Eagle Financial Services Inc(EFSI) - 2025 Q2 - Quarterly Results

Executive Summary & Q2 2025 Highlights 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 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] - Net interest income increased by $2.4 million or 17.7% during the quarter to $15.7 million[3] - Efficiency ratio decreased from 72.20% to 64.91% during the quarter[3] CEO Commentary 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] - 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] - Funding profile strengthened through the transition from higher-cost borrowings to lower-cost deposits, enhancing long-term balance sheet efficiency[4] Income Statement Review 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 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] Interest Income 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] Interest Expense 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] Net Interest Income and Margin 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] Noninterest Income 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] Noninterest Expense 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] Asset Quality and Provision for Credit Losses Asset quality saw an increase in nonperforming assets, with a corresponding rise in specific reserves, while net charge-offs decreased QoQ Nonperforming Assets 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] - 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] - 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] Net Charge-offs and Allowance for Credit Losses 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] Provision for Credit Losses 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] Balance Sheet Overview 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 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] 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] 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] Liquidity Management 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 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] Borrowings and Other Liquidity Sources 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] - 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] Capital and Dividends The company announced a quarterly dividend, saw significant equity growth bolstered by a public offering, and maintained a 'well capitalized' regulatory status Dividend Announcement 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] Shareholders' Equity and Capital Raise 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] - 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] Regulatory Capital Ratios 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] - The Bank exceeded all minimum regulatory capital ratios, including the Basel III capital conservation buffer of 2.5% of risk-weighted assets[28] Non-GAAP Financial Measures 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] - These disclosures are not a substitute for GAAP results and may not be comparable to non-GAAP measures presented by other companies[29] Conference Call and Webcast Information 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] - Conference ID: 3461943. Webcast URL: **https://events.q4inc.com/attendee/115138030**[31](index=31&type=chunk) Forward-Looking Statements 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] - 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] - 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] Financial Tables and Reconciliations 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 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 | $0.89 | | Return on average total assets (annualized) (%) | 1.09 % | (1.48)% | 1.32 % | 0.75 % | 0.72 % | | Return on average total equity (annualized) (%) | 11.93 % | (20.75)% | 21.10 % | 11.99 % | 11.89 % | | Net interest margin (%) | 3.42 % | 2.98 % | 3.03 % | 3.03 % | 2.92 % | | Efficiency ratio (%) | 64.91 % | 72.20 % | 74.58 % | 71.34 % | 77.00 % | Selected Financial Data by Quarter This table presents quarterly trends for balance sheet ratios, per share data, common stock data, and detailed credit quality metrics, offering a comprehensive view of financial performance | (Dollars in thousands, except per share data) | 2Q25 | 1Q25 | 4Q24 | 3Q24 | 2Q24 | | :------------------------------------------ | :--- | :--- | :--- | :--- | :--- | | BALANCE SHEET RATIOS | | | | | | | Loans to deposits (%) | 81.44 % | 89.99 % | 93.14 % | 95.95 % | 97.34 % | | PER SHARE DATA | | | | | | | Dividends ($) | $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 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 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) 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 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 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 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 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% |