Eagle Financial Services, Inc. Announces Improved Quarterly Earnings

Jul 20, 2012, 08:00 ET from Eagle Financial Services, Inc.

BERRYVILLE, Va., July 20, 2012 /PRNewswire/ -- Eagle Financial Services, Inc. (OTC BULLETIN BOARD:EFSI), the holding company for Bank of Clarke County, whose divisions include Eagle Investment Group, today announced earnings of $2.0 million, or $0.60 per diluted share, for the quarter ended June 30, 2012.  This is a 51% increase from the $1.3 million in earnings, or $0.40 per diluted share, for the same period in 2011.

Selected Financial Highlights:



2012


2011

Three months ended:


Q2

Q1


Q2

Net income (000's)


$2,002

$1,714


$1,323

Diluted EPS


$0.60

$0.52


$0.40

Net Interest Margin


4.60%

4.56%


4.32%

Total equity to assets


10.83%

10.64%


9.70%

Allowance for loan losses to total loans


2.01%

2.13%


1.95%

Provision for loan losses (000's)


$300

$300


$900

John R. Milleson, President and CEO, stated, "We are pleased to report another quarter of solid earnings generated by our strong net interest margin and increased net loan growth. With continued improvement in the Company's levels of past due loans and non-performing assets, we remain hopeful that the economic environment will improve in areas that are critical to the Bank's successes. Our market expansion into Loudoun County provides even more opportunity to leverage our company's strengths and contribute to our financial stability.  We are greatly anticipating the construction of our new Purcellville branch which will commence next month and its grand opening is being planned for early 2013.  The Bank is looking ahead to adding to its branch network and is actively seeking a branch site in the Leesburg area."

Income Statement Review

Net income for the quarter ended June 30, 2012 increased 16.80% to $2.0 million when compared to the $1.7 million for the quarter ended March 31, 2012. Net income increased 51.32% for the quarter ended June 30, 2012 when compared to the $1.3 million for the quarter ended June 30, 2011.

Net interest income for the quarter ended June 30, 2012 increased 1.7% to $5.9 million when compared to the $5.8 million for the quarter ended March 31, 2012. Net interest income was $5.6 million for the quarter ended June 30, 2011.

Total loan interest income was $5.7 million for the quarters ended June 30 and March 31, 2012 as well as June 30, 2011.  Average loans for the quarter ended June 30, 2012 were $421.2 million compared to $413.5 million for the quarter ended March 31, 2012.  Total average accruing loans were $419.3 million for the three months ended June 30, 2012 and $411.0 million for the quarter ended March 31, 2012.  For the second quarter of 2011, total average loans were $403.1 million and average accruing loans were $398.1 million. The tax equivalent yield on average loans for the quarter ended June 30, 2012 was 5.51%, down four basis points from 5.55% for the quarter ended March 31, 2012.  Interest income from the investment portfolio was $1.0 million for the quarter ended June 30, 2012 and $1.1 million for the same period ended March 31, 2012.  Average investments were $111.4 million for the quarter ended June 30, 2012 and $116.1 million for the quarter ended March 31, 2012.  Interest income from the investment portfolio was also $1.1 million for the quarter ended June 30, 2011.

Total interest expense was $838,000 for the three months ended June 30, 2012 and $912,000 for the same period ended March 31, 2012. The average cost of interest bearing liabilities decreased seven basis points when comparing the quarter ended June 30, 2012 to the quarter ended March 31, 2012.  The average balance of interest bearing liabilities decreased $4.1 million from the quarter ended March 31, 2012.  The net interest margin was 4.60% for the quarter ended June 30, 2012 and 4.56% for the quarter March 31, 2012.  For the quarter ended June 30, 2011, total interest expense was $1.3 million and the net interest margin was 4.32%. Utilizing cash flows from the investment portfolio to fund increased loan demand, time deposits repricing to lower levels and continued management of other funding costs has helped improve 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%.

Non-interest income was $1.6 million for the quarter ended June 30, 2012 and $1.5 million for the quarter ended March 31, 2012. Due to some one time fees, income from fiduciary activities increased $41,000 or 17.1% for the quarter ended June 30, 2012 when compared to the quarter ended March 31, 2012.  Income from other service charges and fees increased $58,000 or 7.2% for the quarter ended June 30, 2012 when compared to the quarter ended March 31, 2012.  This increase resulted from increases in various items, including safe deposit box fees and ATM fees. Additionally, net gains of $14,000 were realized on the sales of investment securities for the quarter ended June 30, 2012.  Noninterest income for the three months ended June 30, 2011 was $1.7 million.

Noninterest expense was $4.4 million for the quarter ended June 30, 2012.  This represents a decrease of $222,000 or 4.8% from $4.6 million for the quarter ended March 31, 2012. The majority of the decrease resulted from a one-time adjustment to FDIC assessment expense.  The Company determined that the balance of the Company's prepaid FDIC insurance was too low and as a result made a $199,000 adjustment to increase the prepaid balance and decrease the corresponding expense in the quarter ended June 30, 2012.  Net gains of $4,000 and $11,000 were recognized on the sales of other real estate owned for the quarters ended June 30, 2012 and March 31, 2012, respectively. For the quarter ended June 30, 2011, net losses of $118,000 were realized on the sales of other real estate owned. The Company continues to diligently manage and monitor its other operating expenses. Total noninterest expense for the quarter ended June 30, 2011 was $4.6 million.

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.  Nonperforming assets decreased from $5.3 million or 0.94% of total assets at March 31, 2012 to $4.0 million or 0.71% of total assets at June 30, 2012. This decrease resulted from the charge off of non-accrual loans and sales of other real estate owned. During the second quarter of 2012, the Bank placed one loan 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.  All of the non-accrual loans are secured by real estate.  No real estate assets had been foreclosed upon during the second quarter of 2012 and the Bank sold four pieces of other real estate owned recorded at a net value of $605,000 during the same period.  Loans greater than 90 days past due and still accruing decreased from $449,000 at March 31, 2012 to $163,000 at June 30, 2012.  Nonperforming assets were $8.6 million or 1.47% of total assets at June 30, 2011.

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, 2012, the Company had 23 troubled debt restructurings totaling $9.8 million. All of the loans are currently performing loans. 

The Company realized $559,000 in net charge-offs for the quarter ended June 30, 2012 versus $156,000 for the three months ended March 31, 2012. The Company has 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. Net charge-offs for the quarter ended June 30, 2011 were $343,000.

Provisions for loan losses were $300,000 for the three months ended June 30, 2012 and March 31, 2012. The provisions for loan losses for the quarter ended June 30, 2011 were $900,000.  The allowance for loan losses was $8.6 million, or 2.01% of total outstanding loans, at June 30, 2012. At March 31, 2012 and June 30, 2011, the allowance for loan losses was $8.9 million and $7.8 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, 2012 were $568.9 million, which represented an increase of $8.7 million or 1.6% from total assets of $560.2 million at March 31, 2012. This increase was driven by the increased volume of the loan portfolio.  At June 30, 2011, total consolidated assets were $582.4 million. Total loans increased from $407.5 million at March 31, 2012 to $419.9 at June 30, 2012.  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. Total loans were $394.6 million at June 30, 2011.

Deposits and Other Borrowings

Total deposits, which include brokered deposits, increased $6.0 million to $454.1 million at June 30, 2012 from $448.2 million at March 31, 2012. At June 30, 2011, total deposits were $450.0 million.  The Company held $9.9 million in brokered deposits at June 30, 2012 and March 31, 2012.  At June 30, 2011 brokered deposits were $19.0 million.

Fed funds purchased and securities sold under agreement to repurchase were $10.0 million at June 30, 2012 and March 31, 2012.  Fed funds purchased and securities sold under agreement to repurchase were $13.2 million at June 30, 2011.  Borrowings with the Federal Home Loan Bank of Atlanta were unchanged from March 31, 2012 at $32.3 million at June 30, 2012. Borrowings with the Federal home Loan Bank of Atlanta were $52.3 million at June 30, 2011. 

Equity

Shareholders' equity at June 30, 2012 was $61.6 million, reflecting an increase of $2.0 million from $59.6 million at March 31, 2012.  At June 30, 2011 shareholders' equity was $56.5 million. The book value of the Company at June 30, 2012 was $18.47 per common share. Total common shares outstanding were 3,337,251 at June 30, 2012.  On July 18, 2012, the board of directors declared a $0.18 per common share cash dividend for shareholders of record as of August 1, 2012 and payable on August 15, 2012.

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, 2011, and other filings with the Securities and Exchange Commission.

 

EAGLE FINANCIAL SERVICES, INC.










KEY STATISTICS

For the Three Months Ended


2Q12


1Q12


4Q11


3Q11


2Q11











Net Income (dollars in thousands)

$          2,002


$          1,714


$             693


$          1,139


$          1,323

Earnings per share, basic

$            0.60


$            0.52


$            0.21


$            0.34


$            0.40

Earnings per share, diluted

$            0.60


$            0.25


$            0.21


$            0.34


$            0.40











Return on average total assets

1.43%


1.23%


0.48%


0.78%


0.92%

Return on average total equity

13.29%


11.74%


4.76%


7.91%


9.58%

Dividend payout ratio

30.00%


34.62%


85.71%


52.94%


45.00%

Fee revenue as a percent of total revenue

20.26%


19.18%


18.53%


20.43%


20.65%











Net interest margin(1)

4.60%


4.56%


4.47%


4.34%


4.32%

Yield on average earning assets

5.23%


5.25%


5.28%


5.21%


5.26%

Yield on average interest-bearing liabilities

0.87%


0.94%


1.07%


1.15%


1.22%

Net interest spread

4.36%


4.31%


4.21%


4.06%


4.03%

Tax equivalent adjustment to net interest income (dollars in thousands)

$             207


$             212


$             214


$             214


$             202











Non-interest income to average assets

1.12%


1.06%


0.88%


0.96%


1.08%

Non-interest expense to average assets

3.12%


3.31%


3.73%


3.13%


3.10%











Efficiency ratio(2)

56.96%


61.43%


72.60%


61.33%


60.70%











(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












2Q12


1Q12


4Q11


3Q11


2Q11

BALANCE SHEET RATIOS











Loans to deposits

94.36%


92.92%


91.52%


90.34%


89.44%


Average interest-earning assets to











    average-interest bearing liabilities

138.63%


136.42%


132.72%


132.26%


130.75%

PER SHARE DATA











Dividends

$            0.18


$            0.18


$           0.18


$           0.18


$           0.18


Book value

$          18.47


$          18.05


$         17.67


$         17.61


$         17.23


Tangible book value

$          18.47


$          18.05


$         17.67


$         17.61


$         17.23

SHARE PRICE DATA











Closing price

$          20.10


$          20.75


$         16.81


$         16.10


$         17.95


Diluted earnings multiple(1)

8.38


9.98


20.01


11.84


11.22


Book value multiple(2)

1.09


1.15


0.95


0.91


1.04

COMMON STOCK DATA











Outstanding shares at end of period

3,337,251


3,320,600


3,300,692


3,306,853


3,297,098


Weighted average shares outstanding

3,326,999


3,316,005


3,305,189


3,302,082


3,286,551


Weighted average shares outstanding, diluted

3,337,114


3,321,687


3,312,290


3,311,472


3,294,331

CAPITAL RATIOS











Total equity to total assets

10.83%


10.64%


10.23%


10.14%


9.70%

CREDIT QUALITY











Net charge-offs to average loans

0.13%


0.04%


0.01%


0.25%


0.09%


Total non-performing loans to total loans

0.43%


0.59%


0.62%


0.69%


1.21%


Total non-performing assets to total assets

0.71%


0.94%


0.87%


1.10%


1.47%


Non-accrual loans to:











      total loans

0.39%


0.48%


0.60%


0.65%


1.09%


      total assets

0.30%


0.36%


0.43%


0.46%


0.75%


Allowance for loan losses to:











      total loans

2.01%


2.13%


2.13%


1.94%


1.95%


     non-performing assets

213.78%


168.99%


176.06%


125.47%


91.58%


     non-accrual loans

509.93%


445.46%


357.00%


299.47%


178.57%

NON-PERFORMING ASSETS:










(dollars in thousands)











    Loans delinquent over 90 days

$             163


$             449


$              94


$            165


$            492


    Non-accrual loans   

1,692


1,995


2,449


2,635


4,387


    Other real estate owned and repossessed assets

2,181


2,815


2,423


3,489


3,675

NET LOAN CHARGE-OFFS (RECOVERIES):










(dollars in thousands)











    Loans charged off

$             609


$             237


$            327


$         1,110


$            684


    (Recoveries)

(50)


(81)


(279)


(117)


(341)


Net charge-offs (recoveries)

559


156


48


993


343

PROVISION FOR LOAN LOSSES (dollars in thousands)

$             300


$             300


$            900


$         1,050


$            900

ALLOWANCE FOR LOAN LOSS SUMMARY










(dollars in thousands)











Balance at the beginning of period

$          8,887


$          8,743


$         7,891


$         7,834


$         7,277


Provision

300


300


900


1,050


900


Net charge-offs (recoveries)

559


156


48


993


343


Balance at the end of period

$          8,628


$          8,887


$         8,743


$         7,891


$         7,834



(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


Unaudited


Audited


Unaudited


Unaudited


6/30/2012


3/31/2012


12/31/2011


9/30/2011


6/30/2011











Assets










Cash and due from banks

$        12,996


$        11,218


$        21,941


$        18,839


$        39,769

Federal funds sold

-


-


-


-


-

Securities available for sale, at fair value

107,283


110,157


117,654


123,699


116,783

Loans, net of allowance for loan losses

419,877


407,535


401,681


398,649


394,640

Bank premises and equipment, net

16,370


16,316


15,200


15,728


15,772

Other assets

12,391


14,949


11,546


14,421


15,407

              Total assets

$      568,917


$      560,175


$      568,022


$      571,336


$      582,371











Liabilities and Shareholders' Equity










Liabilities










    Deposits:










       Noninterest bearing demand deposits

$      115,478


$      112,735


$      107,237


$      104,153


$      104,786

       Savings and interest bearing demand deposits

220,993


211,494


210,158


194,035


193,729

       Time deposits

117,646


123,930


131,070


151,819


151,459

          Total deposits

$      454,117


$      448,159


$      448,465


$      450,007


$      449,974

    Federal funds purchased and securities










        sold under agreements to repurchase

10,000


10,000


10,000


10,000


13,240

    Federal Home Loan Bank advances

32,250


32,250


42,250


42,250


52,250

    Trust preferred capital notes

7,217


7,217


7,217


7,217


7,217

    Other liabilities

3,694


2,958


2,000


3,939


3,201

    Commitments and contingent liabilities

-


-


-


-


-

              Total liabilities

$      507,278


$      500,584


$      509,932


$      513,413


$      525,882











Shareholders' Equity










    Preferred stock, $10 par value

$                -


$                -


$                -


$                -


$                -

    Common stock, $2.50 par value

8,293


8,253


8,217


8,224


8,199

    Surplus

9,998


9,733


9,568


9,628


9,434

    Retained earnings

39,896


38,492


37,374


37,276


36,730

    Accumulated other comprehensive income

3,452


3,113


2,931


2,795


2,126

              Total shareholders' equity

$        61,639


$        59,591


$        58,090


$        57,923


$        56,489

              Total liabilities and shareholders' equity

$      568,917


$      560,175


$      568,022


$      571,336


$      582,371

 

EAGLE FINANCIAL SERVICES, INC.










CONSOLIDATED STATEMENTS OF INCOME










(dollars in thousands)










Unaudited











Three Months Ended


6/30/2012


3/31/2012


12/31/2011


9/30/2011


6/30/2011











Interest and Dividend Income










        Interest and fees on loans

$          5,748


$          5,675


$          5,837


$          5,750


$          5,711

        Interest on federal funds sold

-


-


-


-


-

        Interest and dividends on securities available for sale:










              Taxable interest income

554


598


640


603


739

              Interest income exempt from federal income taxes

351


360


367


367


335

              Dividends

107


103


99


189


65

        Interest on deposits in banks

2


3


6


11


14

                    Total interest and dividend income

$          6,762


$          6,739


$          6,949


$          6,920


$          6,864

Interest Expense










        Interest on deposits

$             397


$             444


$             548


$             595


$             635

        Interest on federal funds purchased and securities










            sold under agreements to repurchase

89


91


89


93


91

        Interest on Federal Home Loan Bank advances

273


298


374


420


453

        Interest on trust preferred capital notes

79


79


80


80


79

                   Total interest expense

$             838


$             912


$          1,091


$          1,188


$          1,258

                   Net interest income

$          5,924


$          5,827


$          5,858


$          5,732


$          5,606

Provision For Loan Losses

300


300


900


1,050


900

                   Net interest income after provision for loan losses

$          5,624


$          5,527


$          4,958


$          4,682


$          4,706

Noninterest Income










        Income from fiduciary activities

$             281


$             240


$             209


$             189


$             241

        Service charges on deposit accounts

370


352


395


406


396

        Other service charges and fees

868


810


717


861


839

        Gain on the sale of bank premises and equipment

-


-


77


-


-

        Gain (Loss) on sales of AFS securities

14


-


(88)


(8)


163

        Other operating income

40


68


39


24


21

                    Total noninterest income

$          1,573


$          1,470


$          1,349


$          1,472


$          1,660

Noninterest Expenses










        Salaries and employee benefits

$          2,671


$          2,613


$          3,021


$          2,688


$          2,487

        Occupancy expenses

287


292


278


286


282

        Equipment expenses

176


164


169


164


183

        Advertising and marketing expenses

100


115


92


157


125

        Stationery and supplies

69


71


71


53


69

        ATM network fees

135


122


169


131


132

        FDIC assessment

(77)


183


166


170


177

        (Gain) loss on the sale of other real estate owned

(4)


(11)


122


78


118

        Other operating expenses

1,023


1,053


1,413


918


989

                    Total noninterest expenses

$          4,380


$          4,602


$          5,501


$          4,645


$          4,562

                    Income before income taxes

$          2,817


$          2,395


$             806


$          1,509


$          1,804

Income Tax Expense

815


681


113


370


481

                    Net income

$          2,002


$          1,714


$             693


$          1,139


$          1,323

Earnings Per Share










        Net income per common share, basic

$            0.60


$            0.52


$            0.21


$            0.34


$            0.40

        Net income per common share, diluted

$            0.60


$            0.52


$            0.21


$            0.34


$            0.40

 

EAGLE FINANCIAL SERVICES, INC.










Average Balances, Income and Expenses, Yields and Rates










(dollars in thousands)


























For the Three Months Ended


June 30, 2012


March 31, 2012


June 30, 2011




Interest





Interest





Interest



Average


Income/

Average


Average


Income/

Average


Average


Income/

Average

Assets:

Balance


Expense

Rate


Balance


Expense

Rate


Balance


Expense

Rate

Securities:















        Taxable

$71,755


$2,658

3.70%


$  75,179


$      2,819

3.75%


$   79,749


$  3,225

4.04%

        Tax-Exempt (1)

39,638


2,136

5.39%


40,884


2,194

5.37%


36,342


2,042

5.62%

            Total Securities

$111,393


$4,794

4.30%


$116,063


$      5,013

4.32%


$ 116,091


$  5,267

4.54%

Loans:















        Taxable

$414,499


$22,916

5.53%


$406,120


$    22,619

5.57%


$ 393,202


$22,685

5.77%

         Non accrual

1,962


-

0.00%


2,469


-

0.00%


5,071


-

0.00%

        Tax-Exempt (1)

4,777


307

6.42%


4,867


313

6.43%


4,868


337

6.92%

            Total Loans

$421,238


$23,223

5.51%


$413,456


$    22,932

5.55%


$ 403,141


$23,021

5.71%

Federal funds sold

145


-

0.00%


226


-

0.00%


-


-

0.00%

Interest-bearing deposits in other banks

4,652


9

0.20%


5,291


12

0.23%


25,021


52

0.21%

            Total earning assets

$535,466


$28,027

5.23%


$532,567


$    27,957

5.25%


$ 539,182


$28,340

5.26%

Allowance for loan losses

(8,893)





(8,901)





(7,531)




Total non-earning assets

37,390





36,285





42,806




Total assets

$563,963





$559,945





$ 574,457



















Liabilities and Shareholders' Equity:















Interest-bearing deposits:















        NOW accounts

$78,555


$132

0.17%


$  75,651


$         139

0.18%


$   69,553


$     177

0.26%

        Money market accounts

84,224


204

0.24%


84,121


249

0.30%


72,754


379

0.52%

        Savings accounts

52,854


37

0.07%


49,382


57

0.12%


45,000


58

0.13%

Time deposits:















        $100,000 and more

72,740


385

0.53%


74,476


455

0.61%


63,045


631

1.00%

        Less than $100,000

48,326


836

1.73%


53,815


887

1.65%


88,651


1,298

1.46%

            Total interest-bearing deposits

$336,699


$1,593

0.47%


$337,444


1,787

0.53%


$ 339,003


$  2,544

0.75%

Federal  funds purchased and securities















     sold under agreements to repurchase

10,086


360

3.57%


10,606


366

3.45%


13,905


369

2.65%

Federal Home Loan Bank advances

32,250


1,097

3.40%


35,107


1,199

3.41%


52,250


1,816

3.48%

Trust preferred capital notes

7,217


318

4.41%


7,217


318

4.40%


7,217


317

4.40%

            Total interest-bearing liabilities

$386,252


$3,369

0.87%


$390,374


3,669

0.94%


$ 412,375


$  5,046

1.22%

Noninterest-bearing liabilities:















        Demand deposits

114,206





108,376





104,133




        Other Liabilities

2,914





2,444





2,585




            Total liabilities

$503,372





$501,194





$ 519,093




Shareholders' equity

60,591





58,751





55,364




Total liabilities and shareholders' equity

$563,963





$559,945





$ 574,457



















Net interest income



$24,657





$24,288





$23,294

















Net interest spread




4.36%





4.31%





4.03%

Interest expense as a percent of















     average earning assets




0.63%





0.69%





0.94%

Net interest margin




4.60%





4.56%





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


6/30/2012

3/31/2012

12/31/2011

9/30/2011

6/30/2011







GAAP Financial Measurements:






   Interest Income - Loans

$         5,748

$      5,675

$         5,837

$       5,750

$      5,711

   Interest Income - Securities and Other Interest-Earnings Assets

1,014

1,064

1,112

1,170

1,153

   Interest Expense - Deposits

396

444

548

595

635

   Interest Expense - Other Borrowings

442

468

544

593

623

Total Net Interest Income

$         5,924

$      5,827

$         5,857

$       5,732

$      5,606







Non-GAAP Financial Measurements:






   Add:  Tax Benefit on Tax-Exempt Interest Income - Loans

$              26

$           26

$              25

$            25

$           29

   Add:  Tax Benefit on Tax-Exempt Interest Income - Securities

181

186

189

189

173

Total Tax Benefit on Tax-Exempt Interest Income

$            207

$         212

$            214

$          214

$         202

Tax-Equivalent Net Interest Income

$         6,131

$      6,039

$         6,071

$       5,946

$      5,808

 

SOURCE Eagle Financial Services, Inc.