EAGLE FINANCIAL SERVICES, INC. ANNOUNCES 2022 FOURTH QUARTER FINANCIAL RESULTS

BERRYVILLE, Va., Jan. 31, 2023 /PRNewswire/ — Eagle Monetary Providers, Inc. (OTCQX: EFSI), the holding firm for Financial institution of Clarke, whose divisions embrace Financial institution of Clarke Wealth Administration, introduced its fourth quarter 2022 outcomes. Choose highlights for the fourth quarter embrace:

Brandon Lorey, President and CEO, said, “The Financial institution of Clarke and its workers delivered quite a few data for Eagle Monetary Providers, Inc. in 2022, together with mortgage development, earnings, earnings per share, and income, regardless of a considerably greater rate of interest surroundings driving elevated competitors for core deposits. For the yr, the Financial institution’s business and residential lending crew together with our area of interest marine division, LV Finance, delivered mortgage development of $338.0 million or 25.5%. The Financial institution additionally reached a brand new after-tax earnings document of $14.5 million translating to a document EPS of $4.17 per share and prime line income of $62.6 million. Moreover, the Financial institution’s Belief and Wealth Administration division broke by the $500 million threshold in Belongings Beneath Administration (AUM) over the yr and contributed over $1 million in after tax-revenue to the corporate, greater than thrice its historic contribution. We proceed to stay centered on our prospects, group, and shareholders by offering the customer support of Foremost Avenue with the product set of Wall Avenue. Due to our phenomenal employees for his or her continued and tireless work in placing our prospects within the heart of every thing we do, as we work to earn the moniker of being the trusted monetary companions for all we serve within the Valley and Northern Virginia.”

Revenue Assertion Assessment

Web revenue for the quarter ended December 31, 2022 was $3.2 million reflecting a lower of 21.7% from the quarter ended September 30, 2022 and a rise of 40.0% from the quarter ended December 31, 2021. The lower from the quarter ended September 30, 2022 was primarily because of the $930 thousand provision for mortgage losses that was expensed in the course of the fourth quarter of 2022 to maintain tempo with mortgage development.  The rise from the quarter ended December 31, 2021 was primarily pushed by elevated web curiosity revenue led by sturdy mortgage development.  Web revenue was $4.1 million for the three-month interval ended September 30, 2022 and $2.3 million for the quarter ended December 31, 2021.

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Web curiosity revenue for the quarter ended December 31, 2022 was $13.3 million reflecting a rise of two.8% from the quarter ended September 30, 2022 and a rise of 19.5% from the quarter ended December 31, 2021. Web curiosity revenue was $12.9 million and $11.1 million for the quarters ended September 30, 2022 and December 31, 2021, respectively.  The rise in web curiosity revenue from the quarters ended September 30, 2022 and December 31, 2021 resulted primarily from development within the Firm’s mortgage portfolio together with the rising rate of interest surroundings.

Whole mortgage curiosity revenue was $15.1 million and $13.3 million for the quarters ended December 31, 2022 and September 30, 2022, respectively.  Whole mortgage curiosity revenue was $10.7 million for the quarter ended December 31, 2021. Whole mortgage curiosity revenue elevated $4.4 million or 41.7% from the quarter ended December 31, 2021 to the quarter ended December 31, 2022. Common loans for the quarter ended December 31, 2022 had been $1.26 billion in comparison with $963.9 million for the quarter ended December 31, 2021.  The tax equal yield on common loans for the quarter ended December 31, 2022 was 4.78%, a rise of 38 foundation factors from the 4.40% common yield for a similar time interval in 2021. Nearly all of this enhance in yield might be attributed to the present rising rate of interest surroundings.

Curiosity and dividend revenue from the funding portfolio was $879 thousand for the quarter ended December 31, 2022 in comparison with $932 thousand for the quarter ended September 30, 2022. Curiosity revenue and dividend revenue from the funding portfolio was $784 thousand for the quarter ended December 31, 2021. The lower in curiosity and dividend revenue between the third and fourth quarters of 2022 resulted from the sale of securities in the course of the third quarter of 2022. The rise in curiosity and dividend revenue between the quarters ended December 31, 2022 and December 31, 2021 resulted from the rise in yields on securities bought throughout 2022. Common investments for the quarter ended December 31, 2022 had been $154.3 million in comparison with $197.1 million for the quarter ended December 31, 2021. The tax equal yield on common investments for the quarter ended December 31, 2022 was 2.26%, up 19 foundation factors from 2.07% for the quarter ended September 30, 2022 and up 62 foundation factors from 1.64% for the quarter ended December 31, 2021.

Whole curiosity expense was $2.9 million for the three months ended December 31, 2022 and $1.5 million and $373 thousand for 3 months ended September 30, 2022 and December 31, 2021, respectively. The rise in curiosity expense resulted from will increase on charges paid on deposit accounts, the subordinated notes that the Firm issued on March 31, 2022, that are at the moment paying a 4.5% fastened fee, and Federal Residence Mortgage Financial institution advances of $175 million entered into in the course of the third and fourth quarters of 2022. The typical price of interest-bearing liabilities elevated 57 and 103 foundation factors when evaluating the quarter ended December 31, 2022 to the quarters ended September 30, 2022 and December 31, 2021, respectively. The typical stability of interest-bearing liabilities elevated $65.6 million from the quarter ended September 30, 2022 to the quarter ended December 31, 2022. The typical stability of interest-bearing liabilities elevated $225.6 million from the quarter ended December 31, 2021 to the identical interval in 2022.

The web curiosity margin was 3.68% for the quarter ended December 31, 2022. For the quarters ended September 30, 2022 and December 31, 2021, the online curiosity margin was 3.72% and three.67%, respectively. The Firm’s web curiosity margin is just not a measurement below accounting rules typically accepted in the US, however it’s a widespread measure utilized by the monetary companies trade to find out how profitably incomes belongings are funded. The Firm’s web curiosity margin is calculated by dividing tax equal web curiosity revenue by complete common incomes belongings. Tax equal web curiosity revenue is calculated by grossing up curiosity revenue for the quantities which are non-taxable (i.e., municipal revenue) then subtracting curiosity expense. The tax fee utilized is 21%.

Noninterest revenue was $3.1 million for the quarter ended December 31, 2022, which represented a lower of $75 thousand or 2.4% from the $3.2 million for the three months ended September 30, 2022. Noninterest revenue for the quarter ended December 31, 2021 was $3.4 million. The $273 thousand or 8.1% lower between the quarters ended December 31, 2021 and December 31, 2022 was pushed primarily by decrease beneficial properties on the sale of loans held on the market which had been largely impacted by the rising rate of interest surroundings.

Noninterest expense elevated $490 thousand, or 4.4%, to $11.5 million for the quarter ended December 31, 2022 from $11.1 million for the quarter ended September 30, 2022. The most important enhance was in different working bills, which incorporates mortgage expense.  This enhance was due primarily to the excessive mortgage quantity skilled in the course of the fourth quarter of 2022. Noninterest expense was $11.9 million for the quarter ended December 31, 2021, representing a lower of $335 thousand or 2.8% when evaluating the quarter ended December 31, 2022 to the quarter ended December 31, 2021. A rise in salaries and advantages bills was famous between the fourth quarter of 2022 and the identical interval in 2021. Annual pay will increase, newly employed workers, incentive plan accruals and elevated insurance coverage prices have attributed to those will increase. The variety of full-time equal workers (FTEs) has elevated from 221 at December 31, 2021, to 241 at December 31, 2022. This enhance was offset by a big lower in skilled charges and extra particularly, authorized bills. Authorized bills had been greater within the fourth quarter of 2021 primarily from the enlargement of the Financial institution’s wealth administration enterprise line and in addition its construct out of the marine lending division. Roughly $2.0 million of these bills had been one-time charges.

Asset High quality and Provision for Mortgage Losses

Nonperforming belongings encompass nonaccrual loans, loans 90 days or extra late and nonetheless accruing, different actual property owned (foreclosed properties), and repossessed belongings. Nonperforming belongings elevated from $2.4 million or 0.16% of complete belongings at September 30, 2022 to $2.6 million or 0.16% of complete belongings at December 31, 2022. Nonperforming belongings had been $2.8 million at December 31, 2021.  Whole nonaccrual loans had been $2.2 million at December 31, 2022 and $2.4 million at September 30, 2022. Nonaccrual loans had been $2.7 million at December 31, 2021. Nearly all of all nonaccrual loans are secured by actual property and administration evaluates the monetary situation of those debtors and the worth of any collateral on these loans. The outcomes of those evaluations are used to estimate the quantity of losses which can be realized on the disposition of those nonaccrual loans.  Different actual property owned was $108 thousand and nil at December 31, 2022 and September 30, 2022, respectively.

The Firm might, below sure circumstances, restructure loans in troubled debt restructurings as a concession to a borrower when the borrower is experiencing monetary misery. Formal, standardized mortgage restructuring packages are usually not utilized by the Firm. Every mortgage thought-about for restructuring is evaluated primarily based on buyer circumstances and will embrace modifications to a number of mortgage provision. Such restructured loans are included in impaired loans however might not essentially be nonperforming loans. At December 31, 2022, the Firm had 28 troubled debt restructurings totaling $4.6 million. Roughly $4.4 million or 26 loans are performing loans, whereas the remaining loans are on non-accrual standing. At September 30, 2022, the Firm had 26 troubled debt restructurings totaling $4.4 million. Roughly $4.2 million or 24 loans had been performing loans, whereas the remaining loans had been on non-accrual standing.

The Firm realized $454 thousand in web charge-offs for the quarter ended December 31, 2022 versus $895 thousand in web recoveries for the three months ended September 30, 2022. Throughout the three months ended December 31, 2021, $39 thousand in web recoveries had been acknowledged. The quantity of provision for mortgage losses displays the outcomes of the Financial institution’s evaluation used to find out the adequacy of the allowance for mortgage losses. The Firm recorded $930 thousand in provision for mortgage loss for the quarter ended December 31, 2022 because of the important development of the mortgage portfolio in the course of the quarter. The Firm acknowledged provision for mortgage losses of zero and $300 thousand for the quarters ended September 30, 2022 and December 31, 2021, respectively. The shortage of provision for the quarter ended September 30, 2022 was because of the giant web restoration that was acknowledged in the course of the quarter.  The supply for the quarter ended December 31, 2021 resulted principally from mortgage development in the course of the quarter. The ratio of allowance for mortgage losses to complete loans was 0.85% at December 31, 2022 and 0.89% at September 30, 2022.  The ratio of allowance for mortgage losses to complete loans was 0.89% at December 31, 2021. The lower within the ratio of the allowance for mortgage losses to complete loans is especially attributable to the kind of new loans which are being originated within the portfolio. Nearly all of development has been within the business actual property and marine mortgage swimming pools, which have a decrease allocation proportion than the general portfolio. The ratio of allowance for mortgage losses to complete nonaccrual loans was 518.86% at December 31, 2022.  The ratio of allowance for mortgage losses to complete nonaccrual loans was 442.59% and 488.85% at September 30, 2022 and December 31, 2021, respectively. Administration’s judgment in figuring out the extent of the allowance relies on evaluations of the collectability of loans whereas making an allowance for such elements as traits in delinquencies and charge-offs, modifications within the nature and quantity of the mortgage portfolio, present financial circumstances that will have an effect on a borrower’s capability to repay and the worth of collateral, general portfolio high quality and overview of particular potential losses. The Firm is dedicated to sustaining an allowance at a degree that adequately displays the danger inherent within the mortgage portfolio.

Whole Consolidated Belongings

Whole consolidated belongings of the Firm at December 31, 2022 had been $1.62 billion, which represented a rise of $143.6 million or 9.75% from complete belongings of $1.47 billion at September 30, 2022. At December 31, 2021, complete consolidated belongings had been $1.30 billion. Whole web loans elevated $121.5 million from $1.19 billion at September 30, 2022 to $1.31 billion at December 31, 2022. Throughout the quarter ended December 31, 2022, $58.6 million in loans had been offered. The Firm offered $961 thousand in mortgage loans on the secondary market and $57.7 million of loans from the business and client mortgage portfolios. These mortgage gross sales resulted in web beneficial properties of $55 thousand. Whole securities elevated $2.0 million from $156.4 million at September 30, 2022, to $158.4 million at December 31, 2022.  At December 31, 2021, complete funding securities had been $193.4 million and web loans had been $976.9 million. The expansion in complete loans and complete belongings was largely resulting from natural mortgage portfolio development because the Firm expands lending varieties and markets.

Deposits and Different Borrowings

Whole deposits elevated to $1.26 billion as of December 31, 2022 when in comparison with September 30, 2022 deposits of $1.25 billion. At December 31, 2021 complete deposits had been $1.18 billion.  The expansion in deposits was primarily natural development because the Firm continues to increase and develop into newer market areas.

The Firm had $175.0 million and $75.0 million, respectively, in excellent borrowings from the Federal Residence Mortgage Financial institution of Atlanta at December 31, 2022 and September 30, 2022.  There have been no excellent borrowings from the Federal Residence Mortgage Financial institution as of December 31, 2021. At December 31, 2022, the Firm had $33.0 million excellent in fed funds bought. There have been no excellent fed funds bought as of September 30, 2022 or December 31, 2021.  These borrowings had been used primarily to fund the sturdy mortgage development that occurred in the course of the quarter ended December 31, 2022.

On March 31, 2022, the Firm entered into Subordinated Notice Buy Agreements with sure certified institutional patrons and accredited institutional buyers, pursuant to which the Firm issued 4.50% Fastened-to-Floating Charge Subordinated Notes due 2032, within the mixture principal quantity of $30.0 million.

Fairness

Shareholders’ fairness was $101.7 million and $98.5 million at December 31, 2022 and September 30, 2022, respectively. Shareholders’ fairness was $110.3 million at December 31, 2021. The lower in shareholder’s fairness at December 31, 2022 compared to December 31, 2021 was pushed by the opposite complete loss from the unrealized loss on out there on the market securities. The e-book worth of the Firm at December 31, 2022 was $29.15 per widespread share. Whole widespread shares excellent had been 3,490,086 at December 31, 2022. On January 25, 2023, the board of administrators declared a $0.30 per widespread share money dividend for shareholders of document as of February 6, 2023 and payable on February 17, 2023.

Cautionary Notice Concerning Ahead-Wanting Statements

Sure info contained on this dialogue might embrace “forward-looking statements” inside the which means of Part 27A of the Securities Act of 1933, as amended, and Part 21E of the Securities Trade Act of 1934, as amended. These forward-looking statements relate to the Firm’s future operations and are typically recognized by phrases corresponding to “the Firm expects,” “the Firm believes” or phrases of comparable import. Though the Firm believes that its expectations with respect to the forward-looking statements are primarily based upon dependable assumptions inside the bounds of its data of its enterprise and operations, there might be no assurance that precise outcomes, efficiency or achievements of the Firm won’t differ materially from any future outcomes, efficiency or achievements expressed or implied by such forward-looking statements.

Elements that would have a cloth adversarial impact on the operations and future prospects of the Firm embrace, however are usually not restricted to: modifications in rates of interest and common financial circumstances; the consequences of the COVID-19 pandemic, together with on the Firm’s credit score high quality and enterprise operations, in addition to its affect on common financial and monetary market circumstances; the legislative and regulatory local weather; financial and financial insurance policies of the U.S. Authorities, together with insurance policies of the U.S. Treasury and Federal Reserve; the standard or composition of the Firm’s mortgage or funding portfolios; demand for mortgage merchandise; deposit flows; competitors; demand for monetary companies within the Firm’s market space; acquisitions and inclinations; the Firm’s capability to maintain tempo with new applied sciences; a failure in or breach of the Firm’s operational or safety methods or infrastructure, or these of third-party distributors or different service suppliers, together with on account of cyberattacks; the Firm’s capital and liquidity necessities; modifications in tax and accounting guidelines, rules, insurance policies and pointers; and different elements included within the Firm’s Annual Report on Kind 10-Ok for the yr ended December 31, 2021 and different filings with the Securities and Trade Fee.