Core Viewpoint - Eagle Financial Services, Inc. held its Q3 earnings call, indicating a focus on financial performance and future outlook [1]. Group 1: Earnings Performance - The earnings release includes non-GAAP financial measures, which are available on the company's website [3]. - A reconciliation to the most directly comparable GAAP financial measures is provided at the end of the earnings release for reference [3]. Group 2: Forward-Looking Statements - The call contains forward-looking statements, with a caution that actual results may differ materially from those expressed [2]. - Relevant factors that could cause actual results to differ are included in the earnings release and SEC filings [2].

Financial Performance - Consolidated net income for Q3 2025 was $5.6 million, a 6.0% increase from Q2 2025 and a 63.1% increase from Q3 2024[4] - Net interest income rose by $1.5 million or 9.6% to $17.2 million compared to Q2 2025, and increased by 30.7% from Q3 2024[8] - The net interest margin improved to 3.58% in Q3 2025, up from 3.42% in Q2 2025 and 3.03% in Q3 2024[9] - Total noninterest income was $5.2 million in Q3 2025, an increase of 6.1% from Q2 2025, driven by a 10.7% rise in wealth management fee income[10] - The efficiency ratio improved to 64.06% in Q3 2025 from 64.91% in Q2 2025[2] - The return on average total assets for Q3 2025 was 1.10%, compared to 1.09% in Q2 2025[33] - Earnings per share (diluted) for the quarter ended September 30, 2025, was $1.04, consistent with the previous quarter's $0.98[41] Asset and Loan Management - Total consolidated assets decreased by $102.6 million or 5.04% from $2.04 billion at June 30, 2025 to $1.93 billion at September 30, 2025[18] - Total net loans increased by $22.5 million from $1.42 billion at June 30, 2025 to $1.45 billion at September 30, 2025, driven by a $27.4 million growth in commercial real estate loans[19] - Total loans as of September 30, 2025, amounted to $1,454,163 thousand, an increase from $1,432,404 thousand as of June 30, 2025, representing a growth of 1.5%[40] - The commercial loans for owner-occupied properties increased to $290,931 thousand as of September 30, 2025, from $288,821 thousand as of June 30, 2025, a growth of 0.7%[40] Credit Quality - Nonperforming assets decreased to $14.3 million or 0.74% of total assets in Q3 2025, down from $17.5 million or 0.86% in Q2 2025[12] - The company reported $2.3 million in net charge-offs for Q3 2025, significantly higher than $159 thousand in Q2 2025[16] - The allowance for credit losses to total loans ratio decreased from 1.11% at June 30, 2025 to 1.01% at September 30, 2025, primarily due to a $1.1 million charge-off[17] - The allowance for credit losses on loans decreased to $(14,810) thousand as of September 30, 2025, from $(15,979) thousand as of June 30, 2025, showing an improvement in credit quality[40] - The provision for credit losses was $1,112 thousand for the quarter ended September 30, 2025, compared to $668 thousand for the quarter ended June 30, 2025, indicating a rise of 66.4%[41] - Non-performing loans to total loans ratio improved to 0.91% in Q3 2025 from 1.20% in Q2 2025[37] Dividend and Equity - The company declared a quarterly cash dividend of $0.31 per common share, payable on November 14, 2025[2] - Total consolidated equity increased by $67.7 million to $185.6 million at September 30, 2025 compared to September 30, 2024[25] - The Company announced a quarterly common stock cash dividend of $0.31 per share, payable on November 14, 2025[24] - Total shareholders' equity increased to $185,581 thousand in Q3 2025 from $179,648 thousand in Q2 2025[39] Deposits and Funding - Total deposits decreased to $1.66 billion as of September 30, 2025, down from $1.77 billion at June 30, 2025, with a year-over-year increase of $109.1 million[20] - Loans to deposits ratio increased to 88.21% in Q3 2025 from 81.44% in Q2 2025[37] - The Company's liquid assets were $467.7 million as of September 30, 2025, with borrowing availability of $530.9 million, exceeding uninsured deposits by $795.8 million[22] Interest and Expense Management - Noninterest expense increased by $945 thousand or 7.1% to $14.3 million in Q3 2025 compared to Q2 2025[11] - Total noninterest expenses increased to $14,344 thousand for the quarter ended September 30, 2025, from $13,399 thousand in the previous quarter, reflecting a rise of 7.0%[41] - Total interest and dividend income for the quarter ended September 30, 2025, was $25,933 thousand, up from $24,815 thousand in the previous quarter, indicating an increase of 4.5%[41] - Total interest-bearing deposits were $1,159.7 million, with an interest expense of $7,886 million, yielding an average rate of 2.70%[42]

Core Insights - Eagle Financial Services, Inc. reported a strong third quarter for 2025, with net income rising to $5.6 million, a 6.0% increase from the previous quarter and a 63.1% increase year-over-year [2][3][6]. Financial Performance - Consolidated net income for Q3 2025 was $5,584,000, compared to $5,270,000 in Q2 2025 and $3,424,000 in Q3 2024 [2][3]. - Earnings per share for Q3 2025 were $1.04, up from $0.98 in Q2 2025 and $0.97 in Q3 2024 [2][3]. - The annualized return on average equity was 12.20% for Q3 2025, compared to 11.93% in Q2 2025 and 11.99% in Q3 2024 [2][3]. - The annualized return on average assets was 1.10% for Q3 2025, slightly up from 1.09% in Q2 2025 and significantly higher than 0.75% in Q3 2024 [2][3]. Income and Expenses - Net interest income increased to $17.2 million in Q3 2025, a 9.6% increase from Q2 2025 and a 30.7% increase from Q3 2024 [4][6]. - Total noninterest income was $5.2 million in Q3 2025, up from $4.9 million in Q2 2025 and comparable to $5.3 million in Q3 2024 [7]. - Noninterest expense rose to $14.3 million in Q3 2025, a 7.1% increase from Q2 2025 and an 11.3% increase from Q3 2024 [8]. Asset Quality - Nonperforming assets decreased from $17.5 million (0.86% of total assets) at June 30, 2025, to $14.3 million (0.74% of total assets) at September 30, 2025 [9]. - The ratio of allowance for credit losses to total loans was 1.01% as of September 30, 2025, down from 1.11% at June 30, 2025 [13]. Balance Sheet - Total consolidated assets were $1.93 billion as of September 30, 2025, a decrease of $102.6 million (5.04%) from June 30, 2025 [14]. - Total net loans increased by $22.5 million to $1.45 billion, driven primarily by growth in commercial real estate loans [15]. - Total deposits decreased to $1.66 billion as of September 30, 2025, down from $1.77 billion at June 30, 2025 [16][17]. Capital and Dividends - The Board of Directors announced a quarterly cash dividend of $0.31 per common share, payable on November 14, 2025 [20]. - Total consolidated equity increased to $185.6 million as of September 30, 2025, up $67.7 million from the previous year [20][22].

Financial Performance - The Company incurred a net loss of $1.7 million for the six months ended June 30, 2025[134]. - Net income for Q2 2025 was $5.3 million, up from $3.2 million in Q2 2024, while net loss for the first half of 2025 was ($1.7 million) compared to a profit of $5.7 million in the same period of 2024[157]. - Earnings per share for Q2 2025 were $0.98, compared to $0.89 in Q2 2024, while for the first half of 2025, it was ($0.34) compared to $1.61 in the same period of 2024[158]. - The company experienced a net loss of $9.8 million from the sale of available-for-sale securities, impacting ROA and ROE negatively by 1.03% and 12.62%, respectively, for the first half of 2025[161]. - The net operating loss for the Company was $1.7 million for the six months ended June 30, 2025, impacted by a $12.4 million loss on the sale of securities[231]. Assets and Liabilities - As of June 30, 2025, the Company reported total assets of $2.04 billion, net loans of $1.42 billion, total deposits of $1.77 billion, and shareholders' equity of $179.6 million[134]. - Total assets reached $1,932,959 as of June 30, 2025, an increase from $1,767,122 in 2024, marking a growth of approximately 9.4%[171]. - Total deposits increased by $191.4 million, or 12.15%, to $1.77 billion at June 30, 2025, from $1.58 billion at December 31, 2024[230]. - The ratio of gross loans to deposits decreased from 93.14% at December 31, 2024, to 81.44% at June 30, 2025, due to a 12.15% increase in deposits[214]. - Liquid assets reached $535.9 million at June 30, 2025, compared to $335.9 million at December 31, 2024, representing an increase of 59.3%[238]. Income and Expenses - Net interest income for Q2 2025 was $15.7 million, an increase of $3.5 million or 29.1% from Q2 2024, and for the first half of 2025, it was $29.0 million, up $4.4 million or 18.2% from the same period in 2024[162]. - Total interest and dividend income for the first half of 2025 was $48.3 million, an increase of $4.6 million or 10.71% from the same period in 2024[164]. - Total noninterest income for the three months ended June 30, 2025, was $4.9 million, a 14% increase from $4.3 million in 2024[182]. - Total noninterest expenses increased by $889 thousand, or 7.11%, for the three months ended June 30, 2025, compared to the same period in 2024[191]. - Salaries and employee benefits rose by 7% to $7.85 million for the three months ended June 30, 2025, compared to $7.35 million in 2024[192]. Credit and Loans - The allowance for credit losses is established through charges to earnings, reflecting management's estimate of expected credit losses over the contractual term of loans held for investment[152]. - The provision for credit losses for the six months ended June 30, 2025, was $1.9 million, compared to $656 thousand in 2024, indicating a significant increase in expected credit losses[181]. - Nonperforming assets increased by $14.9 million during the six months ended June 30, 2025, totaling $17.5 million compared to $2.6 million at December 31, 2024[224]. - Nonaccrual loans increased to $16.7 million at June 30, 2025, from $2.1 million at December 31, 2024, primarily due to an $11.5 million non-owner occupied commercial real estate relationship[226]. - Charged-off loans were $1.4 million for the six months ended June 30, 2025, compared to $877 thousand for the same period in 2024[220]. Capital and Equity - Total shareholders' equity increased to $179.6 million at June 30, 2025, up from $119.0 million at December 31, 2024, representing an increase of 50.9%[231]. - The Bank's common equity Tier 1 capital ratio improved to 14.14% at June 30, 2025, compared to 11.04% at December 31, 2024, reflecting a significant increase due to a public offering[235]. - The Company issued $30.0 million in subordinated notes with a fixed-to-floating rate due April 1, 2032, as part of its capital management strategy[237]. - The capital conservation buffer requirement of 2.5% is effective, requiring a minimum common equity Tier 1 ratio of 7.0%[234]. - The Bank met all capital adequacy requirements and maintained regulatory capital ratios above the established levels for well-capitalized institutions[232]. Market Activities - The Company completed a public offering of 1,796,875 shares at a price of $32.00 per share, generating net proceeds of $53.5 million[135]. - The company executed balance sheet repositioning transactions, selling $99.2 million of available-for-sale debt securities, resulting in a net pre-tax loss of $12.4 million[186]. - The company sold $50.8 million in mortgage loans during the six months ended June 30, 2025, resulting in gains of $1.5 million, compared to $25.5 million in mortgage loans and $653 thousand in gains in 2024[187]. Operational Efficiency - The efficiency ratio improved to 64.91% for the three months ended June 30, 2025, compared to 77.00% for the same period in 2024, indicating increased operational efficiency[200]. - The Company utilizes non-GAAP financial measures, including tax-equivalent net interest income and efficiency ratio, to provide supplemental information regarding operational performance[153]. - The average rate on interest-bearing liabilities decreased by 11 basis points to 3.01% for the six months ended June 30, 2025, compared to 3.12% in 2024[179]. - The average yield on total earning assets increased to 5.41% for the three months ended June 30, 2025, up from 5.22% in 2024, indicating improved asset utilization[171]. - The net interest spread widened to 2.51% for the three months ended June 30, 2025, compared to 2.08% in the same period of 2024, indicating improved efficiency in interest income generation[171].

Core Viewpoint - The article emphasizes the importance of value investing and highlights Eagle Financial Services (EFSI) as a strong candidate for value investors due to its attractive valuation metrics and strong earnings outlook [2][4][7]. Company Summary - Eagle Financial Services (EFSI) has a Zacks Rank of 2 (Buy) and an A grade for Value, indicating it is a high-quality value stock [4][7]. - The current P/E ratio of EFSI is 9.01, which is lower than the industry average P/E of 10.29, suggesting it may be undervalued [4]. - Over the past 52 weeks, EFSI's Forward P/E has fluctuated between a high of 9.32 and a low of 8.06, with a median of 8.93 [4]. - EFSI's P/B ratio stands at 1.01, significantly lower than the industry average P/B of 1.79, indicating a favorable valuation [5]. - The P/B ratio for EFSI has ranged from a high of 1.10 to a low of 0.88 over the past year, with a median of 1.00 [5]. - The P/S ratio for EFSI is 1.67, compared to the industry average P/S of 2.07, further supporting its undervaluation [6]. Industry Summary - The industry average P/E ratio is 10.29, while the average P/B ratio is 1.79, and the average P/S ratio is 2.07, indicating that EFSI is trading at lower multiples compared to its peers [4][5][6].

[Executive Summary & Q2 2025 Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Q2%202025%20Highlights) Eagle Financial Services achieved record Q2 2025 net income and EPS, driven by strategic portfolio repositioning and improved net interest margin [Q2 2025 Financial Performance Overview](index=1&type=section&id=Q2%202025%20Financial%20Performance%20Overview) Eagle Financial Services reported strong second quarter 2025 results, with consolidated net income reaching $5.3 million and diluted EPS of $0.98, alongside significant improvements in net interest margin and efficiency ratio | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :-------------------------------- | :------------ | :------------- | :------------ | | Consolidated net income (loss) (thousands) | $5,270 | $(6,974) | $3,185 | | Consolidated noninterest income (loss) (thousands) | $4,917 | $(8,554) | $4,305 | | Earnings (loss) per share - basic and diluted ($) | $0.98 | $(1.53) | $0.89 | | Annualized return on average equity (%) | 11.93 % | -20.75% | 11.89% | | Annualized return on average assets (%) | 1.09 % | -1.48% | 0.72% | | Net interest margin (%) | 3.42 % | 2.98% | 2.92% | - Quarterly common stock cash dividend declared: **$0.31 per common share**, payable August 15, 2025[2](index=2&type=chunk) - Net interest income increased by **$2.4 million or 17.7%** during the quarter to **$15.7 million**[3](index=3&type=chunk) - Efficiency ratio decreased from **72.20% to 64.91%** during the quarter[3](index=3&type=chunk) [CEO Commentary](index=2&type=section&id=CEO%20Commentary) President and CEO Brandon Lorey expressed satisfaction with record net income and EPS, attributing strong results to post-capital raise execution and strategic securities portfolio repositioning - Record net income of **$5.3 million** and earnings per share of **$0.98** were reported, aligning with expectations[4](index=4&type=chunk) - Net interest margin expanded by **44 basis points**, and annualized return on assets reached **1.09%**, driven by post-capital raise execution and securities portfolio repositioning[4](index=4&type=chunk) - Funding profile strengthened through the transition from higher-cost borrowings to lower-cost deposits, enhancing long-term balance sheet efficiency[4](index=4&type=chunk) [Income Statement Review](index=2&type=section&id=Income%20Statement%20Review) The income statement reflects a strong recovery in net income, driven by increased net interest income and noninterest income, despite rising noninterest expenses [Net Income Analysis](index=2&type=section&id=Net%20Income%20Analysis) Total net income for Q2 2025 was $5.3 million, a significant recovery from Q1 2025's net loss, driven by higher net interest income, gains on loan sales, and lower credit loss provisions | Metric | Q2 2025 | Q1 2025 | Q1 2025 (Adjusted) | Q2 2024 | | :-------------------------------- | :------ | :------ | :----------------- | :------ | | Total net income (loss) (millions) | $5.3 | $(7.0) | $2.8 | $3.2 | | Loss on sale of securities (millions) | - | $12.4 | - | - | | Net income increase (QoQ adjusted) (%) | 85.4% | - | - | - | | Net income increase (YoY) (%) | 65.5% | - | - | - | - The increase in net income from Q1 2025 was primarily due to increased net interest income and gain on loans held for sale, as well as a lower provision for credit losses, partially offset by higher salaries and employee benefits[5](index=5&type=chunk) [Interest Income](index=2&type=section&id=Interest%20Income) Total loan interest income increased slightly QoQ and YoY, while investment portfolio interest and dividend income saw a substantial increase due to strategic securities repositioning | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :-------------------------------- | :------ | :------ | :------ | | Total loan interest income (millions) | $20.4 | $20.0 | $19.5 | | Loan interest income increase (QoQ) (%) | 2.2% | - | - | | Tax equivalent yield on average loans (%) | 5.67% | 5.57% | - | | Investment portfolio interest and dividend income (thousands) | $1,300 | $848 | $897 | | Tax equivalent yield on average investments (%) | 4.37% | 2.93% | 2.62% | - The increase in investment portfolio yield was largely due to replacing lower-yielding investments (**1.72% weighted average yield**) sold in Q1 2025 with higher-yielding securities (**4.72% weighted average yield**)[7](index=7&type=chunk) [Interest Expense](index=2&type=section&id=Interest%20Expense) Total interest expense decreased QoQ and YoY, primarily due to the payoff of a $25.0 million FHLB advance, partially offset by increased interest on deposits | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :-------------------------------- | :------ | :------ | :------ | | Total interest expense (millions) | $9.1 | $10.2 | $9.6 | | FHLB advances decrease (QoQ) (millions) | $25.0 | - | - | | Average balance of FHLB advances decrease (YoY) (millions) | $104.3 | - | - | | Average balance of interest-bearing deposits increase (YoY) (millions) | $140.0 | - | - | - The decrease in interest expense from Q1 2025 was mainly due to the payoff of a **$25.0 million FHLB advance** in April 2025[8](index=8&type=chunk) [Net Interest Income and Margin](index=3&type=section&id=Net%20Interest%20Income%20and%20Margin) Net interest income for Q2 2025 increased significantly by 17.7% QoQ and 29.1% YoY, with net interest margin expanding to 3.42% due to improved spreads and yields | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :-------------------------------- | :------ | :------ | :------ | | Net interest income (millions) | $15.7 | $13.3 | $12.2 | | Net interest income increase (QoQ) (%) | 17.7% | - | - | | Net interest income increase (YoY) (%) | 29.1% | - | - | | Net interest margin (%) | 3.42% | 2.98% | 2.92% | | Net interest spread (%) | 2.51% | 2.13% | 2.08% | - The increase in net interest margin was driven by a **144 basis point increase** in the yield on securities due to portfolio repositioning, higher yielding loan originations, and lower renewal rates on maturing certificates of deposit[10](index=10&type=chunk) [Noninterest Income](index=3&type=section&id=Noninterest%20Income) Total noninterest income for Q2 2025 was $4.9 million, a substantial recovery from Q1 2025's loss, primarily due to higher gains on SBA loan sales | Metric | Q2 2025 | Q1 2025 | Q1 2025 (Adjusted) | Q2 2024 | | :-------------------------------- | :------ | :------ | :----------------- | :------ | | Total noninterest income (loss) (millions) | $4.9 | $(8.6) | $3.9 | $4.3 | | SBA loans sold (millions) | $8.4 | $2.0 | - | $2.6 | | Gain on SBA loan sales (thousands) | $712 | $125 | - | $238 | - The increase in noninterest income was mainly due to higher gains on sale of loans held for sale, particularly from increased sales activity in the SBA portfolio[11](index=11&type=chunk) [Noninterest Expense](index=3&type=section&id=Noninterest%20Expense) Noninterest expense increased by 6.4% QoQ to $13.4 million and 7.1% YoY, primarily driven by a 9.3% QoQ increase in salaries and benefits due to higher employee count and loan sales activity | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :-------------------------------- | :------ | :------ | :------ | | Total noninterest expense (millions) | $13.4 | $12.6 | $12.5 | | Noninterest expense increase (QoQ) (%) | 6.4% | - | - | | Noninterest expense increase (YoY) (%) | 7.1% | - | - | | Salaries and benefits increase (QoQ) (%) | 9.3% | - | - | | Full time equivalent employees (FTE) | 245 | 233 | - | - The increase in salaries and benefits expenses was mainly due to an increase in the number of employees and higher insurance and commissions expenses from increased loan sales activity[12](index=12&type=chunk) [Asset Quality and Provision for Credit Losses](index=3&type=section&id=Asset%20Quality%20and%20Provision%20for%20Credit%20Losses) Asset quality saw an increase in nonperforming assets, with a corresponding rise in specific reserves, while net charge-offs decreased QoQ [Nonperforming Assets](index=3&type=section&id=Nonperforming%20Assets) Nonperforming assets increased to $17.5 million (0.86% of total assets) at June 30, 2025, primarily due to several loans, including two large relationships totaling $13.7 million, being placed on nonaccrual status | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :-------------------------------- | :------------ | :------------- | :------------ | | Nonperforming assets (millions) | $17.5 | $16.4 | $3.3 | | Nonperforming assets as % of total assets (%) | 0.86% | 0.86% | 0.18% | | Specific reserves on nonaccrual loans (millions) | $1.5 | $0.152 | $0.346 | - The increase in nonperforming assets was largely due to the placement of several loans onto nonaccrual status, including two large relationships totaling **$13.7 million**[13](index=13&type=chunk) - One nonaccrual relationship with a **$2.2 million balance** is secured by a partially owner-occupied property, with foreclosure proceedings expected in Q3 2025, and sufficient collateral is believed to cover the loan[14](index=14&type=chunk) - Another relationship involved four residential multifamily properties with **$11.5 million exposure**; one property was short-sold for **$4.8 million**, creating a **$1.1 million deficiency balance**, which is collateralized by the owner's remaining properties, and a specific reserve has been allocated for the full deficiency[15](index=15&type=chunk) [Net Charge-offs and Allowance for Credit Losses](index=4&type=section&id=Net%20Charge-offs%20and%20Allowance%20for%20Credit%20Losses) Net charge-offs decreased significantly to $159 thousand in Q2 2025, while the allowance for credit losses to total loans increased to 1.11%, reflecting management's commitment to maintaining an adequate allowance | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :-------------------------------- | :------ | :------ | :------ | | Net charge-offs (recoveries) (thousands) | $159 | $891 | $(252) | | Ratio of allowance for credit losses to total loans (%) | 1.11% | 1.05% | 1.04% | - The majority of Q1 2025 charge-offs were due to a **$971 thousand write-down** of one nonaccrual multifamily relationship[17](index=17&type=chunk) [Provision for Credit Losses](index=4&type=section&id=Provision%20for%20Credit%20Losses) The Company recorded $856 thousand in provision for credit losses on loans for Q2 2025, a decrease from Q1 2025 but an increase from Q2 2024, mainly due to a large specific reserve | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :-------------------------------- | :------ | :------ | :------ | | Provision for credit losses on loans (thousands) | $856 | $1,100 | $315 | - The Q2 2025 provision was primarily due to a large specific reserve of **$1.1 million** on a nonaccrual loan relationship, partially offset by a reduction in the loan portfolio[18](index=18&type=chunk) [Balance Sheet Overview](index=4&type=section&id=Balance%20Sheet%20Overview) The balance sheet shows significant asset and deposit growth, primarily driven by increased cash and non-interest bearing deposits, while net loans experienced a slight decrease [Assets](index=4&type=section&id=Assets) Total consolidated assets increased by $130.6 million (6.86%) QoQ to $2.04 billion at June 30, 2025, primarily driven by a $131.1 million increase in cash and cash equivalents from strong deposit growth | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :-------------------------------- | :------------ | :------------- | :------------ | | Total consolidated assets (billions) | $2.04 | $1.90 | $1.79 | | Total assets increase (QoQ) (millions) | $130.6 | - | - | | Total assets increase (YoY) (millions) | $272.3 | - | - | | Cash and cash equivalents increase (QoQ) (millions) | $131.1 | - | - | - The increase in total assets was primarily due to a significant increase in cash and cash equivalents, driven by strong deposit growth[19](index=19&type=chunk) [Loans](index=5&type=section&id=Loans) Total net loans decreased by $14.3 million QoQ to $1.42 billion at June 30, 2025, largely due to marine loan amortization and reductions in commercial and industrial loans | Metric | June 30, 2025 | March 31, 2025 | | :-------------------------------- | :------------ | :------------- | | Total net loans (billions) | $1.42 | $1.44 | | Net loans decrease (QoQ) (millions) | $14.3 | - | | Marine amortization (millions) | $7.0 | - | | Commercial and industrial loans decrease (millions) | $6.4 | - | | Construction pool decrease (millions) | $22.6 | - | - The decrease in commercial and industrial loans was directly related to the sales of two customers' businesses and the subsequent payoffs of their outstanding loan balances[20](index=20&type=chunk) [Deposits](index=5&type=section&id=Deposits) Total deposits increased by $152.7 million QoQ to $1.77 billion at June 30, 2025, primarily driven by large deposits in non-interest bearing accounts related to customer business sales | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :-------------------------------- | :------------ | :------------- | :------------ | | Total deposits (billions) | $1.77 | $1.61 | $1.49 | | Total deposits increase (QoQ) (millions) | $152.7 | - | - | | Total deposits increase (YoY) (millions) | $277.9 | - | - | | Non-interest bearing accounts increase (QoQ) (millions) | $151.7 | - | - | | Core deposit growth (QoQ) (millions) | $6.7 | - | - | - The significant increase in non-interest bearing deposits was primarily related to sales proceeds from two customer businesses, with uncertainty regarding long-term retention[21](index=21&type=chunk) [Liquidity Management](index=5&type=section&id=Liquidity%20Management) The company maintains robust liquidity, with liquid assets and borrowing availability significantly exceeding uninsured deposits, while total outstanding borrowings decreased due to strong deposit growth [Uninsured Deposits and Liquid Assets](index=5&type=section&id=Uninsured%20Deposits%20and%20Liquid%20Assets) As of June 30, 2025, uninsured deposits were $195.5 million (11.1% of total deposits), significantly exceeded by $535.9 million in liquid assets and $499.1 million in borrowing availability | Metric | June 30, 2025 | | :-------------------------------- | :------------ | | Uninsured deposits (millions) | $195.5 | | Uninsured deposits as % of total deposits (%) | 11.1% | | Liquid assets (millions) | $535.9 | | Borrowing availability (millions) | $499.1 | | Excess liquidity over uninsured deposits (millions) | $839.5 | - Liquid assets increased by **$123.8 million** during Q2, mainly due to a **$131.1 million increase** in cash and cash equivalents[23](index=23&type=chunk) [Borrowings and Other Liquidity Sources](index=5&type=section&id=Borrowings%20and%20Other%20Liquidity%20Sources) Total outstanding borrowings decreased significantly to $69.7 million at June 30, 2025, driven by strong deposit growth and higher loan sales, with additional liquidity from operations and securities | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :-------------------------------- | :------------ | :------------- | :------------ | | Total outstanding borrowings (millions) | $69.7 | $94.5 | $174.8 | | Borrowings decrease (QoQ) (millions) | $24.8 | - | - | | Borrowings decrease (YoY) (millions) | $105.1 | - | - | - Decreases in borrowings were primarily due to strong deposit growth and higher levels of loan sales, facilitating the payoff of existing borrowings[23](index=23&type=chunk) - Other liquidity sources include cash flows from operations, loan payments and payoffs, deposit growth, maturities, calls and sales of securities, and the issuance of brokered certificates of deposit[24](index=24&type=chunk) [Capital and Dividends](index=6&type=section&id=Capital%20and%20Dividends) The company announced a quarterly dividend, saw significant equity growth bolstered by a public offering, and maintained a 'well capitalized' regulatory status [Dividend Announcement](index=6&type=section&id=Dividend%20Announcement) The Board of Directors announced a quarterly common stock cash dividend of $0.31 per common share, payable on August 15, 2025, to shareholders of record on August 4, 2025 - A quarterly common stock cash dividend of **$0.31 per common share** was announced[25](index=25&type=chunk) [Shareholders' Equity and Capital Raise](index=6&type=section&id=Shareholders%27%20Equity%20and%20Capital%20Raise) Total consolidated equity increased by $68.5 million YoY to $179.6 million at June 30, 2025, significantly bolstered by a Q1 2025 public offering that generated $53.5 million in net proceeds | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :-------------------------------- | :------------ | :------------- | :------------ | | Total consolidated equity (millions) | $179.6 | $176.4 | $111.1 | | Equity increase (YoY) (millions) | $68.5 | - | - | | Equity increase (QoQ) (millions) | $3.2 | - | - | | Net proceeds from public offering (millions) | - | $53.5 | - | | Accumulated other comprehensive (loss) (millions) | $(7.3) | $(6.6) | $(18.8) | - The company completed a public offering in Q1 2025, issuing **1,796,875 shares** with net proceeds of **$53.5 million**[26](index=26&type=chunk) - A balance sheet repositioning in Q1 2025 involved selling **$99.2 million** in available-for-sale debt securities (**1.72% yield**) and reinvesting **$66.0 million** into higher-yielding securities (**4.70% yield**), resulting in a **$12.4 million pre-tax realized loss**[27](index=27&type=chunk) [Regulatory Capital Ratios](index=6&type=section&id=Regulatory%20Capital%20Ratios) As of June 30, 2025, Bank of Clarke was categorized as 'well capitalized' by the FDIC, exceeding all minimum regulatory capital ratios, including the Basel III capital conservation buffer - Bank of Clarke was categorized as '**well capitalized**' under regulatory frameworks as of June 30, 2025[28](index=28&type=chunk) - The Bank exceeded all minimum regulatory capital ratios, including the Basel III capital conservation buffer of **2.5% of risk-weighted assets**[28](index=28&type=chunk) [Non-GAAP Financial Measures](index=6&type=section&id=Non-GAAP%20Financial%20Measures) The release includes non-GAAP financial information, which management believes provides a better comparison of operating performance and the impact of non-recurring expenses, but should not be viewed as a substitute for GAAP results - Non-GAAP financial measures are provided to offer a clearer comparison of operating performance and the impact of non-recurring expenses[29](index=29&type=chunk) - These disclosures are not a substitute for GAAP results and may not be comparable to non-GAAP measures presented by other companies[29](index=29&type=chunk) [Conference Call and Webcast Information](index=6&type=section&id=Conference%20Call%20and%20Webcast%20Information) Eagle Financial Services will host a listen-only conference call and webcast on Friday, July 25, 2025, at 10 a.m. eastern time, to discuss its second quarter results - A listen-only conference call and webcast for Q2 2025 results will be held on **Friday, July 25, 2025, at 10 a.m. eastern time**[30](index=30&type=chunk) - Conference ID: **3461943**. Webcast URL: **https://events.q4inc.com/attendee/115138030**[31](index=31&type=chunk) [Forward-Looking Statements](index=7&type=section&id=Forward-Looking%20Statements) The report contains forward-looking statements regarding the Company's future operations, which are subject to various risks and uncertainties that may cause actual results to differ materially - The report includes forward-looking statements about future operations, identified by phrases like 'the Company expects' or 'the Company believes'[32](index=32&type=chunk) - Actual results may differ materially from forward-looking statements due to factors including changes in interest rates, economic conditions, legislative and regulatory climate, and the quality of loan or investment portfolios[33](index=33&type=chunk) - Other risk factors include demand for loan products, deposit flows, competition, technological changes, operational or security system failures (including cyberattacks), capital and liquidity, and changes in tax and accounting rules[33](index=33&type=chunk) [Financial Tables and Reconciliations](index=8&type=section&id=Financial%20Tables%20and%20Reconciliations) This section provides comprehensive financial tables and reconciliations, detailing key performance indicators, balance sheet components, loan data, income statements, and non-GAAP adjustments [Key Statistics](index=8&type=section&id=Key%20Statistics) This table provides a summary of key financial performance indicators for the past five quarters, including net income, EPS, return ratios, net interest margin, and efficiency ratio, offering a quick overview of trends | (Dollars in thousands, except per share data) | 2Q25 | 1Q25 | 4Q24 | 3Q24 | 2Q24 | | :------------------------------------------ | :--- | :--- | :--- | :--- | :--- | | Net income (loss) (thousands) | $5,270 | $(6,974) | $6,186 | $3,424 | $3,185 | | Earnings (loss) per share, basic ($) | $0.98 | $(1.53) | $1.74 | $0.97 | $0.89 | | Return on average total assets (annualized) (%) | 1.09 % | (1.48)% | 1.32 % | 0.75 % | 0.72 % | | Return on average total equity (annualized) (%) | 11.93 % | (20.75)% | 21.10 % | 11.99 % | 11.89 % | | Net interest margin (%) | 3.42 % | 2.98 % | 3.03 % | 3.03 % | 2.92 % | | Efficiency ratio (%) | 64.91 % | 72.20 % | 74.58 % | 71.34 % | 77.00 % | [Selected Financial Data by Quarter](index=9&type=section&id=Selected%20Financial%20Data%20by%20Quarter) This table presents quarterly trends for balance sheet ratios, per share data, common stock data, and detailed credit quality metrics, offering a comprehensive view of financial performance | (Dollars in thousands, except per share data) | 2Q25 | 1Q25 | 4Q24 | 3Q24 | 2Q24 | | :------------------------------------------ | :--- | :--- | :--- | :--- | :--- | | BALANCE SHEET RATIOS | | | | | | | Loans to deposits (%) | 81.44 % | 89.99 % | 93.14 % | 95.95 % | 97.34 % | | PER SHARE DATA | | | | | | | Dividends ($) | $0.31 | $0.31 | $0.31 | $0.30 | $0.30 | | Book value ($) | 33.41 | 32.81 | 33.52 | 33.20 | 31.24 | | COMMON STOCK DATA | | | | | | | Outstanding shares at end of period | 5,376,346 | 5,378,653 | 3,549,581 | 3,549,581 | 3,556,844 | | CREDIT QUALITY | | | | | | | Net charge-offs (recoveries) to average loans (%) | 0.01 % | 0.06 % | 0.03 % | 0.08 % | (0.02)% | | Total non-performing loans to total loans (%) | 1.20 % | 1.13 % | 0.17 % | 0.16 % | 0.20 % | | Allowance for credit losses to: Total loans (%) | 1.11 % | 1.05 % | 1.02 % | 1.03 % | 1.04 % | | Non-accrual loans (thousands) | $16,735 | $16,122 | $2,072 | $2,344 | $2,703 | | Net charge-offs (recoveries) (thousands) | $159 | $891 | $486 | $1,237 | $(252) | | PROVISION FOR CREDIT LOSSES ON LOANS (thousands) | $856 | $1,146 | $210 | $1,525 | $315 | | ALLOWANCE FOR CREDIT LOSSES ON LOANS (thousands) | $15,979 | $15,282 | $15,027 | $15,303 | $15,014 | [Consolidated Balance Sheets](index=10&type=section&id=Consolidated%20Balance%20Sheets) This table provides a detailed breakdown of the Company's consolidated assets, liabilities, and shareholders' equity for the past five quarters, illustrating changes in key balance sheet components over time | (dollars in thousands) | 06/30/2025 | 03/31/2025 | 12/31/2024 | 09/30/2024 | 06/30/2024 | | :-------------------------------- | :--------- | :--------- | :--------- | :--------- | :--------- | | Assets | | | | | | | Total assets (thousands) | $2,035,080 | $1,904,477 | $1,866,215 | $1,881,701 | $1,790,405 | | Liabilities | | | | | | | Total deposits (thousands) | $1,766,524 | $1,613,791 | $1,575,156 | $1,545,936 | $1,488,584 | | Federal Home Loan Bank advances, long-term (thousands) | 40,000 | 40,000 | 120,000 | 170,000 | 145,000 | | Total liabilities (thousands) | $1,855,432 | $1,728,002 | $1,747,228 | $1,763,857 | $1,679,290 | | Shareholders' Equity | | | | | | | Total shareholders' equity (thousands) | $179,648 | $176,475 | $118,987 | $117,844 | $111,115 | [Loan Data](index=11&type=section&id=Loan%20Data) This table provides a detailed breakdown of the loan portfolio by category for the past five quarters, showing the composition and changes in various loan types, including mortgage real estate, commercial and industrial, marine, and consumer loans | (dollars in thousands) | 6/30/2025 | 3/31/2025 | 12/31/2024 | 9/30/2024 | 6/30/2024 | | :-------------------------------- | :-------- | :-------- | :--------- | :-------- | :-------- | | Mortgage real estate loans: | | | | | | | Construction & Secured by Farmland (thousands) | $76,060 | $98,660 | $95,200 | $97,170 | $81,609 | | Commercial - Owner Occupied (thousands) | 288,821 | 268,990 | 272,236 | 273,249 | 257,675 | | Commercial - Non-Owner Occupied & Multifamily (thousands) | 372,833 | 374,471 | 367,680 | 357,351 | 352,892 | | Commercial and industrial loans: | | | | | | | Other commercial and industrial loans (thousands) | 103,571 | 109,658 | 106,749 | 107,320 | 102,345 | | Marine loans (thousands) | 196,434 | 203,455 | 210,095 | 225,902 | 236,890 | | Total loans (thousands) | $1,432,404 | $1,445,827 | $1,460,596 | $1,476,347 | $1,441,699 | | Net loans (thousands) | $1,422,653 | $1,436,982 | $1,452,022 | $1,468,025 | $1,433,920 | [Consolidated Statements of Income (Loss)](index=12&type=section&id=Consolidated%20Statements%20of%20Income%20(Loss)) This table presents the consolidated statements of income (loss) for the past five quarters, detailing interest and dividend income, interest expense, net interest income, provision for credit losses, noninterest income, noninterest expenses, and net income (loss) per share | (dollars in thousands, except per share data) | 6/30/2025 | 3/31/2025 | 12/31/2024 | 9/30/2024 | 6/30/2024 | | :------------------------------------------ | :-------- | :-------- | :--------- | :-------- | :-------- | | Total interest and dividend income (thousands) | $24,815 | $23,502 | $23,994 | $23,686 | $21,738 | | Total interest expense (thousands) | $9,117 | $10,166 | $10,495 | $10,529 | $9,582 | | Net interest income (thousands) | $15,698 | $13,336 | $13,499 | $13,157 | $12,156 | | Provision For Credit Losses (thousands) | 668 | 1,233 | 351 | 1,544 | 181 | | Total noninterest income (loss) (thousands) | $4,917 | $(8,554) | $8,521 | $5,251 | $4,305 | | Total noninterest expenses (thousands) | $13,399 | $12,589 | $13,555 | $12,890 | $12,510 | | Net income (loss) (thousands) | $5,270 | $(6,974) | $6,186 | $3,424 | $3,185 | | Net income (loss) per common share, diluted ($) | $0.98 | $(1.53) | $1.74 | $0.97 | $0.89 | [Average Balances, Income and Expenses, Yields and Rates](index=13&type=section&id=Average%20Balances%2C%20Income%20and%20Expenses%2C%20Yields%20and%20Rates) This table provides a detailed analysis of average balances, interest income and expenses, and corresponding yields and rates for earning assets and interest-bearing liabilities over the past three quarters, crucial for understanding net interest margin drivers | (dollars in thousands) | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :-------------------------------- | :------------ | :------------- | :------------ | | Assets: | | | | | Total earning assets (Average Balance, thousands) | $1,842,914 | $1,818,932 | $1,676,259 | | Total earning assets (Interest Income, thousands) | $24,841 | $23,530 | $21,767 | | Total earning assets (Rate, %) | 5.41 % | 5.25 % | 5.22 % | | Liabilities and Shareholders' Equity: | | | | | Total interest-bearing liabilities (Average Balance, thousands) | $1,261,578 | $1,320,137 | $1,225,791 | | Total interest-bearing liabilities (Interest Expense, thousands) | $9,117 | $10,166 | $9,582 | | Total interest-bearing liabilities (Rate, %) | 2.90 % | 3.12 % | 3.14 % | | Net interest income (1) (thousands) | $15,724 | $13,364 | $12,185 | | Net interest spread (%) | 2.51 % | 2.13 % | 2.08 % | | Net interest margin (1) (%) | 3.42 % | 2.98 % | 2.92 % | [Reconciliation of Tax-Equivalent Net Interest Income](index=14&type=section&id=Reconciliation%20of%20Tax-Equivalent%20Net%20Interest%20Income) This table reconciles GAAP net interest income to tax-equivalent net interest income, providing a clearer view of profitability by adjusting for the tax benefits of tax-exempt interest income from loans and securities | (dollars in thousands) | 6/30/2025 | 3/31/2025 | 12/31/2024 | 9/30/2024 | 6/30/2024 | | :-------------------------------- | :-------- | :-------- | :--------- | :-------- | :-------- | | GAAP Financial Measurements: | | | | | | | Total Net Interest Income (thousands) | $15,698 | $13,336 | $13,499 | $13,157 | $12,156 | | Non-GAAP Financial Measurements: | | | | | | | Add: Tax Benefit on Tax-Exempt Interest Income - Loans (thousands) | $26 | $27 | $27 | $27 | $28 | | Add: Tax Benefit on Tax-Exempt Interest Income - Securities (thousands) | — | $1 | $1 | $1 | $1 | | Total Tax Benefit on Tax-Exempt Interest Income (thousands) | $26 | $28 | $28 | $28 | $29 | | Tax-Equivalent Net Interest Income (thousands) | $15,724 | $13,364 | $13,527 | $13,185 | $12,185 | [Reconciliation of Efficiency Ratio](index=15&type=section&id=Reconciliation%20of%20Efficiency%20Ratio) This table reconciles GAAP noninterest expenses and noninterest income to adjusted non-GAAP figures, which are then used to calculate the efficiency ratio, providing a more consistent measure of operational efficiency | (dollars in thousands) | 6/30/2025 | 3/31/2025 | 12/31/2024 | 9/30/2024 | 6/30/2024 | | :-------------------------------- | :-------- | :-------- | :--------- | :-------- | :-------- | | Noninterest expenses (GAAP) (thousands) | $13,399 | $12,589 | $13,555 | $12,890 | $12,510 | | Adjusted noninterest expenses (non-GAAP) (thousands) | $13,399 | $12,456 | $13,555 | $12,686 | $12,510 | | Noninterest income (loss) (GAAP) (thousands) | $4,917 | $(8,554) | $8,521 | $5,251 | $4,305 | | Adjusted noninterest income (non-GAAP) (thousands) | $4,917 | $3,887 | $4,647 | $4,598 | $4,062 | | Total net interest income and noninterest income, adjusted (non-GAAP) (thousands) | $20,641 | $17,251 | $18,174 | $17,783 | $16,247 | | Efficiency ratio (%) | 64.91 % | 72.20 % | 74.58 % | 71.34 % | 77.00 % | [Reconciliation of GAAP to Non-GAAP Performance Highlights](index=16&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Performance%20Highlights) This table provides a comprehensive reconciliation of GAAP financial measurements to non-GAAP adjusted performance highlights, including net income, noninterest income, earnings per share, and return on average equity and assets, adjusting for non-recurring items | (dollars in thousands, except per share data) | 6/30/2025 | 3/31/2025 | 12/31/2024 | 9/30/2024 | 6/30/2024 | | :------------------------------------------ | :-------- | :-------- | :--------- | :-------- | :-------- | | GAAP Net income (loss) (thousands) | $5,270 | $(6,974) | $6,186 | $3,424 | $3,185 | | Non-GAAP Net income (thousands) | $5,270 | $2,842 | $3,125 | $3,424 | $3,185 | | GAAP Noninterest income (loss) (thousands) | $4,917 | $(8,554) | $8,521 | $5,251 | $4,305 | | Non-GAAP Noninterest income (thousands) | $4,917 | $3,871 | $4,647 | $5,251 | $4,305 | | Earnings per share, basic and diluted ($) | $0.98 | $(1.53) | $1.74 | $0.97 | $0.89 | | Non-GAAP Earnings per share, basic and diluted ($) | $0.98 | $0.62 | $0.88 | $0.97 | $0.89 | | Annualized return on average equity (%) | 11.93% | -20.75% | 21.10% | 11.99% | 11.89% | | Non-GAAP Annualized return on average equity (%) | 11.93% | 8.46% | 10.66% | 11.99% | 11.89% | | Annualized return on average assets (%) | 1.09% | -1.48% | 1.32% | 0.75% | 0.72% | | Non-GAAP Annualized return on average assets (%) | 1.09% | 0.59% | 0.67% | 0.75% | 0.72% |

Core Insights - Eagle Financial Services, Inc. reported a record net income of $5.3 million and earnings per share of $0.98 for the second quarter of 2025, marking a significant recovery from a net loss of $6.9 million in the previous quarter [2][3][33] - The company announced a quarterly cash dividend of $0.31 per common share, payable on August 15, 2025, to shareholders of record on August 4, 2025 [1][25] Financial Performance - Consolidated net income for the quarter ended June 30, 2025, was $5.3 million, an increase of $2.4 million or 85.4% from the adjusted net income of $2.8 million for the quarter ended March 31, 2025, and an increase of $2.1 million or 65.5% from $3.2 million for the quarter ended June 30, 2024 [3][11] - Net interest income increased by $2.4 million or 17.7% to $15.7 million compared to the previous quarter, and increased by 29.1% from $12.2 million in the same quarter last year [6][9] - The net interest margin improved to 3.42% for the quarter ended June 30, 2025, up from 2.98% in the previous quarter and 2.92% a year ago [10][34] Income Statement Highlights - Total loan interest income was $20.4 million for the quarter ended June 30, 2025, a 2.2% increase from $20.0 million in the previous quarter and a 4.6% increase from $19.5 million in the same quarter last year [4] - Noninterest income was $4.9 million for the quarter ended June 30, 2025, compared to a loss of $8.6 million in the previous quarter, driven by higher gains on loans held for sale [11][12] Balance Sheet Overview - Total consolidated assets increased by $130.6 million or 6.86% to $2.04 billion as of June 30, 2025, compared to $1.90 billion at March 31, 2025 [19] - Total deposits rose to $1.77 billion as of June 30, 2025, an increase of $152.7 million from $1.61 billion at March 31, 2025, primarily due to large deposits in non-interest bearing accounts [21] Asset Quality and Credit Losses - Nonperforming assets remained stable at $17.5 million or 0.86% of total assets as of June 30, 2025, unchanged from the previous quarter [13] - The allowance for credit losses to total loans ratio was 1.11% as of June 30, 2025, up from 1.05% at March 31, 2025 [18] Capital and Dividends - Total consolidated equity increased by $68.5 million to $179.6 million at June 30, 2025, compared to the previous year [26][28] - The company completed a public offering in the first quarter of 2025, raising net proceeds of $53.5 million [26]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-42512 EAGLE FINANCIAL SERVICES, INC. (Exact name of registrant as specified in its charter) Virginia 54-1601306 (State or other ...

Financial Performance - Consolidated net loss for Q1 2025 was $6.974 million, compared to a net income of $2.842 million in Q4 2024, reflecting a significant decrease due to a $12.4 million loss on the sale of securities[2][5] - Net income (loss) for Q1 2025 was $(6,974), compared to a net income of $6,186 in Q4 2024, indicating a significant decline[38] - Non-GAAP net income for the quarter was $2,842,000, compared to $3,125,000 in the previous quarter, a decrease of approximately 9.1%[43] Income and Revenue - Total loan interest income decreased by $1.1 million or 5.6% from Q4 2024 to Q1 2025, totaling $20.0 million, attributed to lower average loan balances and yields[6] - Net interest income for Q1 2025 was $13.3 million, reflecting a decrease of 1.2% from Q4 2024 but an increase of 7.4% from Q1 2024[10] - Total noninterest income (loss) was $(8.6 million) for Q1 2025, a decrease of $774 thousand or 16.7% from Q4 2024, primarily due to reduced small business investment company income[12] - Noninterest income for Q1 2025 was $(8,554), a substantial decrease from $8,521 in Q4 2024[38] Expenses and Efficiency - Noninterest expense decreased by $966 thousand or 7.1% to $12.6 million for Q1 2025, mainly due to lower salaries and benefits expenses[13] - The efficiency ratio for Q1 2025 was 72.20%, indicating a slight improvement from 74.58% in Q4 2024, reflecting operational efficiency[30] - Adjusted noninterest expenses (non-GAAP) decreased to $12,456,000 from $13,555,000 in the prior quarter, reflecting a reduction of approximately 8.1%[41] Asset and Liability Management - Total consolidated assets rose to $1.90 billion as of March 31, 2025, reflecting a $38.3 million increase from $1.87 billion at December 31, 2024, largely due to $53.5 million in net proceeds from a public offering[17] - Total deposits increased to $1.61 billion as of March 31, 2025, up $38.6 million from $1.58 billion at December 31, 2024, with significant growth in savings and interest-bearing demand deposits[19] - The Company's liquid assets amounted to $412.0 million as of March 31, 2025, with borrowing availability of $466.4 million, exceeding uninsured deposits by $688.6 million[21] Loan and Credit Quality - Nonperforming assets increased to $16.4 million or 0.86% of total assets as of March 31, 2025, up from $3.0 million or 0.16% at December 31, 2024, primarily due to two large relationships placed in nonaccrual status[14] - The total non-performing loans to total loans ratio increased to 1.13% in Q1 2025 from 0.17% in Q4 2024, indicating a significant rise in credit quality concerns[34] - The allowance for credit losses to total loans ratio increased to 1.05% as of March 31, 2025, compared to 1.02% at December 31, 2024, with a provision for credit losses of $1.1 million in Q1 2025[16] Shareholder Returns - The Company declared a quarterly cash dividend of $0.31 per common share, payable on May 16, 2025, to shareholders of record on May 5, 2025[23] - The book value per share decreased to $32.81 in Q1 2025 from $33.52 in Q4 2024, a decline of 2.1%[34] - The closing share price was $32.79 in Q1 2025, down from $36.40 in Q4 2024, a decrease of 10.0%[34] Market and Investment Performance - The diluted earnings multiple was not meaningful in Q1 2025, while it was 5.23 in Q4 2024, indicating a significant change in earnings performance[34] - The net interest margin for Q1 2025 was 2.98%, down from 3.03% in Q4 2024, while the yield on average earning assets was 5.25%[30] - The net interest spread for the quarter was 2.13%, down from 2.21% in the previous quarter[39]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2024 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 001-42512 EAGLE FINANCIAL SERVICES, INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) 2 East Main ...