UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 - ------------------------------------------------------------------------------- Form 10-Q X Quarterly Report Under Section 13 or 15(d) of the Securities --------- Exchange Act of 1934 For the quarterly period ended September 30, 1999 Transition Report Under Section 13 or 15(d) of the Exchange --------- Act - ------------------------------------------------------------------------------- EAGLE FINANCIAL SERVICES, INC (Exact name of registrant as specified in its charter) Virginia 54-1601306 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) Post Office Box 391 Berryville, Virginia 22611 (Address of principal executive offices) (Zip Code) (540) 955-2510 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all documents and 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 [X] No [ ] The number of shares of the Registrant's Common Stock ($2.50 par value) outstanding as of November 12,1999 was 1,425,191. 1 EAGLE FINANCIAL SERVICES, INC. INDEX TO FORM 10-Q PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) ............................ 3 Consolidated Balance Sheets as of September 30, 1999 and December 31, 1998 ................ 3 Consolidated Statements of Income for the Three and Nine Months Ended September 30, 1999 and 1998 ....... 4 Consolidated Statements of Shareholders' Equity for the Nine Months Ended September 30, 1999 and 1998 ....... 5 Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 1999 and 1998 ....... 6 Notes to Consolidated Financial Statements .............. 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations ............... 8 Item 3. Quantitative and Qualitative Disclosures about Market Risk ........................................... 9 PART II. OTHER INFORMATION Item 1. Legal Proceedings ...........................................10 Item 2. Changes in Securities .......................................10 Item 3. Defaults Upon Senior Securities .............................10 Item 4. Submission of Matters to a Vote of Security Holders .........10 Item 5. Other Information ...........................................10 Item 6. Exhibits and reports on Form 8-K ............................11 2 PART I. FINANCIAL INFORMATION Item 1. Financial Statements Eagle Financial Services, Inc. and Subsidiary Consolidated Balance Sheets As of September 30, 1999 and December 31, 1998 Sept 30, 1999 Dec 31, 1998 --------------- --------------- Assets Cash and due from banks $ 5,732,737 $ 5,313,475 Federal funds sold 0 2,323,000 Securities (fair value: 1999, $40,836,678; 1998, $43,239,752) 41,574,196 43,081,952 Loans, net of unearned discounts 113,970,587 95,933,498 Less allowance for loan losses (1,964,445) (925,171) --------------- --------------- Net loans $ 112,922,620 $ 95,008,327 Bank premises and equipment, net 3,976,458 4,117,903 Other assets 3,715,789 3,279,902 --------------- --------------- Total assets $ 167,921,800 $ 153,124,559 =============== =============== Liabilities and Shareholders' Equity Liabilities Deposits: Noninterest bearing demand deposits $ 25,005,831 $ 21,289,370 Interest bearing demand deposits, money market and savings accounts 53,375,636 50,933,486 Time deposits 56,439,089 57,987,032 --------------- --------------- Total deposits $ 134,820,556 $ 130,209,888 Federal funds purchased and securities sold under agreements to repurchase 10,197,792 695,915 Federal Home Loan Bank advances 5,000,000 5,000,000 Other liabilities 896,320 1,025,255 Commitments and contingent liabilities 0 0 --------------- --------------- Total liabilities $ 150,914,668 $ 136,931,058 -------------- --------------- Shareholders' Equity Preferred Stock, $10 par value; 500,000 shares authorized and unissued $ 0 $ 0 Common Stock, $2.50 par value; authorized 5,000,000 shares; issued 1999, 1,424,326; issued 1998, 1,418,341 shares 3,560,815 3,545,853 Surplus 2,451,838 2,307,615 Retained Earnings 11,122,966 10,262,104 Accumulated other comprehensive income (128,487) 77,929 --------------- --------------- Total shareholders' equity $ 17,007,132 $ 16,193,501 --------------- --------------- Total liabilities and shareholders' equity $ 167,921,800 $ 153,124,559 =============== =============== 3 Eagle Financial Services, Inc. and Subsidiary Consolidated Statements of Income For the Periods Ended September 30, 1999 and 1998 Three Months Ended Nine Months Ended September 30 September 30 1999 1998 1999 1998 --------------- --------------- --------------- --------------- Interest Income Interest and fees on loans $ 2,222,801 $ 1,837,649 $ 6,265,983 $ 5,327,780 Interest on federal funds sold 826 26,820 14,426 92,414 Interest on securities held to maturity: Taxable interest income 297,335 496,989 864,020 1,489,112 Interest income exempt from federal income taxes 117,959 58,707 324,538 145,168 Interest and dividends on securities available for sale: Taxable interest income 141,471 28,191 461,699 112,150 Interest income exempt from federal income taxes 7,106 0 17,970 0 Dividends 28,291 18,400 78,319 51,098 Interest on deposits in banks 407 444 898 1,514 --------------- --------------- --------------- --------------- Total interest income $ 2,816,196 $ 2,467,200 $ 8,027,853 $ 7,219,236 --------------- --------------- --------------- --------------- Interest Expense Interest on deposits $ 999,097 $ 1,082,540 $ 2,896,336 $ 3,148,836 Interest on federal funds purchased and securities sold under agreements to repurchase 75,455 4,297 132,476 6,130 Interest on Federal Home Loan Bank advances 63,122 0 187,308 0 --------------- --------------- --------------- --------------- Total interest expense $ 1,137,674 $ 1,086,837 $ 3,216,120 $ 3,154,966 --------------- --------------- --------------- --------------- Net interest income $ 1,678,522 $ 1,380,363 $ 4,811,733 $ 4,064,270 Provision For Loan Losses 80,000 65,000 230,000 202,500 --------------- --------------- --------------- --------------- Net interest income after provision for loan losses $ 1,598,522 $ 1,315,363 $ 4,581,733 $ 3,861,770 --------------- --------------- --------------- --------------- Other Income Trust Department income $ 99,602 $ 85,334 $ 263,788 $ 261,694 Service charges on deposits 192,150 137,670 475,556 409,764 Other service charges and fees 252,553 93,990 668,612 260,279 Gain (loss) on equity investment (4,194) (1,774) (7,511) (3,284) Other operating income 28,831 128,082 90,426 330,566 --------------- --------------- --------------- --------------- $ 568,942 $ 443,302 1,490,871 1,259,019 --------------- --------------- --------------- --------------- Other Expenses Salaries and wages $ 683,186 $ 594,866 $ 1,993,103 $ 1,726,812 Pension and other employee benefits 140,987 149,884 341,499 440,171 Occupancy expenses 103,563 69,970 324,565 277,493 Equipment expenses 139,621 113,511 406,478 358,746 Stationary and supplies 49,460 34,728 150,484 141,929 Postage 34,164 30,332 103,535 96,080 Credit card expense 52,744 35,724 130,459 118,836 Bank franchise tax 25,692 31,793 75,948 79,793 ATM network fees 63,130 30,083 131,389 69,147 Other operating expenses 255,592 210,542 756,761 609,491 --------------- --------------- --------------- --------------- $ 1,548,139 $ 1,301,433 $ 4,414,221 $ 3,918,498 --------------- --------------- --------------- --------------- Income before income taxes $ 619,325 $ 457,232 $ 1,658,383 $ 1,202,291 Income Tax Expense 163,979 108,831 399,825 262,394 --------------- --------------- --------------- --------------- Net Income $ 455,346 $ 348,401 $ 1,258,558 $ 939,897 =============== =============== =============== =============== Net income per common share, basic and diluted $ 0.32 $ 0.25 $ 0.89 $ 0.67 =============== =============== =============== =============== 4 Eagle Financial Services, Inc. and Subsidiary Consolidated Statements of Shareholders' Equity For the Nine Months Ended September 30, 1999 and 1998 Accumulated Other Common Retained Comprehensive Comprehensive Stock Surplus Earnings Income (Loss) Income Total ------------ ------------ ------------ ------------ ------------ -------------- Balance, December 31, 1997 $ 3,521,213 $ 2,107,826 $ 9,419,266 $ 9,810 $ 15,058,115 Comprehensive income: Net income 939,897 $ 939,897 939,897 Other comprehensive income: Unrealized gain on securities available for sale, net of deferred income taxes of $17,964 34,872 34,872 34,872 ------------ Total comprehensive income $ 974,769 ============ Issuance of common stock, dividend investment plan (5,683 shares) 14,208 124,321 138,529 Dividends declared ($0.16 per share) (338,499) (338,499) Fractional shares purchased (7) (76) (83) ------------ ------------ ------------ ------------ -------------- Balance, September 30, 1998 $ 3,535,414 $ 2,232,071 $10,020,664 $ 44,682 $ 15,832,831 ============ ============ ============ ============ ============== Balance, December 31, 1998 $ 3,545,853 $ 2,307,615 $10,262,104 $ 77,929 $16,193,501 Comprehensive income: Net income 1,258,558 $ 1,258,558 1,258,558 Other comprehensive income: Unrealized (loss) on securities available for sale, net of deferred income taxes of $106,336 (206,416) (206,416) (206,416) ------------ Total comprehensive income $ 1,052,142 ============ Issuance of common stock, dividend investment plan (5,991 shares) 14,976 144,375 159,351 Dividends declared ($0.28 per share) (397,696) (397,696) Fractional shares purchased (14) (152) (166) ------------ ------------ ------------ ----------- ------------ Balance, September 30, 1999 $ 3,560,815 $ 2,451,838 $11,122,966 $ (128,487) $17,007,132 ============ ============ ============ =========== ============= 5 Eagle Financial Services, Inc. and Subsidiary Consolidated Statements of Cash Flows For the Nine Months Ended September 30, 1999 and 1998 Nine Months Ended September 30 1999 1998 ------------- ------------- Cash Flows from Operating Activities Net income $ 1,258,558 $ 939,897 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 335,304 276,209 Amortization of intangible assets 42,149 38,113 Loss on equity investment 7,511 3,284 Provision for loan losses 230,000 202,500 Premium amortization (discount accretion) on securities, net 60,516 (8,375) Changes in assets and liabilities: (Increase) in other assets (523,798) (100,787) (Decrease) in other liabilities (22,599) (46,533) ------------- ------------- Net cash provided by operating activities $ 1,387,641 $ 1,304,308 ------------- ------------- Cash Flows from Investing Activities Proceeds from maturities and principal payments on securities held to maturity $ 6,793,349 $ 17,394,343 Proceeds from maturities and principal payments on securities available for sale 4,123,775 2,132,000 Purchases of securities held to maturity (8,453,579) (23,217,798) Purchases of securities available for sale (1,329,057) (460,688) Purchases of bank premises and equipment (155,608) (333,260) Proceeds from sale of other real estate owned 0 0 Net (increase) decrease in loans (18,144,293) (8,615,879) ------------- ------------- Net cash (used in) investing activities $(17,165,413) $(13,101,282) ------------- ------------- Cash Flows from Financing Activities Net increase in demand deposits, money market and savings accounts $ 6,158,611 $ 5,474,887 Net increase (decrease) in certificates of deposits (1,547,943) 2,212,712 Net increase in federal funds purchased and securities sold under agreements to repurchase 9,501,877 1,766,911 Cash dividends paid (238,345) (199,970) Fractional shares purchased (166) (83) ------------- ------------- Net cash provided by financing activities $ 13,874,034 $ 9,254,457 ------------- ------------- Increase (decrease) in cash and cash equivalents $ (1,903,738) $ (2,542,518) Cash and Cash Equivalents Beginning 7,636,475 7,542,309 ------------- ------------- Ending $ 5,732,737 $ 4,999,791 ============= ============= Supplemental Disclosures of Cash Flow Information Cash payments for: Interest $ 3,251,490 $ 3,283,453 ============= ============= Income taxes $ 505,627 $ 157,073 ============= ============= Supplemental Schedule of Non-Cash Investing and Financing Activities: Issuance of common stock, dividend investment plan $ 159,351 $ 138,529 ============= ============= Unrealized gain (loss) on securities available for sale $ (312,752) $ 52,836 ============= ============= Other real estate acquired in Settlement of loans $ 0 $ 16,495 ============= ============= 6 EAGLE FINANCIAL SERVICES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS September 30, 1999 (1) The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principals from interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles. (2) In the opinion of management, the accompanying unaudited financial statements contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the financial position as of September 30, 1999 and December 31, 1998, and the results of operations and cash flows for the three months and nine months ended September 30, 1999 and 1998. The statements should be read in conjunction with the Notes to Financial Statements included in the Company's Annual Report for the year ended December 31, 1998. (3) The results of operations for the three and nine month periods ended September 30, 1999 and 1998, are not necessarily indicative of the results to be expected for the full year. (4) Securities held to maturity and available for sale as of September 30, 1999 and December 31, 1998, are: Sep 30, 1999 Dec 31, 1998 Held to Maturity Amortized Cost Amortized Cost - ---------------- -------------- -------------- U.S. Treasury securities $ 121,982 $ 121,981 Obligations of U.S. government corporations and agencies 3,510,100 6,490,582 Mortgage-backed securities 9,990,102 10,609,645 Obligations of states and political subdivisions 16,651,672 11,445,246 -------------- -------------- $ 30,273,856 $ 28,667,454 ============== ============== Sep 30, 1999 Dec 31, 1998 Fair Value Fair Value -------------- -------------- U.S. Treasury securities $ 126,155 $ 132,256 Obligations of U.S. government corporations and agencies 3,471,250 6,577,962 Mortgage-backed securities 9,710,621 10,588,410 Obligations of states and political subdivisions 16,228,312 11,526,626 -------------- -------------- $ 29,536,338 $ 28,825,254 ============== ============== Sep 30, 1999 Dec 31, 1998 Available for Sale Amortized Cost Amortized Cost - ------------------ -------------- -------------- Obligations of U.S. government corporations and agencies $ 4,153,346 $ 5,150,116 Mortgage-backed securities 4,988,611 7,421,338 Obligations of states and political Subdivisions 687,172 497,157 Other 1,665,888 1,227,812 -------------- -------------- $ 11,495,017 $ 14,296,423 ============== ============== Sep 30, 1999 Dec 31, 1998 Fair Value Fair Value -------------- -------------- Obligations of U.S. government corporations and agencies $ 4,146,927 $ 5,226,059 Mortgage-backed securities 4,859,609 7,438,446 Obligations of states and political Subdivisions 662,341 498,268 Other 1,631,463 1,251,725 -------------- -------------- $ 11,300,340 $ 14,414,498 ============== ============== (5) Net loans at September 30, 1999 and December 31, 1998 are summarized as follows (In Thousands): Sep 30, 1999 Dec 31, 1998 --------------- --------------- Loans secured by real estate: Construction and land development $ 3,055 $ 2,168 Secured by farmland 6,679 3,565 Secured by 1-4 family residential 59,326 51,444 Nonfarm, nonresidential loans 19,649 16,902 Loans to finance agricultural production 545 745 Commercial and industrial loans 9,055 6,463 Loans to individuals 14,344 13,603 Loans to U.S. state and political subdivisions 1,275 1,093 All other loans 95 100 --------------- --------------- Gross loans $ 114,023 $ 96,083 Less: Unearned income (52) (150) Allowance for loan losses (1,048) (925) --------------- --------------- Loans, net $ 112,923 $ 95,008 =============== =============== (6) Allowance for Loan Losses Sep 30, 1999 Sep 30, 1998 Dec 31, 1998 -------------- -------------- -------------- Balance, beginning $ 925,171 $ 748,558 $ 748,558 Provision charged to operating expense 230,000 202,500 371,886 Recoveries added to the allowance 80,978 82,551 98,208 Loan losses charged to the allowance (188,182) (203,633) (293,481) -------------- -------------- -------------- Balance, ending $ 1,047,967 $ 829,976 $ 925,171 ============== ============== ============== (7) New Accounting Pronouncements There are no new accounting pronouncements to disclose within this Form 10-Q. 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations PERFORMANCE SUMMARY Net income of the company for the first nine months of 1999 and 1998 was $1,258,558 and $939,897, respectively. This is an increase of $318,661 or 33.90%. Net interest income after provision for loan losses for the first nine months of 1999 and 1998 was $4,581,733 and $3,861,770, respectively. This is an increase of $719,963 or 18.64%. Total other income increased $231,852 or 18.42% from $1,259,019 for the first nine months of 1998 to $1,490,871 for the first nine months of 1999. Total other expenses increased $495,723 or 12.65% from $3,918,498 during the first nine months of 1998 to $4,414,221 during the first nine months of 1999. Earnings per common share outstanding (basic and diluted) was $0.89 and $0.67 for the nine months ended September 30, 1999 and 1998, respectively. Annualized return on average assets for the nine month periods ended September 30, 1999 and 1998 was 1.07% and 0.91%, respectively. Annualized return on average equity for the nine month periods ended September 30, 1999 and 1998 was 10.14% and 8.14%, respectively. PROVISION AND ALLOWANCE FOR LOAN LOSSES The provision for loan losses is based upon management's estimate of the amount required to maintain an adequate allowance for loan losses reflective of the risks in the loan portfolio. The Company reviews the adequacy of the allowance for loan losses monthly and utilizes the results of these evaluations to establish the provision for loan losses. The allowance is maintained at a level believed by management to absorb potential losses in the loan portfolio. The methodology considers specific identifications, specific and estimate pools, trends in delinquencies, local and regional economic trends, concentrations, commitments, off balance sheet exposure and other factors. The provision for loan losses for the nine month periods ended September 30, 1999 and 1998 increased $27,500 from $202,500 in 1998 to $230,000 in 1999. The allowance for loan losses increased $122,796 or 13.27% during the first nine months of 1999 from $925,171 at December 31, 1998 to $1,047,967 at September 30, 1999. The allowance as a percentage of total loans decreased from 0.96% as of December 31, 1998 to 0.92% as of September 30, 1999. The Company had net charge-offs of $107,204 and $121,082 for the first nine months of 1999 and 1998, respectively. The ratio of net charge-offs to average loans decreased from 0.15% for the first nine months of 1998 to 0.10% for the first nine months of 1999. The coverage of the allowance for loan losses over non-performing assets and loans 90 days past due and still accruing interest increased from 154.36% at December 31, 1998 to 230.93% at September 30, 1999. Loans past due greater than 90 days and still accruing interest decreased from $372,101 at December 31, 1998 to $315,601 at September 30, 1999. Loans are viewed as potential problem loans when management questions the ability of the borrower to comply with current repayment terms. These loans are subject to constant review by management and their status is reviewed on a regular basis. The amount of problem loans as of September 30, 1999 was $860,639. Most of these loans are well secured and management expects to incur only immaterial losses on their disposition. BALANCE SHEET Total assets increased $14.8 million or 9.66% from $153.1 million at December 31, 1998 to $167.9 million at September 30, 1999. Securities decreased $1.5 million or 3.50% during the first nine months of 1999 from $43.1 million at December 31, 1998 to $41.6 million at September 30, 1999. Loans, net of unearned discounts increased $18.1 million or 18.80% during the same period from $95.9 million at December 31, 1998 to $114.0 million at September 30, 1999. Total liabilities increased $14.0 million or 10.21% during the first nine months of 1999 from $136.9 million at December 31, 1998 to $150.9 million at September 30, 1999. Total deposits increased $4.6 million or 3.54% during the same period from $130.2 at December 31, 1998 to $134.8 million at September 30, 1999. Total shareholders' equity increased $0.8 million or 5.02% during the first nine months of 1999 from $16.2 million at December 31, 1998 to $17.0 million at September 30, 1999. SHAREHOLDERS' EQUITY The Company continues to be a well capitalized financial institution. Shareholders' equity per share increased $0.52 or 4.55% from $11.42 per share at December 31, 1998 to $11.94 per share at September 30, 1999. During 1998 the Company paid $0.33 per share in dividends. The Company's 1999 total dividends for the first three quarters was $0.28 per share. The Company has a Dividend Investment Plan that reinvests the dividends of participating shareholders in Company stock. LIQUIDITY AND MARKET RISK Asset and liability management assures liquidity and maintains the balance between rate sensitive assets and liabilities. Liquidity management involves meeting the present and future financial obligations of the Company with the sale or maturity of assets or through the occurrence of additional liabilities. Liquidity needs are met with cash on hand, deposits in banks, federal funds sold, securities classified as available for sale and loans maturing within one year. Total liquid assets were $40.6 million at September 30, 1999 and $44.3 million at December 31, 1998. These represent 26.91% and 32.38% of total liabilities as of September 30, 1999 and December 31, 1998, respectively. There have been no material changes in Quantitative and Qualitative Disclosures about Market Risk as reported at December 31, 1998 in the Company's Form 10-K. YEAR 2000 During 1997 the Company's subsidiary (the Bank) began to assess the effect of the Year 2000 on its systems, vendors, and customers. In January 1998, the Bank's Board of Directors approved a Year 2000 Compliance Plan which identifies particular steps necessary to achieve Year 2000 readiness and a timeline for accomplishing these steps. The plan also named the Bank's Year 2000 committee which includes members of senior management, operations, and data processing. The Bank has completed testing of its systems and has renovated areas with Year 2000 deficiencies. The overall test objective of the Bank is to utilize proxy testing of systems rather than attempting to simulate future date periods using production equipment. During October 1998 an employee of the Bank was sent to the site of our core processing vendor to participate in regional user group testing for the software. Actual data from a bank was used to test the critical dates identified by the Federal Financial Institutions Examination Council (F.F.I.E.C.). A representative from the Bank returned to the vendor's site during February 1999 to complete testing of the auxiliary products of the software which the Bank uses. Proxy testing was also utilized to test the software used for the Bank's Trust Department. Other softwares, which operate in a microcomputer environment, were installed on a stand-alone test computer and tested using future critical dates. During March 1999 the company's ATM machines were evaluated for Year 2000 readiness. The Bank's maintenance vendor upgraded parts and software to ensure these machines are Year 2000 ready. The overall cost of preparing for the Year 2000 has not had a material effect on the Company's consolidated financial statements. The Bank has incurred nominal fees for participating in proxy testing which cover the cost of using the vendor's equipment, supplies, and personnel. The Bank also incurred hardware and software costs to upgrade ATM's to be Year 2000 ready. The Bank utilized existing personnel to perform testing and document Year 2000 efforts, therefore, no outside consulting fees were incurred in achieving Year 2000 readiness. Although the Company has no reason to conclude that a failure will occur, the most likely worst-case Year 2000 scenario would entail a disruption or failure of the Company's power supplier's or voice and data transmission supplier's capability to provide power or data transmission services to a computer system or facility. If such a failure were to occur, the Company would implement its contingency plan. While it is impossible to quantify the impact of such a scenario, the most reasonably likely worst-case scenario would entail diminishment of service levels, some customer inconvenience and additional costs associated with implementing the contingency plan. Although the Bank is confident that its efforts will result in a seamless transition into the Year 2000, a contingency plan has been prepared which addresses carrying on normal operations despite any Year 2000 problems which may be encountered. Through a careful plan for processing at the end of the year, all of the Bank's data and system files will be protected by performing Year 2000 back-up procedures, in addition to normal back-up procedures, onto magnetic tapes which will be stored in a designated secure area. All year-end reports will be printed for access to account and customer information in the event that the systems are unable to operate due to a program or utility company problem which hinders normal processing procedures. 8 Item 3. Quantitative and Qualitative Disclosures about Market Risk The information required by Part I, Item 3., is incorporated herein by reference to the section titled LIQUIDITY AND MARKET RISK within Part I, Item 2 "Management's Discussion and Analysis of Financial Condition and Results of Operation." 9 PART II. OTHER INFORMATION Item 1. Legal proceedings. None. Item 2. Changes in securities. None. Item 3. Defaults upon senior securities. None. Item 4. Submission of matters to a vote of security holders. None. Item 5. Other Information. None. 10 Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits The following exhibits, when applicable, are filed with this Form 10-Q or incorporated by reference to previous filings. Number Description --------- ----------------------------------------- Exhibit 2. Not applicable. Exhibit 3. (i) Articles of Incorporation of Registrant (incorporated herein by reference to Exhibit 3.1 of Registrant's Form S-4 Registration Statement, Registration No. 33-43681.) (ii) Bylaws of Registrant (incorporated herein by reference to Exhibit 3.2 of Registrant's Form S-4 Registration Statement, Registration No. 33-43681) Exhibit 4. Not applicable. Exhibit 10. Material Contracts. 10.1 Description of Executive Supplemental Income Plan (incorporated by reference to Exhibit 10.1 to the Company's Annual Report on Form 10-K for the year ended December 31, 1996). 10.2 Lease Agreement between Bank of Clarke County (tenant) and Winchester Development Company (landlord) dated August 1, 1992 for the branch office at 625 East Jubal Early Drive, Winchester, Virginia (incorporated herein by reference to Exhibit 10.2 of the Company's Annual Report on Form 10-K for the year ended December 31, 1995). 10.3 Lease Agreement between Bank of Clarke County (tenant) and Winchester Development Company (landlord) dated July 1, 1997 for an office at 615 East Jubal Early Drive, Winchester, Virginia (incorporated herein by reference to Exhibit 10.3 of the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1997). 10.4 Lease Agreement between Bank of Clarke County (tenant) and Steven R. Koman (landlord) dated December 2, 1997 for the branch office at 40 West Piccadilly Street, Winchester, Virginia (incorporated herein by reference to Exhibit 10.4 of the Company's Annual Report on Form 10-K for the year ended December 31, 1997). Exhibit 11. Computation of Per Share Earnings (incorporated herein as Exhibit 11). Exhibit 15. Not applicable. Exhibit 18. Not applicable. Exhibit 19. Not applicable. Exhibit 22. Not applicable. Exhibit 23. Not applicable. Exhibit 24. Not applicable. Exhibit 27. Financial Data Schedule (incorporated herein as Exhibit 27). Exhibit 99. Not applicable. (b) Reports on Form 8-K. No reports on Form 8-K were filed by the registrant during the first quarter of 1999. 11 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. EAGLE FINANCIAL SERVICES, INC. Date: November 12, 1999 /s/ JOHN R. MILLESON -------------------------- John R. Milleson President, Chief Executive Officer, and Treasurer Date: November 12, 1999 /s/ JAMES W. MCCARTY, JR. -------------------------- James W. McCarty, Jr. Vice President, Chief Financial Officer, and Secretary 12