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EF

EAGLE FINANCIAL SERVICES INC (EFSI)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 GAAP results were impacted by a deliberate balance sheet repositioning: reported net loss of $6.97M and GAAP EPS of $(1.53) as a $12.4M pre-tax realized loss on securities flowed through noninterest income; on an adjusted basis, non-GAAP net income was $2.84M and EPS was $0.62 .
  • Core franchise trends were constructive: net interest income held at $13.34M (down 1% q/q, up 7% y/y), net interest margin was 2.98% (down 5 bps q/q), and core deposits grew $42.2M as FHLB borrowings fell $55M to $65M in the quarter .
  • Capital strengthened via an upsized equity raise and uplisting to Nasdaq: $53.5M net proceeds (including overallotment), equity rose to $176.5M, and AOCI improved as securities were repositioned to higher yields (AOCI improved from $(18.6)M to $(6.6)M) .
  • Consensus context: non-GAAP EPS of $0.62 missed the S&P Global Primary EPS consensus of $0.83*; revenue consensus $18.49M* vs company “core revenue proxy” (NII + adjusted noninterest income) of ~$17.21M, reflecting softer SBA gains and SBIC timing* . Values retrieved from S&P Global.
  • Near-term stock narrative catalysts: evidence of improved earning-asset yields post-repositioning and sustained core deposit growth vs credit normalization (higher nonaccruals, charge-offs and provision) .

What Went Well and What Went Wrong

What Went Well

  • Deposits and funding mix improved: core deposits +$42.2M q/q; total deposits +$38.6M to $1.61B; FHLB borrowings down to $65.0M (−$55.0M) .
  • Balance sheet repositioning enhanced future yields/AOCI: sold $99.2M AFS at 1.72% yield, reinvested $66.0M at ~4.7%; AOCI improved to $(6.6)M from $(18.6)M .
  • Fee streams resilient outside one-timers: wealth management fees +$301K to $1.68M; mortgage/SBA loan sales generated $429K gain despite lower SBA activity .

What Went Wrong

  • Reported noninterest loss: $(8.55)M as securities loss drove GAAP EPS to $(1.53); adjusted noninterest income fell 17% q/q on softer SBIC and SBA gains .
  • Asset quality normalization: nonperforming assets increased to $16.4M (0.86% of assets) from $3.0M; net charge-offs rose to $891K; provision for loan losses increased to $1.146M .
  • NIM pressure: net interest margin slipped to 2.98% (−5 bps q/q) due to mortgage loan sales and a $202K interest reversal when a $12.5M relationship moved to nonaccrual .

Financial Results

MetricQ1 2024Q4 2024Q1 2025
Net Interest Income ($USD Millions)$12.415 $13.499 $13.336
Noninterest Income (GAAP) ($USD Millions)$3.480 $8.521 $(8.554)
Noninterest Income (Adjusted) ($USD Millions)$3.480 $4.647 $3.871
Net Income (GAAP) ($USD Millions)$2.548 $6.186 $(6.974)
EPS (GAAP) ($)$0.72 $1.74 $(1.53)
EPS (Non-GAAP) ($)$0.72 $0.88 $0.62
Net Interest Margin (%)3.00% 3.03% 2.98%
ROAA (Annualized, %)0.58% 1.32% (1.48)%
ROAE (Annualized, %)9.53% 21.10% (20.75)%
Efficiency Ratio (%)77.73% 74.58% 72.20%

Segment/Portfolio Detail (selected):

Loan Category ($USD Millions)Q4 2024Q1 2025
Marine loans$210.10 $203.46
Resi First Lien – Owner Occupied$194.07 $174.82
Commercial – Non-Owner & Multifamily$367.68 $374.47
Total Loans$1,460.60 $1,445.83

KPIs:

KPIQ1 2024Q4 2024Q1 2025
Loans-to-Deposits (%)97.63% 93.14% 89.99%
Fee Revenue / Total Revenue (%)18.11% 12.79% N/M
Nonperforming Assets / Total Assets (%)0.28% 0.16% 0.86%
Allowance for Credit Losses / Loans (%)1.00% 1.02% 1.05%
Net Charge-offs to Avg Loans (%)0.04% 0.03% 0.06%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Quarterly Dividend per ShareQ1 2025$0.31 (Q4 2024 declaration) $0.31 (payable May 16, 2025) Maintained
Revenue, Margins, OpEx, Tax Rate (explicit ranges)Q1 2025N/AN/ANo guidance provided
Funding/Borrowings DirectionalQ1 2025N/AFHLB borrowings decreased by $55.0M to $65.0M Lowered borrowings

Earnings Call Themes & Trends

Note: No Q1 2025 earnings call transcript was found/posted; themes reflect press releases and 8-K disclosures.

TopicPrevious Mentions (Q3 2024)Previous Mentions (Q4 2024)Current Period (Q1 2025)Trend
Deposit growth & fundingDeposits +$57.4M; time deposit mix rising Deposits +$29.2M; uninsured deposits ~12% Core deposits +$42.2M; uninsured deposits 11.8% Positive; improving funding mix
NIM trajectoryNIM 2.88%; up 8 bps q/q NIM 3.03% NIM 2.98% (−5 bps) Stabilizing with slight pressure
Fee/Noninterest income driversBOLI payout; SBA/mortgage gains higher Sale-leaseback gain; SBA/mortgage gains Securities loss; adjusted fees lower on SBIC timing/SBA gains Volatile; one-timers rolling off
Asset qualityNPA fell to 0.13%; net charge-offs up on marine cleanup NPA 0.16%; provision $351K NPA rose to 0.86% on two relationships; NCOs $891K; provision $1.146M Deterioration from low base
Capital actions—Preparing for expansion; stable equity Uplisted to Nasdaq; $53.5M net equity raised; AOCI improved Strengthening capital/market profile
Securities strategy——Repositioned: sold $99.2M (1.72% yield), bought $66.0M (~4.7% yield) Enhancing earning-asset yield

Management Commentary

  • “The first quarter of 2025 has been a period of transformation… an over-subscribed capital raise, an uplist to the NASDAQ… and a successful repositioning of our securities portfolio… positioned to deliver significantly improved shareholder value in the coming quarters and years.” – Brandon Lorey, President & CEO .
  • CEO highlighted strong low-cost core deposit growth (+$42.2M), borrowing reduction, and board leadership transition to Chair Cary Nelson post annual meeting .

Q&A Highlights

  • No Q1 2025 earnings call transcript was available; no Q&A details or clarifications were furnished in filings. Management provided detailed narrative and full financial schedules within the 8-K press release and exhibits .

Estimates Context

MetricQ1 2025 ConsensusQ1 2025 Actual# of Estimates
Primary EPS$0.83*$0.62* (company non-GAAP EPS) 2*
Revenue$18.49M*Core revenue proxy: $17.21M (NII $13.34M + adj. noninterest $3.87M) 2*
  • EPS missed consensus by ~$0.21*, driven by lower adjusted noninterest income (SBIC timing; SBA gains) and higher provision; GAAP EPS of $(1.53) reflects the securities repositioning loss . Values retrieved from S&P Global.
  • Revenue definition may differ for banks; we present NII + adjusted noninterest income as a comparable proxy to analyst “revenue” for directional context .

Key Takeaways for Investors

  • The quarter’s reported loss was strategic: the securities repositioning compressed GAAP results but should lift forward earning-asset yields and reduced AOCI drag; monitor yield progression and NIM over coming quarters .
  • Core operating trends are intact: stable NII, resilient fee lines (wealth management), and improving funding profile via core deposits and materially lower FHLB borrowings .
  • Credit normalization bears watching: NPA stepped up on two relationships and charge-offs rose; provision increased; closely track resolution paths and collateral coverage into Q2/Q3 .
  • Capital and liquidity are strong: $53.5M equity raise, uplisting to Nasdaq, liquid assets and borrowing capacity exceed uninsured deposits by ~$688.6M, reducing funding risk .
  • Near-term estimate revisions: adjusted EPS and revenue likely reset lower given softer SBIC/SBA gains and higher provision; watch for recovery in SBA volumes and SBIC distributions .
  • Dividend maintained at $0.31; evaluate payout sustainability as adjusted earnings ramp and credit costs stabilize .
  • Tactical trading lens: post-repositioning, incremental catalysts include NIM stabilization/expansion, deposit momentum, and visible credit resolution; risks include further nonaccrual migrations and weaker fee contributions .

Footnote: Values retrieved from S&P Global. (*) indicates S&P Global consensus/actual values.