EAGLE FINANCIAL SERVICES INC [EFSI] Filings

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10-Q 1 efsi-20240630.htm 10-Q 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 0-20146

EAGLE FINANCIAL SERVICES, INC.

(Exact name of registrant as specified in its charter)


Virginia		54-1601306
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

2 East Main Street	P.O. Box 391
Berryville, VA		22611
(Address of principal executive offices)		(Zip Code)

(540) 955-2510

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Date File required to be submitted pursuant to Rule 405 of Regulation S-T (232.405 of this Chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.


If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.		☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of the registrant’s Common Stock ($2.50 par value) outstanding as of August 8, 2024 was 3,550,580.

TABLE OF CONTENTS


PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements:
	Consolidated Balance Sheets at June 30, 2024 and December 31, 2023	1
	Consolidated Statements of Income for the Three and Six Months Ended June 30, 2024 and 2023	2
	Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2024 and 2023	3
	Consolidated Statements of Changes in Shareholders’ Equity for the Three and Six Months Ended June 30, 2024 and 2023	4
	Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2024 and 2023	5
	Notes to Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	34
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	54
Item 4.	Controls and Procedures	54

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	55
Item 1A.	Risk Factors	55
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	55
Item 3.	Defaults Upon Senior Securities	55
Item 4.	Mine Safety Disclosures	55
Item 5.	Other Information	55
Item 6.	Exhibits	56

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

EAGLE FINANCIAL SERVICES, INC.

Consolidated Balance Sheets

(dollars in thousands, except per share amounts)


	June 30, 2024			December 31, 2023
	(Unaudited)
Assets
Cash and due from banks	$	15,202		$	15,417
Interest-bearing deposits with other institutions		45,977			96,649
Federal funds sold		62,476			26,287
Total cash and cash equivalents	$	123,655		$	138,353
Securities available for sale, at fair value, amortized cost of $153,250 and $160,251, respectively		129,489			137,443
Restricted investments, at cost		8,780			9,568
Loans held for sale		3,058			1,661
Loans		1,448,934			1,462,686
Allowance for credit losses		(15,014	)		(14,493	)
Net Loans	$	1,433,920		$	1,448,193
Bank premises and equipment, net		18,114			18,108
Bank owned life insurance		30,103			29,575
Other assets		43,286			42,696
Total assets	$	1,790,405		$	1,825,597
Liabilities and Shareholders’ Equity
Liabilities
Deposits:
Noninterest bearing demand deposits	$	415,017		$	436,619
Savings and interest bearing demand deposits		647,358			656,439
Time deposits		426,209			413,264
Total deposits	$	1,488,584		$	1,506,322
Federal funds purchased		302			—
Federal Home Loan Bank advances, short-term		—			20,000
Federal Home Loan Bank advances, long-term		145,000			145,000
Subordinated debt, net of unamortized issuance costs		29,478			29,444
Other liabilities		15,926			16,452
Total liabilities	$	1,679,290		$	1,717,218
Commitments and contingencies
Shareholders’ Equity
Preferred stock, $10 par value; 500,000 shares authorized and unissued	$	—		$	—
Common stock, $2.50 par value; authorized 10,000,000 shares; issued and outstanding 2024, 3,556,844 including 74,216 shares of unvested restricted stock; issued and outstanding 2023, 3,520,894 including 56,914 shares of unvested restricted stock		8,707			8,660
Surplus		14,604			14,280
Retained earnings		106,567			103,445
Accumulated other comprehensive (loss)		(18,763	)		(18,006	)
Total shareholders’ equity	$	111,115		$	108,379
Total liabilities and shareholders’ equity	$	1,790,405		$	1,825,597

See Notes to Consolidated Financial Statements

TABLE OF CONTENTS

EAGLE FINANCIAL SERVICES, INC.

Consolidated Statements of Income (Unaudited)

(dollars in thousands, except per share amounts)


	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2024			2023		2024			2023
Interest and Dividend Income
Interest and fees on loans	$	19,525		$	18,754	$	39,488		$	35,921
Interest and dividends on securities available for sale:
Taxable interest income		739			785		1,497			1,589
Interest income exempt from federal income taxes		3			5		8			9
Dividends		155			136		311			219
Interest on deposits in banks		1,258			656		2,249			1,146
Interest on federal funds sold		68			28		107			38
Total interest and dividend income	$	21,748		$	20,364	$	43,660		$	38,922
Interest Expense
Interest on deposits	$	7,515		$	5,535	$	14,939		$	8,994
Interest on federal funds purchased		—			—		—			70
Interest on Federal Home Loan Bank advances		1,712			2,032		3,422			4,063
Interest on subordinated debt		355			355		709			709
Total interest expense	$	9,582		$	7,922	$	19,070		$	13,836
Net interest income	$	12,166		$	12,442	$	24,590		$	25,086
Provision for Credit Losses		181			403		656			1,067
Net interest income after provision for credit losses	$	11,985		$	12,039	$	23,934		$	24,019
Noninterest Income
Wealth management fees	$	1,273		$	1,263	$	2,729		$	2,421
Service charges on deposit accounts		456			447		910			883
Other service charges and fees		1,164			1,135		2,133			2,182
(Loss) gain on the sale of bank premises and equipment		(11	)		7		(11	)		7
Gain on sale of loans		492			192		653			648
Bank owned life insurance income		269			179		537			358
Other operating income		652			134		815			384
Total noninterest income	$	4,295		$	3,357	$	7,766		$	6,883
Noninterest Expenses
Salaries and employee benefits	$	7,353		$	7,561	$	14,538		$	14,859
Occupancy expenses		470			533		1,039			1,051
Equipment expenses		401			315		774			638
Advertising and marketing expenses		245			342		482			638
Stationery and supplies		32			56		56			78
ATM network fees		373			365		753			716
Other real estate owned expense		—			—		—			5
(Gain) on other real estate owned		—			—		—			(7	)
FDIC assessment		351			346		760			612
Computer software expense		221			281		454			591
Bank franchise tax		338			313		669			576
Professional fees		511			753		1,017			1,466
Data processing fees		558			478		1,123			880
Other operating expenses		1,657			1,612		3,222			3,238
Total noninterest expenses	$	12,510		$	12,955	$	24,887		$	25,341
Income before income taxes	$	3,770		$	2,441	$	6,813		$	5,561
Income Tax Expense		585			383		1,080			918
Net income	$	3,185		$	2,058	$	5,733		$	4,643
Earnings Per Share
Net income per common share, basic	$	0.89		$	0.58	$	1.61		$	1.32
Net income per common share, diluted	$	0.89		$	0.58	$	1.61		$	1.32

See Notes to Consolidated Financial Statements

TABLE OF CONTENTS

EAGLE FINANCIAL SERVICES, INC.

Consolidated Statements of Comprehensive Income

(Unaudited)

(dollars in thousands)


	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2024		2023			2024			2023
Net income	$	3,185	$	2,058		$	5,733		$	4,643
Other comprehensive income (loss):
Unrealized gain (loss) on available for sale securities, net of deferred income tax of $280 and $(517) for the three months ended, and $(200) and $275 for the six months ended, respectively		1,054		(1,945	)		(753	)		1,035
Changes in benefit obligations and plan assets for post retirement benefit plans, net of reclassification adjustments, net of deferred income tax of $0 for the three months ended, and $1 and $(3) for the six months ended, respectively		—		—			(4	)		(5	)
Total other comprehensive income (loss)		1,054		(1,945	)		(757	)		1,030
Total comprehensive income	$	4,239	$	113		$	4,976		$	5,673

See Notes to Consolidated Financial Statements

TABLE OF CONTENTS

EAGLE FINANCIAL SERVICES, INC.

Consolidated Statements of Changes in Shareholders’ Equity (Unaudited)

(dollars in thousands, except per share amounts)


	Common Stock		Surplus			Retained Earnings			Accumulated Other Comprehensive (Loss)			Total
December 31, 2022	$	8,629	$	13,268		$	100,278		$	(20,446	)		101,729
Cumulative effect adjustment for CECL		—		—			(1,961	)		—			(1,961	)
Net income		—		—			2,585			—			2,585
Other comprehensive income		—		—			—			2,975			2,975
Vesting of restricted stock awards, stock incentive plan (12,749 shares)		31		(31	)		—			—			—
Stock-based compensation expense		—		317

EAGLE FINANCIAL SERVICES INC [EFSI] Filings
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10-Q	[2023-08-14]
10-Q	[2023-05-15]
10-K	[2023-03-29]
10-Q	[2022-11-10]
10-Q	[2022-08-12]
10-Q	[2022-05-12]
10-K	[2022-03-30]
10-Q	[2021-11-12]
10-Q	[2021-08-13]
10-Q	[2021-05-14]
10-K	[2021-03-30]
10-Q	[2020-11-06]
10-Q	[2020-08-07]
10-Q	[2020-05-11]
10-K	[2020-03-13]
10-Q	[2019-11-08]
10-Q	[2019-08-08]
10-Q	[2019-05-09]
10-K	[2019-03-15]
10-Q	[2018-11-08]
10-Q	[2018-08-08]
10-Q	[2018-05-10]
10-K	[2018-03-15]
10-Q	[2017-11-13]
10-Q	[2017-08-14]
10-Q	[2017-05-12]
10-K	[2017-03-29]
10-Q	[2016-11-14]
10-Q	[2016-08-15]
10-Q	[2016-05-13]
10-K	[2016-03-29]
10-Q	[2015-11-13]
10-Q	[2015-08-12]
10-Q	[2015-05-13]
10-K	[2015-03-30]
10-Q	[2014-11-12]
10-Q	[2014-08-12]
10-Q	[2014-05-13]
10-K	[2014-03-26]
10-Q	[2013-11-13]
10-Q	[2013-08-14]
10-Q	[2013-05-15]
10-K	[2013-03-28]
10-Q	[2012-11-14]
10-Q	[2012-08-14]
10-Q	[2012-05-15]
10-K	[2012-03-23]