11,538 | 11,488 | 11,129 | |||||||||||||||
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| Total assets |
$ | 634,315 | $ | 613,741 | $ | 626,830 | $ | 606,216 | $ | 601,740 | ||||||||||
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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 |
$ | 171,368 | $ | 166,085 | $ | 159,352 | $ | 151,961 | $ | 147,992 | ||||||||||
| Savings and interest bearing demand deposits |
257,575 | 249,783 | 249,305 | 248,736 | 248,123 | |||||||||||||||
| Time deposits |
93,844 | 93,836 | 95,159 | 94,439 | 95,931 | |||||||||||||||
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| Total deposits |
$ | 522,787 | $ | 509,704 | $ | 503,816 | $ | 495,136 | $ | 492,046 | ||||||||||
| Federal funds purchased and securities sold under agreements to repurchase |
8,329 | — | — | — | — | |||||||||||||||
| Federal Home Loan Bank advances |
20,000 | 20,000 | 40,000 | 30,000 | 30,000 | |||||||||||||||
| Trust preferred capital notes |
7,217 | 7,217 | 7,217 | 7,217 | 7,217 | |||||||||||||||
| Other liabilities |
2,039 | 2,273 | 2,665 | 2,602 | 2,255 | |||||||||||||||
| Commitments and contingent liabilities |
— | — | — | — | — | |||||||||||||||
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| Total liabilities |
$ | 560,372 | $ | 539,194 | $ | 553,698 | $ | 534,955 | $ | 531,518 | ||||||||||
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| Shareholders’ Equity |
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| Preferred stock, $10 par value |
$ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
| Common stock, $2.50 par value |
8,681 | 8,658 | 8,621 | 8,588 | 8,561 | |||||||||||||||
| Surplus |
13,089 | 12,828 | 12,618 | 12,312 | 11,995 | |||||||||||||||
| Retained earnings |
51,439 | 51,338 | 50,578 | 48,834 | 48,104 | |||||||||||||||
| Accumulated other comprehensive income |
734 | 1,723 | 1,315 | 1,527 | 1,562 | |||||||||||||||
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| Total shareholders’ equity |
$ | 73,943 | $ | 74,547 | $ | 73,132 | $ | 71,261 | $ | 70,222 | ||||||||||
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| Total liabilities and shareholders’ equity |
$ | 634,315 | $ | 613,741 | $ | 626,830 | $ | 606,216 | $ | 601,740 | ||||||||||
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EAGLE FINANCIAL SERVICES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands)
Unaudited
| Three Months Ended | ||||||||||||||||||||
| 6/30/2015 | 3/31/2015 | 12/31/2014 | 9/30/2014 | 6/30/2014 | ||||||||||||||||
| Interest and Dividend Income |
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| Interest and fees on loans |
$ | 5,437 | $ | 5,301 | $ | 5,377 | $ | 5,397 | $ | 5,589 | ||||||||||
| Interest on federal funds sold |
— | — | — | — | — | |||||||||||||||
| Interest and dividends on securities available for sale: |
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| Taxable interest income |
406 | 376 | 378 | 458 | 482 | |||||||||||||||
| Interest income exempt from federal income taxes |
246 | 243 | 261 | 270 | 278 | |||||||||||||||
| Dividends |
26 | 7 | 26 | 126 | 46 | |||||||||||||||
| Interest on deposits in banks |
6 | 11 | 8 | 3 | 1 | |||||||||||||||
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| Total interest and dividend income |
$ | 6,121 | $ | 5,938 | $ | 6,050 | $ | 6,254 | $ | 6,396 | ||||||||||
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| Interest Expense |
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| Interest on deposits |
$ | 182 | $ | 185 | $ | 194 | $ | 241 | $ | 245 | ||||||||||
| Interest on federal funds purchased and securities sold under agreements to repurchase |
1 | — | — | — | 7 | |||||||||||||||
| Interest on Federal Home Loan Bank advances |
66 | 135 | 174 | 159 | 158 | |||||||||||||||
| Interest on trust preferred capital notes |
78 | 78 | 80 | 80 | 78 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total interest expense |
$ | 327 | $ | 398 | $ | 448 | $ | 480 | $ | 488 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net interest income |
5,794 | 5,540 | 5,602 | 5,774 | 5,908 | |||||||||||||||
| Provision For Loan Losses |
300 | 133 | 350 | — | (283 | ) | ||||||||||||||
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|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net interest income after provision for loan losses |
$ | 5,494 | $ | 5,407 | $ | 5,252 | $ | 5,774 | $ | 6,191 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Noninterest Income |
||||||||||||||||||||
| Income from fiduciary activities |
$ | 356 | $ | 428 | $ | 290 | $ | 211 | $ | 362 | ||||||||||
| Service charges on deposit accounts |
307 | 290 | 338 | 332 | 319 | |||||||||||||||
| Other service charges and fees |
930 | 756 | 687 | 828 | 827 | |||||||||||||||
| Gain on the sale of bank premises and equipment |
5 | — | (14 | ) | — | — | ||||||||||||||
| Gain (Loss) on sales of AFS securities |
22 | 74 | 897 | 88 | 6 | |||||||||||||||
| Other operating income |
24 | 81 | 23 | 15 | 46 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total noninterest income |
$ | 1,644 | $ | 1,629 | $ | 2,221 | $ | 1,474 | $ | 1,560 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Noninterest Expenses |
||||||||||||||||||||
| Salaries and employee benefits |
$ | 3,112 | $ | 2,995 | $ | 2,660 | $ | 3,016 | $ | 2,926 | ||||||||||
| Occupancy expenses |
436 | 346 | 317 | 319 | 307 | |||||||||||||||
| Equipment expenses |
260 | 146 | 174 | 197 | 167 | |||||||||||||||
| Advertising and marketing expenses |
184 | 119 | 155 | 159 | 126 | |||||||||||||||
| Stationery and supplies |
61 | 51 | 69 | 73 | 74 | |||||||||||||||
| ATM network fees |
191 | 158 | 180 | 175 | 201 | |||||||||||||||
| Other real estate owned expenses |
14 | 6 | 12 | 4 | 6 | |||||||||||||||
| Loss (gain) on sale of other real estate |
73 | 19 | (78 | ) | 13 | (17 | ) | |||||||||||||
| FDIC assessment |
103 | 108 | 95 | 95 | 86 | |||||||||||||||
| Computer software expense |
192 | 221 | 208 | 252 | 213 | |||||||||||||||
| Bank franchise tax |
126 | 117 | 123 | 124 | 117 | |||||||||||||||
| Professional fees |
261 | 242 | 226 | 290 | 254 | |||||||||||||||
| Other operating expenses |
1,118 | 529 | 702 | 617 | 506 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total noninterest expenses |
$ | 6,131 | $ | 5,057 | $ | 4,843 | $ | 5,334 | $ | 4,966 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Income before income taxes |
1,007 | 1,979 | 2,630 | 1,914 | 2,785 | |||||||||||||||
| Income Tax Expense |
209 | 524 | 196 | 528 | 827 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net income |
$ | 798 | $ | 1,455 | $ | 2,434 | $ | 1,386 | $ | 1,958 | ||||||||||
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|
|
|
|
|
|
|
|
|||||||||||
| Earnings Per Share |
||||||||||||||||||||
| Net income per common share, basic |
$ | 0.23 | $ | 0.42 | $ | 0.71 | $ | 0.40 | $ | 0.57 | ||||||||||
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|
|
|
|
|
|
|
|
|
|||||||||||
| Net income per common share, diluted |
$ | 0.23 | $ | 0.42 | $ | 0.70 | $ | 0.40 | $ | 0.57 | ||||||||||
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|
|
|
|
|
|
|
|
|
|||||||||||
EAGLE FINANCIAL SERVICES, INC.
Average Balances, Income and Expenses, Yields and Rates
(dollars in thousands)
| For the Three Months Ended | ||||||||||||||||||||||||||||||||||||
| June 30, 2015 | March 31, 2015 | June 30, 2014 | ||||||||||||||||||||||||||||||||||
| Average Balance |
Interest Income/ Expense |
Average Yield |
Average Balance |
Interest Income/ Expense |
Average Yield |
Average Balance |
Interest Income/ Expense |
Average Yield |
||||||||||||||||||||||||||||
| Assets: |
||||||||||||||||||||||||||||||||||||
| Securities: |
||||||||||||||||||||||||||||||||||||
| Taxable |
$ | 71,250 | $ | 1,737 | 2.44 | % | $ | 64,715 | $ | 1,553 | 2.40 | % | $ | 70,225 | $ | 2,118 | 3.02 | % | ||||||||||||||||||
| Tax-Exempt (1) |
31,787 | 1,495 | 4.70 | % | 31,608 | 1,493 | 4.72 | % | 33,692 | 1,686 | 5.00 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Total Securities |
$ | 103,037 | $ | 3,232 | 3.14 | % | $ | 96,323 | $ | 3,046 | 3.16 | % | $ | 103,917 | $ | 3,804 | 3.66 | % | ||||||||||||||||||
| Loans: |
||||||||||||||||||||||||||||||||||||
| Taxable |
$ | 455,696 | $ | 21,615 | 4.74 | % | $ | 450,701 | $ | 21,211 | 4.71 | % | $ | 453,174 | $ | 22,253 | 4.91 | % | ||||||||||||||||||
| Nonaccrual |
6,806 | — | 0.00 | % | 7,605 | — | 0.00 | % | 6,452 | — | 0.00 | % | ||||||||||||||||||||||||
| Tax-Exempt (1) |
8,140 | 289 | 3.55 | % | 7,765 | 436 | 5.62 | % | 4,161 | 247 | 5.94 | % | ||||||||||||||||||||||||
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|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Total Loans |
$ | 470,642 | $ | 21,904 | 4.65 | % | $ | 466,071 | $ | 21,647 | 4.64 | % | $ | 463,787 | $ | 22,500 | 4.85 | % | ||||||||||||||||||
| Federal funds sold |
— | — | 0.00 | % | — | — | 0.00 | % | — | — | 0.00 | % | ||||||||||||||||||||||||
| Interest-bearing deposits in other banks |
11,243 | 24 | 0.21 | % | 21,140 | 45 | 0.21 | % | 2,315 | 3 | 0.12 | % | ||||||||||||||||||||||||
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|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Total earning assets |
$ | 578,116 | $ | 25,160 | 4.35 | % | $ | 575,929 | $ | 24,738 | 4.30 | % | $ | 563,567 | $ | 26,307 | 4.67 | % | ||||||||||||||||||
| Allowance for loan losses |
(5,378 | ) | (5,194 | ) | (6,139 | ) | ||||||||||||||||||||||||||||||
| Total non-earning assets |
49,064 | 47,150 | 42,131 | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| Total assets |
$ | 621,802 | $ | 617,885 | $ | 599,559 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| Liabilities and Shareholders’ Equity: |
||||||||||||||||||||||||||||||||||||
| Interest-bearing deposits: |
||||||||||||||||||||||||||||||||||||
| NOW accounts |
$ | 80,266 | $ | 84 | 0.10 | % | $ | 79,846 | $ | 85 | 0.11 | % | $ | 86,894 | $ | 92 | 0.11 | % | ||||||||||||||||||
| Money market accounts |
97,515 | 112 | 0.12 | % | 96,200 | 110 | 0.11 | % | 91,508 | 104 | 0.11 | % | ||||||||||||||||||||||||
| Savings accounts |
75,412 | 40 | 0.05 | % | 72,723 | 37 | 0.05 | % | 66,830 | 34 | 0.05 | % | ||||||||||||||||||||||||
| Time deposits: |
||||||||||||||||||||||||||||||||||||
| $100,000 and more |
35,135 | 156 | 0.45 | % | 35,303 | 170 | 0.48 | % | 35,178 | 189 | 0.54 | % | ||||||||||||||||||||||||
| Less than $100,000 |
58,769 | 337 | 0.57 | % | 59,440 | 345 | 0.58 | % | 61,808 | 562 | 0.91 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Total interest-bearing deposits |
$ | 347,097 | $ | 730 | 0.21 | % | $ | 343,512 | 746 | 0.22 | % | $ | 342,218 | $ | 981 | 0.29 | % | |||||||||||||||||||
| Federal funds purchased and securities sold under agreements to repurchase |
756 | 4 | 0.53 | % | 0 | 0 | 0.00 | % | 3,184 | 28 | 0.89 | % | ||||||||||||||||||||||||
| Federal Home Loan Bank advances |
20,000 | 261 | 1.30 | % | 29,444 | 548 | 1.86 | % | 30,000 | 635 | 2.12 | % | ||||||||||||||||||||||||
| Trust preferred capital notes |
7,217 | 317 | 4.39 | % | 7,217 | 316 | 4.38 | % | 7,217 | 317 | 4.40 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Total interest-bearing liabilities |
$ | 375,070 | $ | 1,312 | 0.35 | % | $ | 380,173 | 1,610 | 0.42 | % | $ | 382,619 | $ | 1,961 | 0.51 | % | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Noninterest-bearing liabilities: |
||||||||||||||||||||||||||||||||||||
| Demand deposits |
170,128 | 161,381 | 146,527 | |||||||||||||||||||||||||||||||||
| Other Liabilities |
2,366 | 2,823 | 1,378 | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| Total liabilities |
$ | 547,564 | $ | 544,377 | $ | 530,524 | ||||||||||||||||||||||||||||||
| Shareholders’ equity |
74,238 | 73,508 | 69,035 | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| Total liabilities and shareholders’ equity |
$ | 621,802 | $ | 617,885 | $ | 599,559 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| Net interest income |
$ | 23,849 | $ | 23,128 | $ | 24,346 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| Net interest spread |
4.00 | % | 3.88 | % | 4.16 | % | ||||||||||||||||||||||||||||||
| Interest expense as a percent of average earning assets |
0.23 | % | 0.28 | % | 0.35 | % | ||||||||||||||||||||||||||||||
| Net interest margin |
4.13 | % | 4.02 | % | 4.32 | % | ||||||||||||||||||||||||||||||
| (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 | ||||||||||||||||||||
| 6/30/2015 | 3/31/2015 | 12/31/2014 | 9/30/2014 | 6/30/2014 | ||||||||||||||||
| GAAP Financial Measurements: |
||||||||||||||||||||
| Interest Income - Loans |
$ | 5,437 | $ | 5,301 | $ | 5,377 | $ | 5,397 | $ | 5,589 | ||||||||||
| Interest Income - Securities and Other Interest-Earnings Assets |
684 | 637 | 673 | 857 | 806 | |||||||||||||||
| Interest Expense - Deposits |
182 | 184 | 194 | 242 | 244 | |||||||||||||||
| Interest Expense - Other Borrowings |
145 | 213 | 254 | 239 | 245 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total Net Interest Income |
$ | 5,794 | $ | 5,541 | $ | 5,602 | $ | 5,773 | $ | 5,906 | ||||||||||
| Non-GAAP Financial Measurements: |
||||||||||||||||||||
| Add: Tax Benefit on Tax-Exempt Interest Income - Loans |
$ | 25 | $ | 36 | $ | 38 | $ | 32 | $ | 21 | ||||||||||
| Add: Tax Benefit on Tax-Exempt Interest Income - Securities |
127 | 125 | 135 | 139 | 143 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total Tax Benefit on Tax-Exempt Interest Income |
$ | 152 | $ | 161 | $ | 173 | $ | 171 | $ | 164 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Tax-Equivalent Net Interest Income |
$ | 6,946 | $ | 5,702 | $ | 5,775 | $ | 5,944 | $ | 6,070 | ||||||||||
|
|
|
|
|
|
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|||||||||||