EAGLE FINANCIAL SERVICES INC - FORM 10-Q

Attached files

file	filename
EX-32.1 - EXHIBIT 32.1 - EAGLE FINANCIAL SERVICES INC	efsi-20200331exhibit321.htm
EX-31.2 - EXHIBIT 31.2 - EAGLE FINANCIAL SERVICES INC	efsi-20200331exhibit312.htm
EX-31.1 - EXHIBIT 31.1 - EAGLE FINANCIAL SERVICES INC	efsi-20200331exhibit311.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)



ý	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2020



¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 0-20146

EAGLE FINANCIAL SERVICES, INC.

(Exact name of registrant as specified in its charter)



Virginia		54-1601306
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

2 East Main Street P.O. Box 391 Berryville, Virginia		22611
(Address of principal executive offices)		(Zip Code)

(540) 955-2510

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Date File required to be submitted pursuant to Rule 405 of Regulation S-T (232.405 of this Chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ý No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.



Large accelerated filer	¨	Accelerated filer	ý

Non-accelerated filer	¨	Smaller reporting company	ý
		Emerging growth company	¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.			¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No ý

The number of shares of the registrant’s Common Stock ($2.50 par value) outstanding as of May 4, 2020 was 3,409,688.

TABLE OF CONTENTS




PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements:
	Consolidated Balance Sheets at March 31, 2020 and December 31, 2019	1
	Consolidated Statements of Income for the Three Months Ended March 31, 2020 and 2019	2
	Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2020 and 2019	3
	Consolidated Statements of Changes in Shareholders’ Equity for the Three Months Ended March 31, 2020 and 2019	4
	Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2020 and 2019	5
	Notes to Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	42
Item 4.	Controls and Procedures	42

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	43
Item 1A.	Risk Factors	43
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	44
Item 3.	Defaults Upon Senior Securities	44
Item 4.	Mine Safety Disclosures	44
Item 5.	Other Information	44
Item 6.	Exhibits	45

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

EAGLE FINANCIAL SERVICES, INC.

Consolidated Balance Sheets

(dollars in thousands, except per share amounts)



	March 31, 2020			December 31, 2019
	(Unaudited)
Assets
Cash and due from banks	$	10,515		$	10,920
Interest-bearing deposits with other institutions	12,242			22,487
Federal funds sold	288			252
Total cash and cash equivalents	23,045			33,659
Securities available for sale, at fair value	156,391			165,003
Restricted investments	1,268			1,197
Loans	674,032			644,760
Allowance for loan losses	(5,387		)	(4,973		)
Net Loans	668,645			639,787
Bank premises and equipment, net	19,179			19,297
Other real estate owned, net of allowance	442			183
Other assets	29,907			18,194
Total assets	$	898,877		$	877,320
Liabilities and Shareholders’ Equity
Liabilities
Deposits:
Noninterest bearing demand deposits	$	271,508		$	269,171
Savings and interest bearing demand deposits	377,677			364,175
Time deposits	140,814			138,198
Total deposits	$	789,999		$	771,544
Other liabilities	9,079			9,450
Total liabilities	$	799,078		$	780,994

Commitments and contingencies

Shareholders’ Equity
Preferred stock, $10 par value; 500,000 shares authorized and unissued	$	—		$	—
Common stock, $2.50 par value; authorized 10,000,000 shares; issued and outstanding 2020, 3,406,927 including 20,480 shares of unvested restricted stock; issued and outstanding 2019, 3,430,103 including 18,488 shares of unvested restricted stock	8,466			8,529
Surplus	10,578			11,406
Retained earnings	76,457			74,909
Accumulated other comprehensive income	4,298			1,482
Total shareholders’ equity	$	99,799		$	96,326
Total liabilities and shareholders’ equity	$	898,877		$	877,320

See Notes to Consolidated Financial Statements

EAGLE FINANCIAL SERVICES, INC.

Consolidated Statements of Income (Unaudited)

(dollars in thousands, except per share amounts)



	Three Months Ended
	March 31,
	2020			2019
Interest and Dividend Income
Interest and fees on loans	$	7,939		$	7,518
Interest and dividends on investment securities:
Taxable interest income	895			785
Interest income exempt from federal income taxes	167			242
Dividends	19			16
Interest on deposits with other institutions	86			31
Interest on federal funds sold	1			1
Total interest and dividend income	$	9,107		$	8,593
Interest Expense
Interest on deposits	$	1,102		$	944
Interest on federal funds purchased	—			25
Total interest expense	$	1,102		$	969
Net interest income	$	8,005		$	7,624
(Recovery of) Provision for Loan Losses	(97		)	194
Net interest income after (recovery of) provision for loan losses	$	8,102		$	7,430
Noninterest Income
Income from fiduciary activities	$	297		$	282
Service charges on deposit accounts	284			285
Other service charges and fees	1,104			1,071
(Loss) on sale of securities	—			(3		)
Gain on disposal of bank premises and equipment	—			120
Other operating income	5			89
Total noninterest income	$	1,690		$	1,844
Noninterest Expenses
Salaries and employee benefits	$	4,088		$	3,542
Occupancy expenses	395			428
Equipment expenses	232			202
Advertising and marketing expenses	205			218
Stationery and supplies	32			29
ATM network fees	242			230
Other real estate owned expense	2			—
(Gain) on other real estate owned	(132		)	—
FDIC assessment	—			53
Computer software expense	120			110
Bank franchise tax	174			146
Professional fees	354			385
Data processing fees	481			240
Other operating expenses	682			648
Total noninterest expenses	$	6,875		$	6,231
Income before income taxes	$	2,917		$	3,043
Income Tax Expense	476			472
Net income	$	2,441		$	2,571
Earnings Per Share
Net income per common share, basic	$	0.71		$	0.74
Net income per common share, diluted	$	0.71		$	0.74

See Notes to Consolidated Financial Statements

EAGLE FINANCIAL SERVICES, INC.

Consolidated Statements of Comprehensive Income

(Unaudited)

(dollars in thousands)



	Three Months Ended
	March 31,
	2020		2019
Net income	$	2,441	$	2,571
Other comprehensive income:
Unrealized gain on available for sale securities net of reclassification adjustments, and net of deferred income tax of $749 and $450 for the three months ended, respectively	2,816		1,690
Total other comprehensive income	$	2,816	$	1,690
Total comprehensive income	$	5,257	$	4,261

See Notes to Consolidated Financial Statements

EAGLE FINANCIAL SERVICES, INC.

Consolidated Statements of Changes in Shareholders’ Equity (Unaudited)

(dollars in thousands, except per share amounts)



	Common Stock			Surplus			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total
Balance, December 31, 2018	$	8,573		$	11,992		$	68,587		$	(1,553	)	$	87,599
Net income							2,571						2,571
Other comprehensive income										1,690			1,690
Vesting of restricted stock awards, stock incentive plan (10,000 shares)	25			(25		)							—
Stock-based compensation expense				86									86
Issuance of common stock, dividend investment plan (3,685 shares)	9			107									116
Repurchase and retirement of common stock (1,500 shares)	(3		)	(44		)							(47		)
Dividends declared ($0.24 per share)							(830		)				(830		)
Balance, March 31, 2019	$	8,604		$	12,116		$	70,328		$	137		$	91,185

Balance, December 31, 2019	$	8,529		$	11,406		$	74,909		$	1,482		96,326
Net income							2,441						2,441
Other comprehensive income										2,816			2,816
Vesting of restricted stock awards, stock incentive plan (9,933 shares)	25			(25		)							—
Stock-based compensation expense				114									114
Issuance of common stock, dividend investment plan (3,514 shares)	9			102									111
Repurchase and retirement of common stock (38,614 shares)	(97		)	(1,019		)							(1,116		)
Dividends declared ($0.26 per share)							(893		)				(893		)
Balance, March 31, 2020	$	8,466		$	10,578		$	76,457		$	4,298		$	99,799

See Notes to Consolidated Financial Statements

EAGLE FINANCIAL SERVICES, INC.

Consolidated Statements of Cash Flows (Unaudited)

(dollars in thousands)



	Three Months Ended
	March 31,
	2020			2019
Cash Flows from Operating Activities
Net income	$	2,441		$	2,571
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	258			231
Amortization of other assets	103			58
(Recovery of) provision for loan losses	(97		)	194
(Gain) on other real estate owned	(132		)	—
(Gain) on the sale and disposal of premises and equipment	—			(120		)
Loss on the sale of securities	—			3
Stock-based compensation expense	114			86
Premium amortization on securities, net	145			99
Changes in assets and liabilities:
(Increase) in other assets	(16		)	(47		)
(Decrease) in other liabilities	(919		)	(1,050		)
Net cash provided by operating activities	$	1,897		$	2,025
Cash Flows from Investing Activities
Proceeds from maturities, calls, and principal payments of securities available for sale	$	12,032		$	2,431
Proceeds from the sale of securities available for sale	—			3,818
Purchases of securities available for sale	—			(3,888		)
Purchases of restricted investments	(71		)	—
Purchases of bank-owned life insurance	(12,000		)	—
Purchases of bank premises and equipment	(140		)	(494		)
Proceeds from the sale of other real estate owned	183			—
Proceeds from the sale of bank premises and equipment	—			258
Net (increase) in loans	(29,071		)	(12,346		)
Net cash (used in) investing activities	$	(29,067	)	$	(10,221	)
Cash Flows from Financing Activities
Net increase in noninterest bearing demand deposits, savings, and interest bearing demand deposits	$	15,839		$	3,714
Net increase in time deposits	2,616			621
Net (decrease)in federal funds purchased	—			(1,516		)
Repurchase and retirement of common stock	(1,116		)	(47		)
Cash dividends paid	(783		)	(714		)
Net cash provided by financing activities	$	16,556		$	2,058

EAGLE FINANCIAL SERVICES, INC.

Consolidated Statements of Cash Flows (Unaudited)

(dollars in thousands)

(continued)



	Three Months Ended
	March 31,
	2020			2019
(Decrease) in cash and cash equivalents	$	(10,614	)	$	(6,138	)
Cash and Cash Equivalents
Beginning	33,659			18,353
Ending	$	23,045		$	12,215
Supplemental Disclosures of Cash Flow Information
Cash payments for:
Interest	$	1,109		$	954
Income taxes	$	—		$	—
Supplemental Schedule of Noncash Investing and Financing Activities:
Unrealized gain on securities available for sale	$	3,565		$	2,140
Other real estate and repossessed assets acquired in settlement of loans	$	310		$	—
Issuance of common stock, dividend investment plan	$	110		$	116
Lease liabilities arising from right-of-use assets	$	549		$	3,751

See Notes to Consolidated Financial Statements

EAGLE FINANCIAL SERVICES, INC.

Notes to Consolidated Financial Statements (Unaudited)

March 31, 2020

NOTE 1. General

The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP.

In the opinion of management, the accompanying financial statements contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the financial position at March 31, 2020 and December 31, 2019, the results of operations and the changes in stockholders' equity for the three months ended March 31, 2020 and 2019, and cash flows for the three months ended March 31, 2020 and 2019. The results of operations for the three months ended March 31, 2020 are not necessarily indicative of the results to be expected for the full year. These financial statements should be read in conjunction with the Consolidated Financial Statements and related Notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 (the “2019 Form 10-K”).

Eagle Financial Services, Inc. (the "Company") owns 100% of Bank of Clarke County (the “Bank”). The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. All significant intercompany accounts and transactions between the Company and the Bank have been eliminated.

Certain amounts in the consolidated financial statements have been reclassified to conform to current year presentations. None of the reclassifications were of a material nature and they had no effect on prior year net income or shareholders' equity.

Risks and Uncertainties

The novel coronavirus (“COVID-19”) spread rapidly across the world in the first quarter of 2020 and was declared a pandemic by the World Health Organization. The government and private sector responses to contain its spread began to significantly affect our operations in March and will likely adversely affect our operations in subsequent quarters, although such effects may vary significantly. The duration and extent of the effects over longer terms cannot be reasonably estimated at this time. The risks and uncertainties resulting from the pandemic will most likely affect the future earnings, cash flows and financial condition of the Company. These uncertainties primarily include the nature and duration of the financial effects felt by our customers and the ability of those customers to fulfill their financial obligations to the Company, the Company’s ability to generate demand for non-loan related products and services, as well as the potential decline of real estate values resulting from market disruption which may impair the recorded values of collateral-dependent loans and other real estate owned. Further, these factors, in addition to those present in local economies throughout the U.S. may necessitate impairment charges for our non-agency debt securities. Accordingly, estimates used in the preparation of our financial statements may be subject to significant adjustments in future periods. The greater the duration and severity of the pandemic the more likely that estimates will be materially impacted by its effects.

NOTE 2. Stock-Based Compensation Plan

During 2014, the Company’s shareholders approved a stock incentive plan which allows key employees and directors to increase their personal financial interest in the Company. This plan permits the issuance of incentive stock options and non-qualified stock options and the award of stock appreciation rights, common stock, restricted stock, and phantom stock. The plan authorizes the issuance of up to 500,000 shares of common stock.

The Company periodically grants restricted stock to its directors, executive officers and certain non-executive officers. Restricted stock provides grantees with rights to shares of common stock upon completion of a service period or achievement of Company performance measures. During the restriction period, all shares are considered outstanding and dividends are paid to the grantee. In general, outside directors are periodically granted restricted shares which vest over a period of less than 9 months. Beginning during 2006, executive officers were granted restricted shares which vest over a 3 year service period and restricted shares which vest based on meeting annual performance measures over a 1 year period. Beginning in 2018, certain non-executive officers also were granted restricted shares which vest over a 3 year service period. The Company recognizes compensation expense over the restricted period based on the fair value of the Company's stock on the grant date. The Company's policy is to recognize forfeitures as they occur. As of March 31, 2020, there was $251 thousand of unrecognized compensation cost related to nonvested restricted stock.

The following table presents restricted stock activity for the three months ended March 31, 2020 and 2019:



	Three Months Ended
	March 31,
	2020				2019
	Shares		Weighted Average Grant Date Fair Value		Shares		Weighted Average Grant Date Fair Value
Nonvested, beginning of period	18,488		$	30.39	16,701		$	29.72
Granted	11,925		31.05		11,450		30.51
Vested	(9,933	)	30.13		(10,000	)	29.30
Forfeited	—		—		—		—
Nonvested, end of period	20,480		30.90		18,151		30.40

NOTE 3. Earnings Per Common Share

Basic earnings per share represents income available to common shareholders divided by the weighted average number of common shares outstanding during the period. Nonvested restricted shares are included in the weighted average number of common shares used to compute basic earnings per share because of dividend participation and voting rights. Diluted earnings per share reflects additional common shares that would have been outstanding if dilutive potential common shares had been issued, as well as any adjustment to income that would result from the assumed issuance. The number of potential common shares is determined using the treasury method.

The following table shows the weighted average number of shares used in computing earnings per share for the three months ended March 31, 2020 and 2019. During 2020 and 2019, there were no potentially dilutive securities outstanding.



	Three Months Ended
	March 31,
	2020	2019
Weighted average number of common shares outstanding used to calculate basic and diluted earnings per share	3,437,085	3,458,213

NOTE 4. Securities

Amortized costs and fair values of securities available for sale at March 31, 2020 and December 31, 2019 were as follows:



	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Fair Value
	March 31, 2020
	(in thousands)
Obligations of U.S. government corporations and agencies	$	17,051	$	1,348	$	—		$	18,399
Mortgage-backed securities	102,500		3,580		—			106,080
Obligations of states and political subdivisions	31,453		520		(61		)	31,912
	$	151,004	$	5,448	$	(61	)	$	156,391
	December 31, 2019
	(in thousands)
Obligations of U.S. government corporations and agencies	$	21,917	$	363	$	(94	)	$	22,186
Mortgage-backed securities	107,410		966		(215		)	108,161
Obligations of states and political subdivisions	33,854		858		(56		)	34,656
	$	163,181	$	2,187	$	(365	)	$	165,003

During the three months ended March 31, 2020, the Company sold no available for sale securities recognizing no gains or losses. During the three months ended March 31, 2019, the Company sold $3.8 million of available for sale securities for gross gains of $6 thousand and $9 thousand in gross losses.

The fair value and gross unrealized losses for securities available for sale, totaled by the length of time that individual securities have been in a continuous gross unrealized loss position, at March 31, 2020 and December 31, 2019 were as follows:



	Less than 12 months				12 months or more				Total
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	March 31, 2020
	(in thousands)
Obligations of states and political subdivisions	$	4,874	$	61	$	—	$	—	$	4,874	$	61
	$	4,874	$	61	$	—	$	—	$	4,874	$	61
	December 31, 2019
	(in thousands)
Obligations of U.S. government corporations and agencies	$	5,466	$	91	$	1,997	$	3	$	7,463	$	94
Mortgage-backed securities	19,509		176		5,271		39		24,780		215
Obligations of states and political subdivisions	3,127		49		923		7		4,050		56
	$	28,102	$	316	$	8,191	$	49	$	36,293	$	365

Gross unrealized losses on available for sale securities included eleven (11) and twenty-eight (28) debt securities at March 31, 2020 and December 31, 2019, respectively. The Company evaluates securities for other-than-temporary impairment on at least a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. Consideration is given to the length of time and the amount of an unrealized loss, the financial condition of the issuer, and the intent and ability of the Company to retain its investment in the issuer long enough to allow for an anticipated recovery in fair value. The fair value of a security reflects its liquidity as compared to similar instruments, current market rates on similar instruments, and the creditworthiness of the issuer. Absent any change in the liquidity of a security or the creditworthiness of the issuer, prices will decline as market rates rise and vice-versa. The primary cause of the unrealized losses at March 31, 2020 and December 31, 2019 was changes in market interest rates and other market conditions and not credit concerns of the issuers. Since the losses can be primarily attributed to changes in market interest rates and conditions and not expected cash flows or an issuer’s financial condition and management does not intend to sell and it is likely that management will not be required to sell the securities prior to their anticipated recovery, the unrealized losses were deemed to be temporary. The Company’s mortgage-backed securities are issued by U.S. government agencies, which guarantee payments to investors regardless of the status of the underlying mortgages. The Company monitors the financial condition of these issuers continuously and will record other-than-temporary impairment if the recovery of value is unlikely.

The Company’s securities are exposed to various risks, such as interest rate, market, currency and credit risks. Due to the level of risk associated with certain securities and the level of uncertainty related to changes in the value of securities, it is at least reasonably possible that changes in risks in the near term would materially affect securities reported in the financial statements.

Securities having a carrying value of $2.9 million at March 31, 2020 were pledged as security for public deposits.

The composition of restricted investments at March 31, 2020 and December 31, 2019 was as follows:



	March 31, 2020		December 31, 2019
	(in thousands)
Federal Reserve Bank Stock	$	344	$	344
Federal Home Loan Bank Stock	784		713
Community Bankers’ Bank Stock	140		140
	$	1,268	$	1,197

NOTE 5. Loans and Allowance for Loan Losses

The composition of loans at March 31, 2020 and December 31, 2019 was as follows:



	March 31,			December 31,
	2020			2019
	(in thousands)
Mortgage loans on real estate:
Construction and land development	$	35,755		$	42,561
Secured by farmland	16,326			13,917
Secured by 1-4 family residential properties	225,839			219,580
Multifamily	13,884			14,415
Commercial	301,799			286,600
Commercial and industrial loans	53,611			46,543
Consumer installment loans	13,923			9,541
All other loans	11,810			12,050
Total loans	$	672,947		$	645,207
Net deferred loan costs (fees)	1,085			(447		)
Allowance for loan losses	(5,387		)	(4,973		)
Net Loans	$	668,645		$	639,787

Changes in the allowance for loan losses for the three months ended March 31, 2020 and 2019 and the year ended December 31, 2019 were as follows:



	Three Months Ended			Year Ended			Three Months Ended
	March 31,			December 31,			March 31,
	2020			2019			2019
				(in thousands)
Balance, beginning	$	4,973		$	5,456		$	5,456
(Recovery of) provision for loan losses	(97		)	629			194
Recoveries added to the allowance	578			201			45
Loan losses charged to the allowance	(67		)	(1,313		)	(10		)
Balance, ending	$	5,387		$	4,973		$	5,685

Nonaccrual and past due loans by class at March 31, 2020 and December 31, 2019 were as follows:



	March 31, 2020
	(in thousands)
	30 - 59 Days Past Due		60 - 89 Days Past Due		90 or More Days Past Due		Total Past Due		Current		Total Loans		90 or More Days Past Due Still Accruing		Nonaccrual Loans
Commercial - Non Real Estate:
Commercial & Industrial	$	16	$	—	$	—	$	16	$	53,595	$	53,611	$	—	$	—
Commercial Real Estate:
Owner Occupied	594		1,495		—		2,089		151,495		153,584		—		212
Non-owner occupied	3,038		—		—		3,038		145,177		148,215		—		248
Construction and Farmland:
Residential	—		—		—		—		7,838		7,838		—		—
Commercial	2,411		—		187		2,598		41,645		44,243		—		187
Consumer:
Installment	74		—		—		74		13,849		13,923		—		8
Residential:
Equity Lines	—		149		—		149		32,232		32,381		—		58
Single family	924		578		393		1,895		191,563		193,458		—		984
Multifamily	—		—		—		—		13,884		13,884		—		—
All Other Loans	—		—		—		—		11,810		11,810		—		—
Total	$	7,057	$	2,222	$	580	$	9,859	$	663,088	$	672,947	$	—	$	1,697



	December 31, 2019
	(in thousands)
	30 - 59 Days Past Due		60 - 89 Days Past Due		90 or More Days Past Due		Total Past Due		Current		Total Loans		90 or More Past Due Still Accruing		Nonaccrual Loans
Commercial - Non Real Estate:
Commercial & Industrial	$	47	$	—	$	32	$	79	$	46,464	$	46,543	$	—	$	32
Commercial Real Estate:
Owner Occupied	1,078		—		—		1,078		147,879		148,957		—		320
Non-owner occupied	—		—		—		—		137,643		137,643		—		329
Construction and Farmland:
Residential	—		—		—		—		7,867		7,867		—		—
Commercial	—		—		187		187		48,424		48,611		—		187
Consumer:
Installment	55		6		—		61		9,480		9,541		—		8
Residential:
Equity Lines	121		—		—		121		33,127		33,248		—		65
Single family	471		541		1,251		2,263		184,069		186,332		—		1,244
Multifamily	—		—		—		—		14,415		14,415		—		—
All Other Loans	—		—		—		—		12,050		12,050		—		—
Total	$	1,772	$	547	$	1,470	$	3,789	$	641,418	$	645,207	$	—	$	2,185

Allowance for loan losses by segment at March 31, 2020 and December 31, 2019 were as follows:



	As of and for the Three Months Ended
	March 31, 2020
	(in thousands)
	Construction and Farmland			Residential		Commercial Real Estate		Commercial - Non Real Estate			Consumer			All Other Loans			Unallocated		Total
Allowance for credit losses:
Beginning Balance	$	446		$	1,601	$	1,991	$	565		$	54		$	120		$	196	$	4,973
Charge-Offs	—			—		—		(49		)	(6		)	(12		)	—		(67		)
Recoveries	2			52		40		472			10			2			—		578
Provision for (recovery of) loan losses	(11		)	92		201		(417		)	28			10			—		(97		)
Ending balance	$	437		$	1,745	$	2,232	$	571		$	86		$	120		$	196	$	5,387
Ending balance: Individually evaluated for impairment	$	100		$	39	$	142	$	—		$	—		$	—		$	—	$	281
Ending balance: collectively evaluated for impairment	$	337		$	1,706	$	2,090	$	571		$	86		$	120		$	196	$	5,106
Loans:
Ending balance	$	52,081		$	239,723	$	301,799	$	53,611		$	13,923		$	11,810		$	—	$	672,947
Ending balance individually evaluated for impairment	$	230		$	3,020	$	2,855	$	186		$	8		$	—		$	—	$	6,299
Ending balance collectively evaluated for impairment	$	51,851		$	236,703	$	298,944	$	53,425		$	13,915		$	11,810		$	—	$	666,648



	As of and for the Twelve Months Ended
	December 31, 2019
	(in thousands)
	Construction and Farmland			Residential			Commercial Real Estate			Commercial - Non Real Estate			Consumer			All Other Loans			Unallocated		Total
Allowance for credit losses:
Beginning Balance	$	583		$	1,788		$	1,988		$	919		$	53		$	97		$	28	$	5,456
Charge-Offs	—			(406		)	—			(850		)	(5		)	(52		)	—		(1,313		)
Recoveries	8			72			20			52			26			23			—		201
Provision for (recovery of) loan losses	(145		)	147			(17		)	444			(20		)	52			168		629
Ending balance	$	446		$	1,601		$	1,991		$	565		$	54		$	120		$	196	$	4,973
Ending balance: Individually evaluated for impairment	$	100		$	51		$	149		$	—		$	—		$	—		$	—	$	300
Ending balance: collectively evaluated for impairment	$	346		$	1,550		$	1,842		$	565		$	54		$	120		$	196	$	4,673
Loans:
Ending balance	$	56,478		$	233,995		$	286,600		$	46,543		$	9,541		$	12,050		$	—	$	645,207
Ending balance individually evaluated for impairment	$	433		$	3,681		$	3,053		$	228		$	8		$	—		$	—	$	7,403
Ending balance collectively evaluated for impairment	$	56,045		$	230,314		$	283,547		$	46,315		$	9,533		$	12,050		$	—	$	637,804

Impaired loans by class as of and for the periods ended March 31, 2020 and December 31, 2019 were as follows:



	As of and for the Three Months Ended
	March 31, 2020
	(in thousands)
	Unpaid Principal Balance		Recorded Investment (1)		Related Allowance		Average Recorded Investment		Interest Income Recognized
With no related allowance:
Commercial - Non Real Estate:
Commercial & Industrial	$	313	$	186	$	—	$	198	$	4
Commercial Real Estate:
Owner Occupied	260		247		—		252		1
Non-owner occupied	331		248		—		277		—
Construction and Farmland:
Residential	—		—		—		—		—
Commercial	51		43		—		44		1
Consumer:
Installment	8		8		—		8		—
Residential:
Equity lines	276		57		—		58		—
Single family	2,568		2,170		—		2,447		15
Multifamily	—		—		—		—		—
Other Loans	—		—		—		—		—
	$	3,807	$	2,959	$	—	$	3,284	$	21
With an allowance recorded:
Commercial - Non Real Estate:
Commercial & Industrial	$	—	$	—	$	—	$	—	$	—
Commercial Real Estate:
Owner Occupied	—		—		—		—		—
Non-owner occupied	2,360		2,364		142		2,368		28
Construction and Farmland:
Residential	—		—		—		—		—
Commercial	187		187		100		187		—
Consumer:
Installment	—		—		—		—		—
Residential:
Equity lines	—		—		—		—		—
Single family	874		817		39		820		9
Multifamily	—		—		—		—		—
Other Loans	—		—		—		—		—
	$	3,421	$	3,368	$	281	$	3,375	$	37
Total:
Commercial	$	313	$	186	$	—	$	198	$	4
Commercial Real Estate	2,951		2,859		142		2,897		29
Construction and Farmland	238		230		100		231		1
Consumer	8		8		—		8		—
Residential	3,718		3,044		39		3,325		24
Other	—		—		—		—		—
Total	$	7,228	$	6,327	$	281	$	6,659	$	58

(1) Recorded investment is defined as the summation of the outstanding principal balance, accrued interest, net deferred loan fees or costs, and any partial charge-offs. Accrued interest and net deferred loan fees or costs totaled $28 thousand at March 31, 2020.



	As of and for the Twelve Months End
	December 31, 2019
	(in thousands)
	Unpaid Principal Balance		Recorded Investment (1)		Related Allowance		Average Recorded Investment		Interest Income Recognized
With no related allowance:
Commercial - Non Real Estate:
Commercial & Industrial	$	364	$	228	$	—	$	269	$	21
Commercial Real Estate:
Owner Occupied	369		356		—		358		4
Non-owner occupied	407		329		—		335		—
Construction and Farmland:
Residential	—		—		—		—		—
Commercial	301		246		—		263		25
Consumer:
Installment	9		8		—		9		—
Residential:
Equity lines	276		65		—		68		1

EAGLE FINANCIAL SERVICES INC - FORM 10-Q - May 11, 2020

Attached files