Eagle Financial Services Inc(US:EFSI)2025-08-13 19:43Financial 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].