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EF

EAGLE FINANCIAL SERVICES INC (EFSI)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 EPS was $1.04 versus $0.98 in Q2 and $0.97 in Q3 2024; Wall Street consensus was $1.11, a modest miss driven by higher incentive accruals and elevated net charge-offs related to two CRE/nonaccrual resolutions . Consensus values marked with * are from S&P Global.*
  • Revenue modestly missed consensus ($21.25M actual vs $21.28M consensus*) while net interest margin expanded 16 bps q/q and 55 bps y/y to 3.58% due to securities portfolio repositioning and runoff of higher-cost CDs . Consensus values marked with * are from S&P Global.*
  • Efficiency ratio improved to 64.06% (from 64.91% in Q2; 71.34% in Q3’24) as noninterest income (wealth management, loan sales) increased; however, noninterest expense rose 7.1% q/q on incentive accruals and headcount .
  • Asset quality is the key watch item: net charge-offs rose to $2.3M on a D.C. multifamily deficiency write-off and a CRE write-down; NPA ratio improved q/q to 0.74% but remains elevated vs 0.13% last year .
  • Dividend maintained at $0.31/share; Bank of Clarke opened a new Fairfax County branch in McLean, VA, supporting strategic expansion and funding reach .

What Went Well and What Went Wrong

What Went Well

  • Net interest margin expanded to 3.58% (vs 3.42% in Q2; 3.03% in Q3’24) on higher securities yields and deposit mix improvements, a core driver of profitability .
  • Wealth management fees grew 10.7% q/q and 20.6% y/y; combined mortgage/SBA sales gains were $1.0M (mortgage $0.54M; SBA $0.47M), supporting noninterest income diversification .
  • CEO tone was constructive: “We are pleased to report another strong quarter… net interest margin of 3.58% and an improved efficiency ratio,” highlighting disciplined balance sheet and operational execution .

What Went Wrong

  • Net charge-offs rose to $2.3M (vs $0.159M in Q2; $1.237M in Q3’24) primarily from a D.C. multifamily deficiency write-off ($1.1M) and a $468K CRE write-down; allowance/loans declined to 1.01% from 1.11% q/q .
  • Noninterest expenses increased 7.1% q/q and 11.3% y/y (incentive accruals, staffing), modestly offsetting margin gains and pressuring operating leverage .
  • Deposit normalization: $72.4M of large noninterest-bearing balances (from Q2 business sale proceeds) left; total deposits fell to $1.66B q/q, adding near-term funding volatility despite y/y growth .

Financial Results

MetricQ3 2024Q2 2025Q3 2025
EPS (Basic/Diluted, $)$0.97 $0.98 $1.04
Revenue ($USD)$16.86M*$19.95M*$21.25M*
Net Interest Income ($USD)$13.16M $15.70M $17.20M
Noninterest Income ($USD)$5.25M $4.92M $5.17M
Net Income ($USD)$3.42M $5.27M $5.58M
Net Interest Margin (%)3.03% 3.42% 3.58%
Efficiency Ratio (%)71.34% 64.91% 64.06%
ROA (Annualized, %)0.75% 1.09% 1.10%
ROE (Annualized, %)11.99% 11.93% 12.20%
Provision for Credit Losses ($USD)$1.544M $0.668M $1.112M
Net Charge-offs ($USD)$1.237M $0.159M $2.300M

Note: Revenue values marked with * are retrieved from S&P Global.

Segment and Mix Detail

  • Noninterest Income Composition | Category ($USD) | Q2 2025 | Q3 2025 | |-----------------|---------|---------| | Wealth Management Fees | $1.650M | $1.827M | | Service Charges (Deposits) | $0.517M | $0.558M | | Other Service Charges/Fees | $1.060M | $1.151M | | Gain on Sale of Loans (HFS) | $1.104M | $1.012M | | SBIC Income | $0.133M | $0.058M | | BOLI Income | $0.278M | $0.268M | | Other Operating Income | $0.175M | $0.293M | | Total Noninterest Income | $4.917M | $5.165M |

  • Loan Portfolio Selected Categories | Category ($USD) | Q2 2025 | Q3 2025 | |-----------------|---------|---------| | CRE Owner-Occupied | $288.82M | $290.93M | | CRE Non-Owner & Multifamily | $372.83M | $398.08M | | Other C&I | $103.57M | $100.78M | | Marine | $196.43M | $185.94M | | Residential First Lien Owner-Occupied | $177.00M | $178.73M |

KPI Snapshot

KPIQ3 2024Q2 2025Q3 2025
Total Deposits ($USD)$1.546B $1.767B $1.655B
Net Loans ($USD)$1.468B $1.423B $1.445B
Loans/Deposits (%)95.95% 81.44% 88.21%
NPA / Assets (%)0.13% 0.86% 0.74%
Uninsured Deposits ($USD / %)N/A$195.5M / 11.1% $202.8M / 12.3%

Guidance Changes

  • No formal financial guidance (revenue, margins, OpEx, tax rate, segment) was issued in Q3 2025 press materials; dividend maintained.
MetricPeriodPrevious GuidanceCurrent GuidanceChange
Dividend per ShareQ3 2025 payout$0.31 (Q2) $0.31 payable Nov 14; record Nov 3 Maintained

Earnings Call Themes & Trends

(Transcript not available; themes derived from Q1–Q3 releases.)

TopicPrevious Mentions (Q1 and Q2)Current Period (Q3)Trend
Balance Sheet RepositioningSold $99.2M AFS at 1.72% yield; reinvested $66.0M at ~4.7%; NIM up to 2.98% in Q1 and 3.42% in Q2 Continued benefit; NIM 3.58% with security yields at 4.30% Positive, expanding margin
Asset Quality ResolutionTwo large relationships to nonaccrual; specific reserves and receivership advances in Q2 Deficiency charged off ($1.1M); NPA improved q/q to 0.74% Improving q/q; elevated vs y/y
Funding/Deposits MixCore deposit growth $42.2M (Q1); large noninterest-bearing inflows $151.7M (Q2) $72.4M of these funds left; remaining $79.3M; deposits $1.655B Normalizing; some volatility
Fee BusinessesSBA/mortgage gains increased in Q2; wealth fees up Wealth +10.7% q/q; mortgage gains $0.54M Constructive
Capital/RegulatoryNASDAQ uplist; $53.5M raise; well-capitalized in Q1–Q2 Well-capitalized; AOCI improved; equity $185.6M Strengthened
Expansion—New McLean, VA branch opening Growth footprint

Management Commentary

  • CEO (Q3): “We are pleased to report another strong quarter… net interest margin of 3.58% and an improved efficiency ratio… We remain committed to supporting our customers and communities while delivering consistent value to our shareholders.”
  • CEO noted leadership changes: promotion of Nick Smith to EVP, Deputy CFO to “strengthen financial leadership” and succession planning .
  • CEO (Q2): “Record net income of $5.3 million… 44-basis point expansion in net interest margin… transition from higher-cost borrowings to lower-cost deposits is strengthening our funding profile.”
  • CEO (Q1): “Over-subscribed capital raise, uplist to NASDAQ, and successful securities repositioning optimally positioned the organization to deliver improved shareholder value.”

Q&A Highlights

  • The Q3 2025 earnings call transcript was not available in our document corpus. The company hosted a listen-only call and webcast on Oct 24, 2025; replay link provided . Q&A themes and guidance clarifications will be updated when the transcript is accessible.

Estimates Context

MetricPeriodActualConsensus*Delta
EPS ($)Q2 20250.98 0.815*+0.165 (beat)
EPS ($)Q3 20251.04 1.11*-0.07 (miss)
Revenue ($USD)Q2 2025$19.95M*$19.39M*+$0.56M (beat)
Revenue ($USD)Q3 2025$21.25M*$21.28M*-$0.03M (slight miss)

Values marked with * are retrieved from S&P Global.

Key Takeaways for Investors

  • Margin expansion remains the core earnings driver; continued benefit from securities repositioning and deposit mix should support NIM near-term, contingent on rate trajectory and CD repricing .
  • Asset quality is the swing factor: despite q/q NPA improvement, elevated net charge-offs and specific CRE/nonaccrual resolutions warrant ongoing monitoring; a stabilizing trajectory could be a catalyst .
  • Noninterest income diversification (wealth management, mortgage/SBA gains) is improving operating leverage; sustaining loan sales activity and AUM growth will be key to fee durability .
  • Funding normalizes: the runoff of large noninterest-bearing balances introduces short-term deposit volatility; core deposit retention and growth are important for cost of funds and L/D balance .
  • Capital position strong (well-capitalized; equity up y/y; AOCI improvement); dividend maintained at $0.31/share provides yield support while growth investments (McLean branch) expand the franchise .
  • Near-term trading: watch for updates on nonaccrual resolutions and net charge-offs; beats/misses around EPS likely tied to credit costs and incentive accruals rather than core margin .
  • Medium-term thesis: a community bank with improving NIM, diversified fee streams, and strengthened capital base; execution on credit clean-up and deposit growth should unlock multiple and EPS upside versus Q3 miss dynamics .

Additional Notes

  • Reconciliation nuance: Q3 provision for credit losses appears as $1.112M in the income statement and $1.131M in credit quality tables, reflecting classification/rounding differences across schedules .
  • Liquidity remains robust: liquid assets $467.7M; borrowing availability $530.9M vs uninsured deposits $202.8M (12.3% of deposits) .