PR Newswire
BERRYVILLE, Va., July 22, 2016
BERRYVILLE, Va., July 22, 2016 /PRNewswire/ -- Eagle Financial Services, Inc. (OTCQX: EFSI), the holding company for Bank of Clarke County, whose divisions include Eagle Investment Group, reported increased quarterly earnings, continued asset quality improvement and strong performance for the second quarter of 2016. On July 20, 2016, the Board of Directors announced a quarterly common stock cash dividend of $0.20 per common share, payable on August 15, 2016, to shareholders of record on August 1, 2016. Select highlights for the second quarter include:
John R. Milleson, President and CEO, stated "I am extremely satisfied with the continued improvement in the Company's overall asset quality. That, combined with our consistent loan and deposit growth, has contributed to the increased level of net interest income. Our bankers have been diligently working on various undertakings that have notably contributed to the admirable 2016 second quarter and year to date financial performance. We are very fortunate to have some of the top bankers in each of our markets. This benefits all- our Company, our communities, our customers and our shareholders."
Income Statement Review
Net income for the quarter ended June 30, 2016 increased 5.64% to $1.6 million when compared to the $1.5 million for the quarter ended March 31, 2016. Net income for the quarter ended June 30, 2016 was $813,000 higher than net income for the same period in 2015. Much of this increase from the quarter ended June 30, 2015, related to the increase in net interest income, the decrease in the provision for loan losses and the large expense related to the June 2015 purchase of land on which one of the Company's retail branches is located. While the Company had owned the branch building, the land had previously been leased. On June 10, 2015, the Company purchased the land, subject to the existing lease, and recorded it at market value, resulting in a $520,000 expense and write down of the total purchase price.
Net interest income increased $232,000 or 3.79% from $6.1 million for the quarter ended March 31, 2016 to $6.3 million for the quarter ended June 30, 2016. This increase in net interest income was driven by both increased loan volume and loan yields experienced by the Bank. Net interest income increased 9.53% or $552,000 from $5.8 million for the quarter ended June 30, 2015 to $6.3 million for the quarter ended June 30, 2016. This increase is also attributed to increased loan volume and yield.
Total loan interest income was $5.9 and $5.7 million for the quarters ended June 30 and March 31, 2016, respectively. For the quarter ended June 30, 2015, total loan interest income was $5.4 million. Average loans for the quarter ended June 30, 2016 were $509.7 million compared to $501.3 million for the quarter ended March 31, 2016. Total average accruing loans were $505.5 million for the three months ended June 30, 2016 and $496.1 million for the quarter ended March 31, 2016. For the second quarter of 2015, total average loans were $470.6 million and average accruing loans were $463.8 million. The tax equivalent yield on average loans for the quarters ended June 30 and March 31, 2016 was 4.67% and 4.60%, respectively. The tax equivalent yield on loans for the quarter ended June 30, 2015 was 4.65%. Interest income from the investment portfolio was $737,000 for the quarter ended June 30, 2016 and $696,000 for the same period ended March 31, 2016. Average investments were $103.6 million for the quarter ended June 30, 2016 and $104.7 million for the quarter ended March 31, 2016. Interest income from the investment portfolio was $678,000 for the quarter ended June 30, 2015 while average investments were $103.0 million for the same time period.
Total interest expense was $297,000 for the three months ended June 30, 2016 and $307,000 for the quarter ended March 31, 2016. The average cost of interest bearing liabilities decreased by one basis point when comparing the quarter ended June 30, 2016 to the quarter ended March 31, 2016. The average balance of interest bearing liabilities increased by $1.0 million from the quarter ended March 31, 2016. The net interest margin was 4.16% for the quarter ended June 30, 2016 and 4.09% for the quarter March 31, 2016. For the quarter ended June 30, 2015, total interest expense was $327,000 and the net interest margin was 4.13%.
The Company's net interest margin is not a measurement under accounting principles generally accepted in the United States, but it is a common measure used by the financial services industry to determine how profitably earning assets are funded. The Company's net interest margin is calculated by dividing tax equivalent net interest income by total average earning assets. Tax equivalent net interest income is calculated by grossing up interest income for the amounts that are non-taxable (i.e., municipal income) then subtracting interest expense. The tax rate utilized is 34%. The table at the end of this document reconciles tax-equivalent net interest income, which is not a measurement under accounting principles generally accepted in the United States of America (GAAP), to net interest income.
Non-interest income was $1.7 million and $1.6 million for the quarters ended June 30 and March 31, 2016, respectively. When comparing the quarter ended June 30, 2016 to the quarter ended March 31, 2016, fees from fiduciary activities increased $52,000 or 15.85%. This increase results mostly from some one time fees collected during the quarter ended June 30, 2016. Fees from fiduciary activities increased $24,000 or 6.74% from the quarter ended June 30, 2016 to the same period in 2015. Other service charges and fees increased $163,000 or 19.66% when comparing the three months ended June 30 to March 31, 2016. The majority of this increase resulted from the increase in fees from ATMs, service release premiums and non-deposit investment sales. When comparing the quarter ended June 30 2016 to the same period in 2015, other service charges and fees increased $62,000 or 6.67%. Noninterest income for the three months ended June 30, 2015 was $1.6 million.
Noninterest expense was $5.8 million for the quarter ended June 30, 2016, representing an increase of $279,000 or 5.02% when compared to the quarter ended March 31, 2016. Several components of non-interest expense, including salaries and employees' benefits, equipment expenses, professional fees, atm network fees and advertising and marketing expenses have also increased with the Company's expansion into Loudoun County, Virginia. Noninterest expense decreased $299,000 or 4.88% from the quarter ended June 30, 2016 compared to the same time period in 2015. Much of this decrease resulted from the adjustment to the purchase price of land acquired in June 2015. On June 10, 2015, the Company purchased the land, subject to the existing lease, and recorded it at market value, resulting in a $520,000 write down of the total purchase price.
Asset Quality and Provision for Loan Losses
Nonperforming assets consist of loans 90 days past due and still accruing interest, nonaccrual loans, other real estate owned (foreclosed properties), and repossessed assets. At June 30, 2016, nonperforming asset were $4.5 million or 0.67% of total assets, a decrease of $516,000 when compared to the $5.1 million at March 31, 2016. During the second quarter of 2016, the Bank placed two loans on non-accrual status. Management regularly evaluates the financial condition of borrowers with loans on non-accrual status and the value of any collateral on these loans. The results of these evaluations are used to estimate the amount of losses which may be realized on the disposition of these non-accrual loans. The majority of the non-accrual loans are secured by real estate. No real estate assets had been foreclosed upon during the second quarter of 2016 and the Bank was in the process of settling the sale of one other real estate owned property during the same period. The property to be sold had been recorded at a net value of $174,000 and the sale is expected to result in a net loss of $47,000. Loans greater than 90 days past due and still accruing increased from $24,000 at March 31, 2016 to $33,000 at June 30, 2016. Nonperforming assets were $9.1 million or 1.44% of total assets at June 30, 2015.
The Company may, under certain circumstances, restructure loans in troubled debt restructurings as a concession to a borrower when the borrower is experiencing financial distress. Formal, standardized loan restructuring programs are not utilized by the Company. Each loan considered for restructuring is evaluated based on customer circumstances and may include modifications to one or more loan provision. Such restructured loans are included in impaired loans but may not necessarily be nonperforming loans. At June 30, 2016, the Company had 25 troubled debt restructurings totaling $7.8 million, of which 22 loans, totaling $6.5 million, were considered performing loans.
The Company realized $31,000 in net charge offs for the quarter ended June 30, 2016 compared to $34,000 in net charge offs for the three months ended March 31, 2016. For the quarter ended June 30, 2015, the Company realized net recoveries of $64,000. The Company continues to operate a troubled credit group to monitor past due loans, identify potential problem credits, and develop action plans to work through its troubled loans as promptly as possible. Asset quality remains a primary focus of the Company. Necessary resources continue to be devoted to the ongoing review of the loan portfolio and the workouts of problem assets to minimize any losses to the Company. Management will continue to monitor delinquencies, risk rating changes, charge-offs, market trends and other indicators of risk in the Company's portfolio, particularly those tied to residential and commercial real estate, and adjust the allowance for loan losses accordingly.
The Company recorded no provision for loan losses for the quarter ended June 30, 2016. Provisions for loan losses were $79,000 and $300,000 for the three months ended March 31, 2016 and June 30, 2015, respectively. The allowance for loan losses was $5.0 million, or 0.96% of total outstanding loans, at June 30, 2016. At March 31, 2016 and June 30, 2015, the allowance for loan losses was $5.0 million and $5.5 million, respectively. The amount of provision for loan losses during each quarter reflects the results of the Bank's analysis used to determine the adequacy of the allowance for loan losses. The Company is committed to maintaining an allowance at a level that adequately reflects the risk inherent in the loan portfolio.
Total Consolidated Assets
Total consolidated assets of the Company at June 30, 2016 were $677.4 million, which represented an increase of $13.1 million or 1.97% from total assets of $664.3 million at March 31, 2016. This increase was driven by the increased volume of the loan portfolio. Total loans increased from $511.0 million at March 31, 2016 to $517.4 at June 30, 2016. At June 30, 2015, total consolidated assets were $634.3 million and total loans were $486.0 million.
Deposits and Other Borrowings
Total deposits, which include brokered deposits, were $571.2 million at June 30, 2016. This reflects an increase of 2.06% or $11.8 million from $559.4 at March 31, 2016. At June 30, 2015, total deposits were $522.8 million. The Company held no brokered deposits at June 30, 2016 and March 31, 2016. The Company held $11.0 million in brokered deposits at June 30, 2015.
There were no outstanding balances of fed funds purchased and securities sold under agreement to repurchase at June 30 and March 31, 2016. Fed funds purchased and securities sold under agreement to repurchase were $8.3 million at June 30, 2015. Borrowings with the Federal Home Loan Bank of Atlanta were $20.0 million at June 30 and March 31, 2016 and June 30, 2015.
Equity
Shareholders' equity at June 30, 2016 was $81.4 million, reflecting an increase of $1.6 million from $79.8 million at March 31, 2016. At June 30, 2015 shareholders' equity was $73.9 million. The book value of the Company at June 30, 2016 was $23.09 per common share. Total common shares outstanding were 3,541,802 at June 30, 2016. On July 20, 2016, the board of directors declared a $0.20 per common share cash dividend for shareholders of record as of August 1, 2016 and payable on August 15, 2016.
Certain information contained in this discussion may include "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements relate to the Company's future operations and are generally identified by phrases such as "the Company expects," "the Company believes" or words of similar import. Although the Company believes that its expectations with respect to the forward-looking statements are based upon reliable assumptions within the bounds of its knowledge of its business and operations, there can be no assurance that actual results, performance or achievements of the Company will not differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. For details on factors that could affect expectations, see the risk factors and other cautionary language included in the Company's Annual Report on Form 10-K for the year ended December 31, 2015, and other filings with the Securities and Exchange Commission.
EAGLE FINANCIAL SERVICES, INC. | | | | | | | | | | |
KEY STATISTICS | For the Three Months Ended | | ||||||||
| 2Q16 | | 1Q16 | | 4Q15 | | 3Q15 | | 2Q15 | |
| | | | | | | | | | |
Net Income (dollars in thousands) | $ 1,611 | | $ 1,525 | | $ 1,355 | | $ 3,289 | | $ 798 | |
Earnings per share, basic | $ 0.46 | | $ 0.43 | | $ 0.38 | | $ 0.94 | | $ 0.23 | |
Earnings per share, diluted | $ 0.46 | | $ 0.43 | | $ 0.38 | | $ 0.94 | | $ 0.23 | |
| | | | | | | | | | |
Return on average total assets | 0.97% | | 0.89% | | 0.84% | | 2.20% | | 0.51% | |
Return on average total equity | 8.07% | | 7.42% | | 6.92% | | 17.26% | | 4.31% | |
Dividend payout ratio | 43.48% | | 46.51% | | 52.63% | | 21.28% | | 86.96% | |
Fee revenue as a percent of total revenue | 20.56% | | 18.68% | | 17.64% | | 16.01% | | 21.42% | |
| | | | | | | | | | |
Net interest margin(1) | 4.16% | | 4.09% | | 3.97% | | 4.07% | | 4.13% | |
Yield on average earning assets | 4.35% | | 4.30% | | 4.17% | | 4.29% | | 4.35% | |
Yield on average interest-bearing liabilities | 0.31% | | 0.32% | | 0.31% | | 0.33% | | 0.35% | |
Net interest spread | 4.50% | | 3.98% | | 3.85% | | 3.96% | | 4.00% | |
Tax equivalent adjustment to net interest income (dollars in thousands) Werbung Mehr Nachrichten zur Eagle Fincl Services Aktie kostenlos abonnieren
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