Exhibit 99.1
EAGLE FINANCIAL SERVICES, INC. ANNOUNCES 2009
ANNUAL AND FOURTH QUARTER FINANCIAL RESULTS
| | | | |
| Contact: | | Kathleen J. Chappell, Vice President and CFO | | 540-955-2510 |
| | | | kchappell@bankofclarke.com |
BERRYVILLE, VIRGINIA(January 29, 2010) – Eagle Financial Services, Inc. (OTC BULLETIN BOARD: EFSI), the holding company for Bank of Clarke County, whose divisions include Eagle Investment Group, announces annual and fourth quarter 2009 financial results. 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 2009 Financial Highlights:
| | | | | | | | |
| | | Q4 | | | Annual | |
Net income (000’s) | | $ | 792 | | | $ | 3,441 | |
Diluted EPS | | $ | 0.25 | | | $ | 1.08 | |
Net Interest Margin | | | 4.52 | % | | | 4.31 | % |
Total equity to assets | | | | | | | 9.65 | % |
Allowance for loan losses to total loans | | | | | | | 1.48 | % |
Total loan growth (000’s) | | | | | | $ | 14.0 | |
Retail deposit growth (000’s) | | | | | | $ | 27.2 | |
John R. Milleson, President and CEO, stated “Although 2009 earnings were not at a desired level of performance, the Bank’s annual results compare favorably to those of its peers. Our 2009 earnings were adversely affected mostly because of two matters: the increase in the Bank’s provision for loan losses and the increase in the Bank’s FDIC premium. Challenging times remain for our economy and the banking industry. The Company will continue its focus on providing sound financial services to the communities it serves while sustaining its conservative approach to banking principles as it has during the past 129 years. I take comfort and pride in the fact that we are an independent, community bank.”
Net Interest Income and Net Interest Margin
Net interest income for the quarter ended December 31, 2009 was $5.5 million which represented an increase of 16.7% when compared to $4.7 million for the same period in 2008. Net interest income for the year ended December 31, 2009 was $20.7 million which represented an increase of 9.2% when compared to $18.9 million in 2008. This increase in net interest income resulted mostly from the decline in the Company’s funding costs.
Total loan interest income was $5.9 million for the quarter ended December 31, 2009, reflecting a decrease of $38,000 from the quarter ended December 31, 2008. Total loan interest income was $23.0 million for the year ended December 31, 2009, reflecting a decrease of $1.8 million from the year ended December 31, 2008. Average loans for the quarter ended December 31, 2009 were $400.0 million compared to $390.4 million for the same period in 2008. Average loans for the year ended December 31, 2009 were $391.4 million compared to $389.9 million for the same period in 2008. The tax equivalent yield on average loans for the quarter ended December 31, 2009 was 5.92%, down 18 basis points from the same time period in 2008. The tax equivalent yield on average loans for the year ended December 31, 2009 was 5.91%, down 48 basis points from the same time period in 2008. Interest income from the investment portfolio was $617,000 for the quarter ended December 31, 2009 and $1.2 million for the same period in 2008. Interest income from the investment portfolio was $4.4 million for the year ended December 31, 2009 and $4.6 million for the same period in 2008.
Total interest expense for the three months ended December 31, 2009 decreased $1.0 million when compared to the three months ended December 31, 2008. Total interest expense for the year ended December 31, 2009 decreased $3.7 million when compared to the year ended December 31, 2008. The average cost of interest bearing liabilities decreased 98 basis points when comparing the quarter ended December 31, 2009 to the same time period in 2008. The average cost of interest bearing liabilities decreased 97 basis points when comparing the year ended December 31, 2009 to the same time period in 2008. The average balance of interest bearing liabilities decreased $1.1 million from the quarter ended December 31, 2008 to the same period in 2009. The average balance of interest bearing liabilities increased $2.9 million from the year ended December 31, 2008 to the same period in 2009.
The net interest margin was 4.52% for the quarter December 31, 2009. When compared to the quarter ended December 31, 2008, the net interest margin increased 54 basis points. The net interest margin was 4.31% for the year ended December 31, 2009. When compared to the year ended December 31, 2008, the net interest margin increased 29 basis points. This increase was attributable to the decreased balance and cost of interest bearing liabilities.
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%.
Asset Quality and Provision for Loan Losses
Provisions for loan losses were $1.5 million for the three months ended December 31, 2009, compared to $1.1 million for the quarter ended December 31, 2008. Provisions for loan losses were $4.4 million for the year ended December 31, 2009, compared to $2.3 million for the year ended December 31, 2008. Given the level of problem loans and continued uncertainty in the economy, the Company deemed it prudent to increase its allowance for loan losses.
Non performing assets increased from $4.6 million or .88% of total assets at December 31, 2008 to $7.9 million or 1.48% of total assets at December 31, 2009. This increase mostly resulted from additions to non accrual loans and other real estate owned. During the fourth quarter of 2009, the Bank placed approximately 21 loans on non accrual status. The majority of these loans is secured by real estate and has allocated specific allowances. Two real estate assets valued at $456,000 had been foreclosed upon during the fourth quarter of 2009 while the Bank also sold two pieces of other real estate owned recorded at $293,000 during the same period. Additionally, an allowance for other real estate owned of $198,000 was established during the fourth quarter of 2009.
Loans greater than 90 days past due decreased from $510,000 at December 31, 2008 to $13,000 at December 31, 2009. The Company realized $376,000 in net charge-offs for the quarter ended December 31, 2009 versus $490,000 for the same period in 2008. The Company realized $2.9 million in net charge-offs for the year ended December 31, 2009 versus $980,000 for the same period in 2008. Early in 2009, the Company developed 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.
Given the current economic environment, it is anticipated there could be an increase in past due loans, non performing loans and other real estate owned. However, the increase is not expected to be as significant as that experienced during 2009. The Company believes that the allowance for loan losses will be maintained at a level adequate to mitigate any negative impact resulting from such increases.
Noninterest Income and Noninterest Expense
Noninterest income was $1.3 million for the quarters ended December 31, 2009 and 2008. Noninterest income was $4.6 million for the years ended December 31, 2009 and 2008. Noninterest expense was $4.4 million and $3.7 million for the quarters ended December 31, 2009 and 2008, respectively. Noninterest expense was $16.5 million and $15.8 million for the years ended December 31, 2009 and 2008, respectively. Despite the impact of the increase in FDIC insurance premiums of $604,000 and the loss provision for other real estate owned of $198,000 for the year ended December 31, 2009, the Company has diligently managed and monitored its other operating expenses.
Total Consolidated Assets
Total consolidated assets of the Company at December 31, 2009 were $535.4 million, which represented an increase of $7.3 million or 1.4% from total assets of $528.1 million at December 31, 2008. Total loans increased $14.0 million from $390.1 million at December 31, 2008 to $404.1 million at December 31, 2009. Considering the current interest rate and competitive market environment, the Company has been conscientious about maintaining both its underwriting standards and its net interest margin and thereby cautious about the growth it has accepted in the loan portfolio.
Deposits and Other Borrowings
Total deposits, which include brokered deposits, increased $11.6 million to $398.1 million at December 31, 2009 from $386.5 million at December 31, 2008. The Company held $9.9 million in brokered deposits at December 31, 2009. At December 31, 2008 brokered deposits were $25.5 million.
Securities sold under agreement to repurchase were $14.0 million at December 31, 2009 and $14.7 million at December 31, 2008. Borrowings with the Federal Home Loan Bank of Atlanta were $62.3 million at December 31, 2009 and $70.0 million at December 31, 2008.
Equity
Shareholders’ equity at December 31, 2009 and December 31, 2008 was $51.6 million and $46.8 million, respectively. The book value of the Company at December 31, 2009 was $16.14 per common share. Total common shares outstanding were 3,199,636 at December 31, 2009. On January 20, 2010, the board of directors declared a $0.17 per common share cash dividend for shareholders of record as of February 1, 2010 and payable on February 16, 2010.
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, 2008, and other filings with the Securities and Exchange Commission.
EAGLE FINANCIAL SERVICES, INC.
KEY STATISTICS
| | | | | | | | | | | | | | | | | | | | |
| | | For the Three Months Ended | |
| | | 4Q09 | | | 3Q09 | | | 2Q09 | | | 1Q09 | | | 4Q08 | |
| | | | | |
Net Income(dollars in thousands) | | $ | 792 | | | $ | 790 | | | $ | 904 | | | $ | 955 | | | $ | 1,715 | |
Earnings per share, basic | | $ | 0.25 | | | $ | 0.25 | | | $ | 0.29 | | | $ | 0.30 | | | $ | 0.54 | |
Earnings per share, diluted | | $ | 0.25 | | | $ | 0.25 | | | $ | 0.28 | | | $ | 0.30 | | | $ | 0.54 | |
| | | | | |
Return on average total assets | | | 0.59 | % | | | 0.60 | % | | | 0.71 | % | | | 0.74 | % | | | 1.31 | % |
Return on average total equity | | | 6.15 | % | | | 6.33 | % | | | 7.80 | % | | | 8.27 | % | | | 15.00 | % |
Dividend payout ratio | | | 68.00 | % | | | 68.00 | % | | | 58.62 | % | | | 56.67 | % | | | 31.48 | % |
Fee revenue as a percent of total revenue | | | 18.06 | % | | | 11.35 | % | | | 15.44 | % | | | 15.13 | % | | | 20.91 | % |
| | | | | |
Net interest margin(1) | | | 4.52 | % | | | 4.51 | % | | | 4.24 | % | | | 3.98 | % | | | 3.98 | % |
Yield on average earning assets | | | 5.67 | % | | | 5.73 | % | | | 5.67 | % | | | 5.66 | % | | | 5.94 | % |
Yield on average interest-bearing liabilities | | | 1.49 | % | | | 1.56 | % | | | 1.82 | % | | | 2.12 | % | | | 2.47 | % |
Net interest spread | | | 4.18 | % | | | 4.17 | % | | | 3.85 | % | | | 3.54 | % | | | 3.47 | % |
Tax equivalent adjustment to net interest income (dollars in thousands) | | $ | 191 | | | $ | 195 | | | $ | 187 | | | $ | 182 | | | $ | 171 | |
| | | | | |
Non-interest income to average assets | | | 0.96 | % | | | 0.67 | % | | | 0.95 | % | | | 0.92 | % | | | 0.96 | % |
Non-interest expense to average assets | | | 3.26 | % | | | 3.20 | % | | | 3.10 | % | | | 2.92 | % | | | 2.87 | % |
| | | | | |
Efficiency ratio(2) | | | 62.43 | % | | | 60.82 | % | | | 62.88 | % | | | 63.04 | % | | | 60.86 | % |
| (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%. For the quarters ended December 31, 2009 and December 31, 2008 net interest income on a tax equivalent basis was $5.7 million and $4.9 million, respectively. For the quarters ended September 30, June 30 and March 31, 2009 net interest income on a tax equivalent basis was $5.6 million, $5.3 million and $4.9 million, respectively. See the table below for a 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. The tax rate utilized is 34%. For the quarters ended December 31, 2009 and December 31, 2008 net interest income on a tax equivalent basis was $5.7 million and $4.9 million, respectively. For the quarters ended September 30, June 30 and March 31, 2009 net interest income on a tax equivalent basis was $5.6 million, $5.3 million and $4.9 million, respectively. See the table below for a reconciliation of net interest income to tax equivalent net interest income. Total non interest income, excluding gains and losses on the investment portfolio, for the quarters ended December 31, 2009 and December 31, 2008, was $1.3 million. Total non interest income, excluding gains and losses on the investment portfolio, for the quarters ended September 30, June 30, and March 31, 2009, was $1.3 million, $1.3 million and $1.2 million, respectively. 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
| | | | | | | | | | | | | | | | | | | | |
| | | 4Q09 | | | 3Q09 | | | 2Q09 | | | 1Q09 | | | 4Q08 | |
BALANCE SHEET RATIOS | | | | | | | | | | | | | | | | | | | | |
Loans to deposits | | | 101.50 | % | | | 104.31 | % | | | 102.20 | % | | | 96.85 | % | | | 100.79 | % |
Average interest-earning assets to average-interest bearing liabilities | | | 129.55 | % | | | 136.59 | % | | | 126.56 | % | | | 125.56 | % | | | 125.86 | % |
PER SHARE DATA | | | | | | | | | | | | | | | | | | | | |
Dividends | | $ | 0.17 | | | $ | 0.17 | | | $ | 0.17 | | | $ | 0.17 | | | $ | 0.17 | |
Book value | | $ | 16.14 | | | $ | 15.88 | | | $ | 15.28 | | | $ | 14.74 | | | $ | 14.79 | |
Tangible book value | | $ | 16.13 | | | $ | 15.88 | | | $ | 15.26 | | | $ | 14.71 | | | $ | 14.76 | |
SHARE PRICE DATA | | | | | | | | | | | | | | | | | | | | |
Closing price | | $ | 15.75 | | | $ | 15.35 | | | $ | 15.00 | | | $ | 14.60 | | | $ | 16.10 | |
Diluted earnings multiple(1) | | | 0.98 | | | | 0.97 | | | | 0.98 | | | | 0.99 | | | | 1.09 | |
Book value multiple(2) | | | 0.98 | | | | 0.97 | | | | 0.98 | | | | 0.99 | | | | 1.09 | |
COMMON STOCK DATA | | | | | | | | | | | | | | | | | | | | |
Outstanding shares at end of period | | | 3,199,636 | | | | 3,190,304 | | | | 3,180,899 | | | | 3,167,250 | | | | 3,166,530 | |
Weighted average shares outstanding | | | 3,194,970 | | | | 3,185,806 | | | | 3,169,197 | | | | 3,162,666 | | | | 3,148,570 | |
Weighted average shares outstanding, diluted | | | 3,202,595 | | | | 3,193,758 | | | | 3,172,659 | | | | 3,166,620 | | | | 3,156,646 | |
CAPITAL RATIOS | | | | | | | | | | | | | | | | | | | | |
Total equity to total assets | | | 9.65 | % | | | 9.72 | % | | | 9.30 | % | | | 8.72 | % | | | 8.87 | % |
CREDIT QUALITY | | | | | | | | | | | | | | | | | | | | |
Net charge-offs to average loans | | | 0.37 | % | | | 0.14 | % | | | 0.43 | % | | | 0.08 | % | | | 0.13 | % |
Total non-performing loans to total loans | | | 1.27 | % | | | 0.34 | % | | | 0.54 | % | | | 1.52 | % | | | 1.00 | % |
Total non-performing assets to total assets | | | 1.48 | % | | | 0.81 | % | | | 0.82 | % | | | 1.30 | % | | | 0.88 | % |
Non-accrual loans to: | | | | | | | | | | | | | | | | | | | | |
total loans | | | 1.26 | % | | | 0.27 | % | | | 0.53 | % | | | 1.10 | % | | | 0.87 | % |
total assets | | | 0.95 | % | | | 0.20 | % | | | 0.39 | % | | | 0.80 | % | | | 0.64 | % |
Allowance for loan losses to: | | | | | | | | | | | | | | | | | | | | |
total loans | | | 1.48 | % | | | 1.25 | % | | | 1.13 | % | | | 1.29 | % | | | 1.16 | % |
non-performing assets | | | 75.46 | % | | | 116.68 | % | | | 102.74 | % | | | 72.12 | % | | | 97.67 | % |
non-accrual loans | | | 117.08 | % | | | 458.66 | % | | | 213.60 | % | | | 116.66 | % | | | 133.56 | % |
NON-PERFORMING ASSETS: | | | | | | | | | | | | | | | | | | | | |
(dollars in thousands) | | | | | | | | | | | | | | | | | | | | |
Loans delinquent over 90 days | | $ | 13 | | | $ | 284 | | | $ | 50 | | | $ | 1,624 | | | $ | 510 | |
Non-accrual loans | | | 5,099 | | | | 1,067 | | | | 2,052 | | | | 4,293 | | | | 3,385 | |
Other real estate owned and repossessed assets | | | 2,799 | | | | 2,845 | | | | 2,164 | | | | 1,027 | | | | 734 | |
NET LOAN CHARGE-OFFS (RECOVERIES): | | | | | | | | | | | | | | | | | | | | |
(dollars in thousands) | | | | | | | | | | | | | | | | | | | | |
Loans charged off | | $ | 448 | | | $ | 617 | | | $ | 1,727 | | | $ | 361 | | | $ | 521 | |
(Recoveries) | | | (72 | ) | | | (79 | ) | | | (52 | ) | | | (48 | ) | | | (31 | ) |
Net charge-offs (recoveries) | | | 376 | | | | 537 | | | | 1,675 | | | | 313 | | | | 490 | |
PROVISION FOR LOAN LOSSES (dollars in thousands) | | $ | 1,450 | | | $ | 1,050 | | | $ | 1,050 | | | $ | 800 | | | $ | 1,100 | |
ALLOWANCE FOR LOAN LOSS SUMMARY | | | | | | | | | | | | | | | | | | | | |
(dollars in thousands) | | | | | | | | | | | | | | | | | | | | |
Balance at the beginning of period | | $ | 4,896 | | | $ | 4,383 | | | $ | 5,008 | | | $ | 4,521 | | | $ | 3,911 | |
Provision | | | 1,450 | | | | 1,050 | | | | 1,050 | | | | 800 | | | | 1,100 | |
Net charge-offs (recoveries) | | | 376 | | | | 537 | | | | 1,675 | | | | 313 | | | | 490 | |
Balance at the end of period | | $ | 5,970 | | | $ | 4,896 | | | $ | 4,383 | | | $ | 5,008 | | | $ | 4,521 | |
| (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
12/31/2009 | | Audited
12/31/2008 | |
| | |
Assets | | | | | | | |
Cash and due from banks | | $ | 7,353 | | $ | 7,287 | |
Federal funds sold | | | 179 | | | 11,052 | |
Securities available for sale, at fair value | | | 101,210 | | | 98,919 | |
Loans, net of allowance for loan losses | | | 398,096 | | | 385,565 | |
Bank premises and equipment, net | | | 14,778 | | | 15,377 | |
Other assets | | | 13,816 | | | 9,942 | |
| | | | | | | |
Total assets | | $ | 535,432 | | $ | 528,142 | |
| | | | | | | |
| | |
Liabilities and Shareholders’ Equity | | | | | | | |
Liabilities | | | | | | | |
Deposits: | | | | | | | |
Noninterest bearing demand deposits | | $ | 90,575 | | $ | 81,340 | |
Savings and interest bearing demand deposits | | | 170,485 | | | 154,622 | |
Time deposits | | | 137,047 | | | 150,565 | |
| | | | | | | |
Total deposits | | $ | 398,107 | | $ | 386,527 | |
Federal funds purchased and securities sold under agreements to repurchase | | | 14,016 | | | 14,693 | |
Federal Home Loan Bank advances | | | 62,250 | | | 70,000 | |
Trust preferred capital notes | | | 7,217 | | | 7,217 | |
Other liabilities | | | 2,198 | | | 2,876 | |
Commitments and contingent liabilities | | | — | | | — | |
| | | | | | | |
Total liabilities | | $ | 483,788 | | $ | 481,313 | |
| | | | | | | |
| | |
Shareholders’ Equity | | | | | | | |
Preferred stock, $10 par value | | $ | — | | $ | — | |
Common stock, $2.50 par value | | | 7,999 | | | 7,888 | |
Surplus | | | 8,504 | | | 7,796 | |
Retained earnings | | | 34,049 | | | 32,779 | |
Accumulated other comprehensive income | | | 1,092 | | | (1,634 | ) |
| | | | | | | |
Total shareholders’ equity | | $ | 51,644 | | $ | 46,829 | |
| | | | | | | |
Total liabilities and shareholders’ equity | | $ | 535,432 | | $ | 528,142 | |
| | | | | | | |
EAGLE FINANCIAL SERVICES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands)
| | | | | | | | | | | | | | | | |
| | | Three Months Ended
December 31, | | | Year Ended
December 31, | |
| | | 2009 | | | 2008 | | | 2009 | | | 2008 | |
| | | Unaudited | | | Unaudited | | | Unaudited | | | Audited | |
Interest and Dividend Income | | | | | | | | | | | | | | | | |
Interest and fees on loans | | $ | 5,934 | | | $ | 5,972 | | | $ | 23,001 | | | $ | 24,790 | |
Interest on federal funds sold | | | 1 | | | | 2 | | | | 10 | | | | 45 | |
Interest and dividends on securities available for sale: | | | | | | | | | | | | | | | | |
Taxable interest income | | | 617 | | | | 757 | | | | 2,784 | | | | 2,766 | |
Interest income exempt from federal income taxes | | | 304 | | | | 271 | | | | 1,194 | | | | 1,142 | |
Dividends | | | 113 | | | | 141 | | | | 461 | | | | 691 | |
Interest on deposits in banks | | | — | | | | 1 | | | | 3 | | | | 5 | |
| | | | | | | | | | | | | | | | |
Total interest and dividend income | | $ | 6,969 | | | $ | 7,144 | | | $ | 27,453 | | | $ | 29,439 | |
| | | | | | | | | | | | | | | | |
Interest Expense | | | | | | | | | | | | | | | | |
Interest on deposits | | $ | 806 | | | $ | 1,551 | | | $ | 4,040 | | | $ | 6,978 | |
Interest on federal funds purchased and securities sold under agreements to repurchase | | | 98 | | | | 113 | | | | 392 | | | | 482 | |
Interest on Federal Home Loan Bank advances | | | 464 | | | | 670 | | | | 2,042 | | | | 2,706 | |
Interest on trust preferred capital notes | | | 80 | | | | 80 | | | | 319 | | | | 346 | |
| | | | | | | | | | | | | | | | |
Total interest expense | | $ | 1,448 | | | $ | 2,414 | | | $ | 6,793 | | | $ | 10,512 | |
| | | | | | | | | | | | | | | | |
Net interest income | | $ | 5,521 | | | $ | 4,730 | | | $ | 20,660 | | | $ | 18,927 | |
Provision For Loan Losses | | | 1,450 | | | | 1,100 | | | | 4,350 | | | | 2,310 | |
| | | | | | | | | | | | | | | | |
Net interest income after provision for loan losses | | $ | 4,071 | | | $ | 3,630 | | | $ | 16,310 | | | $ | 16,617 | |
| | | | | | | | | | | | | | | | |
Noninterest Income | | | | | | | | | | | | | | | | |
Income from fiduciary activities | | $ | 174 | | | $ | 211 | | | $ | 818 | | | $ | 911 | |
Service charges on deposit accounts | | | 522 | | | | 567 | | | | 2,053 | | | | 2,333 | |
Other service charges and fees | | | 534 | | | | 473 | | | | 2,148 | | | | 2,565 | |
Gain on the sale of loans | | | — | | | | — | | | | — | | | | 376 | |
(Loss) Gain on the sale of bank premises and equipment | | | (5 | ) | | | — | | | | (5 | ) | | | 742 | |
(Loss) on the sale of repossessed assets | | | 15 | | | | 28 | | | | (35 | ) | | | (42 | ) |
(Loss) on sales of AFS securities | | | 20 | | | | — | | | | (419 | ) | | | (2,488 | ) |
Other operating income | | | 29 | | | | (26 | ) | | | 66 | | | | 212 | |
| | | | | | | | | | | | | | | | |
Total noninterest income | | $ | 1,289 | | | $ | 1,253 | | | $ | 4,626 | | | $ | 4,609 | |
| | | | | | | | | | | | | | | | |
Noninterest Expenses | | | | | | | | | | | | | | | | |
Salaries and employee benefits | | $ | 2,312 | | | $ | 2,122 | | | $ | 9,262 | | | $ | 9,069 | |
Occupancy expenses | | | 134 | | | | 288 | | | | 1,069 | | | | 1,189 | |
Equipment expenses | | | 153 | | | | 181 | | | | 666 | | | | 700 | |
Advertising and marketing expenses | | | 85 | | | | 115 | | | | 409 | | | | 406 | |
Stationery and supplies | | | 94 | | | | 82 | | | | 311 | | | | 326 | |
ATM network fees | | | 20 | | | | (18 | ) | | | 104 | | | | 323 | |
FDIC assessment | | | 216 | | | | 62 | | | | 801 | | | | 197 | |
Provision for other real estate owned | | | 198 | | | | — | | | | 198 | | | | — | |
Other operating expenses | | | 1,152 | | | | 913 | | | | 3,660 | | | | 3,604 | |
| | | | | | | | | | | | | | | | |
Total noninterest expenses | | $ | 4,364 | | | $ | 3,745 | | | $ | 16,480 | | | $ | 15,814 | |
| | | | | | | | | | | | | | | | |
Income before income taxes | | $ | 996 | | | $ | 1,138 | | | $ | 4,456 | | | $ | 5,412 | |
Income Tax Expense | | | 204 | | | | (577 | ) | | | 1,015 | | | | 1,357 | |
| | | | | | | | | | | | | | | | |
Net income | | $ | 792 | | | $ | 1,715 | | | $ | 3,441 | | | $ | 4,055 | |
| | | | | | | | | | | | | | | | |
Earnings Per Share | | | | | | | | | | | | | | | | |
Net income per common share, basic | | $ | 0.25 | | | $ | 0.54 | | | $ | 1.09 | | | $ | 1.29 | |
| | | | | | | | | | | | | | | | |
Net income per common share, diluted | | $ | 0.25 | | | $ | 0.54 | | | $ | 1.08 | | | $ | 1.29 | |
| | | | | | | | | | | | | | | | |
EAGLE FINANCIAL SERVICES, INC.
Average Balances, Income and Expenses, Yields and Rates
(dollars in thousands)
| | | | | | | | | | | | | | | | |
| | | For the Three Months Ended December, | |
| | | 2009 | | | 2008 | |
| | | Average
Balance | | | Interest
Income/
Expense | | Average
Rate | | | Average
Balance | | | Interest
Income/
Expense | | Average
Rate | |
Assets: | | | | | | | | | | | | | | | | |
Securities: | | | | | | | | | | | | | | | | |
Taxable | | 65,116 | | | 2,897 | | 4.45 | % | | 66,448 | | | 3,563 | | 5.36 | % |
Tax-Exempt(1) | | 32,872 | | | 1,827 | | 5.56 | % | | 29,820 | | | 1,629 | | 5.46 | % |
| | | | | | | | | | | | | | | | |
Total Securities | | 97,988 | | | 4,724 | | 4.82 | % | | 96,268 | | | 5,192 | | 5.39 | % |
Loans: | | | | | | | | | | | | | | | | |
Taxable | | 394,194 | | | 23,271 | | 5.90 | % | | 385,022 | | | 23,451 | | 6.09 | % |
Tax-Exempt(1) | | 5,808 | | | 410 | | 7.06 | % | | 5,348 | | | 364 | | 6.81 | % |
| | | | | | | | | | | | | | | | |
Total Loans | | 400,002 | | | 23,681 | | 5.92 | % | | 390,370 | | | 23,815 | | 6.10 | % |
Federal funds sold | | 3,073 | | | 4 | | 0.13 | % | | 1,623 | | | 8 | | 0.49 | % |
Interest-bearing deposits in other banks | | 177 | | | — | | 0.00 | % | | 124 | | | 4 | | 3.23 | % |
| | | | | | | | | | | | | | | | |
Total earning assets | | 501,240 | | | 28,408 | | 5.67 | % | | 488,385 | | | 29,019 | | 5.94 | % |
| | | | | | | | | | | | | | | | |
Allowance for loan losses | | (5,222 | ) | | | | | | | (3,856 | ) | | | | | |
Total non-earning assets | | 34,881 | | | | | | | | 33,380 | | | | | | |
| | | | | | | | | | | | | | | | |
Total assets | | 530,899 | | | | | | | | 517,909 | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | |
Liabilities and Shareholders’ Equity: | | | | | | | | | | | | | | | | |
Interest-bearing deposits: | | | | | | | | | | | | | | | | |
NOW accounts | | 66,525 | | | 307 | | 0.46 | % | | 56,762 | | | 554 | | 0.98 | % |
Money market accounts | | 61,233 | | | 443 | | 0.72 | % | | 55,341 | | | 942 | | 1.70 | % |
Savings accounts | | 36,927 | | | 72 | | 0.19 | % | | 33,855 | | | 193 | | 0.57 | % |
Time deposits: | | | | | | | | | | | | | | | | |
$100,000 and more | | 46,328 | | | 755 | | 1.62 | % | | 61,083 | | | 1,881 | | 3.08 | % |
Less than $100,000 | | 90,998 | | | 1,621 | | 1.78 | % | | 82,106 | | | 2,582 | | 3.14 | % |
| | | | | | | | | | | | | | | | |
Total interest-bearing deposits | | 302,011 | | | 3,198 | | 1.06 | % | | 289,147 | | | 6,152 | | 2.13 | % |
Federal funds purchased and securities sold under agreements to repurchase | | 15,426 | | | 390 | | 5.23 | % | | 17,584 | | | 451 | | 2.56 | % |
Federal Home Loan Bank advances | | 62,250 | | | 1,843 | | 2.96 | % | | 74,076 | | | 2,658 | | 3.59 | % |
Trust preferred capital notes | | 7,217 | | | 317 | | 4.40 | % | | 7,217 | | | 317 | | 4.39 | % |
| | | | | | | | | | | | | | | | |
Total interest-bearing liabilities | | 386,904 | | | 5,747 | | 1.49 | % | | 388,024 | | | 9,578 | | 2.47 | % |
| | | | | | | | | | | | | | | | |
Noninterest-bearing liabilities: | | | | | | | | | | | | | | | | |
Demand deposits | | 89,016 | | | | | | | | 81,802 | | | | | | |
Other Liabilities | | 3,910 | | | | | | | | 2,715 | | | | | | |
| | | | | | | | | | | | | | | | |
Total liabilities | | 479,830 | | | | | | | | 472,541 | | | | | | |
Shareholders’ equity | | 51,069 | | | | | | | | 45,368 | | | | | | |
| | | | | | | | | | | | | | | | |
Total liabilities and shareholders’ equity | | 530,899 | | | | | | | | 517,909 | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Net interest income | | | | | 22,661 | | | | | | | | 19,441 | | | |
| | | | | | | | | | | | | | | | |
Net interest spread | | | | | | | 4.18 | % | | | | | | | 3.47 | % |
Interest expense as a percent of average earning assets | | | | | | | 1.15 | % | | | | | | | 1.96 | % |
Net interest margin | | | | | | | 4.52 | % | | | | | | | 3.98 | % |
| (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, | |
| | | 2009 | | | 2008 | |
| | | Average
Balance | | | Interest
Income/
Expense | | Average
Rate | | | Average
Balance | | | Interest
Income/
Expense | | Average
Rate | |
Assets: | | | | | | | | | | | | | | | | |
Securities: | | | | | | | | | | | | | | | | |
Taxable | | 67,341 | | | 3,246 | | 4.82 | % | | 65,099 | | | 3,457 | | 5.31 | % |
Tax-Exempt(1) | | 32,460 | | | 1,809 | | 5.57 | % | | 30,566 | | | 1,731 | | 5.67 | % |
| | | | | | | | | | | | | | | | |
Total Securities | | 99,801 | | | 5,055 | | 5.06 | % | | 95,665 | | | 5,188 | | 5.42 | % |
Loans: | | | | | | | | | | | | | | | | |
Taxable | | 385,423 | | | 22,729 | | 5.90 | % | | 385,214 | | | 24,575 | | 6.38 | % |
Tax-Exempt(1) | | 5,974 | | | 413 | | 6.92 | % | | 4,651 | | | 325 | | 6.99 | % |
| | | | | | | | | | | | | | | | |
Total Loans | | 391,397 | | | 23,142 | | 5.91 | % | | 389,865 | | | 24,900 | | 6.39 | % |
Federal funds sold | | 4,937 | | | 10 | | 0.21 | % | | 2,195 | | | 45 | | 2.05 | % |
Interest-bearing deposits in other banks | | 222 | | | 3 | | 1.20 | % | | 198 | | | 5 | | 2.53 | % |
| | | | | | | | | | | | | | | | |
Total earning assets | | 496,357 | | | 28,209 | | 5.68 | % | | 487,923 | | | 30,138 | | 6.18 | % |
| | | | | | | | | | | | | | | | |
Allowance for loan losses | | (4,673 | ) | | | | | | | (3,466 | ) | | | | | |
Total non-earning assets | | 34,649 | | | | | | | | 31,714 | | | | | | |
| | | | | | | | | | | | | | | | |
Total assets | | 526,333 | | | | | | | | 516,171 | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | |
Liabilities and Shareholders’ Equity: | | | | | | | | | | | | | | | | |
Interest-bearing deposits: | | | | | | | | | | | | | | | | |
NOW accounts | | 60,338 | | | 306 | | 0.51 | % | | 60,774 | | | 680 | | 1.12 | % |
Money market accounts | | 60,001 | | | 543 | | 0.90 | % | | 52,464 | | | 975 | | 1.86 | % |
Savings accounts | | 36,160 | | | 108 | | 0.30 | % | | 33,748 | | | 214 | | 0.63 | % |
Time deposits: | | | | | | | | | | | | | | | | |
$100,000 and more | | 51,455 | | | 1,941 | | 3.77 | % | | 68,732 | | | 2,451 | | 3.57 | % |
Less than $100,000 | | 94,523 | | | 1,142 | | 1.21 | % | | 74,445 | | | 2,658 | | 3.57 | % |
| | | | | | | | | | | | | | | | |
Total interest-bearing deposits | | 302,477 | | | 4,040 | | 1.34 | % | | 290,163 | | | 6,978 | | 2.40 | % |
Federal funds purchased and securities sold under agreements to repurchase | | 15,736 | | | 392 | | 2.49 | % | | 17,119 | | | 482 | | 2.82 | % |
Federal Home Loan Bank advances | | 63,709 | | | 2,042 | | 3.21 | % | | 71,762 | | | 2,706 | | 3.77 | % |
Trust preferred capital notes | | 7,217 | | | 319 | | 4.42 | % | | 7,217 | | | 346 | | 4.79 | % |
| | | | | | | | | | | | | | | | |
Total interest-bearing liabilities | | 389,139 | | | 6,793 | | 1.75 | % | | 386,261 | | | 10,512 | | 2.72 | % |
| | | | | | | | | | | | | | | | |
Noninterest-bearing liabilities: | | | | | | | | | | | | | | | | |
Demand deposits | | 84,876 | | | | | | | | 81,033 | | | | | | |
Other Liabilities | | 3,478 | | | | | | | | 2,823 | | | | | | |
| | | | | | | | | | | | | | | | |
Total liabilities | | 477,492 | | | | | | | | 470,117 | | | | | | |
Shareholders’ equity | | 48,841 | | | | | | | | 46,054 | | | | | | |
| | | | | | | | | | | | | | | | |
Total liabilities and shareholders’ equity | | 526,333 | | | | | | | | 516,171 | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Net interest income | | | | | 21,416 | | | | | | | | 19,626 | | | |
| | | | | | | | | | | | | | | | |
| | | | | | |
Net interest spread | | | | | | | 3.93 | % | | | | | | | 3.46 | % |
Interest expense as a percent of average earning assets | | | | | | | 1.37 | % | | | | | | | 2.15 | % |
Net interest margin | | | | | | | 4.31 | % | | | | | | | 4.02 | % |
| (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 |
| | | 12/31/2009 | | 9/30/2009 | | 6/30/2009 | | 3/31/2009 | | 12/31/2008 |
| | | | | |
GAAP Financial Measurements: | | | | | | | | | | | | | | | |
Interest Income - Loans | | $ | 5,934 | | $ | 5,765 | | $ | 5,698 | | $ | 5,604 | | $ | 5,972 |
Interest Income - Securities and Other Interest-Earnings Assets | | | 1,035 | | | 1,092 | | | 1,170 | | | 1,155 | | | 1,172 |
Interest Expense - Deposits | | | 806 | | | 826 | | | 1,080 | | | 1,328 | | | 1,551 |
Interest Expense - Other Borrowings | | | 642 | | | 668 | | | 704 | | | 739 | | | 863 |
| | | | | | | | | | | | | | | |
Total Net Interest Income | | $ | 5,521 | | $ | 5,363 | | $ | 5,084 | | $ | 4,692 | | $ | 4,730 |
| | | | | |
Non-GAAP Financial Measurements: | | | | | | | | | | | | | | | |
Add: Tax Benefit on Tax-Exempt Interest Income - Loans | | $ | 35 | | $ | 37 | | $ | 33 | | $ | 35 | | $ | 31 |
Add: Tax Benefit on Tax-Exempt Interest Income - Securities | | | 156 | | | 158 | | | 154 | | | 147 | | | 140 |
| | | | | | | | | | | | | | | |
Total Tax Benefit on Tax-Exempt Interest Income | | $ | 191 | | $ | 195 | | $ | 187 | | $ | 182 | | $ | 171 |
| | | | | | | | | | | | | | | |
Tax-Equivalent Net Interest Income | | $ | 5,712 | | $ | 5,558 | | $ | 5,271 | | $ | 4,874 | | $ | 4,901 |
| | | | | | | | | | | | | | | |
