Eagle Financial Services Reports $5.3 Million Net Income for Q2 2025, Faces Year-to-Date Loss

Eagle Financial Services, Inc. reported a net income of $5.3 million for the three months ended June 30, 2025, a significant increase from $3.2 million in the same period last year. However, the company experienced a net loss of $1.7 million for the six months ended June 30, 2025, compared to a profit of $5.7 million for the same period in 2024. The earnings per share for the second quarter were $0.98, up from $0.89 in the prior year, while the year-to-date loss per share was $(0.34), a decline from $1.61 in 2024. The company's total assets increased to $2.04 billion, up from $1.87 billion at the end of 2024, driven by a rise in cash and cash equivalents.

The financial performance was impacted by a balance sheet repositioning strategy executed in the first quarter of 2025, which involved selling available-for-sale securities with an amortized cost of $99.2 million, resulting in a net realized pre-tax loss of $12.4 million. This repositioning was aimed at enhancing the yield on the investment portfolio and was complemented by a public offering of 1,796,875 shares of common stock, generating net proceeds of $53.5 million. The company’s total deposits rose to $1.77 billion, reflecting a 12.15% increase from the previous period, primarily due to large non-interest-bearing deposits related to business sales.

Operationally, Eagle Financial Services reported a decrease in gross loans to $1.44 billion from $1.47 billion at the end of 2024, with a notable decline in marine loans as the company ceased new marine lending business. The allowance for credit losses on loans increased to $15.98 million, representing 1.11% of total loans, up from 1.02% at the end of 2024. The company also reported a rise in nonaccrual loans to $16.7 million, significantly higher than $2.1 million at the end of the previous year, indicating increased credit risk.

Looking ahead, Eagle Financial Services aims to maintain its capital adequacy and liquidity while navigating the challenges posed by market conditions and credit quality. The company’s capital ratios improved following the public offering, with common equity Tier 1 capital at 14.14% as of June 30, 2025. Management remains focused on enhancing operational efficiency and profitability, despite the recent losses attributed to the repositioning strategy. The company plans to continue leveraging its local market presence and customer relationships to drive growth in its core banking operations.