Eagle Financial Services, Inc. Announces 2014 First Quarter Financial Results

Eagle Financial Services, Inc. Announces 2014 First Quarter Financial Results

PR Newswire

BERRYVILLE, Va., April 22, 2014

BERRYVILLE, Va., April 22, 2014 /PRNewswire/ --Eagle Financial Services, Inc.
(OTC BULLETIN BOARD: EFSI), the holding company for Bank of Clarke County,
whose divisions include Eagle Investment Group, announces first quarter 2014
financial results. The Company's common stock trades on the Over-the-Counter
(OTC) Bulletin Board under the ticker symbol EFSI.

Financial Highlights:

                                         2014     2013
Three months ended:                      Q1       Q4     Q1
Net income (000's)                       $1,363   $1,850 $1,803
Diluted EPS                              $0.40    $0.54  $0.53
Net Interest Margin                      4.29%    4.17%  4.29%
Allowance for loan losses to total loans 1.25%    1.24%  1.64%
Provision for loan losses                $283     ($767) $383
Loan Growth                              $12,199  $6,209 $5,753

John R. Milleson, President and CEO, stated "With the quarter's $12.2 million
in loan growth and a 4.29% net interest margin, I am pleased to announce an
admirable beginning to 2014. Our expansion into Loudoun County continues to
provide great opportunities for growth in both loans and deposits. The work
completed in 2013 with respect to updating products and services has enhanced
the Company's ability to serve and communicate with its customers and
potential clients in all the markets in which we serve. I am excited about the
Company's continued expansion plans as we seek additional branch locations in
and around Leesburg, Virginia. As always, the support the Company receives
from its customers and shareholders is greatly appreciated."

Income Statement Review

Net income for the quarter ended March 31, 2014 was $1.4 million reflecting a
decrease of 26.3% from the quarter ended December 31, 2013 and a decrease of
24.4% from the quarter ended March 31, 2013. Net income was $1.9 million for
the three month period ended December 31, 2013 and $1.8 million for the
quarter ended March 31, 2013. For the quarter ended December 31, 2013, the
Company had loan loss recoveries of $767,000 while the Company had sold its
holdings of Fannie Mae and Freddie Mac preferred stock at a net gain of
$313,000 during March 2013.

Net interest income was $5.7 million for the quarter ended March 31, 2014 and
$5.6 million for the quarter ended December 31, 2013. Although low earning
excess cash balances had been deployed to fund higher yielding assets, overall
asset yields remained relatively flat when compared to those realized in the
quarter ended December 31, 2013. Continued management of interest bearing
liabilities and the Company's election to prepay a $10.0 million outstanding
advance with the Federal Home Loan Bank of Atlanta in December 2013 helped
preserve net interest income levels and the net interest margin. Net
interest income was $5.6 million for the quarter ended March 31, 2013.

Total loan interest income was $5.3 million for the quarter ended March 31,
2014, reflecting a decrease of $79,000 from the quarter ended December 31,
2013. Total loan interest income was $5.3 million for the quarter ended March
31, 2013. Average loans for the quarter ended March 31, 2014 were $447.9
million compared to $441.1 million at December 31, 2013. Total average
accruing loans were $443.3 million for the quarter ended March 31, 2014 and
$437.1 million at December 31, 2013. For the quarter ended March 31, 2013,
total average loans were $419.0 million and average accruing loans were $416.5
million. The tax equivalent yield on average loans for the quarter ended March
31, 2014 was 4.85%, down four basis points from 4.89% for the quarter ended
December 31, 2013 and down 33 basis points from the 5.18% average yield at
March 31, 2013. Interest income from the investment portfolio was $818,000
for the quarter ended March 31, 2014 and $826,000 for the quarter ended
December 31, 2013. Average investments were $105.7 million for the quarter
ended March 31, 2014 and $105.3 million for the quarter ended December 31,
2013. Average investments were $111.4 million for the quarter ended March 31,
2013 and interest income was $938,000 for that same period.

Total interest expense for the three months ended March 31, 2014 was $495,000,
a decrease of $119,000 from the quarter ended December 31, 2013. Total
interest expense decreased $208,000 when comparing the quarter ended March 31,
2014 to the same period in 2013. The average cost of interest bearing
liabilities decreased 11 basis points when comparing the quarter ended March
31, 2014 to the quarter ended December 31, 2013. The average balance of
interest bearing liabilities decreased $2.5 million from the quarter ended
December 31, 2013. The average cost of interest bearing liabilities decreased
10 basis points when comparing the quarter ended March 31, 2014 to the quarter
ended March 31, 2013. The average balance of interest bearing liabilities
decreased $6.2 million from the quarter ended March 31, 2013. During December
2013, the Company elected to prepay a $10.0 million 4.07% outstanding advance
with the Federal Home Loan Bank of Atlanta. In addition, the Company
continues to steadfastly manage the cost of its interest bearing deposits.
The combination of these factors has contributed to the decreased balance of
interest bearing liabilities and their corresponding cost. The net interest
margin was 4.29% for the quarter ended March 31, 2014 and 4.17% for the
quarter December 31, 2013. For the quarter ended March 31, 2013 the net
interest margin was 4.29%.

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%.

Noninterest income was $1.4 million for the quarter ended March 31, 2014 and
$1.5 million for the quarter ended December 31, 2013. Much of the decrease for
the quarter results from the decline in credit card merchant fees. The Company
sold its merchant portfolio during the second quarter of 2013 and no longer
receives these fees. There were no net gains or losses recognized on the sale
of investment securities for the three month period ended March 31, 2013. Net
gains of $65,000 and $390,000 were recognized on the sale of investment
securities for the quarters ended December 31, 2013 and March 31, 2013,
respectively. Noninterest income for the quarter ended March 31, 2013 was
$1.9 million.

Noninterest expense was $4.8 million for the quarter ended March 31, 2014.
This represents a decrease of $817,000 or 14.4% from $5.7 million for the
quarter ended December 31, 2013 and an increase of 5.7% from $4.6 million for
the quarter ended March 31, 2013. Much of the decrease compared to the fourth
quarter of 2013 is related to the decline in other operating expenses. For
the quarter ended December 31, 2013, a $612,000 prepayment fee was incurred by
the Company in conjunction with the repayment of the Federal Home Loan Bank
advance. Additionally, a net loss of $82,000 on the sale of other real estate
owned was realized during the quarter ended December 31, 2013. Much of the
increase compared to the quarter ended March 31, 2013 relates to costs
associated with the opening of the Company's newest retail branch in
Purcellville, VA. This branch opened in May 2013. Noninterest expense for
the Purcellville branch during the first quarter of 2014 approximated
$150,000.

Asset Quality and Provision for Loan Losses

Nonperforming assets consist of nonaccrual loans, loans 90 days or more past
due and still accruing, other real estate owned (foreclosed properties), and
repossessed assets. Nonperforming assets increased from $6.1 million or 1.04%
of total assets at December 31, 2013 to $8.7 million or 1.45% of total assets
at March 31, 2014. This increase resulted mostly from the increases in
nonaccrual loans. Non-performing assets were $6.3 million or 1.08% of total
assets at March 31, 2013. During the first quarter of 2014, the Bank placed 15
loans totaling $2.7 million on non-accrual status. All but three of the loans
are secured by real estate. Management evaluates the financial condition of
these borrowers 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 nonaccrual loans. At March 31, 2014,
$4.1 million or 59.9% of total nonaccrual loans had allocated specific
allowances totaling $1.5 million. At March 31, 2014, the Bank had one loan 90
days or more past due and still accruing that totaled $18,000. At December
31, 2013 the Bank had one loan 90 days or more past due and still accruing
that totaled $11,000 and at March 31, 2013, five loans totaling $631,000 were
90 days or more past due and still accruing. Other real estate owned
increased from $1.6 million at December 31, 2013 to $1.8 million at March 31,
2014. The Company foreclosed on one property totaling $163,000 during the
first quarter of 2014. There were no sales of other real estate owned during
the first quarter of 2014. Other real estate owned totaled $2.9 million at
March 31, 2013.

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
March 31, 2014, the Company had 15 troubled debt restructurings totaling $5.2
million. All but five of the restructured loans are performing loans.

The Company realized $54,000 in net charge-offs for the quarter ended March
31, 2014 versus $463,000 for the three months ended December 31, 2013. The
Company continues to operate a troubled credit group to monitor past due
loans, identify potential problem credits, and develop action plans to work
through its troubled loans as promptly as possible. Asset quality remains a
primary focus of the Company. Necessary resources continue to be devoted to
the ongoing review of the loan portfolio and the workouts of problem assets to
minimize any losses to the Company. Management will continue to monitor
delinquencies, risk rating changes, charge-offs, market trends and other
indicators of risk in the Company's portfolio, particularly those tied to
residential and commercial real estate, and adjust the allowance for loan
losses accordingly.

The amount of provision for loan losses reflects the results of the Bank's
analysis used to determine the adequacy of the allowance for loan losses.
Provisions for loan losses were $283,000 for the three months ended March 31,
2014, compared to net recoveries of $767,000 for the quarter ended December
31, 2013. The provisions for loan losses for the quarter ended March 31, 2013
were $383,000. The ratio of allowance for loan losses to total nonaccrual
loans was 83.8% at March 31, 2014 and 124.4% at December 31, 2013. At March
31, 2014, impaired loans totaled $12.7 million and had related specific
allocations of $1.5 million. At December 31, 2013, impaired loans totaled
$13.7 million and had related specific allocations of $1.5 million. At March
31, 2013, total impaired loans were $15.0 million and required specific
allocations of $2.2 million.

Total Consolidated Assets

Total consolidated assets of the Company at March 31, 2014 were $595.6
million, which represented an increase of $9.2 million or 1.6% from total
assets of $586.4 million at December 31, 2013. At March 31, 2013, total
consolidated assets were $580.8 million. Securities available for sale
increased $1.5 million from $104.8 million at December 31, 2013. Total loans
increased from $444.3 million at December 31, 2013 to $456.5 million at March
31, 2014. As loan growth rises, the Company remains conscientious about
maintaining both its underwriting standards and its net interest margin. At
March 31, 2013, total investment securities were $115.0 million and total
loans were $423.9 million.

Deposits and Other Borrowings

Total deposits, which include brokered deposits, decreased $4.5 million from
$487.6 million at December 31, 2013 to $483.1 million at March 31, 2014. At
March 31, 2013, total deposits were $473.1 million. The Company held $9.9
million in brokered deposits at March 31, 2014, December 31, 2013 and March
31, 2013.

Federal funds purchased increased $4.6 million from December 31, 2013. Federal
funds purchased balances were zero at December 31 and March 31, 2013.
Borrowings with the Federal Home Loan Bank of Atlanta increased $7.8 million
from December 31, 2013 with the acquisition of a $10.0 million short term
advance in March 2014 and maturity of a $2.5 million advance in February 2014.
Borrowings with the Federal Home Loan Bank of Atlanta decreased $2.3 million
from March 31, 2013.

Equity

Shareholders' equity at March 31, 2014 was $68.0 million and $66.4 million at
December 31, 2013. Shareholder's equity was $64.9 million at March 31, 2013.
The book value of the Company at March 31, 2014 was $19.97 per common share.
Total common shares outstanding were 3,417,832 at March 31, 2014. On April
16, 2013, the board of directors declared a $0.19 per common share cash
dividend for shareholders of record as of April 30, 2014 and payable on May
16, 2014.

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, 2013, and other filings with the Securities and Exchange
Commission.

EAGLE FINANCIAL SERVICES, INC.
KEY STATISTICS                     For the Three Months Ended
                                   1Q14     4Q13     3Q13     2Q13     1Q13
Net Income (dollars in thousands)  $       $       $       $       $ 
                                   1,363   1,849   1,505   2,001   1,803
Earnings per share, basic          $      $      $      $      $  
                                   0.40    0.54    0.44    0.59    0.54
Earnings per share, diluted        $      $      $      $      $  
                                   0.40    0.54    0.44    0.59    0.53
Return on average total assets     0.95%    1.25%    1.30%    1.40%    1.27%
Return on average total equity     8.22%    11.13%   9.25%    12.51%   11.42%
Dividend payout ratio              47.50%   35.19%   43.18%   32.20%   35.19%
Fee revenue as a percent of total  18.34%   19.29%   21.34%   25.86%   20.02%
revenue
Net interest margin^(1)            4.29%    4.17%    4.28%    4.28%    4.29%
Yield on average earning assets    4.65%    4.61%    4.73%    4.76%    4.81%
Yield on average interest-bearing  0.54%    0.65%    0.66%    0.69%    0.75%
liabilities
Net interest spread                4.12%    3.96%    4.07%    4.07%    4.06%
Tax equivalent adjustment to net   $     $     $     $     $   
interest income (dollars in        169      174      180      186      192
thousands)
Non-interest income to average     0.94%    1.00%    1.09%    1.73%    1.36%
assets
Non-interest expense to average    3.37%    3.82%    3.55%    3.47%    3.23%
assets
Efficiency ratio^(2)               67.50%   77.75%   69.63%   60.18%   62.71%

(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
                         1Q14       4Q13       3Q13       2Q13       1Q13
BALANCE SHEET RATIOS
 Loans to deposits       94.49%     91.12%     92.32%     92.19%     89.59%
 Average
 interest-earning assets
 to
  average-interest    147.83%    147.11%    145.62%    145.49%    152.08%
 bearing liabilities
PER SHARE DATA
 Dividends               $      $      $      $      $    
                          0.19     0.19     0.19     0.19     0.19
 Book value              $      $      $      $      $    
                         19.97     19.57     19.36     19.13     19.36
 Tangible book value     $      $      $      $      $    
                         19.97     19.57     19.36     19.13     19.36
SHARE PRICE DATA
 Closing price           $      $      $      $      $    
                         23.00     22.50     23.75     23.35     22.10
 Diluted earnings        14.38      10.42      13.49      9.89       10.42
 multiple(1)
 Book value multiple(2)  1.15       1.15       1.23       1.22       1.15
COMMON STOCK DATA
 Outstanding shares at   3,417,832  3,409,831  3,400,711  3,388,005  3,372,080
 end of period
 Weighted average shares 3,413,920  3,405,215  393,519    3,373,353  3,367,689
 outstanding
 Weighted average shares 3,420,933  3,416,841  3,405,225  3,383,748  3,378,369
 outstanding, diluted
CAPITAL RATIOS
 Total equity to total   11.42%     11.36%     11.21%     11.00%     11.17%
 assets
CREDIT QUALITY
 Net charge-offs to                 0.10%      0.06%      0.09%      0.00%
 average loans
 Total non-performing    1.50%      1.00%      0.98%      0.59%      0.79%
 loans to total loans
 Total non-performing    1.45%      1.04%      1.10%      0.89%      1.08%
 assets to total assets
 Non-accrual loans to:
  total loans       1.50%      0.99%      0.94%      0.55%      0.64%
  total assets      1.15%      0.76%      0.71%      0.41%      0.47%
 Allowance for loan
 losses to:
  total loans       1.25%      1.24%      1.53%      1.60%      1.64%
  non-performing     66.08%     90.41%     104.64%    133.53%    110.88%
 assets
  non-accrual loans  83.77%     124.36%    162.70%    291.44%    256.07%
NON-PERFORMING ASSETS:
(dollars in thousands)
  Loans delinquent    $      $      $      $      $    
 over 90 days               18      11     147      201      631
  Non-accrual         6,825      4,413      4,129      2,394      2,718
 loans
  Other real estate
 owned and repossessed   1,809      1,646      2,144      2,630      2,928
 assets
NET LOAN CHARGE-OFFS
(RECOVERIES):
(dollars in thousands)
  Loans charged off   $      $      $      $      $    
                            91     493      385      403       42
  (Recoveries)        (37)       (30)       (125)      (37)       (42)
 Net charge-offs         54         463        260        366        -
 (recoveries)
PROVISION FOR LOAN       $      $      $      $      $    
LOSSES (dollars in         283     (767)       -     384      383
thousands)
ALLOWANCE FOR LOAN LOSS
SUMMARY
(dollars in thousands)
 Balance at the          $      $      $      $      $    
 beginning of period     5,488     6,718     6,978     6,960     6,577
 Provision               283        (767)      -          384        383
 Net charge-offs         54         463        260        366        -
 (recoveries)
 Balance at the end of   $      $      $      $      $    
 period                  5,717     5,488     6,718     6,978     6,960

(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    Audited      Unaudited  Unaudited  Unaudited
                     3/31/2014    12/31/2013   9/30/2013  6/30/2013  3/31/2013
Assets
Cash and due from    $         $         $       $       $   
banks                10,440      14,243      17,686    10,632    21,829
Federal funds sold   -            -            -          -          -
Securities available
for sale, at fair    106,308      104,790      104,753    109,145    115,001
value
Loans, net of
allowance for loan   450,755      438,785      431,346    429,379    416,890
losses
Bank premises and    17,132       17,214       17,231     17,287     16,834
equipment, net
Other assets         11,003       11,412       12,489     19,230     10,292
 Total  $          $          $        $        $  
assets               595,638     586,444     583,505   585,673   580,846
Liabilities and
Shareholders' Equity
Liabilities
 Deposits:
 Noninterest   $          $          $        $        $  
bearing demand       146,517     147,698     143,156   135,802   135,650
deposits
 Savings and
interest bearing     239,285      240,749      230,581    234,430    227,876
demand deposits
 Time deposits 97,302       99,140       100,790    103,080    109,554
 Total      $          $          $        $        $  
deposits             483,104     487,587     474,527   473,312   473,080
 Federal funds
purchased and
securities
 sold under
agreements to        4,589        -            -          5,616      -
repurchase
 Federal Home     30,000       22,250       32,250     32,250     32,250
Loan Bank advances
 Trust preferred  7,217        7,217        7,217      7,217      7,217
capital notes
 Other            2,706        2,984        4,093      2,860      3,429
liabilities
 Commitments and
contingent           -            -            -          -          -
liabilities
 Total  $          $          $        $        $  
liabilities          527,616     520,038     518,087   521,255   515,976
Shareholders' Equity
 Preferred stock, $       $       $      $      $    
$10 par value          -         -          -      -      -
 Common stock,    8,517        8,482        8,449      8,417      8,376
$2.50 par value
 Surplus          11,693       11,537       11,276     10,935     10,636
 Retained         46,797       46,082       44,879     44,018     42,657
earnings
 Accumulated
other comprehensive  1,015        305          814        1,048      3,201
income
 Total  $         $         $       $       $   
shareholders' equity 68,022      66,406      65,418    64,418    64,870
 Total  $          $          $        $        $  
liabilities and      595,638     586,444     583,505   585,673   580,846
shareholders' equity







EAGLE FINANCIAL
SERVICES, INC.
CONSOLIDATED
STATEMENTS OF INCOME
(dollars in thousands)
Unaudited
                       Three Months Ended
                       3/31/2014  12/31/2013   9/30/2013  6/30/2013  3/31/2013
Interest and Dividend
Income
 Interest and   $      $        $      $      $    
fees on loans          5,331     5,410       5,446     5,343     5,331
 Interest on    -          -            -          -          -
federal funds sold
 Interest and
dividends on
securities available
for sale:
 Taxable  507        490          500        518        547
interest income
 Interest
income exempt from     286        296          307        314        324
federal income taxes
          25         40           38         42         67
Dividends
 Interest on    1          5            3          6          9
deposits in banks
    $      $        $      $      $    
Total interest and     6,150     6,241       6,294     6,223     6,278
dividend income
Interest Expense
 Interest on    $      $       $      $      $    
deposits                 244     259          269      288      326
 Interest on
federal funds
purchased and
securities
 sold under
agreements to          13         -            2          1          28
repurchase
 Interest on
Federal Home Loan Bank 159        275          276        273        270
advances
 Interest on
trust preferred        79         80           80         78         79
capital notes
     $      $       $      $      $    
Total interest expense   495     614          627      640      703
 Net $      $        $      $      $    
interest income        5,655     5,627       5,667     5,583     5,575
Provision For Loan     283        (767)        -          384        383
Losses
 Net
interest income after  $      $        $      $      $    
provision for loan     5,372     6,394       5,667     5,199     5,192
losses
Noninterest Income
 Income from    $      $       $      $      $    
fiduciary activities     299     257          296      273      360
 Service
charges on deposit     333        367          377        366        343
accounts
 Other service  653        747          874        1,443      800
charges and fees
 Gain on the
sale of bank premises  -          -            -          -          -
and equipment
 Gain (Loss) on
sales of AFS           -          65           -          10         390
securities
 Other          66         44           34         377        39
operating income
    $      $        $      $      $    
Total noninterest      1,351     1,480       1,581     2,469     1,932
income
Noninterest Expenses
 Salaries and   $      $        $      $      $    
employee benefits      2,825     2,974       2,926     2,910     2,641
 Occupancy      337        355          336        319        281
expenses
 Equipment      182        169          151        191        155
expenses
 Advertising    132        127          150        144        127
and marketing expenses
 Stationery and 90         71           57         68         78
supplies
 ATM network    157        159          157        143        157
fees
 Other real     4          10           2          20         8
estate owned expenses
 Loss (gain) on
sale of other real     -          82           111        (53)       -
estate
 FDIC           81         90           92         96         97
assessment
 Computer        199        160          185        164        155
software expense
 Bank franchise  102        102          103        101        101
tax
 Professional    217        223          265        284        241
fees
 Other          517        1,138        637        565        542
operating expenses
    $      $        $      $      $    
Total noninterest      4,843     5,660       5,172     4,952     4,583
expenses
    $      $        $      $      $    
Income before income   1,880     2,214       2,076     2,716     2,541
taxes
Income Tax Expense     517        364          571        715        738
    $      $        $      $      $    
Net income             1,363     1,850       1,505     2,001     1,803
Earnings Per Share
 Net income per $      $       $      $      $    
common share, basic     0.40    0.54         0.44     0.59     0.54
 Net income per $      $       $      $      $    
common share, diluted   0.40    0.54         0.44     0.59     0.53









EAGLE FINANCIAL SERVICES, INC.
Average Balances, Income and Expenses, Yields
and Rates
(dollars in thousands)
                    For the Three Months Ended
                    March 31, 2014              December 31, 2013           March 31, 2013
                              Interest                    Interest                   Interest
                    Average   Income/  Average  Average   Income/  Average  Average  Income/  Average
Assets:             Balance   Expense  Yield    Balance   Expense  Yield    Balance  Expense  Yield
Securities:
 Taxable     $70,873   $2,154   3.04%    $         $       3.01%    $       $ 2,490 3.37%
                                                69,686   2,100            73,925
 Tax-Exempt  34,855    1,759    5.05%    35,577    1,782    5.01%    37,473   1,990    5.31%
^(1)
 Total   $105,728  $3,913   3.70%    $105,263  $       3.69%    $        $ 4,480 4.02%
Securities                                                3,882            111,398
Loans:
 Taxable     $439,069  $21,454  4.89%    $432,857  $        4.92%    $        $21,426  5.20%
                                                          21,300           411,822
 Nonaccrual 4,591     -        0.00%    3,972     -        0.00%    2,514    -        0.00%
 Tax-Exempt  4,263     253      5.94%    4,222     249      5.89%    4,651    294      6.32%
^(1)
 Total   $447,923  $21,707  4.85%    $441,051  $        4.89%    $        $21,719  5.18%
Loans                                                     21,549           418,987
Federal funds sold  -         -        0.00%    -         -        0.00%    -        -        0.00%
Interest-bearing
deposits in other   1,655     4        0.25%    9,393     21       0.23%    17,156   41       0.24%
banks
 Total   $550,715  $25,624  4.65%    $551,735  $        4.61%    $        $26,240  4.81%
earning assets                                            25,452           545,027
Allowance for loan  (5,724)                     (6,694)                     (6,784)
losses
Total non-earning   38,320                      42,670                      37,769
assets
Total assets        $583,311                    $587,711                    $
                                                                            576,012
Liabilities and
Shareholders'
Equity:
Interest-bearing
deposits:
 NOW         $83,606   $93      0.11%    $         $     0.11%    $       $      0.16%
accounts                                        82,926    88              85,175   134
 Money       91,587    105      0.12%    90,733    115      0.13%    85,589   142      0.17%
market accounts
 Savings     64,392    32       0.05%    61,901    32       0.05%    55,696   28       0.05%
accounts
Time deposits:
 $100,000    35,973    187      0.52%    36,777    206      0.56%    41,255   296      0.72%
and more
 Less than   62,538    572      0.91%    63,363    590      0.93%    68,359   722      1.06%
$100,000
 Total                                                           $
interest-bearing    $338,096  $990     0.29%    $335,699  1,030    0.31%    336,074  $ 1,322 0.39%
deposits
Federal funds
purchased and
securities
 sold under
agreements to       4,238     53       1.24%    1         0        0.83%    3,222    118      3.65%
repurchase
Federal Home Loan   22,986    645      2.81%    32,141    1,090    3.39%    32,250   1,095    3.40%
Bank advances
Trust preferred     7,217     316      4.38%    7,217     317      4.40%    7,217    316      4.38%
capital notes
 Total                                                           $
interest-bearing    $372,537  $2,003   0.54%    $375,059  2,438    0.65%    378,763  $ 2,851 0.75%
liabilities
Noninterest-bearing
liabilities:
 Demand      142,267                     142,203                     130,333
deposits
 Other       1,280                       4,536                       2,882
Liabilities
 Total   $516,084                    $521,797                    $
liabilities                                                                 511,978
Shareholders'       67,227                      65,914                      64,034
equity
Total liabilities                                                           $
and shareholders'   $583,311                    $587,711                    576,012
equity
Net interest income           $23,620                     $23,015                    $23,389
Net interest spread                    4.12%                       3.96%                      4.06%
Interest expense as
a percent of
 average                           0.36%                       0.44%                      0.52%
earning assets
Net interest margin                    4.29%                       4.17%                      4.29%

(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
                         3/31/2014   12/31/2013  9/30/2013 6/30/2013 3/31/2013
GAAP Financial
Measurements:
 Interest Income -     $       $       $     $     $    
Loans                    5,331      5,410      5,445    5,342    5,331
 Interest Income -
Securities and Other     819         831         849       880       947
Interest-Earnings Assets
 Interest Expense -    244         259         269       287       326
Deposits
 Interest Expense -    251         355         355       353       377
Other Borrowings
Total Net Interest       $       $       $     $     $    
Income                   5,655      5,627      5,670    5,582    5,575
Non-GAAP Financial
Measurements:
 Add: Tax Benefit on              $      $     $     $    
Tax-Exempt Interest      21            21         22     24     25
Income - Loans
 Add: Tax Benefit on
Tax-Exempt Interest      148         153         158       162       167
Income - Securities
Total Tax Benefit on     $      $      $     $     $    
Tax-Exempt Interest       169        174         180     186     192
Income
Tax-Equivalent Net       $       $       $     $     $    
Interest Income          5,824      5,801      5,850    5,768    5,767



SOURCE Eagle Financial Services, Inc.

Contact: Kathleen J. Chappell, Vice President and CFO, 540-955-2510,
kchappell@bankofclarke.com
 
Press spacebar to pause and continue. Press esc to stop.