株探米国株
英語
エドガーで原本を確認する
--12-310000880641falseQ2http://fasb.org/us-gaap/2025#OtherLiabilitieshttp://fasb.org/us-gaap/2025#OtherLiabilitieshttp://fasb.org/us-gaap/2025#OtherAssetshttp://fasb.org/us-gaap/2025#OtherAssetshttp://fasb.org/us-gaap/2025#OtherLiabilitiesMarch 31, 2026http://fasb.org/us-gaap/2025#GainLossOnSaleOfOtherAssetshttp://fasb.org/us-gaap/2025#OtherAssetshttp://fasb.org/us-gaap/2025#OtherLiabilitieshttp://fasb.org/us-gaap/2025#OtherAssetshttp://fasb.org/us-gaap/2025#OtherLiabilities0000880641efsi:MarineSegmentMember2024-12-310000880641efsi:MarineSegmentMember2025-01-012025-06-300000880641efsi:RevolvingLoansAmortizedCostBasisMemberefsi:CommercialRealEstateNonOwnerOccupiedMember2025-06-300000880641us-gaap:CommonStockMember2025-01-012025-03-3100008806412024-08-150000880641efsi:ResidentialJuniorLiensMemberus-gaap:PassMemberefsi:RevolvingLoansConvertedToTermMember2024-12-310000880641efsi:OtherCommercialAndIndustrialLoansMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2024-12-310000880641efsi:ResidentialFirstLienInvestorMemberus-gaap:SpecialMentionMember2024-12-310000880641efsi:ClassifiedMemberefsi:CommercialRealEstateOwnerOccupiedMember2025-06-300000880641us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsNonrecurringMemberefsi:FinancialAssetsMember2024-12-310000880641efsi:ConsumerLoansMember2025-06-300000880641us-gaap:AdditionalPaidInCapitalMember2025-01-012025-03-310000880641efsi:OtherLoansMemberus-gaap:PassMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2022Member2025-06-300000880641efsi:CommercialRealEstateNonOwnerOccupiedMember2024-12-310000880641us-gaap:CommercialRealEstatePortfolioSegmentMember2024-12-310000880641us-gaap:SecuredOvernightFinancingRateSofrOvernightIndexSwapRateMember2025-01-012025-06-300000880641efsi:TotalByRiskCategoryMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2023Memberus-gaap:PassMember2025-06-300000880641efsi:CommercialRealEstateNonOwnerOccupiedMemberus-gaap:PassMemberefsi:RevolvingLoansConvertedToTermMember2025-06-300000880641efsi:WealthManagementMember2025-01-012025-06-300000880641efsi:OtherCommercialAndIndustrialLoansMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2025-06-300000880641efsi:CommercialRealEstateOwnerOccupiedMemberus-gaap:SpecialMentionMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2022Member2025-06-300000880641us-gaap:PassMemberefsi:TermLoanAmortizedCostBasisByOriginationYearPriorMemberefsi:ConsumerLoansMember2024-12-3100008806412025-06-300000880641us-gaap:FairValueInputsLevel1Member2024-12-310000880641efsi:AssetsManagementMember2025-04-012025-06-300000880641us-gaap:FairValueMeasurementsNonrecurringMemberefsi:NonfinancialAssetsMember2024-12-310000880641efsi:ResidentialJuniorLiensMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2024Member2025-06-3000008806412024-01-012024-06-300000880641efsi:InterchangeFeesMember2025-01-012025-06-300000880641efsi:BrokerageCommissionsMember2024-01-012024-06-300000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2020Memberefsi:OtherCommercialAndIndustrialLoansMemberus-gaap:PassMember2024-12-310000880641efsi:CommunityBankingMember2024-01-012024-06-300000880641efsi:OtherCommercialAndIndustrialLoansMemberus-gaap:PassMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2025Member2025-06-300000880641us-gaap:CommonStockMember2024-06-300000880641efsi:RevolvingLoansAmortizedCostBasisMemberefsi:TotalByRiskCategoryMember2025-06-300000880641efsi:EliminationsMember2024-04-012024-06-300000880641efsi:ResidentialJuniorLiensMemberus-gaap:SpecialMentionMemberefsi:TermLoanAmortizedCostBasisByOriginationYearPriorMember2025-06-300000880641srt:MaximumMember2025-01-012025-06-300000880641us-gaap:ConsumerPortfolioSegmentMember2024-01-012024-12-310000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2024Memberus-gaap:PassMemberefsi:ConsumerLoansMember2024-12-310000880641efsi:MarineLoansMember2024-12-310000880641efsi:TotalByRiskCategoryMemberus-gaap:SpecialMentionMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2022Member2024-12-310000880641us-gaap:AdditionalPaidInCapitalMember2024-01-012024-03-310000880641efsi:MarineLendingMember2025-04-012025-06-300000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2021Memberefsi:CommercialNonRealEstateCommercialAndIndustrialFinancingReceivableMember2024-12-3100008806412024-03-310000880641efsi:ConstructionAndFarmlandResidentialFinancingReceivableMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2023Memberus-gaap:SpecialMentionMember2024-12-310000880641us-gaap:FinancingReceivables30To59DaysPastDueMemberefsi:ResidentialJuniorLiensMember2024-12-310000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2020Memberefsi:MarineLoansMember2024-12-310000880641efsi:BrokerageCommissionsMember2024-04-012024-06-300000880641efsi:ResidentialFirstLienInvestorMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2024Member2025-06-300000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2021Memberefsi:MarineLoansMember2025-06-300000880641us-gaap:FinancingReceivables30To59DaysPastDueMemberefsi:HelocsMember2024-12-310000880641efsi:ClassifiedMemberefsi:OtherCommercialAndIndustrialLoansMember2025-06-300000880641us-gaap:DesignatedAsHedgingInstrumentMemberefsi:FairValueSwapMember2024-12-310000880641efsi:ResidentialFirstLienInvestorMember2024-12-310000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2023Memberefsi:ConsumerLoansMember2025-06-300000880641us-gaap:CommonStockMember2024-01-012024-03-310000880641us-gaap:LongTermDebtMemberefsi:DueIn2026Memberus-gaap:FederalHomeLoanBankAdvancesMember2025-01-012025-06-300000880641efsi:AllOtherLoansFinancingReceivableMember2025-01-012025-06-300000880641efsi:CommercialRealEstateNonOwnerOccupiedMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2020Member2024-12-310000880641efsi:TermLoanAmortizedCostBasisByOriginationYearPriorMemberefsi:ConsumerLoansMember2025-06-300000880641efsi:ClassifiedMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2021Memberefsi:CommercialRealEstateOwnerOccupiedMember2025-06-300000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2023Memberus-gaap:PassMemberefsi:ResidentialFirstLienOwnerOccupiedMember2024-12-310000880641us-gaap:PassMemberefsi:MarineLoansMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2022Member2025-06-300000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2020Memberus-gaap:PassMemberefsi:ConsumerLoansMember2024-12-310000880641us-gaap:CommonStockMember2025-03-310000880641efsi:MarineLoansMember2024-12-310000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2022Memberefsi:ConsumerLoansMember2024-12-310000880641efsi:CommercialRealEstateOwnerOccupiedMember2024-12-310000880641us-gaap:FinancingReceivables60To89DaysPastDueMemberefsi:ResidentialFirstLienOwnerOccupiedMember2024-12-310000880641efsi:CommercialRealEstateOwnerOccupiedMemberus-gaap:SpecialMentionMember2025-06-3000008806412024-06-300000880641efsi:ResidentialJuniorLiensMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2020Member2024-12-310000880641efsi:CommunityBankingMember2025-04-012025-06-300000880641efsi:TermLoanAmortizedCostBasisByOriginationYearPriorMemberefsi:ResidentialFirstLienOwnerOccupiedMember2025-06-300000880641efsi:ResidentialFirstLienInvestorMemberus-gaap:PassMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2022Member2024-12-310000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2023Memberus-gaap:PassMemberefsi:ConsumerLoansMember2024-12-310000880641us-gaap:SpecialMentionMemberefsi:ResidentialFirstLienOwnerOccupiedMember2025-06-300000880641us-gaap:FairValueMeasurementsNonrecurringMemberefsi:FinancialAssetsMember2024-12-310000880641efsi:ConstructionAndFarmlandResidentialFinancingReceivableMemberus-gaap:SpecialMentionMember2025-06-300000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2021Member2025-06-300000880641efsi:ClassifiedMemberefsi:TotalByRiskCategoryMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2024Member2024-12-310000880641us-gaap:FinancialAssetPastDueMember2024-12-310000880641efsi:CommercialRealEstateNonOwnerOccupiedMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2023Member2024-12-310000880641efsi:RevolvingLoansAmortizedCostBasisMemberefsi:CommercialRealEstateOwnerOccupiedMember2024-12-310000880641us-gaap:FairValueMeasurementsNonrecurringMemberefsi:NonfinancialAssetsMember2025-06-300000880641us-gaap:FairValueMeasurementsNonrecurringMemberefsi:FinancialAssetsMember2025-06-300000880641efsi:McLeanBranchMember2025-01-012025-03-310000880641efsi:ResidentialFirstLienInvestorMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2023Memberus-gaap:PassMember2025-06-300000880641efsi:TotalByRiskCategoryMemberus-gaap:SpecialMentionMemberefsi:RevolvingLoansConvertedToTermMember2025-06-300000880641efsi:ResidentialJuniorLiensMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2021Memberus-gaap:PassMember2024-12-310000880641efsi:RevolvingLoansAmortizedCostBasisMemberefsi:CommercialRealEstateNonOwnerOccupiedMemberus-gaap:PassMember2024-12-310000880641efsi:OtherCommercialAndIndustrialLoansMemberus-gaap:SpecialMentionMember2024-12-310000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2021Memberus-gaap:PassMemberefsi:CommercialNonRealEstateCommercialAndIndustrialFinancingReceivableMember2025-06-300000880641efsi:ResidentialFirstLienInvestorMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2021Memberus-gaap:PassMember2024-12-310000880641us-gaap:PassMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2022Memberefsi:ConsumerLoansMember2024-12-310000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2024Memberus-gaap:SpecialMentionMemberefsi:ResidentialFirstLienOwnerOccupiedMember2025-06-300000880641us-gaap:PassMemberefsi:ConsumerLoansMember2025-06-300000880641us-gaap:AdditionalPaidInCapitalMember2023-12-310000880641efsi:ClassifiedMemberefsi:ConstructionAndFarmlandResidentialFinancingReceivableMember2025-06-300000880641efsi:CommercialRealEstateNonOwnerOccupiedMemberus-gaap:PassMember2024-12-310000880641efsi:OtherLoansMemberus-gaap:PassMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2022Member2024-12-310000880641efsi:CommercialRealEstateOwnerOccupiedMemberus-gaap:PassMemberefsi:TermLoanAmortizedCostBasisByOriginationYearPriorMember2024-12-310000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2024Memberefsi:OtherCommercialAndIndustrialLoansMemberus-gaap:SpecialMentionMember2024-12-310000880641efsi:ClassifiedMemberefsi:OtherCommercialAndIndustrialLoansMember2024-12-310000880641efsi:CommercialRealEstateNonOwnerOccupiedMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2021Member2024-12-310000880641us-gaap:ResidentialRealEstateMember2024-12-310000880641us-gaap:CommercialPortfolioSegmentMember2023-12-310000880641us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-04-012024-06-300000880641efsi:MonthlyandOtherServiceFeesMember2024-01-012024-06-300000880641efsi:ConstructionAndFarmlandResidentialFinancingReceivableMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2022Member2025-06-300000880641us-gaap:AvailableforsaleSecuritiesMember2025-01-012025-06-300000880641efsi:OtherLoansMemberus-gaap:PassMemberefsi:TermLoanAmortizedCostBasisByOriginationYearPriorMember2025-06-300000880641efsi:ConsumerInstallmentLoansFinancingReceivablesMember2024-12-310000880641us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2025-06-300000880641us-gaap:FairValueInputsLevel2Memberus-gaap:USGovernmentCorporationsAndAgenciesSecuritiesMember2025-06-300000880641efsi:ResidentialJuniorLiensMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2021Memberus-gaap:PassMember2025-06-300000880641us-gaap:AvailableforsaleSecuritiesMember2025-06-300000880641efsi:TotalByRiskCategoryMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2024Memberus-gaap:SpecialMentionMember2024-12-310000880641efsi:TotalByRiskCategoryMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2024Member2025-06-300000880641efsi:OtherCommercialAndIndustrialLoansMemberus-gaap:FinancialAssetPastDueMember2024-12-310000880641efsi:CommercialRealEstateNonOwnerOccupiedMemberus-gaap:SpecialMentionMember2025-06-300000880641efsi:MatchedInterestRateSwapsWithBorrowerMemberus-gaap:InterestRateSwapMemberus-gaap:NondesignatedMember2024-12-310000880641efsi:CommercialRealEstateOwnerOccupiedMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2025-06-300000880641efsi:TotalByRiskCategoryMemberus-gaap:SpecialMentionMemberefsi:TermLoanAmortizedCostBasisByOriginationYearPriorMember2025-06-300000880641us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2025-01-012025-06-300000880641efsi:ResidentialJuniorLiensMemberus-gaap:PassMemberefsi:RevolvingLoansConvertedToTermMember2025-06-300000880641efsi:OtherLoansMember2024-12-310000880641efsi:MarineLendingMember2025-06-300000880641efsi:CommercialRealEstateNonOwnerOccupiedMemberus-gaap:PassMemberefsi:RevolvingLoansConvertedToTermMember2024-12-310000880641efsi:CommercialRealEstateOwnerOccupiedMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2022Member2024-12-310000880641efsi:ClassifiedMemberefsi:OverdraftsMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2024Member2024-12-310000880641efsi:TotalByRiskCategoryMemberefsi:RevolvingLoansConvertedToTermMember2025-06-300000880641efsi:RealEstateCollateralMember2024-12-310000880641efsi:ClassifiedMemberefsi:OverdraftsMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2025Member2025-06-300000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2021Memberus-gaap:PassMemberefsi:ResidentialFirstLienOwnerOccupiedMember2025-06-300000880641efsi:InterchangeFeesMember2024-04-012024-06-300000880641efsi:ResidentialFirstLienInvestorMemberus-gaap:PassMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2022Member2025-06-300000880641us-gaap:PassMemberefsi:CommercialNonRealEstateCommercialAndIndustrialFinancingReceivableMember2024-12-310000880641efsi:ATMFeesMember2025-04-012025-06-300000880641us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2025-01-012025-06-300000880641efsi:CommercialRealEstateNonOwnerOccupiedMemberus-gaap:PassMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2022Member2025-06-300000880641efsi:ResidentialFirstLienInvestorMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2023Memberus-gaap:SpecialMentionMember2025-06-300000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2024Memberefsi:ConsumerLoansMember2025-06-300000880641us-gaap:PassMemberefsi:TermLoanAmortizedCostBasisByOriginationYearPriorMemberefsi:ResidentialFirstLienOwnerOccupiedMember2024-12-310000880641efsi:CommercialRealEstateOwnerOccupiedMemberus-gaap:PassMember2024-12-310000880641efsi:HelocsMemberefsi:RevolvingLoansAmortizedCostBasisMemberus-gaap:SpecialMentionMember2025-06-300000880641efsi:OtherLoansMemberus-gaap:PassMember2025-06-300000880641us-gaap:FinancingReceivables30To59DaysPastDueMemberefsi:ResidentialJuniorLiensMember2025-06-300000880641us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-12-310000880641efsi:ClassifiedMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2021Memberefsi:ConsumerLoansMember2024-12-310000880641us-gaap:PassMemberefsi:ResidentialFirstLienOwnerOccupiedMember2025-06-300000880641efsi:BrokerageCommissionsMember2025-01-012025-06-300000880641efsi:RevolvingLoansAmortizedCostBasisMemberefsi:ConstructionAndFarmlandResidentialFinancingReceivableMember2025-06-300000880641efsi:CommercialRealEstateOwnerOccupiedMemberus-gaap:FinancialAssetPastDueMember2024-12-310000880641efsi:RevolvingLoansAmortizedCostBasisMemberefsi:OtherLoansMemberus-gaap:PassMember2024-12-310000880641efsi:OverdraftsMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2024Member2024-12-310000880641efsi:ConstructionAndFarmlandResidentialFinancingReceivableMemberus-gaap:PassMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2022Member2025-06-300000880641us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2024-03-310000880641us-gaap:FinancingReceivables30To59DaysPastDueMemberefsi:MarineLoansMember2025-06-300000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2021Memberus-gaap:PassMemberefsi:CommercialNonRealEstateCommercialAndIndustrialFinancingReceivableMember2024-12-310000880641efsi:CommercialRealEstateOwnerOccupiedMemberus-gaap:PassMemberefsi:RevolvingLoansConvertedToTermMember2025-06-300000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2021Memberefsi:TotalByRiskCategoryMember2025-06-300000880641efsi:ResidentialJuniorLiensMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2023Memberus-gaap:PassMember2025-06-300000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2020Memberefsi:ConstructionAndFarmlandResidentialFinancingReceivableMember2024-12-310000880641efsi:ResidentialJuniorLiensMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2022Member2025-06-300000880641us-gaap:SpecialMentionMemberefsi:ResidentialFirstLienOwnerOccupiedMember2024-12-310000880641efsi:RevolvingLoansAmortizedCostBasisMemberefsi:OtherCommercialAndIndustrialLoansMember2025-06-300000880641efsi:ResidentialJuniorLiensMember2025-06-300000880641efsi:RevolvingLoansAmortizedCostBasisMemberefsi:TotalByRiskCategoryMemberus-gaap:PassMember2024-12-310000880641efsi:MonthlyandOtherServiceFeesMember2024-04-012024-06-300000880641efsi:OtherCommercialAndIndustrialLoansMemberus-gaap:PassMember2024-12-310000880641efsi:RealEstateCollateralMemberefsi:ResidentialFirstLienInvestorMember2025-06-300000880641efsi:IndividuallyEvaluatedCollateral-DependentLoansMemberefsi:OtherCommercialAndIndustrialLoansMember2025-06-300000880641efsi:TotalByRiskCategoryMemberus-gaap:PassMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2025Member2025-06-300000880641efsi:CommunityBankingMember2025-06-300000880641efsi:TotalByRiskCategoryMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2021Memberus-gaap:SpecialMentionMember2024-12-310000880641us-gaap:PassMemberefsi:RevolvingLoansConvertedToTermMemberefsi:ResidentialFirstLienOwnerOccupiedMember2024-12-310000880641efsi:RevolvingLoansAmortizedCostBasisMemberefsi:CommercialRealEstateOwnerOccupiedMember2025-06-300000880641efsi:OtherLoansMember2024-12-310000880641efsi:ConsumerLoansMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2024-12-310000880641efsi:AllOtherLoansFinancingReceivableMember2025-06-300000880641us-gaap:InterestRateContractMember2025-06-300000880641efsi:ResidentialJuniorLiensMemberus-gaap:PassMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2025Member2025-06-300000880641efsi:MeasurementInputDiscountForSellingCostsMemberus-gaap:OtherAssetsMember2024-01-012024-12-310000880641srt:FederalHomeLoanBankOfAtlantaMember2025-06-300000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2024Memberefsi:CommercialRealEstateOwnerOccupiedMember2025-06-300000880641efsi:HelocsMember2024-12-310000880641efsi:SubordinatedNotesDueAprilOneTwoThousandThirtyTwoMember2022-03-310000880641efsi:MarineSegmentMember2023-12-310000880641us-gaap:CommercialPortfolioSegmentMember2025-01-012025-06-300000880641efsi:RevolvingLoansAmortizedCostBasisMemberefsi:ConsumerLoansMember2024-12-310000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2021Memberefsi:OtherCommercialAndIndustrialLoansMemberus-gaap:PassMember2025-06-300000880641efsi:ClassifiedMemberefsi:OverdraftsMember2025-06-300000880641efsi:ResidentialFirstLienInvestorMemberus-gaap:PassMemberefsi:TermLoanAmortizedCostBasisByOriginationYearPriorMember2024-12-310000880641us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2024-01-012024-06-300000880641efsi:ConstructionAndFarmlandResidentialFinancingReceivableMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2023Memberus-gaap:SpecialMentionMember2025-06-300000880641us-gaap:PassMemberefsi:MarineLoansMember2024-12-310000880641efsi:ResidentialJuniorLiensMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2023Memberus-gaap:SpecialMentionMember2025-06-300000880641efsi:CommercialRealEstateOwnerOccupiedMember2024-12-310000880641efsi:ClassifiedMemberefsi:TotalByRiskCategoryMemberefsi:TermLoanAmortizedCostBasisByOriginationYearPriorMember2024-12-310000880641efsi:OtherChargesandFeesMember2024-04-012024-06-300000880641efsi:ResidentialFirstLienOwnerOccupiedMember2025-06-300000880641efsi:AllOtherMember2025-04-012025-06-300000880641efsi:OtherCommercialAndIndustrialLoansMemberefsi:RevolvingLoansConvertedToTermMemberus-gaap:SpecialMentionMember2024-12-310000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2021Memberefsi:ConstructionAndFarmlandResidentialFinancingReceivableMember2025-06-300000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2021Memberefsi:CommercialNonRealEstateCommercialAndIndustrialFinancingReceivableMember2025-06-300000880641efsi:OtherCommercialAndIndustrialLoansMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2022Member2024-12-310000880641efsi:CommercialRealEstateOwnerOccupiedMemberus-gaap:SpecialMentionMemberefsi:TermLoanAmortizedCostBasisByOriginationYearPriorMember2024-12-310000880641efsi:CommercialRealEstateOwnerOccupiedMemberus-gaap:PassMemberefsi:TermLoanAmortizedCostBasisByOriginationYearPriorMember2025-06-300000880641efsi:OtherLoansMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2023Memberus-gaap:PassMember2025-06-300000880641efsi:ConsumerLoansMember2024-12-3100008806412025-01-012025-03-310000880641efsi:ClassifiedMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2021Memberefsi:CommercialRealEstateOwnerOccupiedMember2024-12-310000880641efsi:ATMFeesMember2024-04-012024-06-300000880641us-gaap:OtherAssetsMember2025-06-300000880641efsi:ConsumerLoansMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2025-06-300000880641efsi:ClassifiedMemberefsi:HelocsMember2025-06-300000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2021Memberefsi:OtherCommercialAndIndustrialLoansMemberus-gaap:SpecialMentionMember2024-12-310000880641efsi:OtherCommercialAndIndustrialLoansMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2025Member2025-06-300000880641efsi:AllOtherLoansFinancingReceivableMember2024-12-310000880641efsi:OtherChargesandFeesMember2025-04-012025-06-300000880641efsi:ResidentialFirstLienInvestorMemberus-gaap:SpecialMentionMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2022Member2024-12-310000880641efsi:CommercialRealEstateNonOwnerOccupiedMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2024Memberus-gaap:PassMember2025-06-300000880641us-gaap:CommercialRealEstatePortfolioSegmentMember2025-06-300000880641efsi:OtherLoansMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2023Member2025-06-300000880641efsi:RevolvingLoansAmortizedCostBasisMemberus-gaap:PassMemberefsi:ConsumerLoansMember2024-12-310000880641efsi:ClassifiedMemberefsi:ResidentialFirstLienInvestorMember2025-06-300000880641efsi:OverdrawnAccountFeesMember2024-01-012024-06-300000880641efsi:RevolvingLoansConvertedToTermMemberefsi:ResidentialFirstLienOwnerOccupiedMember2025-06-300000880641efsi:ResidentialFirstLienInvestorMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2021Memberus-gaap:SpecialMentionMember2025-06-300000880641efsi:OtherCommercialAndIndustrialLoansMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2023Memberus-gaap:SpecialMentionMember2025-06-300000880641efsi:ResidentialFirstLienInvestorMemberefsi:TermLoanAmortizedCostBasisByOriginationYearPriorMember2025-06-300000880641us-gaap:ResidentialRealEstateMember2023-12-310000880641us-gaap:MortgageBackedSecuritiesMember2025-06-300000880641efsi:OtherCommercialAndIndustrialLoansMemberefsi:RevolvingLoansConvertedToTermMember2024-12-310000880641efsi:OtherCommercialAndIndustrialLoansMember2024-12-310000880641efsi:RealEstateCollateralMemberefsi:CommercialRealEstateOwnerOccupiedMember2025-06-300000880641efsi:CollateralDependentLoansMemberefsi:MeasurementInputDiscountForSellingCostsMember2025-01-012025-06-300000880641us-gaap:FairValueInputsLevel2Memberus-gaap:SubordinatedDebtMember2024-12-310000880641efsi:TotalByRiskCategoryMemberus-gaap:SpecialMentionMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2022Member2025-06-300000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2021Memberefsi:CommercialRealEstateOwnerOccupiedMemberus-gaap:PassMember2025-06-300000880641efsi:RevolvingLoansAmortizedCostBasisMemberefsi:OtherLoansMemberus-gaap:PassMember2025-06-300000880641us-gaap:AdditionalPaidInCapitalMember2024-06-300000880641efsi:ResidentialFirstLienInvestorMember2024-12-310000880641us-gaap:RetainedEarningsMember2025-03-310000880641efsi:ResidentialFirstLienInvestorMemberus-gaap:PassMemberefsi:RevolvingLoansConvertedToTermMember2024-12-310000880641us-gaap:AssetPledgedAsCollateralMemberefsi:FederalReserveBankDiscountWindowMember2025-06-300000880641efsi:ResidentialJuniorLiensMember2025-06-300000880641efsi:SbaPppLoansMember2024-12-310000880641efsi:CommercialNonRealEstateCommercialAndIndustrialFinancingReceivableMember2024-12-310000880641efsi:TotalByRiskCategoryMemberus-gaap:PassMemberefsi:RevolvingLoansConvertedToTermMember2025-06-300000880641efsi:RevolvingLoansAmortizedCostBasisMemberefsi:CommercialRealEstateOwnerOccupiedMemberus-gaap:PassMember2025-06-300000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2021Memberefsi:CommercialRealEstateOwnerOccupiedMember2025-06-300000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2020Memberefsi:ConsumerLoansMember2024-12-310000880641us-gaap:LongTermDebtMemberus-gaap:FederalHomeLoanBankAdvancesMember2025-06-300000880641efsi:WealthManagementMember2025-04-012025-06-300000880641efsi:OtherLoansMember2025-06-300000880641efsi:TotalByRiskCategoryMemberus-gaap:SpecialMentionMemberefsi:TermLoanAmortizedCostBasisByOriginationYearPriorMember2024-12-310000880641efsi:ConstructionAndFarmlandResidentialFinancingReceivableMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2024Member2025-06-300000880641efsi:CommercialRealEstateNonOwnerOccupiedMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2021Memberus-gaap:PassMember2025-06-300000880641us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMemberefsi:ResidentialJuniorLiensMember2025-06-300000880641efsi:ResidentialJuniorLiensMemberus-gaap:PassMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2022Member2024-12-310000880641efsi:OtherCommercialAndIndustrialLoansMemberefsi:TermLoanAmortizedCostBasisByOriginationYearPriorMember2025-06-300000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2023Memberefsi:ResidentialFirstLienOwnerOccupiedMember2024-12-310000880641efsi:HelocsMember2025-06-300000880641us-gaap:USStatesAndPoliticalSubdivisionsMember2024-12-310000880641efsi:CommercialRealEstateNonOwnerOccupiedMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2023Member2025-06-300000880641efsi:ResidentialFirstLienInvestorMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2021Memberus-gaap:SpecialMentionMember2024-12-310000880641efsi:AllOtherMember2024-01-012024-06-300000880641us-gaap:CollateralizedMortgageObligationsMember2025-06-300000880641efsi:MarineSegmentMember2025-06-300000880641efsi:MarineSegmentMember2024-01-012024-12-310000880641efsi:ConsumerLoansMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2024-12-310000880641us-gaap:CommercialPortfolioSegmentMember2024-12-310000880641us-gaap:ConsumerPortfolioSegmentMember2025-01-012025-06-300000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2020Memberefsi:ResidentialFirstLienOwnerOccupiedMember2024-12-310000880641us-gaap:EstimateOfFairValueFairValueDisclosureMember2024-12-310000880641us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2025-03-310000880641efsi:ConsumerLoansMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2025-06-300000880641efsi:CommercialRealEstateOwnerOccupiedMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2023Memberus-gaap:PassMember2024-12-310000880641efsi:CommercialRealEstateNonOwnerOccupiedMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2020Memberus-gaap:SpecialMentionMember2024-12-310000880641us-gaap:FairValueInputsLevel3Member2025-06-300000880641efsi:CommercialRealEstateOwnerOccupiedMemberus-gaap:FinancialAssetPastDueMember2025-06-300000880641efsi:AssetsManagementMember2024-01-012024-06-3000008806412025-03-310000880641efsi:ResidentialJuniorLiensMemberus-gaap:PassMemberefsi:TermLoanAmortizedCostBasisByOriginationYearPriorMember2024-12-310000880641efsi:TotalByRiskCategoryMemberus-gaap:PassMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2022Member2024-12-310000880641efsi:ResidentialJuniorLiensMemberefsi:RevolvingLoansConvertedToTermMember2024-12-310000880641efsi:CommunityBankersBankStockMember2025-06-300000880641efsi:MeasurementInputDiscountForSellingCostsMemberus-gaap:OtherAssetsMember2025-01-012025-06-300000880641efsi:OverdraftsMember2025-06-300000880641efsi:RevolvingLoansAmortizedCostBasisMemberefsi:OtherCommercialAndIndustrialLoansMemberus-gaap:PassMember2024-12-310000880641us-gaap:CommonStockMember2023-12-310000880641us-gaap:FairValueInputsLevel2Memberus-gaap:SubordinatedDebtMember2025-06-300000880641efsi:ClassifiedMemberefsi:CommercialRealEstateOwnerOccupiedMember2024-12-310000880641efsi:ResidentialFirstLienInvestorMemberefsi:RevolvingLoansConvertedToTermMember2024-12-310000880641efsi:ResidentialJuniorLiensMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2025Member2025-06-300000880641efsi:ConstructionAndFarmlandFinancingReceivableMember2025-06-300000880641efsi:ServicePeriodMembersrt:OfficerMember2025-01-012025-06-300000880641efsi:OtherLoansMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2025Member2025-06-300000880641efsi:CommercialRealEstateOwnerOccupiedMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2023Member2024-12-310000880641efsi:OtherCommercialAndIndustrialLoansMember2024-12-310000880641efsi:OtherLoansMemberus-gaap:PassMember2024-12-310000880641efsi:ConsolidatedMember2025-04-012025-06-300000880641us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2025-03-310000880641efsi:MonthlyandOtherServiceFeesMember2025-04-012025-06-300000880641us-gaap:FinancingReceivables30To59DaysPastDueMember2025-06-300000880641efsi:ResidentialFirstLienInvestorMemberus-gaap:FinancialAssetPastDueMember2024-12-310000880641efsi:ClassifiedMemberefsi:RevolvingLoansAmortizedCostBasisMemberefsi:TotalByRiskCategoryMember2025-06-300000880641efsi:ResidentialJuniorLiensMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2021Member2025-06-300000880641efsi:CommercialRealEstateNonOwnerOccupiedMember2024-12-310000880641efsi:TotalByRiskCategoryMemberus-gaap:PassMemberefsi:TermLoanAmortizedCostBasisByOriginationYearPriorMember2024-12-310000880641us-gaap:FairValueInputsLevel2Memberus-gaap:USStatesAndPoliticalSubdivisionsMember2024-12-310000880641efsi:TotalByRiskCategoryMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2024Member2024-12-310000880641efsi:ResidentialFirstLienInvestorMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2021Member2024-12-310000880641efsi:OtherCommercialAndIndustrialLoansMemberus-gaap:PassMemberefsi:TermLoanAmortizedCostBasisByOriginationYearPriorMember2025-06-300000880641efsi:RevolvingLoansAmortizedCostBasisMemberefsi:CommercialRealEstateNonOwnerOccupiedMember2024-12-310000880641efsi:OtherLoansMember2025-06-300000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2023Memberus-gaap:PassMemberefsi:ResidentialFirstLienOwnerOccupiedMember2025-06-300000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2024Memberus-gaap:PassMemberefsi:ResidentialFirstLienOwnerOccupiedMember2024-12-310000880641efsi:ResidentialFirstLienInvestorMember2025-06-300000880641efsi:WealthManagementMember2024-12-310000880641us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2025-06-300000880641efsi:CommercialRealEstateOwnerOccupiedMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2025-06-300000880641us-gaap:CommercialRealEstatePortfolioSegmentMember2024-01-012024-12-310000880641efsi:ResidentialFirstLienInvestorMemberus-gaap:SpecialMentionMemberefsi:TermLoanAmortizedCostBasisByOriginationYearPriorMember2024-12-310000880641efsi:ConstructionAndFarmlandResidentialFinancingReceivableMemberus-gaap:PassMemberefsi:TermLoanAmortizedCostBasisByOriginationYearPriorMember2025-06-300000880641efsi:OverdrawnAccountFeesMember2025-01-012025-06-300000880641efsi:ClassifiedMemberefsi:TermLoanAmortizedCostBasisByOriginationYearPriorMemberefsi:ResidentialFirstLienOwnerOccupiedMember2025-06-300000880641efsi:RevolvingLoansAmortizedCostBasisMemberefsi:ConstructionAndFarmlandResidentialFinancingReceivableMemberus-gaap:PassMember2025-06-300000880641us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsNonrecurringMemberefsi:NonfinancialAssetsMember2024-12-310000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2021Memberefsi:CommercialRealEstateOwnerOccupiedMemberus-gaap:SpecialMentionMember2024-12-310000880641efsi:AllOtherMember2025-01-012025-06-300000880641us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsNonrecurringMemberefsi:FinancialAssetsMember2025-06-300000880641efsi:TotalByRiskCategoryMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2022Member2024-12-310000880641efsi:CommercialRealEstateNonOwnerOccupiedMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2020Memberus-gaap:PassMember2024-12-310000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2024Memberefsi:OtherCommercialAndIndustrialLoansMemberus-gaap:SpecialMentionMember2025-06-300000880641efsi:CommercialRealEstateNonOwnerOccupiedMemberus-gaap:PassMemberefsi:TermLoanAmortizedCostBasisByOriginationYearPriorMember2024-12-310000880641efsi:CommercialRealEstateOwnerOccupiedMemberefsi:TermLoanAmortizedCostBasisByOriginationYearPriorMember2024-12-310000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2021Memberefsi:ResidentialFirstLienOwnerOccupiedMember2024-12-310000880641efsi:ResidentialJuniorLiensMemberus-gaap:PassMember2024-12-310000880641us-gaap:CommercialRealEstatePortfolioSegmentMember2025-01-012025-06-300000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2020Memberefsi:TotalByRiskCategoryMember2024-12-310000880641efsi:ATMFeesMember2025-01-012025-06-300000880641efsi:ConstructionAndFarmlandResidentialFinancingReceivableMemberus-gaap:PassMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2025Member2025-06-300000880641efsi:FederalReserveBankStockMember2024-12-310000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2020Memberus-gaap:PassMemberefsi:ResidentialFirstLienOwnerOccupiedMember2024-12-310000880641us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsNonrecurringMemberefsi:NonfinancialAssetsMember2025-06-300000880641efsi:CommercialRealEstateNonOwnerOccupiedMemberefsi:RevolvingLoansConvertedToTermMember2025-06-300000880641efsi:SbaPppLoansMember2025-06-300000880641us-gaap:PassMemberefsi:ResidentialFirstLienOwnerOccupiedMember2024-12-310000880641efsi:TotalByRiskCategoryMemberus-gaap:PassMember2025-06-300000880641efsi:ResidentialFirstLienInvestorMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2025Member2025-06-300000880641efsi:CommercialRealEstateNonOwnerOccupiedMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2021Memberus-gaap:SpecialMentionMember2025-06-300000880641efsi:ConsolidatedMember2024-04-012024-06-300000880641efsi:RevolvingLoansAmortizedCostBasisMemberefsi:ConstructionAndFarmlandResidentialFinancingReceivableMemberus-gaap:PassMember2024-12-310000880641efsi:OtherLoansMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2022Member2024-12-310000880641efsi:ClassifiedMemberefsi:CommercialRealEstateNonOwnerOccupiedMember2025-06-300000880641efsi:ResidentialFirstLienInvestorMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2025-06-300000880641efsi:OtherCommercialAndIndustrialLoansMemberus-gaap:PassMember2025-06-300000880641efsi:TotalByRiskCategoryMember2025-06-300000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2024Memberefsi:ConsumerLoansMember2024-12-3100008806412023-05-160000880641us-gaap:USGovernmentCorporationsAndAgenciesSecuritiesMember2025-06-300000880641us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2024-06-300000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2020Memberus-gaap:PassMemberefsi:MarineLoansMember2024-12-310000880641efsi:ClassifiedMemberefsi:ConstructionAndFarmlandResidentialFinancingReceivableMember2024-12-310000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2020Memberefsi:TotalByRiskCategoryMemberus-gaap:SpecialMentionMember2024-12-310000880641efsi:RevolvingLoansAmortizedCostBasisMemberefsi:OtherLoansMember2025-06-300000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2021Memberefsi:CommercialRealEstateOwnerOccupiedMemberus-gaap:SpecialMentionMember2025-06-300000880641us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMemberefsi:ResidentialJuniorLiensMember2024-12-310000880641efsi:MarineLoansMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2022Member2025-06-300000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2021Memberefsi:ConsumerLoansMember2024-12-310000880641efsi:ResidentialFirstLienInvestorMemberus-gaap:SpecialMentionMemberefsi:TermLoanAmortizedCostBasisByOriginationYearPriorMember2025-06-300000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2021Memberefsi:OtherCommercialAndIndustrialLoansMember2024-12-310000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2024Memberefsi:ResidentialFirstLienOwnerOccupiedMember2025-06-300000880641efsi:RevolvingLoansConvertedToTermMemberefsi:ConsumerLoansMember2024-12-310000880641efsi:ResidentialJuniorLiensMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2021Member2024-12-310000880641efsi:RevolvingLoansAmortizedCostBasisMemberefsi:CommercialRealEstateNonOwnerOccupiedMemberus-gaap:PassMember2025-06-300000880641us-gaap:InvestmentInFederalHomeLoanBankStockMember2025-06-300000880641us-gaap:ShortTermDebtMemberus-gaap:FederalHomeLoanBankAdvancesMember2024-12-310000880641us-gaap:RetainedEarningsMember2024-06-300000880641efsi:ResidentialJuniorLiensMemberus-gaap:SpecialMentionMember2024-12-310000880641efsi:CommercialRealEstateOwnerOccupiedMemberus-gaap:PassMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2022Member2024-12-310000880641efsi:OtherCommercialAndIndustrialLoansMemberus-gaap:SpecialMentionMemberefsi:RevolvingLoansConvertedToTermMember2025-06-300000880641efsi:ResidentialFirstLienOwnerOccupiedMember2025-06-300000880641efsi:CommercialRealEstateOwnerOccupiedMember2025-06-300000880641srt:MinimumMember2025-01-012025-06-300000880641us-gaap:PassMemberefsi:MarineLoansMemberefsi:TermLoanAmortizedCostBasisByOriginationYearPriorMember2025-06-300000880641efsi:AssetsManagementMember2024-04-012024-06-300000880641efsi:ResidentialJuniorLiensMemberus-gaap:PassMember2025-06-300000880641us-gaap:PassMemberefsi:CommercialNonRealEstateCommercialAndIndustrialFinancingReceivableMember2025-06-300000880641efsi:RevolvingLoansAmortizedCostBasisMemberefsi:CommercialRealEstateOwnerOccupiedMemberus-gaap:PassMember2024-12-310000880641efsi:ConstructionAndFarmlandResidentialFinancingReceivableMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2024Member2024-12-310000880641efsi:CommunityBankersBankStockMember2024-12-310000880641efsi:HelocsMemberus-gaap:SpecialMentionMember2025-06-300000880641efsi:ConstructionAndLandDevelopmentFinancingReceivableMember2025-06-300000880641efsi:EliminationsMember2024-12-310000880641efsi:ResidentialJuniorLiensMember2024-12-310000880641efsi:EliminationsMember2024-01-012024-06-300000880641efsi:OtherCommercialAndIndustrialLoansMemberefsi:TermLoanAmortizedCostBasisByOriginationYearPriorMember2024-12-310000880641efsi:ClassifiedMemberefsi:ResidentialFirstLienInvestorMemberefsi:RevolvingLoansConvertedToTermMember2024-12-310000880641efsi:HelocsMemberefsi:RevolvingLoansAmortizedCostBasisMember2025-06-300000880641efsi:CommercialRealEstateOwnerOccupiedMemberus-gaap:SpecialMentionMemberefsi:TermLoanAmortizedCostBasisByOriginationYearPriorMember2025-06-300000880641efsi:ConstructionAndFarmlandResidentialFinancingReceivableMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2025Member2025-06-300000880641us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMemberefsi:ResidentialFirstLienOwnerOccupiedMember2024-12-310000880641us-gaap:PassMemberefsi:ConsumerLoansMember2024-12-310000880641us-gaap:PassMemberefsi:MarineLoansMember2025-06-300000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2022Memberefsi:ConsumerLoansMember2025-06-300000880641us-gaap:PassMemberefsi:ResidentialFirstLienOwnerOccupiedMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2022Member2025-06-300000880641us-gaap:ConsumerPortfolioSegmentMember2025-06-300000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2024Memberefsi:OtherCommercialAndIndustrialLoansMemberus-gaap:PassMember2025-06-300000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2023Memberefsi:CommercialRealEstateOwnerOccupiedMemberus-gaap:SpecialMentionMember2024-12-310000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2023Memberefsi:ResidentialFirstLienOwnerOccupiedMember2025-06-300000880641efsi:CommercialRealEstateNonOwnerOccupiedMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2024Member2024-12-310000880641efsi:CommercialRealEstateOwnerOccupiedMemberus-gaap:SpecialMentionMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2022Member2024-12-310000880641us-gaap:FairValueInputsLevel2Memberus-gaap:CollateralizedMortgageObligationsMember2025-06-300000880641us-gaap:AccumulatedOtherComprehensiveIncomeMember2025-04-012025-06-300000880641efsi:HelocsMemberefsi:RevolvingLoansAmortizedCostBasisMemberus-gaap:PassMember2024-12-310000880641efsi:TotalByRiskCategoryMemberus-gaap:SpecialMentionMember2024-12-310000880641efsi:ResidentialJuniorLiensMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2022Member2024-12-310000880641efsi:TotalByRiskCategoryMemberus-gaap:PassMemberefsi:TermLoanAmortizedCostBasisByOriginationYearPriorMember2025-06-300000880641efsi:RealEstateCollateralMemberefsi:CommercialRealEstateNonOwnerOccupiedMember2025-06-300000880641efsi:OtherCommercialAndIndustrialLoansMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2023Memberus-gaap:PassMember2024-12-310000880641us-gaap:AssetPledgedAsCollateralMemberefsi:EFSIMember-DepositAccountsMember2025-06-300000880641us-gaap:FinancingReceivables30To59DaysPastDueMember2024-12-310000880641efsi:ResidentialJuniorLiensMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2023Member2024-12-310000880641us-gaap:USTreasurySecuritiesMember2025-06-300000880641efsi:CommercialRealEstateOwnerOccupiedMemberefsi:TermLoanAmortizedCostBasisByOriginationYearPriorMember2025-06-300000880641efsi:TotalByRiskCategoryMemberus-gaap:PassMember2024-12-310000880641us-gaap:FinancialAssetPastDueMemberefsi:ResidentialJuniorLiensMember2024-12-310000880641us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2023-12-310000880641efsi:ClassifiedMemberefsi:TotalByRiskCategoryMemberefsi:RevolvingLoansConvertedToTermMember2025-06-300000880641efsi:TotalByRiskCategoryMemberus-gaap:PassMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2022Member2025-06-300000880641efsi:CommercialRealEstateNonOwnerOccupiedMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2022Member2025-06-300000880641efsi:TotalByRiskCategoryMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2024Memberus-gaap:SpecialMentionMember2025-06-300000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2021Memberefsi:TotalByRiskCategoryMember2024-12-310000880641us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2025-06-300000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2021Memberus-gaap:PassMemberefsi:MarineLoansMember2024-12-310000880641efsi:HelocsMember2024-12-310000880641efsi:OtherCommercialAndIndustrialLoansMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2025-06-300000880641efsi:OtherLoansMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2022Member2025-06-300000880641efsi:CommercialRealEstateOwnerOccupiedMember2025-06-300000880641efsi:ConstructionAndFarmlandFinancingReceivableMember2024-12-310000880641efsi:ConstructionSecuredByFarmlandMember2025-06-300000880641efsi:ConsumerLoansMemberus-gaap:FinancialAssetPastDueMember2025-06-300000880641us-gaap:EstimateOfFairValueFairValueDisclosureMember2025-06-300000880641us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMemberefsi:CommercialRealEstateNonOwnerOccupiedMember2025-06-300000880641efsi:OverdrawnAccountFeesMember2024-04-012024-06-300000880641efsi:OtherCommercialAndIndustrialLoansMember2025-06-300000880641efsi:OtherCommercialAndIndustrialLoansMemberus-gaap:PassMemberefsi:RevolvingLoansConvertedToTermMember2025-06-300000880641efsi:ResidentialFirstLienInvestorMemberus-gaap:PassMember2025-06-300000880641us-gaap:PassMemberefsi:TermLoanAmortizedCostBasisByOriginationYearPriorMemberefsi:ResidentialFirstLienOwnerOccupiedMember2025-06-300000880641efsi:TotalByRiskCategoryMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2021Memberus-gaap:PassMember2025-06-300000880641efsi:ConsolidatedMember2025-06-300000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2021Memberefsi:CommercialRealEstateOwnerOccupiedMember2024-12-310000880641us-gaap:ResidentialRealEstateMember2024-01-012024-12-310000880641efsi:OtherCommercialAndIndustrialLoansMemberus-gaap:PassMemberefsi:RevolvingLoansConvertedToTermMember2024-12-310000880641efsi:OverdrawnAccountFeesMember2025-04-012025-06-300000880641efsi:ConsumerLoansMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2024-12-3100008806412025-08-080000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2025Memberefsi:ResidentialFirstLienOwnerOccupiedMember2025-06-300000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2024Memberefsi:CommercialRealEstateOwnerOccupiedMemberus-gaap:SpecialMentionMember2025-06-300000880641efsi:RevolvingLoansAmortizedCostBasisMemberefsi:OtherCommercialAndIndustrialLoansMember2024-12-310000880641efsi:RevolvingLoansAmortizedCostBasisMemberefsi:OtherLoansMember2024-12-310000880641efsi:AllOtherLoansFinancingReceivableMember2023-12-310000880641efsi:CommercialRealEstateNonOwnerOccupiedMemberus-gaap:SpecialMentionMemberefsi:TermLoanAmortizedCostBasisByOriginationYearPriorMember2025-06-300000880641efsi:CommercialNonRealEstateCommercialAndIndustrialFinancingReceivableMember2025-06-300000880641efsi:TotalByRiskCategoryMemberefsi:RevolvingLoansConvertedToTermMember2024-12-310000880641efsi:ClassifiedMemberefsi:CommercialRealEstateNonOwnerOccupiedMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2022Member2025-06-300000880641efsi:CommercialRealEstateNonOwnerOccupiedMemberefsi:TermLoanAmortizedCostBasisByOriginationYearPriorMember2025-06-300000880641efsi:CommercialRealEstateOwnerOccupiedMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2022Member2025-06-300000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2024Memberus-gaap:PassMemberefsi:ResidentialFirstLienOwnerOccupiedMember2025-06-300000880641efsi:OtherCommercialAndIndustrialLoansMemberefsi:RevolvingLoansConvertedToTermMember2025-06-300000880641efsi:CommunityBankingMember2024-04-012024-06-300000880641us-gaap:RetainedEarningsMember2024-12-310000880641efsi:OtherLoansMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2023Member2024-12-310000880641efsi:OverdraftsMember2025-06-300000880641efsi:ConstructionAndFarmlandResidentialFinancingReceivableMemberus-gaap:PassMember2024-12-310000880641efsi:EliminationsMember2025-06-300000880641efsi:CommercialRealEstateOwnerOccupiedMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2023Member2025-06-300000880641efsi:ResidentialJuniorLiensMemberus-gaap:PassMemberefsi:TermLoanAmortizedCostBasisByOriginationYearPriorMember2025-06-300000880641efsi:AllOtherLoansExcludingLoansToFarmersMember2025-06-300000880641efsi:TotalByRiskCategoryMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2022Member2025-06-300000880641us-gaap:FinancialAssetPastDueMemberefsi:MarineLoansMember2025-06-300000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2021Memberefsi:MarineLoansMember2024-12-310000880641efsi:CommercialNonOwnerOccupiedMultifamilyMember2024-12-310000880641efsi:MonthlyandOtherServiceFeesMember2025-01-012025-06-300000880641efsi:ResidentialFirstLienInvestorMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2021Memberus-gaap:PassMember2025-06-300000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2024Memberefsi:CommercialRealEstateOwnerOccupiedMember2024-12-310000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2021Memberus-gaap:PassMemberefsi:MarineLoansMember2025-06-300000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2023Memberefsi:OtherCommercialAndIndustrialLoansMember2025-06-300000880641us-gaap:CommercialPortfolioSegmentMember2025-06-300000880641efsi:CommercialRealEstateNonOwnerOccupiedMemberus-gaap:SpecialMentionMember2024-12-3100008806412025-04-012025-06-300000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2021Memberefsi:CommercialRealEstateOwnerOccupiedMemberus-gaap:PassMember2024-12-310000880641efsi:OtherCommercialAndIndustrialLoansMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2024-12-310000880641us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMemberefsi:ResidentialFirstLienOwnerOccupiedMember2025-06-300000880641efsi:ConsolidatedMember2024-01-012024-06-300000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2024Memberus-gaap:PassMemberefsi:ConsumerLoansMember2025-06-300000880641efsi:OtherCommercialAndIndustrialLoansMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2025-06-300000880641us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2024-12-310000880641efsi:ResidentialFirstLienOwnerOccupiedMember2024-12-310000880641us-gaap:FairValueInputsLevel1Member2025-06-300000880641us-gaap:AssetPledgedAsCollateralMemberefsi:EFSITrustAccountsMember2025-06-3000008806412024-04-012024-06-300000880641efsi:CommercialRealEstateOwnerOccupiedMemberus-gaap:SpecialMentionMember2024-12-310000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2021Memberefsi:ResidentialFirstLienOwnerOccupiedMember2025-06-300000880641efsi:AllOtherLoansFinancingReceivableMember2024-01-012024-12-310000880641efsi:HelocsMemberus-gaap:SpecialMentionMember2024-12-310000880641efsi:MarineLoansMember2025-06-300000880641efsi:ResidentialFirstLienInvestorMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2024Memberus-gaap:PassMember2025-06-300000880641efsi:ResidentialJuniorLiensMemberefsi:RevolvingLoansConvertedToTermMember2025-06-300000880641efsi:RealEstateCollateralMemberefsi:ResidentialFirstLienOwnerOccupiedMember2024-12-310000880641efsi:ResidentialFirstLienInvestorMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2020Memberus-gaap:PassMember2024-12-310000880641us-gaap:AdditionalPaidInCapitalMember2025-03-310000880641us-gaap:AccumulatedOtherComprehensiveIncomeMember2025-01-012025-03-310000880641efsi:ClassifiedMemberefsi:TermLoanAmortizedCostBasisByOriginationYearPriorMemberefsi:ResidentialFirstLienOwnerOccupiedMember2024-12-310000880641efsi:ResidentialFirstLienOwnerOccupiedMemberus-gaap:FinancialAssetPastDueMember2025-06-300000880641us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2024-06-3000008806412025-01-012025-06-300000880641us-gaap:PassMemberefsi:ResidentialFirstLienOwnerOccupiedMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2022Member2024-12-310000880641us-gaap:RetainedEarningsMember2024-01-012024-03-310000880641efsi:OverdraftsMember2024-12-310000880641efsi:FederalReserveBankStockMember2025-06-300000880641efsi:RevolvingLoansAmortizedCostBasisMemberefsi:TotalByRiskCategoryMemberus-gaap:SpecialMentionMember2024-12-310000880641efsi:OtherLoansMemberus-gaap:PassMemberefsi:TermLoanAmortizedCostBasisByOriginationYearPriorMember2024-12-310000880641efsi:ClassifiedMemberefsi:ResidentialFirstLienOwnerOccupiedMember2025-06-300000880641efsi:CollateralDependentLoansMemberefsi:MeasurementInputDiscountForSellingCostsMember2024-01-012024-12-310000880641us-gaap:OtherAssetsMember2024-01-012024-12-310000880641us-gaap:ResidentialRealEstateMember2025-01-012025-06-300000880641us-gaap:RetainedEarningsMember2024-03-310000880641us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-12-310000880641efsi:CommunityBankingMember2024-12-310000880641us-gaap:PassMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2025Memberefsi:ResidentialFirstLienOwnerOccupiedMember2025-06-300000880641efsi:PerformanceMeasureMembersrt:ExecutiveOfficerMember2025-01-012025-06-300000880641us-gaap:PassMemberefsi:TermLoanAmortizedCostBasisByOriginationYearPriorMemberefsi:ConsumerLoansMember2025-06-300000880641efsi:OtherCollateralMember2024-12-310000880641efsi:ClassifiedMemberefsi:ConsumerLoansMember2024-12-310000880641efsi:ConstructionSecuredByFarmlandMember2024-12-310000880641efsi:RevolvingLoansAmortizedCostBasisMemberefsi:ConstructionAndFarmlandResidentialFinancingReceivableMember2024-12-310000880641us-gaap:CommonStockMember2025-04-012025-06-300000880641us-gaap:SubordinatedDebtMember2025-06-300000880641efsi:ResidentialFirstLienInvestorMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2024Memberus-gaap:PassMember2024-12-310000880641efsi:MarineLendingMember2025-01-012025-06-300000880641efsi:CommercialRealEstateNonOwnerOccupiedMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2025Member2025-06-300000880641efsi:HelocsMemberus-gaap:PassMember2025-06-300000880641us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2024-04-012024-06-300000880641srt:DirectorMember2025-01-012025-06-300000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2021Memberefsi:ConsumerLoansMember2025-06-300000880641efsi:ResidentialJuniorLiensMemberus-gaap:PassMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2022Member2025-06-300000880641efsi:ClassifiedMemberefsi:ResidentialFirstLienInvestorMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2022Member2025-06-300000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2023Memberus-gaap:PassMemberefsi:MarineLoansMember2024-12-310000880641us-gaap:InvestmentInFederalHomeLoanBankStockMember2024-12-310000880641efsi:OtherCommercialAndIndustrialLoansMemberus-gaap:SpecialMentionMemberefsi:TermLoanAmortizedCostBasisByOriginationYearPriorMember2024-12-310000880641efsi:InterchangeFeesMember2024-01-012024-06-300000880641efsi:ResidentialFirstLienOwnerOccupiedMemberefsi:TermLoanAmortizedCostBasisByOriginationYearPriorMember2024-12-310000880641efsi:OtherCollateralMember2025-06-300000880641efsi:ClassifiedMemberefsi:ResidentialJuniorLiensMember2024-12-310000880641us-gaap:FederalHomeLoanBankAdvancesMember2025-06-300000880641efsi:OtherCommercialAndIndustrialLoansMember2025-06-300000880641efsi:ConsumerInstallmentLoansFinancingReceivablesMember2025-06-300000880641us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2024-12-310000880641efsi:CommercialRealEstateNonOwnerOccupiedMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2021Memberus-gaap:PassMember2024-12-310000880641efsi:OtherCommercialAndIndustrialLoansMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2023Member2024-12-310000880641efsi:MarineLoansMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2022Member2024-12-310000880641efsi:ResidentialFirstLienInvestorMemberefsi:RevolvingLoansConvertedToTermMember2025-06-300000880641efsi:ClassifiedMemberefsi:ConstructionAndFarmlandResidentialFinancingReceivableMemberefsi:TermLoanAmortizedCostBasisByOriginationYearPriorMember2025-06-300000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2021Memberus-gaap:PassMemberefsi:ConsumerLoansMember2025-06-300000880641us-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:ChangeDuringPeriodFairValueDisclosureMemberefsi:LoansHeldForSaleMember2024-01-012024-12-310000880641efsi:TotalByRiskCategoryMemberus-gaap:SpecialMentionMember2025-06-300000880641efsi:TermLoanAmortizedCostBasisByOriginationYearPriorMemberefsi:ConsumerLoansMember2024-12-310000880641efsi:ClassifiedMemberefsi:ConsumerLoansMember2025-06-300000880641efsi:CommercialRealEstateNonOwnerOccupiedMemberus-gaap:PassMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2022Member2024-12-310000880641efsi:ConstructionAndFarmlandResidentialFinancingReceivableMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2023Member2025-06-300000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2023Memberus-gaap:PassMemberefsi:ConsumerLoansMember2025-06-300000880641us-gaap:CommercialRealEstatePortfolioSegmentMember2023-12-310000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2023Memberefsi:OtherCommercialAndIndustrialLoansMemberus-gaap:PassMember2025-06-300000880641efsi:CommercialRealEstateNonOwnerOccupiedMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2023Memberus-gaap:PassMember2025-06-300000880641efsi:ResidentialJuniorLiensMemberefsi:TermLoanAmortizedCostBasisByOriginationYearPriorMember2024-12-310000880641efsi:ResidentialJuniorLiensMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2024Memberus-gaap:PassMember2025-06-300000880641us-gaap:DesignatedAsHedgingInstrumentMember2025-04-012025-06-300000880641efsi:HelocsMember2025-06-300000880641us-gaap:CommonStockMember2024-12-310000880641efsi:ResidentialFirstLienInvestorMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2022Member2025-06-300000880641us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-06-300000880641us-gaap:FinancialAssetPastDueMemberefsi:HelocsMember2025-06-300000880641efsi:ResidentialFirstLienInvestorMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2023Memberus-gaap:SpecialMentionMember2024-12-310000880641us-gaap:AdditionalPaidInCapitalMember2024-12-310000880641efsi:AssetsManagementMember2025-01-012025-06-300000880641efsi:TotalByRiskCategoryMemberefsi:TermLoanAmortizedCostBasisByOriginationYearPriorMember2024-12-310000880641efsi:RevolvingLoansAmortizedCostBasisMemberefsi:TotalByRiskCategoryMemberus-gaap:PassMember2025-06-300000880641efsi:MarineLoansMember2025-06-300000880641efsi:ConsumerLoansMember2024-12-310000880641efsi:ResidentialFirstLienInvestorMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2023Member2024-12-310000880641efsi:ClassifiedMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2021Memberefsi:OtherCommercialAndIndustrialLoansMember2025-06-300000880641efsi:CollateralDependentLoansMember2024-01-012024-12-310000880641efsi:ConstructionAndFarmlandResidentialFinancingReceivableMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2024Memberus-gaap:PassMember2025-06-300000880641efsi:ResidentialFirstLienInvestorMemberus-gaap:PassMember2024-12-310000880641efsi:MarineLoansMemberefsi:TermLoanAmortizedCostBasisByOriginationYearPriorMember2025-06-300000880641efsi:OtherCommercialAndIndustrialLoansMemberus-gaap:FinancialAssetPastDueMember2025-06-300000880641efsi:RevolvingLoansAmortizedCostBasisMemberefsi:TotalByRiskCategoryMember2024-12-310000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2025Memberefsi:ConsumerLoansMember2025-06-300000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2024Memberefsi:ResidentialFirstLienOwnerOccupiedMember2024-12-310000880641efsi:TotalByRiskCategoryMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2023Member2025-06-300000880641efsi:ResidentialFirstLienInvestorMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2024Member2024-12-310000880641us-gaap:FinancialAssetPastDueMemberefsi:ConstructionSecuredByFarmlandMember2025-06-300000880641efsi:RevolvingLoansConvertedToTermMemberefsi:ResidentialFirstLienOwnerOccupiedMember2024-12-310000880641efsi:ATMFeesMember2024-01-012024-06-300000880641efsi:ConstructionAndFarmlandResidentialFinancingReceivableMemberus-gaap:PassMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2022Member2024-12-310000880641efsi:ClassifiedMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2021Memberefsi:ConsumerLoansMember2025-06-300000880641efsi:ClassifiedMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2021Memberefsi:TotalByRiskCategoryMember2025-06-300000880641efsi:ResidentialFirstLienInvestorMemberus-gaap:PassMemberefsi:RevolvingLoansConvertedToTermMember2025-06-300000880641us-gaap:FairValueInputsLevel2Memberus-gaap:USTreasurySecuritiesMember2025-06-300000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2023Memberus-gaap:SpecialMentionMemberefsi:ResidentialFirstLienOwnerOccupiedMember2024-12-310000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2020Memberefsi:OtherCommercialAndIndustrialLoansMember2024-12-310000880641efsi:CommercialRealEstateOwnerOccupiedMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2023Memberus-gaap:SpecialMentionMember2025-06-300000880641efsi:OtherCommercialAndIndustrialLoansMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2024-12-310000880641efsi:ClassifiedMemberefsi:TotalByRiskCategoryMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2023Member2024-12-310000880641efsi:CommercialRealEstateNonOwnerOccupiedMemberus-gaap:PassMemberefsi:TermLoanAmortizedCostBasisByOriginationYearPriorMember2025-06-300000880641us-gaap:RetainedEarningsMember2023-12-310000880641efsi:CommercialRealEstateNonOwnerOccupiedMemberus-gaap:SpecialMentionMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2022Member2025-06-300000880641efsi:ConsumerLoansMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2025-06-300000880641efsi:OtherChargesandFeesMember2025-01-012025-06-300000880641us-gaap:CommonStockMember2024-03-310000880641us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2025-04-012025-06-300000880641efsi:ResidentialFirstLienInvestorMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2023Memberus-gaap:PassMember2024-12-310000880641efsi:TotalByRiskCategoryMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2025Member2025-06-300000880641efsi:CommercialRealEstateOwnerOccupiedMemberefsi:RevolvingLoansConvertedToTermMember2025-06-300000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2024Memberefsi:CommercialRealEstateOwnerOccupiedMemberus-gaap:PassMember2025-06-300000880641efsi:WealthManagementMember2025-06-300000880641efsi:CommercialNonOwnerOccupiedMultifamilyMember2025-06-300000880641efsi:ClassifiedMemberefsi:TotalByRiskCategoryMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2022Member2025-06-300000880641efsi:ResidentialFirstLienInvestorMemberus-gaap:PassMemberefsi:TermLoanAmortizedCostBasisByOriginationYearPriorMember2025-06-300000880641efsi:ServicePeriodMembersrt:ExecutiveOfficerMember2025-01-012025-06-300000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2020Memberefsi:CommercialRealEstateOwnerOccupiedMember2024-12-310000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2021Memberefsi:ConstructionAndFarmlandResidentialFinancingReceivableMemberus-gaap:PassMember2025-06-300000880641efsi:RealEstateCollateralMemberefsi:CommercialRealEstateOwnerOccupiedMember2024-12-310000880641efsi:ConstructionAndFarmlandFinancingReceivableMember2024-01-012024-12-310000880641efsi:WealthManagementMember2024-04-012024-06-300000880641efsi:TotalByRiskCategoryMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2024Memberus-gaap:PassMember2025-06-300000880641efsi:MatchedInterestRateSwapsWithBorrowerMemberus-gaap:InterestRateSwapMemberus-gaap:NondesignatedMember2025-06-300000880641efsi:CommercialRealEstateNonOwnerOccupiedMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2023Memberus-gaap:PassMember2024-12-310000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2024Memberefsi:CommercialRealEstateOwnerOccupiedMemberus-gaap:PassMember2024-12-310000880641us-gaap:MortgageBackedSecuritiesMemberus-gaap:FairValueInputsLevel1Member2025-06-300000880641efsi:RevolvingLoansAmortizedCostBasisMemberefsi:HelocsMemberus-gaap:SpecialMentionMember2024-12-310000880641us-gaap:RetainedEarningsMember2024-04-012024-06-300000880641us-gaap:PassMemberefsi:RevolvingLoansConvertedToTermMemberefsi:ConsumerLoansMember2024-12-310000880641us-gaap:PassMemberefsi:MarineLoansMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2022Member2024-12-310000880641efsi:ResidentialFirstLienInvestorMemberus-gaap:PassMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2025Member2025-06-300000880641us-gaap:PassMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2025Memberefsi:ConsumerLoansMember2025-06-300000880641efsi:CommercialRealEstateOwnerOccupiedMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2025Member2025-06-300000880641us-gaap:SubordinatedDebtMember2024-12-310000880641efsi:SbaPppLoansMember2025-06-300000880641efsi:ResidentialFirstLienInvestorMemberus-gaap:SpecialMentionMember2025-06-300000880641efsi:ConsumerLoansMemberus-gaap:FinancialAssetPastDueMember2024-12-310000880641efsi:CommercialRealEstateNonOwnerOccupiedMember2025-06-300000880641efsi:ResidentialFirstLienInvestorMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2023Member2025-06-300000880641efsi:ResidentialFirstLienInvestorMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2024-12-310000880641efsi:MarineLendingMember2024-04-012024-06-300000880641efsi:OtherLoansMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2023Memberus-gaap:PassMember2024-12-310000880641efsi:ConstructionAndFarmlandResidentialFinancingReceivableMemberefsi:TermLoanAmortizedCostBasisByOriginationYearPriorMember2025-06-300000880641efsi:WealthManagementMember2024-01-012024-06-300000880641efsi:CommercialRealEstateNonOwnerOccupiedMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2021Member2025-06-300000880641us-gaap:AdditionalPaidInCapitalMember2025-06-300000880641efsi:AllOtherLoansExcludingLoansToFarmersMember2024-12-310000880641efsi:TotalByRiskCategoryMember2024-12-310000880641efsi:ConstructionAndFarmlandResidentialFinancingReceivableMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2022Member2024-12-310000880641efsi:TotalByRiskCategoryMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2020Memberus-gaap:PassMember2024-12-310000880641us-gaap:FinancingReceivables30To59DaysPastDueMemberefsi:HelocsMember2025-06-300000880641us-gaap:SpecialMentionMemberefsi:TermLoanAmortizedCostBasisByOriginationYearPriorMemberefsi:ResidentialFirstLienOwnerOccupiedMember2024-12-310000880641efsi:ConstructionAndFarmlandResidentialFinancingReceivableMember2024-12-310000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2020Memberefsi:ConstructionAndFarmlandResidentialFinancingReceivableMemberus-gaap:PassMember2024-12-310000880641efsi:CommercialRealEstateNonOwnerOccupiedMember2025-06-300000880641us-gaap:PassMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2022Memberefsi:ConsumerLoansMember2025-06-300000880641us-gaap:CommercialPortfolioSegmentMember2024-01-012024-12-310000880641us-gaap:DesignatedAsHedgingInstrumentMemberefsi:FairValueSwapMember2025-06-300000880641efsi:CommercialRealEstateOwnerOccupiedMemberus-gaap:PassMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2022Member2025-06-300000880641efsi:CommunityBankingMember2025-03-310000880641efsi:TotalByRiskCategoryMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2023Memberus-gaap:SpecialMentionMember2025-06-300000880641efsi:ConstructionAndFarmlandFinancingReceivableMember2025-01-012025-06-300000880641us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-01-012024-03-310000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2021Memberus-gaap:PassMemberefsi:ConsumerLoansMember2024-12-310000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2023Memberefsi:MarineLoansMember2025-06-300000880641efsi:OtherCommercialAndIndustrialLoansMemberus-gaap:PassMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2022Member2025-06-300000880641efsi:ClassifiedMemberefsi:TotalByRiskCategoryMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2024Member2025-06-300000880641efsi:ClassifiedMemberefsi:ResidentialFirstLienOwnerOccupiedMember2024-12-310000880641efsi:RevolvingLoansAmortizedCostBasisMemberus-gaap:PassMemberefsi:ConsumerLoansMember2025-06-300000880641efsi:ConstructionAndFarmlandResidentialFinancingReceivableMemberefsi:TermLoanAmortizedCostBasisByOriginationYearPriorMember2024-12-310000880641efsi:ConstructionAndFarmlandResidentialFinancingReceivableMemberus-gaap:SpecialMentionMember2024-12-310000880641efsi:TotalByRiskCategoryMemberefsi:RevolvingLoansConvertedToTermMemberus-gaap:SpecialMentionMember2024-12-310000880641efsi:ClassifiedMemberefsi:ResidentialFirstLienInvestorMember2024-12-310000880641efsi:OtherLoansMemberus-gaap:PassMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2025Member2025-06-300000880641us-gaap:MortgageBackedSecuritiesMember2024-12-310000880641us-gaap:DesignatedAsHedgingInstrumentMember2025-01-012025-06-300000880641efsi:ClassifiedMemberefsi:CommercialRealEstateNonOwnerOccupiedMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2021Member2025-06-300000880641us-gaap:ConsumerPortfolioSegmentMember2024-12-310000880641efsi:ConstructionAndFarmlandResidentialFinancingReceivableMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2024Memberus-gaap:PassMember2024-12-310000880641us-gaap:MortgageBackedSecuritiesMemberus-gaap:FairValueInputsLevel2Member2024-12-310000880641us-gaap:InterestRateSwapMemberefsi:MatchedInterestRateSwapsWithCounterpartyMemberus-gaap:NondesignatedMember2024-12-310000880641efsi:TotalByRiskCategoryMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2024Memberus-gaap:PassMember2024-12-310000880641efsi:AllOtherMember2024-04-012024-06-300000880641efsi:HelocsMemberefsi:RevolvingLoansAmortizedCostBasisMember2024-12-310000880641us-gaap:PassMemberefsi:RevolvingLoansConvertedToTermMemberefsi:ResidentialFirstLienOwnerOccupiedMember2025-06-300000880641us-gaap:CommonStockMember2024-04-012024-06-300000880641efsi:TotalByRiskCategoryMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2021Memberus-gaap:PassMember2024-12-310000880641efsi:ResidentialFirstLienInvestorMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2022Member2024-12-310000880641efsi:ClassifiedMemberefsi:ResidentialFirstLienInvestorMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2024Member2025-06-300000880641us-gaap:CommonStockMember2025-06-300000880641efsi:CommercialRealEstateOwnerOccupiedMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2024-12-310000880641efsi:BrokerageCommissionsMember2025-04-012025-06-300000880641us-gaap:FairValueInputsLevel2Member2025-06-300000880641efsi:ClassifiedMemberefsi:TotalByRiskCategoryMemberefsi:RevolvingLoansConvertedToTermMember2024-12-310000880641efsi:OtherLoansMemberefsi:TermLoanAmortizedCostBasisByOriginationYearPriorMember2024-12-310000880641efsi:CommercialRealEstateOwnerOccupiedMemberus-gaap:PassMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2025Member2025-06-300000880641efsi:TotalByRiskCategoryMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2023Memberus-gaap:PassMember2024-12-310000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2020Memberefsi:CommercialRealEstateOwnerOccupiedMemberus-gaap:PassMember2024-12-310000880641us-gaap:FinancialAssetPastDueMember2025-06-300000880641us-gaap:RetainedEarningsMember2025-04-012025-06-300000880641efsi:ResidentialFirstLienInvestorMember2025-06-300000880641efsi:CommercialRealEstateNonOwnerOccupiedMemberus-gaap:PassMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2025Member2025-06-300000880641us-gaap:FinancingReceivables30To59DaysPastDueMemberefsi:ConstructionSecuredByFarmlandMember2025-06-300000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2024Memberefsi:OtherCommercialAndIndustrialLoansMember2024-12-310000880641efsi:CommercialRealEstateNonOwnerOccupiedMemberus-gaap:SpecialMentionMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2022Member2024-12-310000880641us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2024-04-012024-06-300000880641us-gaap:SpecialMentionMemberefsi:TermLoanAmortizedCostBasisByOriginationYearPriorMemberefsi:ResidentialFirstLienOwnerOccupiedMember2025-06-300000880641us-gaap:RetainedEarningsMember2025-06-300000880641efsi:ResidentialFirstLienOwnerOccupiedMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2022Member2024-12-310000880641efsi:CommercialRealEstateNonOwnerOccupiedMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2023Memberus-gaap:SpecialMentionMember2025-06-300000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2024Memberefsi:OtherCommercialAndIndustrialLoansMember2025-06-300000880641efsi:ConstructionAndFarmlandResidentialFinancingReceivableMember2025-06-300000880641us-gaap:FinancingReceivables60To89DaysPastDueMember2025-06-300000880641efsi:ResidentialFirstLienInvestorMemberus-gaap:FinancialAssetPastDueMember2025-06-300000880641efsi:RevolvingLoansAmortizedCostBasisMemberefsi:HelocsMemberus-gaap:PassMember2025-06-300000880641us-gaap:FinancialAssetPastDueMemberefsi:ResidentialFirstLienOwnerOccupiedMember2024-12-310000880641efsi:ClassifiedMemberefsi:TotalByRiskCategoryMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2023Member2025-06-300000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2023Memberefsi:ConsumerLoansMember2024-12-310000880641efsi:TotalByRiskCategoryMemberefsi:TermLoanAmortizedCostBasisByOriginationYearPriorMember2025-06-300000880641us-gaap:RetainedEarningsMember2025-01-012025-03-310000880641us-gaap:MortgageBackedSecuritiesMemberus-gaap:FairValueInputsLevel2Member2025-06-300000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2023Memberefsi:CommercialRealEstateOwnerOccupiedMemberus-gaap:PassMember2025-06-300000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2024Memberus-gaap:SpecialMentionMemberefsi:ResidentialFirstLienOwnerOccupiedMember2024-12-310000880641efsi:ClassifiedMemberefsi:OverdraftsMember2024-12-310000880641efsi:RealEstateCollateralMemberefsi:ConsumerLoansMember2025-06-300000880641efsi:ClassifiedMemberefsi:TotalByRiskCategoryMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2021Member2024-12-310000880641efsi:InterchangeFeesMember2025-04-012025-06-300000880641efsi:ResidentialFirstLienInvestorMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2021Member2025-06-300000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2021Memberefsi:ConstructionAndFarmlandResidentialFinancingReceivableMember2024-12-310000880641efsi:RevolvingLoansAmortizedCostBasisMemberefsi:OtherCommercialAndIndustrialLoansMemberus-gaap:PassMember2025-06-300000880641efsi:ResidentialJuniorLiensMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2024Member2024-12-310000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2023Memberefsi:MarineLoansMember2024-12-310000880641efsi:RealEstateCollateralMemberefsi:HelocsMember2025-06-300000880641efsi:ClassifiedMemberefsi:TotalByRiskCategoryMember2025-06-300000880641us-gaap:LongTermDebtMemberus-gaap:FederalHomeLoanBankAdvancesMember2024-12-310000880641efsi:ConstructionAndFarmlandResidentialFinancingReceivableMemberus-gaap:PassMemberefsi:TermLoanAmortizedCostBasisByOriginationYearPriorMember2024-12-310000880641us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2024-03-310000880641efsi:MarineLendingMember2024-01-012024-06-300000880641us-gaap:ConsumerPortfolioSegmentMember2023-12-310000880641us-gaap:AdditionalPaidInCapitalMember2024-03-310000880641efsi:ClassifiedMemberefsi:TotalByRiskCategoryMemberefsi:TermLoanAmortizedCostBasisByOriginationYearPriorMember2025-06-300000880641efsi:ConsumerLoansMember2025-06-300000880641efsi:HelocsMemberus-gaap:PassMember2024-12-310000880641efsi:ResidentialJuniorLiensMemberus-gaap:SpecialMentionMember2025-06-300000880641efsi:ConstructionAndFarmlandResidentialFinancingReceivableMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2023Memberus-gaap:PassMember2025-06-3000008806412023-12-310000880641us-gaap:DesignatedAsHedgingInstrumentMember2025-06-3000008806412024-01-012024-12-310000880641efsi:CommunityBankingMember2025-01-012025-06-300000880641efsi:ResidentialJuniorLiensMemberefsi:TermLoanAmortizedCostBasisByOriginationYearPriorMember2025-06-300000880641efsi:ConsolidatedMember2024-12-310000880641efsi:ResidentialFirstLienOwnerOccupiedMember2024-12-310000880641efsi:CommercialRealEstateNonOwnerOccupiedMemberus-gaap:SpecialMentionMemberefsi:TermLoanAmortizedCostBasisByOriginationYearPriorMember2024-12-310000880641efsi:OtherCommercialAndIndustrialLoansMemberus-gaap:PassMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2022Member2024-12-310000880641us-gaap:FairValueInputsLevel2Memberus-gaap:USGovernmentCorporationsAndAgenciesSecuritiesMember2024-12-310000880641efsi:ClassifiedMemberefsi:RevolvingLoansAmortizedCostBasisMemberefsi:HelocsMember2025-06-300000880641efsi:ConsolidatedMember2025-01-012025-06-300000880641efsi:ClassifiedMemberefsi:TotalByRiskCategoryMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2025Member2025-06-300000880641efsi:OtherCommercialAndIndustrialLoansMemberefsi:OtherCollateralMember2025-06-300000880641us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2025-04-012025-06-300000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2024Memberefsi:OtherCommercialAndIndustrialLoansMemberus-gaap:PassMember2024-12-310000880641efsi:CommercialRealEstateOwnerOccupiedMemberus-gaap:PassMember2025-06-300000880641efsi:TotalByRiskCategoryMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2023Memberus-gaap:SpecialMentionMember2024-12-310000880641us-gaap:AdditionalPaidInCapitalMember2024-04-012024-06-3000008806412024-12-310000880641efsi:OtherLoansMemberefsi:TermLoanAmortizedCostBasisByOriginationYearPriorMember2025-06-300000880641efsi:EliminationsMember2025-01-012025-06-300000880641efsi:SbaPppLoansMember2024-12-310000880641efsi:RealEstateCollateralMemberefsi:ResidentialFirstLienOwnerOccupiedMember2025-06-300000880641us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-03-310000880641efsi:IndividuallyEvaluatedCollateral-DependentLoansMember2024-12-310000880641us-gaap:FinancialAssetPastDueMemberefsi:CommercialRealEstateNonOwnerOccupiedMember2025-06-300000880641us-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:ChangeDuringPeriodFairValueDisclosureMemberefsi:LoansHeldForSaleMember2025-01-012025-03-310000880641efsi:OtherCommercialAndIndustrialLoansMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2022Member2025-06-300000880641efsi:ClassifiedMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2023Memberefsi:OtherCommercialAndIndustrialLoansMember2025-06-300000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2022Member2025-06-300000880641efsi:OverdraftsMember2024-12-310000880641efsi:CommercialRealEstateNonOwnerOccupiedMemberus-gaap:PassMember2025-06-300000880641efsi:ResidentialJuniorLiensMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2023Member2025-06-300000880641efsi:AllOtherMember2025-06-300000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2021Memberefsi:OtherCommercialAndIndustrialLoansMemberus-gaap:PassMember2024-12-310000880641efsi:TotalByRiskCategoryMemberus-gaap:PassMemberefsi:RevolvingLoansConvertedToTermMember2024-12-3100008806412024-01-012024-03-310000880641us-gaap:FairValueInputsLevel3Member2024-12-310000880641efsi:MarineLendingMember2024-12-310000880641us-gaap:FinancialAssetPastDueMemberefsi:ResidentialJuniorLiensMember2025-06-300000880641efsi:ResidentialJuniorLiensMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2024Memberus-gaap:PassMember2024-12-310000880641efsi:ConstructionAndLandDevelopmentFinancingReceivableMember2024-12-310000880641efsi:CommercialRealEstateNonOwnerOccupiedMemberefsi:RevolvingLoansConvertedToTermMember2024-12-310000880641efsi:OtherCommercialAndIndustrialLoansMemberus-gaap:SpecialMentionMember2025-06-300000880641us-gaap:ResidentialRealEstateMember2025-06-300000880641efsi:CommercialRealEstateOwnerOccupiedMemberus-gaap:PassMemberefsi:RevolvingLoansConvertedToTermMember2024-12-310000880641efsi:CommercialRealEstateNonOwnerOccupiedMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2024Memberus-gaap:PassMember2024-12-310000880641efsi:TotalByRiskCategoryMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2023Member2024-12-310000880641us-gaap:InterestRateContractMember2024-12-310000880641efsi:OtherChargesandFeesMember2024-01-012024-06-300000880641us-gaap:FinancingReceivables30To59DaysPastDueMemberefsi:CommercialRealEstateNonOwnerOccupiedMember2025-06-300000880641efsi:ResidentialJuniorLiensMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2023Memberus-gaap:PassMember2024-12-310000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2023Memberefsi:OtherCommercialAndIndustrialLoansMemberus-gaap:SpecialMentionMember2024-12-310000880641efsi:ConstructionAndFarmlandFinancingReceivableMember2023-12-310000880641efsi:ClassifiedMemberefsi:ResidentialJuniorLiensMemberefsi:RevolvingLoansConvertedToTermMember2024-12-310000880641efsi:ConstructionAndFarmlandResidentialFinancingReceivableMemberus-gaap:PassMember2025-06-300000880641efsi:RevolvingLoansAmortizedCostBasisMemberefsi:ConsumerLoansMember2025-06-300000880641efsi:CommercialRealEstateNonOwnerOccupiedMemberefsi:TermLoanAmortizedCostBasisByOriginationYearPriorMember2024-12-310000880641efsi:CommercialRealEstateOwnerOccupiedMemberefsi:RevolvingLoansConvertedToTermMember2024-12-310000880641efsi:OtherCommercialAndIndustrialLoansMemberus-gaap:PassMemberefsi:TermLoanAmortizedCostBasisByOriginationYearPriorMember2024-12-310000880641efsi:RevolvingLoansAmortizedCostBasisMemberefsi:TotalByRiskCategoryMemberus-gaap:SpecialMentionMember2025-06-300000880641us-gaap:FinancialAssetPastDueMemberefsi:HelocsMember2024-12-310000880641efsi:ResidentialJuniorLiensMember2024-12-310000880641us-gaap:FairValueInputsLevel2Member2024-12-310000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2021Memberus-gaap:PassMemberefsi:ResidentialFirstLienOwnerOccupiedMember2024-12-310000880641efsi:ClassifiedMemberefsi:TotalByRiskCategoryMember2024-12-310000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2023Memberus-gaap:PassMemberefsi:MarineLoansMember2025-06-300000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2022Memberefsi:ResidentialFirstLienOwnerOccupiedMember2025-06-300000880641us-gaap:AdditionalPaidInCapitalMember2025-04-012025-06-300000880641us-gaap:AccumulatedOtherComprehensiveIncomeMember2025-06-300000880641us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2024-12-310000880641efsi:ResidentialJuniorLiensMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2020Memberus-gaap:PassMember2024-12-310000880641us-gaap:AccumulatedOtherComprehensiveIncomeMember2025-03-310000880641us-gaap:OtherAssetsMember2025-01-012025-06-300000880641efsi:EliminationsMember2025-04-012025-06-300000880641efsi:ClassifiedMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2023Memberefsi:OtherCommercialAndIndustrialLoansMember2024-12-310000880641efsi:TotalByRiskCategoryMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2021Memberus-gaap:SpecialMentionMember2025-06-300000880641efsi:OverdraftsMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2025Member2025-06-300000880641efsi:AllOtherMember2024-12-310000880641efsi:ResidentialFirstLienInvestorMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2020Member2024-12-310000880641efsi:ResidentialFirstLienInvestorMemberefsi:TermLoanAmortizedCostBasisByOriginationYearPriorMember2024-12-310000880641efsi:ResidentialJuniorLiensMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2020Memberus-gaap:SpecialMentionMember2024-12-310000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2021Memberefsi:OtherCommercialAndIndustrialLoansMember2025-06-300000880641us-gaap:InterestRateSwapMemberefsi:MatchedInterestRateSwapsWithCounterpartyMemberus-gaap:NondesignatedMember2025-06-300000880641efsi:RealEstateCollateralMember2025-06-300000880641efsi:ConstructionAndFarmlandResidentialFinancingReceivableMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2023Member2024-12-310000880641us-gaap:USGovernmentCorporationsAndAgenciesSecuritiesMember2024-12-310000880641efsi:TermLoanAmortizedCostBasisByOriginationYear2021Memberefsi:ConstructionAndFarmlandResidentialFinancingReceivableMemberus-gaap:PassMember2024-12-310000880641efsi:ConstructionAndFarmlandResidentialFinancingReceivableMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2023Memberus-gaap:PassMember2024-12-310000880641us-gaap:FinancingReceivables60To89DaysPastDueMember2024-12-310000880641us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2023-12-310000880641efsi:ClassifiedMemberefsi:ConstructionAndFarmlandResidentialFinancingReceivableMemberefsi:TermLoanAmortizedCostBasisByOriginationYearPriorMember2024-12-310000880641efsi:CommunityBankingMember2025-01-012025-03-310000880641us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2024-01-012024-06-300000880641efsi:CommercialRealEstateNonOwnerOccupiedMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2022Member2024-12-310000880641efsi:CommercialRealEstateNonOwnerOccupiedMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2024Member2025-06-300000880641efsi:CommercialRealEstateNonOwnerOccupiedMemberefsi:TermLoanAmortizedCostBasisByOriginationYear2021Memberus-gaap:SpecialMentionMember2024-12-31xbrli:purexbrli:sharesefsi:Securityiso4217:USDxbrli:sharesiso4217:USD

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

 

☒

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

 

For the quarterly period ended June 30, 2025

or

 

☐

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: 001-42512

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, VA

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

Common Stock, Par Value $2.50

EFSI

The Nasdaq Stock Market LLC

 

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 ☒ 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 ☒ 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

 

☐

 

 

 

 

Non-accelerated filer

 

☒

 

 

Smaller reporting company

 

☒

 

 

 

 

 

 

 

 

 

 

 

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 ☒

 

The number of shares of the registrant’s Common Stock ($2.50 par value) outstanding as of August 8, 2025 was 5,376,346.

 

 

TABLE OF CONTENTS

 

PART I - FINANCIAL INFORMATION

 

 

 

 

Item 1.

Financial Statements:

 

 

Consolidated Balance Sheets at June 30, 2025 and December 31, 2024

1

 

Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2025 and 2024

2

 

Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2025 and 2024

3

 

Consolidated Statements of Changes in Shareholders’ Equity for the Three and Six Months Ended June 30, 2025 and 2024

4

 

Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2025 and 2024

5

 

Notes to Consolidated Financial Statements

6

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

41

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

63

Item 4.

Controls and Procedures

63

 

 

PART II - OTHER INFORMATION

 

 

 

 

Item 1.

Legal Proceedings

64

Item 1A.

Risk Factors

64

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

64

Item 3.

Defaults Upon Senior Securities

64

Item 4.

Mine Safety Disclosures

64

Item 5.

Other Information

64

Item 6.

Exhibits

65

 

 

 

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

EAGLE FINANCIAL SERVICES, INC.

Consolidated Balance Sheets

(dollars in thousands, except per share amounts)

 

 

 

 

June 30, 2025

 

 

December 31, 2024

 

 

 

(Unaudited)

 

 

*

 

Assets

 

 

 

 

 

 

Cash and due from banks

 

$

17,401

 

 

$

13,129

 

Interest-bearing deposits with other institutions

 

 

260,568

 

 

 

162,595

 

Federal funds sold

 

 

118,033

 

 

 

17,435

 

Total cash and cash equivalents

 

$

396,002

 

 

$

193,159

 

Securities available for sale, at fair value, amortized cost of $130,148 and $144,929, respectively

 

 

120,907

 

 

 

121,330

 

Restricted investments, at cost

 

 

3,786

 

 

 

7,557

 

Loans held for sale

 

 

3,302

 

 

 

2,660

 

Loans

 

 

1,438,632

 

 

 

1,467,049

 

Allowance for credit losses

 

 

(15,979

)

 

 

(15,027

)

Net Loans

 

$

1,422,653

 

 

$

1,452,022

 

Bank premises and equipment, net

 

 

14,693

 

 

 

14,339

 

Bank owned life insurance

 

 

31,172

 

 

 

30,621

 

Other assets

 

 

42,565

 

 

 

44,527

 

Total assets

 

$

2,035,080

 

 

$

1,866,215

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

Noninterest bearing demand deposits

 

$

574,596

 

 

$

406,180

 

Savings and interest bearing demand deposits

 

 

728,370

 

 

 

679,330

 

Time deposits

 

 

463,558

 

 

 

489,646

 

Total deposits

 

$

1,766,524

 

 

$

1,575,156

 

Federal funds purchased

 

 

172

 

 

 

—

 

Federal Home Loan Bank advances, short-term

 

 

—

 

 

 

25,000

 

Federal Home Loan Bank advances, long-term

 

 

40,000

 

 

 

95,000

 

Subordinated debt, net of unamortized issuance costs

 

 

29,545

 

 

 

29,512

 

Other liabilities

 

 

19,191

 

 

 

22,560

 

Total liabilities

 

$

1,855,432

 

 

$

1,747,228

 

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 2025, 5,376,346 including 72,107 shares of unvested restricted stock; issued and outstanding 2024, 3,549,581 including 64,043 shares of unvested restricted stock

 

 

13,260

 

 

 

8,714

 

Surplus

 

 

64,154

 

 

 

14,901

 

Retained earnings

 

 

109,530

 

 

 

114,012

 

Accumulated other comprehensive loss

 

 

(7,296

)

 

 

(18,640

)

Total shareholders’ equity

 

$

179,648

 

 

$

118,987

 

Total liabilities and shareholders’ equity

 

$

2,035,080

 

 

$

1,866,215

 

 

See Notes to Consolidated Financial Statements

 

* Derived from the consolidated audited financial statements.

 

TABLE OF CONTENTS

EAGLE FINANCIAL SERVICES, INC.

Consolidated Statements of Operations (Unaudited)

(dollars in thousands, except per share amounts)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2025

 

 

2024

 

 

2025

 

 

2024

 

Interest and Dividend Income

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans

 

$

20,409

 

 

$

19,525

 

 

$

40,380

 

 

$

39,488

 

Interest and dividends on securities available for sale:

 

 

 

 

 

 

 

 

 

 

 

 

Taxable interest income

 

 

1,142

 

 

 

739

 

 

 

1,837

 

 

 

1,497

 

Interest income exempt from federal income taxes

 

 

—

 

 

 

3

 

 

 

3

 

 

 

8

 

Dividends

 

 

117

 

 

 

155

 

 

 

267

 

 

 

311

 

Interest on deposits in banks

 

 

3,060

 

 

 

1,248

 

 

 

5,704

 

 

 

2,230

 

Interest on federal funds sold

 

 

87

 

 

 

68

 

 

 

126

 

 

 

107

 

Total interest and dividend income

 

$

24,815

 

 

$

21,738

 

 

$

48,317

 

 

$

43,641

 

Interest Expense

 

 

 

 

 

 

 

 

 

 

 

 

Interest on deposits

 

$

8,263

 

 

$

7,515

 

 

$

16,767

 

 

$

14,939

 

Interest on Federal Home Loan Bank advances

 

 

499

 

 

 

1,712

 

 

 

1,807

 

 

 

3,422

 

Interest on subordinated debt

 

 

355

 

 

 

355

 

 

 

709

 

 

 

709

 

Total interest expense

 

$

9,117

 

 

$

9,582

 

 

$

19,283

 

 

$

19,070

 

Net interest income

 

$

15,698

 

 

$

12,156

 

 

$

29,034

 

 

$

24,571

 

Provision for Credit Losses

 

 

668

 

 

 

181

 

 

 

1,901

 

 

 

656

 

Net interest income after provision for credit losses

 

$

15,030

 

 

$

11,975

 

 

$

27,133

 

 

$

23,915

 

Noninterest Income

 

 

 

 

 

 

 

 

 

 

 

 

Wealth management fees

 

$

1,650

 

 

$

1,273

 

 

$

3,331

 

 

$

2,729

 

Service charges on deposit accounts

 

 

517

 

 

 

456

 

 

 

1,009

 

 

 

910

 

Other service charges and fees

 

 

1,060

 

 

 

1,164

 

 

 

2,032

 

 

 

2,133

 

(Loss) on the sale of bank premises and equipment

 

 

—

 

 

 

(11

)

 

 

(16

)

 

 

(11

)

(Loss) on the sale of securities

 

 

—

 

 

 

—

 

 

 

(12,425

)

 

 

—

 

Gain on sale of loans

 

 

1,104

 

 

 

492

 

 

 

1,533

 

 

 

653

 

Small business investment company income

 

 

133

 

 

 

259

 

 

 

153

 

 

 

385

 

Bank owned life insurance income

 

 

278

 

 

 

269

 

 

 

551

 

 

 

537

 

Other operating income

 

 

175

 

 

 

403

 

 

 

195

 

 

 

449

 

Total noninterest income (loss)

 

$

4,917

 

 

$

4,305

 

 

$

(3,637

)

 

$

7,785

 

Noninterest Expenses

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

$

7,845

 

 

$

7,353

 

 

$

15,024

 

 

$

14,538

 

Occupancy expenses

 

 

598

 

 

 

470

 

 

 

1,260

 

 

 

1,039

 

Equipment expenses

 

 

401

 

 

 

401

 

 

 

824

 

 

 

774

 

Advertising and marketing expenses

 

 

152

 

 

 

245

 

 

 

335

 

 

 

482

 

Stationery and supplies

 

 

35

 

 

 

32

 

 

 

77

 

 

 

56

 

ATM network fees

 

 

332

 

 

 

373

 

 

 

694

 

 

 

753

 

Loss on sale of repossessed assets

 

 

—

 

 

 

—

 

 

 

133

 

 

 

—

 

FDIC assessment

 

 

254

 

 

 

351

 

 

 

576

 

 

 

760

 

Computer software expense

 

 

325

 

 

 

221

 

 

 

607

 

 

 

454

 

Bank franchise tax

 

 

381

 

 

 

338

 

 

 

748

 

 

 

669

 

Professional fees

 

 

641

 

 

 

511

 

 

 

1,204

 

 

 

1,017

 

Data processing fees

 

 

633

 

 

 

558

 

 

 

1,183

 

 

 

1,123

 

Other operating expenses

 

 

1,802

 

 

 

1,657

 

 

 

3,323

 

 

 

3,222

 

Total noninterest expenses

 

$

13,399

 

 

$

12,510

 

 

$

25,988

 

 

$

24,887

 

Income (loss) before income taxes

 

$

6,548

 

 

$

3,770

 

 

$

(2,492

)

 

$

6,813

 

Income Tax Expense (Benefit)

 

 

1,278

 

 

 

585

 

 

 

(788

)

 

 

1,080

 

Net Income (Loss)

 

$

5,270

 

 

$

3,185

 

 

$

(1,704

)

 

$

5,733

 

Earnings (Loss) Per Share

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per common share, basic

 

$

0.98

 

 

$

0.89

 

 

$

(0.34

)

 

$

1.61

 

Net income (loss) per common share, diluted

 

$

0.98

 

 

$

0.89

 

 

$

(0.34

)

 

$

1.61

 

 

See Notes to Consolidated Financial Statements

2

TABLE OF CONTENTS

EAGLE FINANCIAL SERVICES, INC.

Consolidated Statements of Comprehensive Income

(Unaudited)

(dollars in thousands)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2025

 

 

2024

 

 

2025

 

 

2024

 

Net income (loss)

 

$

5,270

 

 

$

3,185

 

 

$

(1,704

)

 

$

5,733

 

Other comprehensive (loss) income:

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized (loss) gain on available for sale securities, net of reclassification adjustments, net of deferred income tax of $(179) and $280 for the three months ended June 30, 2025 and 2024, respectively, and $3,014 and $(200) for the six months ended June 30, 2025 and 2024, respectively

 

 

(669

)

 

 

1,054

 

 

 

11,344

 

 

 

(753

)

Changes in benefit obligations and plan assets for post retirement benefit plans, net of reclassification adjustments, net of deferred income tax of $0 for the three months ended June 30, 2025 and 2024, respectively, and $0 and $1 for the six months ended June 30, 2025 and 2024, respectively

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(4

)

Total other comprehensive (loss) income

 

 

(669

)

 

 

1,054

 

 

 

11,344

 

 

 

(757

)

Total comprehensive income

 

$

4,601

 

 

$

4,239

 

 

$

9,640

 

 

$

4,976

 

 

See Notes to Consolidated Financial Statements

3

TABLE OF CONTENTS

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
(Loss)

 

 

Total

 

December 31, 2023

 

$

8,660

 

 

$

14,280

 

 

$

103,445

 

 

$

(18,006

)

 

$

108,379

 

Cumulative effect adjustment for adopton of ASU 2023-02

 

 

—

 

 

 

—

 

 

 

(477

)

 

 

—

 

 

 

(477

)

Net income

 

 

—

 

 

 

—

 

 

 

2,548

 

 

 

—

 

 

 

2,548

 

Other comprehensive (loss)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(1,811

)

 

 

(1,811

)

Vesting of restricted stock awards, stock incentive plan (23,557 shares)

 

 

59

 

 

 

(59

)

 

 

—

 

 

 

—

 

 

 

—

 

Stock-based compensation expense

 

 

—

 

 

 

302

 

 

 

—

 

 

 

—

 

 

 

302

 

Repurchase and retirement of common stock (5,605 shares)

 

 

(14

)

 

 

(155

)

 

 

—

 

 

 

—

 

 

 

(169

)

Dividends declared ($0.30 per share)

 

 

—

 

 

 

—

 

 

 

(1,067

)

 

 

—

 

 

 

(1,067

)

March 31, 2024

 

$

8,705

 

 

$

14,368

 

 

$

104,449

 

 

$

(19,817

)

 

$

107,705

 

Net income

 

 

—

 

 

 

—

 

 

 

3,185

 

 

 

—

 

 

 

3,185

 

Other comprehensive income

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1,054

 

 

 

1,054

 

Vesting of restricted stock awards, stock incentive plan (1,081 shares)

 

 

3

 

 

 

(3

)

 

 

—

 

 

 

—

 

 

 

—

 

Stock-based compensation expense

 

 

—

 

 

 

249

 

 

 

—

 

 

 

—

 

 

 

249

 

Repurchase and retirement of common stock (385 shares)

 

 

(1

)

 

 

(10

)

 

 

—

 

 

 

—

 

 

 

(11

)

Dividends declared ($0.30 per share)

 

 

—

 

 

 

—

 

 

 

(1,067

)

 

 

—

 

 

 

(1,067

)

June 30, 2024

 

$

8,707

 

 

$

14,604

 

 

$

106,567

 

 

$

(18,763

)

 

$

111,115

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2024

 

$

8,714

 

 

$

14,901

 

 

$

114,012

 

 

$

(18,640

)

 

$

118,987

 

Net loss

 

 

—

 

 

 

—

 

 

 

(6,974

)

 

 

—

 

 

 

(6,974

)

Other comprehensive income

 

 

—

 

 

 

—

 

 

 

—

 

 

 

12,013

 

 

 

12,013

 

Vesting of restricted stock awards, stock incentive plan (25,717 shares)

 

 

64

 

 

 

(64

)

 

 

—

 

 

 

—

 

 

 

—

 

Stock-based compensation expense

 

 

—

 

 

 

323

 

 

 

—

 

 

 

—

 

 

 

323

 

Issuance of common stock, public offering, net (1,796,875 shares)

 

 

4,492

 

 

 

49,009

 

 

 

 

 

 

 

 

 

53,501

 

Repurchase and retirement of common stock (7,348 shares)

 

 

(18

)

 

 

(247

)

 

 

—

 

 

 

—

 

 

 

(265

)

Dividends declared ($0.31 per share)

 

 

—

 

 

 

—

 

 

 

(1,110

)

 

 

—

 

 

 

(1,110

)

March 31, 2025

 

$

13,252

 

 

$

63,922

 

 

$

105,928

 

 

$

(6,627

)

 

$

176,475

 

Net income

 

 

—

 

 

 

—

 

 

 

5,270

 

 

 

—

 

 

 

5,270

 

Other comprehensive loss

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(669

)

 

 

(669

)

Vesting of restricted stock awards, stock incentive plan (4,889 shares)

 

 

12

 

 

 

(12

)

 

 

—

 

 

 

—

 

 

 

—

 

Stock-based compensation expense

 

 

—

 

 

 

290

 

 

 

—

 

 

 

—

 

 

 

290

 

Repurchase and retirement of common stock (1,432 shares)

 

 

(4

)

 

 

(46

)

 

 

—

 

 

 

—

 

 

 

(50

)

Dividends declared ($0.31 per share)

 

 

—

 

 

 

—

 

 

 

(1,668

)

 

 

—

 

 

 

(1,668

)

June 30, 2025

 

$

13,260

 

 

$

64,154

 

 

$

109,530

 

 

$

(7,296

)

 

$

179,648

 

 

See Notes to Consolidated Financial Statements

4

TABLE OF CONTENTS

EAGLE FINANCIAL SERVICES, INC.

Consolidated Statements of Cash Flows (Unaudited)

(dollars in thousands)

 

 

 

 

Six Months Ended

 

 

 

June 30,

 

 

 

2025

 

 

2024

 

Cash Flows from Operating Activities

 

 

 

 

 

 

Net (loss) income

 

$

(1,704

)

 

$

5,733

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

Depreciation

 

 

389

 

 

 

498

 

Amortization of other assets

 

 

543

 

 

 

182

 

Origination of loans held for sale

 

 

(42,521

)

 

 

(29,466

)

Proceeds from sale of loans held for sale

 

 

43,418

 

 

 

28,722

 

Net (gain) on sales of loans

 

 

(1,528

)

 

 

(653

)

Provision for credit losses on loans

 

 

2,002

 

 

 

789

 

(Gain) on the sale of portfolio loans

 

 

(5

)

 

 

—

 

Loss on the sale and disposal of premises and equipment

 

 

16

 

 

 

11

 

Loss on the sale of repossessed assets

 

 

133

 

 

 

—

 

Loss on the sale of securities

 

 

12,425

 

 

 

—

 

Amortization of subordinated debt issuance costs

 

 

33

 

 

 

34

 

Stock-based compensation expense

 

 

613

 

 

 

551

 

(Accretion) amortization of premiums and discounts on debt securities and loans, net

 

 

(273

)

 

 

138

 

Bank-owned life insurance income

 

 

(551

)

 

 

(537

)

(Gain) on bank-owned life insurance settlement

 

 

—

 

 

 

(254

)

Changes in assets and liabilities:

 

 

 

 

 

 

(Increase) in other assets

 

 

(539

)

 

 

(967

)

(Decrease) increase in other liabilities

 

 

(4,085

)

 

 

152

 

Net cash provided by operating activities

 

$

8,366

 

 

$

4,933

 

Cash Flows from Investing Activities

 

 

 

 

 

 

Proceeds from maturities, calls, and principal payments of securities available for sale

 

$

6,899

 

 

$

6,863

 

Proceeds from the sale of securities available for sale

 

 

86,822

 

 

 

—

 

Purchases of securities available for sale

 

 

(91,155

)

 

 

—

 

Proceeds from the sale of restricted investments

 

 

3,815

 

 

 

1,425

 

Purchases of restricted investments

 

 

(44

)

 

 

(637

)

Proceeds of bank-owned life insurance settlement

 

 

—

 

 

 

263

 

Purchases of bank premises and equipment

 

 

(799

)

 

 

(515

)

Proceeds from the sale of bank premises and equipment

 

 

40

 

 

 

—

 

Proceeds from the sale of repossessed assets

 

 

381

 

 

 

12

 

Proceeds from the sale of portfolio loans

 

 

18,772

 

 

 

—

 

Net decrease in loans

 

 

8,290

 

 

 

13,372

 

Funding of capital commitments related to other investments

 

 

(492

)

 

 

(664

)

Net cash provided by investing activities

 

$

32,529

 

 

$

20,119

 

Cash Flows from Financing Activities

 

 

 

 

 

 

Net increase (decrease) in noninterest bearing demand deposits, savings, and interest bearing demand deposits

 

$

217,456

 

 

$

(30,683

)

Net (decrease) increase in time deposits

 

 

(26,088

)

 

 

12,945

 

Net increase in federal funds purchased

 

 

172

 

 

 

302

 

Repayments of short-term Federal Home Loan Bank advances

 

 

(25,000

)

 

 

(20,000

)

Repayments of long-term Federal Home Loan Bank advances

 

 

(55,000

)

 

 

—

 

Net proceeds from issuance of common stock in public offering

 

 

53,501

 

 

 

—

 

Repurchase and retirement of common stock

 

 

(315

)

 

 

(180

)

Cash dividends paid

 

 

(2,778

)

 

 

(2,134

)

Net cash provided by (used in) financing activities

 

$

161,948

 

 

$

(39,750

)

Increase (decrease) in cash and cash equivalents

 

$

202,843

 

 

$

(14,698

)

Cash and Cash Equivalents

 

 

 

 

 

 

Beginning

 

 

193,159

 

 

 

138,353

 

Ending

 

$

396,002

 

 

$

123,655

 

Supplemental Disclosures of Cash Flow Information

 

 

 

 

 

 

Cash payments for:

 

 

 

 

 

 

Interest

 

$

20,125

 

 

$

19,037

 

Income taxes

 

$

1,200

 

 

$

—

 

Supplemental Schedule of Noncash Investing and Financing Activities:

 

 

 

 

 

 

Unrealized gain (loss) on securities available for sale

 

$

14,358

 

 

$

(953

)

Minimum postretirement liability adjustment

 

$

—

 

 

$

(5

)

Repossessed assets acquired in settlement of loans

 

$

186

 

 

$

111

 

Lease liabilities arising from right-of-use assets

 

$

773

 

 

$

—

 

 

See Notes to Consolidated Financial Statements

5

TABLE OF CONTENTS

EAGLE FINANCIAL SERVICES, INC.

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2025

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 June 30, 2025 and December 31, 2024, the results of operations and the changes in shareholders' equity for the three and six months ended June 30, 2025 and 2024, and cash flows for the six months ended June 30, 2025 and 2024. The results of operations for the three and six months ended June 30, 2025 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, 2024 (the “2024 Form 10-K”).

Eagle Financial Services, Inc. (the "Company") owns 100% of Bank of Clarke (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.

Application of the principles of GAAP and practices within the banking industry require management to make estimates, assumptions, and judgments that affect the amounts reported in the financial statements and accompanying notes. These estimates, assumptions, and judgments are based on information available as of the date of the financial statement; accordingly, as this information changes, the financial statements may reflect different estimates, assumptions, and judgments. Certain policies inherently rely more extensively on the use of estimates, assumptions, and judgments and as such may have a greater possibility of producing results that could be materially different than originally reported. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance of credit losses on loans.

The Company's significant accounting policies followed in preparation of the unaudited consolidated financial statements are disclosed in Note 1 of the Company's 2024 Form 10-K. There have been no significant changes to the application of significant accounting policies since December 31, 2024.

 

 

NOTE 2. Stock-Based Compensation Plan

On May 16, 2023, the Company’s shareholders approved the 2023 Stock Incentive Plan which allows key employees and directors to increase their personal financial interest in the Company. The 2023 plan permits the issuance of incentive stock options and non-qualified stock options and the award of common stock, restricted stock, and stock units. The plan authorizes the issuance of up to 250,000 shares of common stock. The 2023 Stock Incentive Plan replaced the 2014 Stock Incentive Plan.

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 restricted period, all shares are considered outstanding and dividends are paid to the grantee. Outside directors are periodically granted restricted shares which vest over a period of one year. Executive officers have been granted restricted shares which vest over a three year service period and restricted shares which cliff vest based on meeting performance measures over a three year period.

6

TABLE OF CONTENTS

Certain non-executive officers also have been granted restricted shares which vest over a three 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 June 30, 2025, there was $1.4 million of unrecognized compensation cost related to nonvested restricted stock, with a weighted average remaining term of 2.05 years.

The following table presents restricted stock activity for the six months ended June 30, 2025 and 2024:

 

 

 

Six Months Ended

 

 

 

June 30,

 

 

 

2025

 

 

2024

 

 

 

Shares

 

 

Weighted
Average
Grant Date
Fair Value

 

 

Shares

 

 

Weighted
Average
Grant Date
Fair Value

 

Nonvested, beginning of period

 

 

64,043

 

 

$

32.02

 

 

 

56,914

 

 

$

35.06

 

Granted

 

 

39,545

 

 

 

36.40

 

 

 

41,940

 

 

 

30.00

 

Vested

 

 

(30,606

)

 

 

33.02

 

 

 

(24,638

)

 

 

34.10

 

Forfeited

 

 

(875

)

 

 

35.95

 

 

 

—

 

 

 

—

 

Nonvested, end of period

 

 

72,107

 

 

$

33.95

 

 

 

74,216

 

 

$

32.46

 

 

 

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 and six months ended June 30, 2025 and 2024. During 2025 and 2024, there were no potentially dilutive securities outstanding.

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2025

 

 

2024

 

 

2025

 

 

2024

 

Average number of common shares outstanding used to calculate basic and diluted earnings per share

 

 

5,378,214

 

 

 

3,556,935

 

 

 

4,977,482

 

 

 

3,557,069

 

 

7

TABLE OF CONTENTS

NOTE 4. Securities

Amortized costs and fair values of securities available for sale at June 30, 2025 and December 31, 2024 were as follows:

 

 

 

Amortized
Cost

 

 

Gross
Unrealized
Gains

 

 

Gross
Unrealized
(Losses)

 

 

Fair Value

 

 

 

June 30, 2025

 

 

 

(in thousands)

 

Obligations of U.S. government corporations and agencies

 

$

7,980

 

 

$

10

 

 

$

(56

)

 

$

7,934

 

U.S. treasury securities

 

 

9,966

 

 

 

—

 

 

 

(10

)

 

 

9,956

 

Mortgage-backed securities

 

 

86,037

 

 

 

—

 

 

 

(8,456

)

 

 

77,581

 

Collateralized mortgage obligations

 

 

22,915

 

 

 

—

 

 

 

(223

)

 

 

22,692

 

Subordinated debt

 

 

3,250

 

 

 

—

 

 

 

(506

)

 

 

2,744

 

 

 

$

130,148

 

 

$

10

 

 

$

(9,251

)

 

$

120,907

 

 

 

 

December 31, 2024

 

 

 

(in thousands)

 

Obligations of U.S. government corporations and agencies

 

$

8,198

 

 

$

—

 

 

$

(530

)

 

$

7,668

 

Mortgage-backed securities

 

 

127,061

 

 

 

—

 

 

 

(22,094

)

 

 

104,967

 

Obligations of states and political subdivisions

 

 

4,920

 

 

 

—

 

 

 

(275

)

 

 

4,645

 

Subordinated debt

 

 

4,750

 

 

 

—

 

 

 

(700

)

 

 

4,050

 

 

 

$

144,929

 

 

$

—

 

 

$

(23,599

)

 

$

121,330

 

 

The Company has elected to exclude accrued interest receivable, totaling $476 thousand at June 30, 2025, from the amortized cost basis of securities. The deferred tax asset on the securities portfolio at June 30, 2025 and December 31, 2024 was $1.9 million and $5.0 million, respectively, and is included in Other Assets in the Consolidated Balance Sheets.

 

In March 2025, balance sheet repositioning transactions were executed. The Bank sold available for sale securities with an amortized cost balance of $99.2 million and reinvested $66.0 million into purchases of available for sale securities. The sale of securities resulted in a net realized pre-tax loss of $12.4 million recognized during six months ended June 30, 2025. There were no sales of available for sale securities during the three months ended June 30, 2025 or the three and six months ended June 30, 2024.

 

The following table summarizes amounts related to the sale of available for sale securities:

 

 

 

For the Six Months Ended June 30,

 

 

 

2025

 

 

 

(in thousands)

 

Proceeds from sales

 

$

86,822

 

 

 

 

 

Gross realized gains

 

$

—

 

Gross realized losses

 

 

(12,425

)

Net realized losses on securities

 

$

(12,425

)

 

The amortized cost and estimated fair value of securities at June 30, 2025, by the earlier of contractual maturity or expected maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to prepay obligations with or without call or prepayment penalties.

 

8

TABLE OF CONTENTS

 

 

Amortized Cost

 

 

Fair Value

 

 

 

(in thousands)

 

Due in one year or less

 

$

9,966

 

 

$

9,956

 

Due after one year through five years

 

 

5,794

 

 

 

5,793

 

Due after five years through ten years

 

 

27,285

 

 

 

26,658

 

Due after ten years

 

 

87,103

 

 

 

78,500

 

 

 

$

130,148

 

 

$

120,907

 

 

 

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 June 30, 2025 and December 31, 2024 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

 

 

 

June 30, 2025

 

 

 

(in thousands)

 

Obligations of U.S. government corporations and agencies

 

$

3,775

 

 

$

56

 

 

$

—

 

 

$

—

 

 

$

3,775

 

 

$

56

 

U.S. treasury securities

 

 

9,956

 

 

 

10

 

 

 

—

 

 

 

—

 

 

 

9,956

 

 

 

10

 

Mortgage-backed securities

 

 

43,081

 

 

 

284

 

 

 

29,483

 

 

 

8,172

 

 

 

72,564

 

 

 

8,456

 

Collateralized mortgage obligations

 

 

22,692

 

 

 

223

 

 

 

—

 

 

 

—

 

 

 

22,692

 

 

 

223

 

Subordinated debt

 

 

—

 

 

 

—

 

 

 

2,744

 

 

 

506

 

 

 

2,744

 

 

 

506

 

Total

 

$

79,504

 

 

$

573

 

 

$

32,227

 

 

$

8,678

 

 

$

111,731

 

 

$

9,251

 

 

 

 

Less than 12 months

 

 

12 months or more

 

 

Total

 

 

 

Fair Value

 

 

Gross
Unrealized
Losses

 

 

Fair Value

 

 

Gross
Unrealized
Losses

 

 

Fair Value

 

 

Gross
Unrealized
Losses

 

 

 

December 31, 2024

 

 

 

(in thousands)

 

Obligations of U.S. government corporations and agencies

 

$

—

 

 

$

—

 

 

$

7,668

 

 

$

530

 

 

$

7,668

 

 

$

530

 

Mortgage-backed securities

 

 

—

 

 

 

—

 

 

 

104,967

 

 

 

22,094

 

 

 

104,967

 

 

 

22,094

 

Obligations of states and political subdivisions

 

 

—

 

 

 

—

 

 

 

4,645

 

 

 

275

 

 

 

4,645

 

 

 

275

 

Subordinated debt

 

 

—

 

 

 

—

 

 

 

3,550

 

 

 

700

 

 

 

3,550

 

 

 

700

 

Total

 

$

—

 

 

$

—

 

 

$

120,830

 

 

$

23,599

 

 

$

120,830

 

 

$

23,599

 

 

The reference point for determining when securities are in an unrealized loss position is month end. As such, it is possible that a security's market value exceeded its amortized cost on other days during the past twelve-month period.

There were 52 debt securities with a fair value below the amortized cost basis, totaling $111.7 million of aggregate fair value as of June 30, 2025. The Company concluded that a credit loss does not exist in its securities portfolio at June 30, 2025 based on the fact that (1) changes in fair value were caused by non-credit-related factors, primarily fluctuations in interest rates, (2) securities with unrealized losses had generally high credit quality, (3) as of June 30, 2025, the Company intends to hold these investments in debt securities to maturity and it is more-likely-than-not that the Company will not be required to sell these investments before a recovery of its investment, and (4) issuers have continued to make timely payments of principal and interest. Additionally, the Company’s mortgage-backed securities and obligations of U.S. government corporations and agencies are entirely issued by either U.S. government agencies or U.S. government-sponsored enterprises. Collectively, these entities provide a guarantee, which is either explicitly or implicitly supported by the full faith and credit of the U.S. government, that investors in such mortgage-backed securities will receive timely principal and interest payments.

9

TABLE OF CONTENTS

Securities having carrying values of $7.0 million, $3.0 million and $93.1 million at June 30, 2025 were pledged as security for trust accounts, a deposit relationship and for borrowing capacity at the Federal Reserve Bank discount window, respectively.

The composition of restricted investments at June 30, 2025 and December 31, 2024 was as follows:

 

 

 

June 30, 2025

 

 

December 31, 2024

 

 

 

(in thousands)

 

Federal Reserve Bank Stock

 

$

344

 

 

$

344

 

Federal Home Loan Bank Stock

 

 

3,302

 

 

 

7,073

 

Community Bankers’ Bank Stock

 

 

140

 

 

 

140

 

 

 

$

3,786

 

 

$

7,557

 

 

NOTE 5. Loans and Allowance for Credit Losses on Loans

The composition of loans at June 30, 2025 and December 31, 2024 was as follows:

 

 

June 30,

 

 

December 31,

 

 

 

2025

 

 

2024

 

 

 

(in thousands)

 

Mortgage real estate loans:

 

 

 

 

 

 

   Construction & Secured by Farmland

 

$

76,060

 

 

$

95,200

 

   HELOCs

 

 

52,032

 

 

 

50,646

 

   Residential First Lien - Investor

 

 

106,493

 

 

 

105,910

 

   Residential First Lien - Owner Occupied

 

 

177,000

 

 

 

194,065

 

   Residential Junior Liens

 

 

10,865

 

 

 

11,184

 

   Commercial - Owner Occupied

 

 

288,821

 

 

 

272,236

 

   Commercial - Non-Owner Occupied & Multifamily

 

 

372,833

 

 

 

367,680

 

Commercial and industrial loans:

 

 

 

 

 

 

   SBA PPP loans

 

 

16

 

 

 

28

 

   Other commercial and industrial loans

 

 

106,499

 

 

 

110,315

 

Marine loans

 

 

196,434

 

 

 

210,095

 

Consumer loans

 

 

29,739

 

 

 

31,017

 

Overdrafts

 

 

240

 

 

 

309

 

Other loans

 

 

15,372

 

 

 

11,911

 

Total loans

 

$

1,432,404

 

 

$

1,460,596

 

Net deferred loan costs and premiums

 

 

6,228

 

 

 

6,453

 

Allowance for credit losses

 

 

(15,979

)

 

 

(15,027

)

 

$

1,422,653

 

 

$

1,452,022

 

 

At June 30, 2025, the Company was servicing $29.7 million of loans for other financial institutions which are not included in the table above. Also excluded from the table above are net servicing assets of $455 thousand at June 30, 2025, which are recorded in other assets in the Consolidated Balance Sheets. When loans are sold with servicing retained, servicing assets are recorded which represent the Company's right to service loans that were sold. Servicing assets are initially recorded by the Company at fair value and are subsequently amortized in proportion to, and over the period of, estimated net servicing income.

 

10

TABLE OF CONTENTS

Changes in the allowance for credit losses on loans for the three and six months ended June 30, 2025 and 2024 and year-ended December 31, 2024 were as follows:

 

 

 

Three Months Ended

 

 

Year Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

December 31,

 

 

June 30,

 

 

 

2025

 

 

2024

 

 

2024

 

 

2025

 

 

2024

 

 

 

(in thousands)

 

Balance, beginning

 

$

15,282

 

 

$

14,448

 

 

$

14,493

 

 

$

15,027

 

 

$

14,493

 

Provision for credit losses

 

 

856

 

 

 

314

 

 

 

2,525

 

 

 

2,002

 

 

 

789

 

Recoveries added to the allowance

 

 

176

 

 

 

424

 

 

 

853

 

 

 

361

 

 

 

609

 

Credit losses charged to the allowance

 

 

(335

)

 

 

(172

)

 

 

(2,844

)

 

 

(1,411

)

 

 

(877

)

Balance, ending

 

$

15,979

 

 

$

15,014

 

 

$

15,027

 

 

$

15,979

 

 

$

15,014

 

 

Past due loans by class at June 30, 2025 and December 31, 2024 were as follows:

 

 

 

June 30, 2025

 

 

 

(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

 

Mortgage real estate loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Construction & Secured by Farmland

 

$

428

 

 

$

—

 

 

$

—

 

 

$

428

 

 

$

75,632

 

 

$

76,060

 

 

$

—

 

HELOCs

 

 

354

 

 

 

—

 

 

 

—

 

 

 

354

 

 

 

51,678

 

 

 

52,032

 

 

 

—

 

Residential First Lien - Investor

 

 

—

 

 

 

—

 

 

 

98

 

 

 

98

 

 

 

106,395

 

 

 

106,493

 

 

 

—

 

Residential First Lien - Owner Occupied

 

 

—

 

 

 

—

 

 

 

570

 

 

 

570

 

 

 

176,430

 

 

 

177,000

 

 

 

543

 

Residential Junior Liens

 

 

488

 

 

 

—

 

 

 

—

 

 

 

488

 

 

 

10,377

 

 

 

10,865

 

 

 

—

 

Commercial - Owner Occupied

 

 

3,914

 

 

 

—

 

 

 

2,211

 

 

 

6,125

 

 

 

282,696

 

 

 

288,821

 

 

 

—

 

Commercial - Non-Owner Occupied & Multifamily

 

 

—

 

 

 

—

 

 

 

11,474

 

 

 

11,474

 

 

 

361,359

 

 

 

372,833

 

 

 

—

 

Commercial and industrial loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SBA PPP loans

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

16

 

 

 

16

 

 

 

—

 

Other commercial and industrial loans

 

 

505

 

 

 

662

 

 

 

218

 

 

 

1,385

 

 

 

105,114

 

 

 

106,499

 

 

 

45

 

Marine loans

 

 

801

 

 

 

—

 

 

 

—

 

 

 

801

 

 

 

195,633

 

 

 

196,434

 

 

 

—

 

Consumer loans

 

 

392

 

 

 

67

 

 

 

87

 

 

 

546

 

 

 

29,193

 

 

 

29,739

 

 

 

5

 

Overdrafts

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

240

 

 

 

240

 

 

 

—

 

Other loans

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

15,372

 

 

 

15,372

 

 

 

—

 

Total

 

$

6,882

 

 

$

729

 

 

$

14,658

 

 

$

22,269

 

 

$

1,410,135

 

 

$

1,432,404

 

 

$

593

 

 

11

TABLE OF CONTENTS

 

 

 

December 31, 2024

 

 

 

(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

 

Mortgage real estate loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Construction & Secured by Farmland

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

95,200

 

 

$

95,200

 

 

$

—

 

HELOCs

 

 

21

 

 

 

—

 

 

 

—

 

 

 

21

 

 

 

50,625

 

 

 

50,646

 

 

 

—

 

Residential First Lien - Investor

 

 

—

 

 

 

98

 

 

 

—

 

 

 

98

 

 

 

105,812

 

 

 

105,910

 

 

 

—

 

Residential First Lien - Owner Occupied

 

 

—

 

 

 

28

 

 

 

247

 

 

 

275

 

 

 

193,790

 

 

 

194,065

 

 

 

—

 

Residential Junior Liens

 

 

13

 

 

 

—

 

 

 

—

 

 

 

13

 

 

 

11,171

 

 

 

11,184

 

 

 

—

 

Commercial - Owner Occupied

 

 

2,212

 

 

 

—

 

 

 

—

 

 

 

2,212

 

 

 

270,024

 

 

 

272,236

 

 

 

—

 

Commercial - Non-Owner Occupied & Multifamily

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

367,680

 

 

 

367,680

 

 

 

—

 

Commercial and industrial loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SBA PPP loans

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

28

 

 

 

28

 

 

 

—

 

Other commercial and industrial loans

 

 

922

 

 

 

84

 

 

 

80

 

 

 

1,086

 

 

 

109,229

 

 

 

110,315

 

 

 

—

 

Marine loans

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

210,095

 

 

 

210,095

 

 

 

—

 

Consumer loans

 

 

673

 

 

 

6

 

 

 

138

 

 

 

817

 

 

 

30,200

 

 

 

31,017

 

 

 

—

 

Overdrafts

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

309

 

 

 

309

 

 

 

—

 

Other loans

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

11,911

 

 

 

11,911

 

 

 

—

 

Total

 

$

3,841

 

 

$

216

 

 

$

465

 

 

$

4,522

 

 

$

1,456,074

 

 

$

1,460,596

 

 

$

—

 

 

 

Nonaccrual loans by class at June 30, 2025 and December 31, 2024 were as follows:

 

 

 

June 30, 2025

 

 

December 31, 2024

 

 

 

(in thousands)

 

 

(in thousands)

 

 

 

Nonaccruals with No Allowance for Credit Losses

 

 

Nonaccrual with an Allowance for Credit Losses

 

 

Nonaccrual
Loans

 

 

Nonaccruals with No Allowance for Credit Losses

 

 

Nonaccrual with an Allowance for Credit Losses

 

 

Nonaccrual
Loans

 

Mortgage real estate loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Construction & Secured by Farmland

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

HELOCs

 

 

348

 

 

 

—

 

 

 

348

 

 

 

—

 

 

 

—

 

 

 

—

 

Residential First Lien - Investor

 

 

98

 

 

 

—

 

 

 

98

 

 

 

—

 

 

 

—

 

 

 

—

 

Residential First Lien - Owner Occupied

 

 

523

 

 

 

—

 

 

 

523

 

 

 

347

 

 

 

—

 

 

 

347

 

Residential Junior Liens

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Commercial - Owner Occupied

 

 

2,925

 

 

 

—

 

 

 

2,925

 

 

 

739

 

 

 

—

 

 

 

739

 

Commercial - Non-Owner Occupied & Multifamily

 

 

—

 

 

 

11,474

 

 

 

11,474

 

 

 

—

 

 

 

—

 

 

 

—

 

Commercial and industrial loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SBA PPP loans

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Other commercial and industrial loans

 

 

50

 

 

 

1,234

 

 

 

1,284

 

 

 

—

 

 

 

903

 

 

 

903

 

Marine loans

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Consumer loans

 

 

83

 

 

 

—

 

 

 

83

 

 

 

83

 

 

 

—

 

 

 

83

 

Overdrafts

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Other loans

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total

 

$

4,027

 

 

$

12,708

 

 

$

16,735

 

 

$

1,169

 

 

$

903

 

 

$

2,072

 

 

12

TABLE OF CONTENTS

 

 

 

The allowance for credit losses on loans by segment at June 30, 2025 and December 31, 2024 was as follows:

 

 

 

As of and For the Six Months Ended

 

 

 

June 30, 2025

 

 

 

(in thousands)

 

 

 

Construction
and Farmland

 

 

Residential
Real Estate

 

 

Commercial
Real Estate &
MultiFamily

 

 

Commercial

 

 

Marine

 

 

Consumer

 

 

All Other
Loans

 

 

Unallocated

 

 

Total

 

Allowance for credit losses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning Balance

 

$

2,387

 

 

$

2,318

 

 

$

7,251

 

 

$

1,433

 

 

$

1,279

 

 

$

238

 

 

$

121

 

 

$

—

 

 

$

15,027

 

Charge-Offs

 

 

—

 

 

 

(30

)

 

 

(971

)

 

 

(134

)

 

 

(114

)

 

 

(90

)

 

 

(72

)

 

 

—

 

 

 

(1,411

)

Recoveries

 

 

3

 

 

 

252

 

 

 

—

 

 

 

78

 

 

 

—

 

 

 

13

 

 

 

15

 

 

 

—

 

 

 

361

 

Provision

 

 

(783

)

 

 

(693

)

 

 

3,143

 

 

 

120

 

 

 

(270

)

 

 

73

 

 

 

412

 

 

 

—

 

 

 

2,002

 

Ending balance

 

$

1,607

 

 

$

1,847

 

 

$

9,423

 

 

$

1,497

 

 

$

895

 

 

$

234

 

 

$

476

 

 

$

—

 

 

$

15,979

 

Ending balance: Individually evaluated for impairment

 

$

—

 

 

$

—

 

 

$

1,147

 

 

$

381

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

1,528

 

Ending balance: Collectively evaluated for impairment

 

$

1,607

 

 

$

1,847

 

 

$

8,276

 

 

$

1,116

 

 

$

895

 

 

$

234

 

 

$

476

 

 

$

—

 

 

$

14,451

 

Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ending balance

 

$

76,060

 

 

$

346,390

 

 

$

661,654

 

 

$

106,515

 

 

$

196,434

 

 

$

29,739

 

 

$

15,612

 

 

$

—

 

 

$

1,432,404

 

Ending balance: Individually evaluated for impairment

 

$

—

 

 

$

942

 

 

$

14,399

 

 

$

1,234

 

 

$

—

 

 

$

83

 

 

$

—

 

 

$

—

 

 

$

16,658

 

Ending balance: Collectively evaluated for impairment

 

$

76,060

 

 

$

345,448

 

 

$

647,255

 

 

$

105,281

 

 

$

196,434

 

 

$

29,656

 

 

$

15,612

 

 

$

—

 

 

$

1,415,746

 

 

13

TABLE OF CONTENTS

 

 

As of and For the Year Ended

 

 

 

December 31, 2024

 

 

 

(in thousands)

 

 

 

Construction
and Farmland

 

 

Residential
Real Estate

 

 

Commercial
Real Estate &
MultiFamily

 

 

Commercial

 

 

Marine

 

 

Consumer

 

 

All Other
Loans

 

 

Unallocated

 

 

Total

 

Allowance for credit losses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning Balance

 

$

772

 

 

$

4,725

 

 

$

6,224

 

 

$

1,027

 

 

$

1,153

 

 

$

198

 

 

$

394

 

 

$

—

 

 

$

14,493

 

Charge-Offs

 

 

(94

)

 

 

(277

)

 

 

(7

)

 

 

(238

)

 

 

(1,778

)

 

 

(309

)

 

 

(141

)

 

 

—

 

 

 

(2,844

)

Recoveries

 

 

102

 

 

 

347

 

 

 

162

 

 

 

67

 

 

 

—

 

 

 

150

 

 

 

25

 

 

 

—

 

 

 

853

 

Provision

 

 

1,607

 

 

 

(2,477

)

 

 

872

 

 

 

577

 

 

 

1,904

 

 

 

199

 

 

 

(157

)

 

 

—

 

 

 

2,525

 

Ending balance

 

$

2,387

 

 

$

2,318

 

 

$

7,251

 

 

$

1,433

 

 

$

1,279

 

 

$

238

 

 

$

121

 

 

$

—

 

 

$

15,027

 

Ending balance: Individually evaluated for impairment

 

$

—

 

 

$

—

 

 

$

—

 

 

$

248

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

248

 

Ending balance: Collectively evaluated for impairment

 

$

2,387

 

 

$

2,318

 

 

$

7,251

 

 

$

1,185

 

 

$

1,279

 

 

$

238

 

 

$

121

 

 

$

—

 

 

$

14,779

 

Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ending balance

 

$

95,200

 

 

$

361,805

 

 

$

639,916

 

 

$

110,343

 

 

$

210,095

 

 

$

31,017

 

 

$

12,220

 

 

$

—

 

 

$

1,460,596

 

Ending balance: Individually evaluated for impairment

 

$

—

 

 

$

318

 

 

$

739

 

 

$

908

 

 

$

—

 

 

$

83

 

 

$

—

 

 

$

—

 

 

$

2,048

 

Ending balance: Collectively evaluated for impairment

 

$

95,200

 

 

$

361,487

 

 

$

639,177

 

 

$

109,435

 

 

$

210,095

 

 

$

30,934

 

 

$

12,220

 

 

$

—

 

 

$

1,458,548

 

 

14

TABLE OF CONTENTS

The following table presents the amortized cost basis of collateral-dependent loans by loan portfolio segment:

 

 

 

June 30, 2025

 

 

December 31, 2024

 

 

 

(in thousands)

 

 

(in thousands)

 

(in thousands)

 

Real Estate Collateral

 

 

Other Collateral

 

 

Total

 

 

Real Estate Collateral

 

 

Other Collateral

 

 

Total

 

Mortgage real estate loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Construction & Secured by Farmland

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

HELOCs

 

 

348

 

 

 

—

 

 

 

348

 

 

 

—

 

 

 

—

 

 

 

—

 

Residential First Lien - Investor

 

 

98

 

 

 

—

 

 

 

98

 

 

 

—

 

 

 

—

 

 

 

—

 

Residential First Lien - Owner Occupied

 

 

496

 

 

 

—

 

 

 

496

 

 

 

318

 

 

 

—

 

 

 

318

 

Residential Junior Liens

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Commercial - Owner Occupied

 

 

2,925

 

 

 

—

 

 

 

2,925

 

 

 

739

 

 

 

—

 

 

 

739

 

Commercial - Non-Owner Occupied & Multifamily

 

 

11,474

 

 

 

—

 

 

 

11,474

 

 

 

—

 

 

 

—

 

 

 

—

 

Commercial and industrial loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SBA PPP loans

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Other commercial and industrial loans

 

 

—

 

 

 

1,234

 

 

 

1,234

 

 

 

—

 

 

 

908

 

 

 

908

 

Marine loans

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Consumer loans

 

 

83

 

 

 

—

 

 

 

83

 

 

 

83

 

 

 

—

 

 

 

83

 

Overdrafts

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Other loans

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

$

15,424

 

 

$

1,234

 

 

$

16,658

 

 

$

1,140

 

 

$

908

 

 

$

2,048

 

 

The Company did not identify any significant changes in the extent to which collateral secures its collateral dependent loans, whether in the form of general deterioration or from other factors during the period ended June 30, 2025.

 

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans individually to classify the loans as to credit risk. This analysis is performed on a quarterly basis. The following table presents risk ratings by loan portfolio segment and origination year. Description of these ratings are as follows:

 

Pass

 

Pass loans exhibit acceptable history of profits, cash flow ability and liquidity. Sufficient cash flow exists to service the loan. All obligations have been paid by the borrower in an as agreed manner.

Special Mention

 

Special mention loans exhibit negative trends and potential weakness that, if left uncorrected, may negatively affect the borrower’s ability to repay its obligations. Loan relationships with stale financial statements at their annual review will also cause a downgrade to special mention until current financials are received and upgrade is approved. The risk of default is not imminent and the borrower still demonstrates sufficient financial strength to service debt.

Classified

 

Classified loans include loans rated Substandard, Doubtful and Loss.

 

 
•
Substandard loans exhibit well defined weaknesses resulting in a higher probability of default. The borrowers exhibit adverse financial trends and a diminishing ability or willingness to service debt.

 

 
•
Doubtful loans exhibit all of the characteristics inherent in substandard loans; however given the severity of weaknesses, the collection of 100% of the principal is unlikely under current conditions.

 

 
•
Loss loans are considered uncollectible over a reasonable period of time and of such little value that its continuance as a bankable asset is not warranted.

 

 

Credit quality information by class at June 30, 2025 and gross charge-offs by year of origination for the six months ended June 30, 2025 was as follows:

 

15

TABLE OF CONTENTS

June 30, 2025

 

 

 

 

 

 

Term Loans Amortized Cost Basis by Origination Year

 

 

 

 

 

 

 

 

 

 

 

(in thousands)

 

2025

 

 

2024

 

 

2023

 

 

2022

 

 

2021

 

 

Prior

 

 

Revolving Loans Amortized Cost Basis

 

 

Revolving Loans Converted to Term

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage real estate loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Construction & Secured by Farmland

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

8,724

 

 

$

31,497

 

 

$

8,474

 

 

$

12,572

 

 

$

3,717

 

 

$

7,143

 

 

$

3,477

 

 

$

—

 

 

$

75,604

 

 

Special Mention

 

 

—

 

 

 

—

 

 

 

428

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

428

 

 

Classified

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

28

 

 

 

—

 

 

 

—

 

 

 

28

 

 

Total

 

$

8,724

 

 

$

31,497

 

 

$

8,902

 

 

$

12,572

 

 

$

3,717

 

 

$

7,171

 

 

$

3,477

 

 

$

—

 

 

$

76,060

 

 

Current period gross charge-offs

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

HELOCs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

51,644

 

 

$

—

 

 

$

51,644

 

 

Special Mention

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

40

 

 

 

—

 

 

 

40

 

 

Classified

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

348

 

 

 

—

 

 

 

348

 

 

Total

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

52,032

 

 

$

—

 

 

$

52,032

 

 

Current period gross charge-offs

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

30

 

 

$

—

 

 

$

30

 

 

Residential First Lien - Investor

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

9,435

 

 

$

6,615

 

 

$

12,056

 

 

$

17,485

 

 

$

25,326

 

 

$

27,614

 

 

$

—

 

 

$

1,177

 

 

$

99,708

 

 

Special Mention

 

 

—

 

 

 

—

 

 

 

690

 

 

 

—

 

 

 

2,425

 

 

 

1,756

 

 

 

—

 

 

 

—

 

 

 

4,871

 

 

Classified

 

 

—

 

 

 

1,816

 

 

 

—

 

 

 

98

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1,914

 

 

Total

 

$

9,435

 

 

$

8,431

 

 

$

12,746

 

 

$

17,583

 

 

$

27,751

 

 

$

29,370

 

 

$

—

 

 

$

1,177

 

 

$

106,493

 

 

Current period gross charge-offs

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

Residential First Lien - Owner Occupied

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

6,637

 

 

$

17,760

 

 

$

49,338

 

 

$

29,458

 

 

$

21,801

 

 

$

47,562

 

 

$

—

 

 

$

295

 

 

$

172,851

 

 

Special Mention

 

 

—

 

 

 

42

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

3,328

 

 

 

—

 

 

 

—

 

 

 

3,370

 

 

Classified

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

779

 

 

 

—

 

 

 

—

 

 

 

779

 

 

Total

 

$

6,637

 

 

$

17,802

 

 

$

49,338

 

 

$

29,458

 

 

$

21,801

 

 

$

51,669

 

 

$

—

 

 

$

295

 

 

$

177,000

 

 

Current period gross charge-offs

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

Residential Junior Liens

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

939

 

 

$

962

 

 

$

1,740

 

 

$

1,956

 

 

$

2,686

 

 

$

2,193

 

 

$

—

 

 

$

168

 

 

$

10,644

 

 

Special Mention

 

 

—

 

 

 

—

 

 

 

154

 

 

 

—

 

 

 

—

 

 

 

67

 

 

 

—

 

 

 

—

 

 

 

221

 

 

Classified

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

Total

 

$

939

 

 

$

962

 

 

$

1,894

 

 

$

1,956

 

 

$

2,686

 

 

$

2,260

 

 

$

—

 

 

$

168

 

 

$

10,865

 

 

Current period gross charge-offs

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

Commercial - Owner Occupied

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

11,648

 

 

$

27,703

 

 

$

50,779

 

 

$

72,617

 

 

$

26,973

 

 

$

64,284

 

 

$

1,598

 

 

$

2,989

 

 

$

258,591

 

 

Special Mention

 

 

—

 

 

 

2,311

 

 

 

700

 

 

 

4,270

 

 

 

6,165

 

 

 

13,859

 

 

 

—

 

 

 

—

 

 

 

27,305

 

 

Classified

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

2,925

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

2,925

 

 

16

TABLE OF CONTENTS

Total

 

$

11,648

 

 

$

30,014

 

 

$

51,479

 

 

$

76,887

 

 

$

36,063

 

 

$

78,143

 

 

$

1,598

 

 

$

2,989

 

 

$

288,821

 

 

Current period gross charge-offs

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

Commercial - Non-Owner Occupied & Multifamily

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

20,720

 

 

$

26,200

 

 

$

54,447

 

 

$

79,902

 

 

$

49,932

 

 

$

106,247

 

 

$

4,961

 

 

$

5,036

 

 

$

347,445

 

 

Special Mention

 

 

—

 

 

 

—

 

 

 

2,571

 

 

 

4,216

 

 

 

4,954

 

 

 

2,174

 

 

 

—

 

 

 

—

 

 

 

13,915

 

 

Classified

 

 

—

 

 

 

—

 

 

 

—

 

 

 

7,120

 

 

 

4,353

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

11,473

 

 

Total

 

$

20,720

 

 

$

26,200

 

 

$

57,018

 

 

$

91,238

 

 

$

59,239

 

 

$

108,421

 

 

$

4,961

 

 

$

5,036

 

 

$

372,833

 

 

Current period gross charge-offs

 

$

—

 

 

$

—

 

 

$

—

 

 

$

257

 

 

$

714

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

971

 

 

Commercial and industrial loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SBA PPP loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

16

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

16

 

 

Special Mention

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

Classified

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

Total

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

16

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

16

 

 

Current period gross charge-offs

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

Other commercial and industrial loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

14,914

 

 

$

24,163

 

 

$

8,195

 

 

$

10,725

 

 

$

5,472

 

 

$

5,889

 

 

$

33,352

 

 

$

2,351

 

 

$

105,061

 

 

Special Mention

 

 

—

 

 

 

67

 

 

 

505

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

11

 

 

 

583

 

 

Classified

 

 

—

 

 

 

—

 

 

 

834

 

 

 

—

 

 

 

21

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

855

 

 

Total

 

$

14,914

 

 

$

24,230

 

 

$

9,534

 

 

$

10,725

 

 

$

5,493

 

 

$

5,889

 

 

$

33,352

 

 

$

2,362

 

 

$

106,499

 

 

Current period gross charge-offs

 

$

—

 

 

$

—

 

 

$

81

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

53

 

 

$

—

 

 

$

134

 

 

Marine loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

—

 

 

$

—

 

 

$

64,811

 

 

$

101,942

 

 

$

29,055

 

 

$

626

 

 

$

—

 

 

$

—

 

 

$

196,434

 

 

Special Mention

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

Classified

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

Total

 

$

—

 

 

$

—

 

 

$

64,811

 

 

$

101,942

 

 

$

29,055

 

 

$

626

 

 

$

—

 

 

$

—

 

 

$

196,434

 

 

Current period gross charge-offs

 

$

—

 

 

$

—

 

 

$

—

 

 

$

114

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

114

 

 

Consumer loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

1,260

 

 

$

2,145

 

 

$

1,504

 

 

$

10,218

 

 

$

5,055

 

 

$

7,786

 

 

$

1,688

 

 

$

—

 

 

$

29,656

 

 

Special Mention

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

Classified

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

83

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

83

 

 

Total

 

$

1,260

 

 

$

2,145

 

 

$

1,504

 

 

$

10,218

 

 

$

5,138

 

 

$

7,786

 

 

$

1,688

 

 

$

—

 

 

$

29,739

 

 

Current period gross charge-offs

 

$

—

 

 

$

—

 

 

$

9

 

 

$

2

 

 

$

—

 

 

$

8

 

 

$

71

 

 

$

—

 

 

$

90

 

 

Overdrafts

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

Special Mention

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

Classified

 

 

240

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

240

 

 

Total

 

$

240

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

240

 

 

Current period gross charge-offs

 

$

72

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

72

 

 

Other loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

4,250

 

 

$

—

 

 

$

47

 

 

$

8,786

 

 

$

—

 

 

$

2,223

 

 

$

66

 

 

$

—

 

 

$

15,372

 

 

Special Mention

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

17

TABLE OF CONTENTS

Classified

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

Total

 

$

4,250

 

 

$

—

 

 

$

47

 

 

$

8,786

 

 

$

—

 

 

$

2,223

 

 

$

66

 

 

$

—

 

 

$

15,372

 

 

Current period gross charge-offs

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

Total by Risk Category

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

78,527

 

 

$

137,045

 

 

$

251,391

 

 

$

345,661

 

 

$

170,033

 

 

$

271,567

 

 

$

96,786

 

 

$

12,016

 

 

$

1,363,026

 

 

Special Mention

 

 

—

 

 

 

2,420

 

 

 

5,048

 

 

 

8,486

 

 

 

13,544

 

 

 

21,184

 

 

 

40

 

 

 

11

 

 

 

50,733

 

 

Classified

 

 

240

 

 

 

1,816

 

 

 

834

 

 

 

7,218

 

 

 

7,382

 

 

 

807

 

 

 

348

 

 

 

—

 

 

 

18,645

 

 

Total

 

$

78,767

 

 

$

141,281

 

 

$

257,273

 

 

$

361,365

 

 

$

190,959

 

 

$

293,558

 

 

$

97,174

 

 

$

12,027

 

 

$

1,432,404

 

 

Total current period gross charge-offs

 

$

72

 

 

$

—

 

 

$

90

 

 

$

373

 

 

$

714

 

 

$

8

 

 

$

154

 

 

$

—

 

 

$

1,411

 

 

 

Credit quality information by class at December 31, 2024 and gross charge-offs by year of origination for the year ended December 31, 2024 was as follows:

18

TABLE OF CONTENTS

December 31, 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Term Loans Amortized Cost Basis by Origination Year

 

 

 

 

 

 

 

 

 

 

(in thousands)

 

2024

 

 

2023

 

 

2022

 

 

2021

 

 

2020

 

 

Prior

 

 

Revolving Loans Amortized Cost Basis

 

 

Revolving Loans Converted to Term

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage real estate loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Construction & Secured by Farmland

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

33,338

 

 

$

25,777

 

 

$

13,722

 

 

$

3,830

 

 

$

4,758

 

 

$

3,908

 

 

$

3,055

 

 

$

—

 

 

$

88,388

 

Special Mention

 

 

—

 

 

 

6,781

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

6,781

 

Classified

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

31

 

 

 

—

 

 

 

—

 

 

 

31

 

Total

 

$

33,338

 

 

$

32,558

 

 

$

13,722

 

 

$

3,830

 

 

$

4,758

 

 

$

3,939

 

 

$

3,055

 

 

$

—

 

 

$

95,200

 

Current period gross charge-offs

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

94

 

 

$

—

 

 

$

—

 

 

$

94

 

HELOCs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

50,454

 

 

$

—

 

 

$

50,454

 

Special Mention

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

192

 

 

 

—

 

 

 

192

 

Classified

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

50,646

 

 

$

—

 

 

$

50,646

 

Current period gross charge-offs

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

14

 

 

$

—

 

 

$

14

 

Residential First Lien - Investor

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

7,567

 

 

$

15,074

 

 

$

18,816

 

 

$

27,722

 

 

$

10,729

 

 

$

21,201

 

 

$

—

 

 

$

559

 

 

$

101,668

 

Special Mention

 

 

—

 

 

 

696

 

 

 

370

 

 

 

1,053

 

 

 

—

 

 

 

295

 

 

 

—

 

 

 

—

 

 

 

2,414

 

Classified

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1,828

 

 

 

1,828

 

Total

 

$

7,567

 

 

$

15,770

 

 

$

19,186

 

 

$

28,775

 

 

$

10,729

 

 

$

21,496

 

 

$

—

 

 

$

2,387

 

 

$

105,910

 

Current period gross charge-offs

 

$

—

 

 

$

—

 

 

$

—

 

 

$

150

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

150

 

Residential First Lien - Owner Occupied

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

25,982

 

 

$

57,230

 

 

$

33,257

 

 

$

22,387

 

 

$

33,514

 

 

$

19,438

 

 

$

—

 

 

$

387

 

 

$

192,195

 

Special Mention

 

 

45

 

 

 

623

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

592

 

 

 

—

 

 

 

—

 

 

 

1,260

 

Classified

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

610

 

 

 

—

 

 

 

—

 

 

 

610

 

Total

 

$

26,027

 

 

$

57,853

 

 

$

33,257

 

 

$

22,387

 

 

$

33,514

 

 

$

20,640

 

 

$

—

 

 

$

387

 

 

$

194,065

 

Current period gross charge-offs

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

103

 

 

$

—

 

 

$

—

 

 

$

103

 

Residential Junior Liens

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

991

 

 

$

2,191

 

 

$

2,484

 

 

$

2,942

 

 

$

555

 

 

$

1,762

 

 

$

—

 

 

$

175

 

 

$

11,100

 

Special Mention

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

70

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

70

 

Classified

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

14

 

 

 

14

 

19

TABLE OF CONTENTS

Total

 

$

991

 

 

$

2,191

 

 

$

2,484

 

 

$

2,942

 

 

$

625

 

 

$

1,762

 

 

$

—

 

 

$

189

 

 

$

11,184

 

Current period gross charge-offs

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

10

 

 

$

—

 

 

$

—

 

 

$

10

 

Commercial - Owner Occupied

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

29,892

 

 

$

32,228

 

 

$

75,213

 

 

$

36,558

 

 

$

21,827

 

 

$

45,648

 

 

$

2,623

 

 

$

2,856

 

 

$

246,845

 

Special Mention

 

 

—

 

 

 

364

 

 

 

3,995

 

 

 

5,523

 

 

 

—

 

 

 

14,770

 

 

 

—

 

 

 

—

 

 

 

24,652

 

Classified

 

 

—

 

 

 

—

 

 

 

—

 

 

 

739

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

739

 

Total

 

$

29,892

 

 

$

32,592

 

 

$

79,208

 

 

$

42,820

 

 

$

21,827

 

 

$

60,418

 

 

$

2,623

 

 

$

2,856

 

 

$

272,236

 

Current period gross charge-offs

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

7

 

 

$

—

 

 

$

—

 

 

$

7

 

Commercial - Non-Owner Occupied & Multifamily

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

28,275

 

 

$

43,596

 

 

$

106,921

 

 

$

55,945

 

 

$

65,561

 

 

$

44,949

 

 

$

5,397

 

 

$

5,834

 

 

$

356,478

 

Special Mention

 

 

—

 

 

 

—

 

 

 

1,384

 

 

 

7,584

 

 

 

1,446

 

 

 

788

 

 

 

—

 

 

 

—

 

 

 

11,202

 

Classified

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total

 

$

28,275

 

 

$

43,596

 

 

$

108,305

 

 

$

63,529

 

 

$

67,007

 

 

$

45,737

 

 

$

5,397

 

 

$

5,834

 

 

$

367,680

 

Current period gross charge-offs

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

Commercial and industrial loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SBA PPP loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

—

 

 

$

—

 

 

$

—

 

 

$

28

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

28

 

Special Mention

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Classified

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total

 

$

—

 

 

$

—

 

 

$

—

 

 

$

28

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

28

 

Current period gross charge-offs

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

Other commercial and industrial loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

28,978

 

 

$

8,605

 

 

$

17,187

 

 

$

4,512

 

 

$

3,324

 

 

$

3,614

 

 

$

37,618

 

 

$

2,064

 

 

$

105,902

 

Special Mention

 

 

411

 

 

 

1,095

 

 

 

—

 

 

 

1,915

 

 

 

—

 

 

 

3

 

 

 

—

 

 

 

86

 

 

 

3,510

 

Classified

 

 

—

 

 

 

903

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

903

 

Total

 

$

29,389

 

 

$

10,603

 

 

$

17,187

 

 

$

6,427

 

 

$

3,324

 

 

$

3,617

 

 

$

37,618

 

 

$

2,150

 

 

$

110,315

 

Current period gross charge-offs

 

$

—

 

 

$

32

 

 

$

8

 

 

$

—

 

 

$

63

 

 

$

—

 

 

$

135

 

 

$

—

 

 

$

238

 

Marine loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

—

 

 

$

68,970

 

 

$

110,481

 

 

$

30,011

 

 

$

633

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

210,095

 

Special Mention

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Classified

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total

 

$

—

 

 

$

68,970

 

 

$

110,481

 

 

$

30,011

 

 

$

633

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

210,095

 

Current period gross charge-offs

 

$

—

 

 

$

1,371

 

 

$

199

 

 

$

208

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

1,778

 

20

TABLE OF CONTENTS

Consumer loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

2,700

 

 

$

1,987

 

 

$

10,787

 

 

$

5,274

 

 

$

7,221

 

 

$

1,117

 

 

$

1,834

 

 

$

13

 

 

$

30,933

 

Special Mention

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Classified

 

 

—

 

 

 

—

 

 

 

—

 

 

 

84

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

84

 

Total

 

$

2,700

 

 

$

1,987

 

 

$

10,787

 

 

$

5,358

 

 

$

7,221

 

 

$

1,117

 

 

$

1,834

 

 

$

13

 

 

$

31,017

 

Current period gross charge-offs

 

$

—

 

 

$

13

 

 

$

4

 

 

$

47

 

 

$

167

 

 

$

—

 

 

$

78

 

 

$

—

 

 

$

309

 

Overdrafts

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

Special Mention

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Classified

 

 

309

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

309

 

Total

 

$

309

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

309

 

Current period gross charge-offs

 

$

141

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

141

 

Other loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

—

 

 

$

54

 

 

$

9,500

 

 

$

—

 

 

$

—

 

 

$

2,281

 

 

$

76

 

 

$

—

 

 

$

11,911

 

Special Mention

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Classified

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total

 

$

—

 

 

$

54

 

 

$

9,500

 

 

$

—

 

 

$

—

 

 

$

2,281

 

 

$

76

 

 

$

—

 

 

$

11,911

 

Current period gross charge-offs

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

Total by Risk Category

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

157,723

 

 

$

255,712

 

 

$

398,368

 

 

$

189,209

 

 

$

148,122

 

 

$

143,918

 

 

$

101,057

 

 

$

11,888

 

 

$

1,405,997

 

Special Mention

 

 

456

 

 

 

9,559

 

 

 

5,749

 

 

 

16,075

 

 

 

1,516

 

 

 

16,448

 

 

 

192

 

 

 

86

 

 

 

50,081

 

Classified

 

 

309

 

 

 

903

 

 

 

—

 

 

 

823

 

 

 

—

 

 

 

641

 

 

 

—

 

 

 

1,842

 

 

 

4,518

 

Total

 

$

158,488

 

 

$

266,174

 

 

$

404,117

 

 

$

206,107

 

 

$

149,638

 

 

$

161,007

 

 

$

101,249

 

 

$

13,816

 

 

$

1,460,596

 

Total current period gross charge-offs

 

$

141

 

 

$

1,416

 

 

$

211

 

 

$

405

 

 

$

230

 

 

$

214

 

 

$

227

 

 

$

—

 

 

$

2,844

 

 

 

21

TABLE OF CONTENTS

Unfunded Commitments: The Company maintains a separate reserve for credit losses on unfunded commitments, which is included in Other Liabilities on the Consolidated Balance Sheet. The reserve for credit losses on off-balance-sheet credit exposures is adjusted as a provision for credit losses in the Consolidated Statement of Operations. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded, utilizing the same models and approaches for the Company's other loan portfolio segments, as these unfunded commitments share similar risk characteristics as its loan portfolio segments. The Company has identified the unfunded portion of certain lines of credit as unconditionally cancellable credit exposures, meaning the Company can cancel the unfunded commitment at any time. No credit loss estimate is reported for off-balance-sheet credit exposures that are unconditionally cancellable by the Company or for undrawn amounts under such arrangements that maybe drawn prior to the cancellation of the arrangement.

During the three and six months ended June 30, 2025, a reduction to the unfunded commitment reserve of $188 thousand and $101 thousand, respectively, was recorded as a credit to the provision for credit losses in the consolidated statement of operations. During the three and six months ended June 30, 2024, a reduction to the unfunded commitment reserve of $134 thousand was recorded as a credit to the provision for credit losses in the consolidated income statement. The reserve for unfunded commitments at June 30, 2025 and 2024 and December 31, 2024 was $404 thousand, $345 thousand, and $505 thousand, respectively.

Restructurings for Borrowers Experiencing Financial Difficulty: There were no loans to borrowers experiencing financial difficulty that had a payment default during the three and six months ended June 30, 2025 and 2024 and were modified in the twelve months prior to that default. Default is determined at 30 days or more past due, upon charge-off, or upon foreclosure. Modified loans in default are individually evaluated for the allowance of credit losses or if the modified loan is deemed uncollectible, the loan, or a portion of the loan, is written off and the allowance for credit losses is adjusted accordingly.

 

NOTE 6. Deposits

The composition of deposits at June 30, 2025 and December 31, 2024 was as follows:

 

 

 

June 30, 2025

 

 

December 31, 2024

 

 

 

(in thousands)

 

Noninterest bearing demand deposits

 

$

574,596

 

 

$

406,180

 

Savings and interest bearing demand deposits:

 

 

 

 

 

 

NOW accounts

 

$

336,653

 

 

$

278,835

 

Money market accounts

 

 

262,622

 

 

 

269,115

 

Regular savings accounts

 

 

129,095

 

 

 

131,380

 

 

$

728,370

 

 

$

679,330

 

Time deposits:

 

 

 

 

 

 

Balances of less than $250,000

 

$

285,217

 

 

$

293,864

 

Balances of $250,000 and more

 

 

178,341

 

 

 

195,782

 

 

$

463,558

 

 

$

489,646

 

 

$

1,766,524

 

 

$

1,575,156

 

 

 

NOTE 7. Leases

Lease liabilities represent the Company’s obligation to make lease payments and are presented at each reporting date as the net present value of the remaining contractual cash flows. Cash flows are discounted at the Company’s incremental borrowing rate in effect at the commencement date of the lease. Right-of-use assets represent the Company’s right to use the underlying asset for the lease term and are calculated as the sum of the lease liability and if applicable, prepaid rent, initial direct costs and any incentives received from the lessor. Right-of-use assets and lease liabilities are included in Other Assets and Other Liabilities, respectively, in the Consolidated Balance Sheets. During the first quarter of 2025, the Company entered into a long-term lease with the intention of establishing a full-service branch in McLean, Viriginia and moving the Tysons loan production office into the new location.

22

TABLE OF CONTENTS

The new lease will replace an expiring lease and resulted in the initial recognition of a right-of-use asset and lease liability of $773 thousand.

The Company’s six long-term lease agreements are classified as operating leases. These leases offer the option to extend the lease term and the Company has included such extensions in its calculation of the lease liability to the extent the options are reasonably certain of being exercised. The lease agreements do not provide for a residual value guarantee and have no restrictions or covenants that would impact dividends or require incurring additional financial obligations.

The following tables present information about the Company’s leases:

 

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2025

 

 

December 31, 2024

 

 

 

 

 

 

 

Lease liabilities

 

$

10,200

 

 

$

9,779

 

 

 

 

 

 

 

Right-of-use assets

 

$

9,843

 

 

$

9,465

 

 

 

 

 

 

 

Weighted average remaining lease term

 

12 years

 

 

12 years

 

 

 

 

 

 

 

Weighted average discount rate

 

 

4.23

 %

 

 

4.16

 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Six Months Ended

 

Lease Cost

 

June 30, 2025

 

 

June 30, 2024

 

 

June 30, 2025

 

 

June 30, 2024

 

Operating lease cost

 

$

310

 

 

$

132

 

 

$

594

 

 

$

264

 

Short-term lease cost

 

 

3

 

 

 

4

 

 

 

7

 

 

 

7

 

Total lease cost

 

$

313

 

 

$

136

 

 

$

601

 

 

$

271

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash paid for amounts included in the measurement of lease liabilities

 

$

257

 

 

$

119

 

 

$

508

 

 

$

239

 

 

A maturity analysis of operating lease liabilities and reconciliation of the undiscounted cash flows to the total operating lease liabilities is as follows:

 

(dollars in thousands)

 

As of

 

Lease payments due

 

June 30, 2025

 

2025, remainder

 

$

560

 

2026

 

 

1,021

 

2027

 

 

1,035

 

2028

 

 

1,058

 

2029

 

 

1,083

 

Thereafter

 

 

8,564

 

Total undiscounted cash flows

 

$

13,321

 

Discount

 

 

(3,121

)

Lease liabilities

 

$

10,200

 

 

 

NOTE 8. Fair Value Measurements

GAAP requires the Company to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. The fair value of assets and liabilities is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

“Fair Value Measurements” defines fair value, establishes a framework for measuring fair value, establishes a three-level valuation hierarchy for disclosure of fair value measurement and enhances disclosure requirements for fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The three levels are defined as follows:

23

TABLE OF CONTENTS

 

•

 

Level 1

 

Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

 

 

 

•

 

Level 2

 

Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

 

 

 

•

 

Level 3

 

Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

 

The following section provides a description of the valuation methodologies used for instruments measured at fair value on a recurring basis, as well as the general classification of such instruments pursuant to the valuation hierarchy:

 

Securities Available for Sale: Where quoted prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy. Level 1 securities would include highly liquid government bonds, mortgage products and exchange traded equities. If quoted market prices are not available, then fair values are estimated by using pricing models, quoted prices of securities with similar characteristics, or discounted cash flow. Level 2 securities would include U.S. agency securities, mortgage-backed agency securities, obligations of states and political subdivisions and certain corporate, asset backed and other securities. In certain cases where there is limited activity or less transparency around inputs to the valuation, securities are classified within Level 3 of the valuation hierarchy.

 

Derivative instruments are recorded at fair value on a recurring basis. The Company utilizes derivative instruments as part of the management of interest rate risk to modify the re-pricing characteristics of certain portions of the Company’s interest-bearing assets and liabilities. The Company has contracted with a third-party vendor to provide valuations for derivatives using standard valuation techniques and therefore classifies such valuations as Level 2. The Company has considered counterparty credit risk in the valuation of its derivative assets and has considered its own credit risk in the valuation of its derivative liabilities.

24

TABLE OF CONTENTS

The following table presents balances of financial assets and liabilities measured at fair value on a recurring basis at June 30, 2025 and December 31, 2024:

 

 

 

 

 

 

Fair Value Measurements at

 

 

 

 

 

 

June 30, 2025

 

 

 

 

 

 

Using

 

 

 

Balance as of

 

 

Quoted Prices
in Active
Markets for
Identical Assets

 

 

Significant
Other
Observable
Inputs

 

 

Significant
Unobservable
Inputs

 

 

 

June 30, 2025

 

 

(Level 1)

 

 

(Level 2)

 

 

(Level 3)

 

 

 

(in thousands)

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Securities available for sale

 

 

 

 

 

 

 

 

 

 

 

 

Obligations of U.S. government corporations and agencies

 

$

7,934

 

 

$

—

 

 

$

7,934

 

 

$

—

 

U.S. Treasury securities

 

 

9,956

 

 

 

—

 

 

 

9,956

 

 

 

—

 

Mortgage-backed securities

 

 

77,581

 

 

 

5,017

 

 

 

72,564

 

 

 

—

 

Collateralized mortgage obligations

 

 

22,692

 

 

 

 

 

 

22,692

 

 

 

 

Subordinated debt

 

 

2,744

 

 

 

—

 

 

 

2,744

 

 

 

—

 

Derivative:

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate swaps on loans

 

 

1,079

 

 

 

—

 

 

 

1,079

 

 

 

—

 

Total assets at fair value

 

$

121,986

 

 

$

5,017

 

 

$

116,969

 

 

$

—

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate swaps on loans

 

$

1,079

 

 

$

—

 

 

$

1,079

 

 

$

—

 

Fair value swap

 

 

45

 

 

 

—

 

 

 

45

 

 

 

—

 

Total liabilities at fair value

 

$

1,124

 

 

$

—

 

 

$

1,124

 

 

$

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair Value Measurements at

 

 

 

 

 

 

December 31, 2024

 

 

 

 

 

 

Using

 

 

 

Balance as of

 

 

Quoted Prices
in Active
Markets for
Identical Assets

 

 

Significant
Other
Observable
Inputs

 

 

Significant
Unobservable
Inputs

 

 

 

December 31, 2024

 

 

(Level 1)

 

 

(Level 2)

 

 

(Level 3)

 

 

 

(in thousands)

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Securities available for sale

 

 

 

 

 

 

 

 

 

 

 

 

Obligations of U.S. government corporations and agencies

 

$

7,668

 

 

$

—

 

 

$

7,668

 

 

$

—

 

Mortgage-backed securities

 

 

104,967

 

 

 

—

 

 

 

104,967

 

 

 

—

 

Obligations of states and political subdivisions

 

 

4,645

 

 

 

—

 

 

 

4,645

 

 

 

—

 

Subordinated debt

 

 

4,050

 

 

 

—

 

 

 

4,050

 

 

 

—

 

Derivative:

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate swaps on loans

 

 

1,466

 

 

 

 

 

 

1,466

 

 

 

 

Fair value swap

 

 

93

 

 

 

—

 

 

 

93

 

 

 

—

 

Total assets at fair value

 

$

122,889

 

 

$

—

 

 

$

122,889

 

 

$

—

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate swaps on loans

 

$

1,466

 

 

$

—

 

 

$

1,466

 

 

$

—

 

Total liabilities at fair value

 

$

1,466

 

 

$

—

 

 

$

1,466

 

 

$

—

 

 

25

TABLE OF CONTENTS

Certain financial assets are measured at fair value on a nonrecurring basis in accordance with GAAP. Adjustments to the fair value of these assets usually result from the application of lower of cost or market accounting or write downs of individual assets.

The following describes the valuation techniques used by the Company to measure certain financial and nonfinancial assets recorded at fair value on a nonrecurring basis in the financial statements:

Loans Held for Sale: Loans held for sale are carried at the lower of cost or market value. These loans currently consist of one-to-four family residential loans originated for sale in the secondary market. Fair value is based on the price secondary markets are currently offering for similar loans using observable market data which is not materially different than cost due to the short duration between origination and sale (Level 2). The Company records any fair value adjustments on a nonrecurring basis. No nonrecurring fair value adjustments were recorded on loans held for sale during six months ended June 30, 2025 and the year ended December 31, 2024.

Individually Evaluated Collateral-Dependent Loans: The estimated fair value of individually evaluated collateral-dependent loans is based on the value of the underlying collateral or the value of the underlying collateral, less estimated cost to sell, as appropriate. Collateral is generally real estate; however, collateral may include vehicles, marine vessels, equipment, inventory, accounts receivable, and/or other business assets. The value of real estate collateral is determined using a market valuation approach based on an appraisal conducted by an independent, licensed appraiser. The value of other assets may also be based on an appraisal, market quotations, aging schedules or other sources. Collateral-dependent individually evaluated loans are classified within Level 3 of the fair value hierarchy. Any fair value adjustments are recorded in the period incurred as a provision for credit losses on the Consolidated Statements of Operations. At June 30, 2025 collateral-dependent loans totaling $12.7 million were individually evaluated and being carried at fair value of $11.2 million, the majority of which represents one relationship consisting of four non-owner occupied commercial real estate loans totaling $11.5 million. The remaining collateral-dependent loans of $1.2 million at June 30, 2025 were commercial business loans collateralized by equipment. At December 31, 2024 there were two collateral-dependent relationships totaling $908 thousand, which were individually evaluated and being carried at fair value of $659 thousand. These two relationships consist of four commercial business loans collateralized by equipment.

Other Real Estate Owned: Assets acquired through, or in lieu of, loan foreclosure are held for sale and are initially recorded at the fair value of the property, less estimated selling costs, establishing a new costs basis. Any write-downs based on the asset’s fair value at the date of acquisition are charged to the allowance for credit losses. Costs of significant property improvements are capitalized, whereas costs relating to holding property are expensed. The portion of interest costs relating to development of real estate is capitalized. Valuations are periodically obtained by management, and any subsequent write-downs are recorded as a charge to operations, if necessary, to reduce the carrying value of a property to fair value less cost to sell. The fair value measurement of real estate held in other real estate owned is assessed in the same manner as collateral-dependent loans described above. We believe that the fair value follows the provisions of GAAP. The Company held no other real estate owned at June 30, 2025 or December 31, 2024.

Repossessed Assets: Assets acquired through, or in lieu of, loan foreclosure are held for sale and are initially recorded at the fair value of the asset, less estimated selling costs, establishing a new costs basis. Any write-downs based on the asset’s fair value at the date of acquisition are charged to the allowance for credit losses. Costs of significant improvements are capitalized, whereas costs relating to holding assets are expensed. Valuations are periodically obtained by management, and any subsequent write-downs are recorded as a charge to operations, if necessary, to reduce the carrying value of an asset to fair value less cost to sell. The fair value measurement of repossessed assets is assessed in the same manner as collateral dependent loans described above. We believe that the fair value follows the provisions of GAAP. The Company held $186 thousand and $514 thousand at June 30, 2025 and December 31, 2024, respectively. Repossessed assets are included in other assets in the Consolidated Balance Sheets.

26

TABLE OF CONTENTS

The following table summarizes the Company's financial and nonfinancial assets that were measured at fair value on a nonrecurring basis at June 30, 2025 and December 31, 2024.

 

 

 

 

 

 

Carrying value at

 

 

 

 

 

 

June 30, 2025

 

 

 

Balance as of

 

 

Identical
Assets

 

 

Observable
Inputs

 

 

Unobservable
Inputs

 

 

 

June 30, 2025

 

 

(Level 1)

 

 

(Level 2)

 

 

(Level 3)

 

 

 

(in thousands)

 

Financial Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Collateral-dependent loans

 

$

11,180

 

 

$

—

 

 

$

—

 

 

$

11,180

 

Nonfinancial Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Repossessed assets

 

 

186

 

 

 

—

 

 

 

—

 

 

 

186

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Carrying value at

 

 

 

 

 

 

December 31, 2024

 

 

 

Balance as of

 

 

Quoted Prices
in Active
Markets
for Identical
Assets

 

 

Significant
Other
Observable
Inputs

 

 

Significant
Unobservable
Inputs

 

 

 

December 31, 2024

 

 

(Level 1)

 

 

(Level 2)

 

 

(Level 3)

 

 

 

(in thousands)

 

Financial Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Collateral-dependent loans

 

$

659

 

 

$

—

 

 

$

—

 

 

$

659

 

Nonfinancial Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Repossessed assets

 

 

514

 

 

 

—

 

 

 

—

 

 

 

514

 

 

 

The following table displays quantitative information about Level 3 Fair Value Measurements for certain financial and nonfinancial assets measured at fair value on a nonrecurring basis for June 30, 2025 and December 31, 2024.

 

 

 

Quantitative information about Level 3 Fair Value Measurements

 

 

June 30, 2025

 

 

Valuation Technique(s)

 

Unobservable Input

 

Range

 

Weighted Average (1)

Assets:

 

 

 

 

 

 

 

 

Collateral dependent individually evaluated loans

 

Discounted value

 

Selling cost and appraisal discount

 

3% - 31%

 

5 %

Repossessed assets

 

Discounted appraised value

 

Selling cost

 

10 %

 

10 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quantitative information about Level 3 Fair Value Measurements

 

 

December 31, 2024

 

 

Valuation Technique(s)

 

Unobservable Input

 

Range

 

Weighted Average (1)

Assets:

 

 

 

 

 

 

 

 

Collateral dependent individually evaluated loans

 

Discounted value

 

Selling cost and appraisal discount

 

16 %

 

16 %

Repossessed assets

 

Discounted appraised value

 

Selling cost

 

10 %

 

10 %

(1) Weighted based on the relative fair value of the specific items measured at fair value.

27

TABLE OF CONTENTS

 

The carrying value and fair value of the Company’s financial instruments at June 30, 2025 and December 31, 2024 were as follows:

 

 

 

Fair Value Measurements at

 

 

 

June 30, 2025

 

 

 

Using

 

 

 

Carrying
Value
as of

 

 

Quoted Prices
in Active
Markets for
Identical
Assets

 

 

Significant
Other
Observable
Inputs

 

 

Significant
Unobservable
Inputs

 

 

Fair Value
as of

 

 

 

June 30, 2025

 

 

(Level 1)

 

 

(Level 2)

 

 

(Level 3)

 

 

June 30, 2025

 

 

 

(in thousands)

 

Financial assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and short-term investments

 

$

396,002

 

 

$

396,002

 

 

$

—

 

 

$

—

 

 

$

396,002

 

Securities

 

 

120,907

 

 

 

5,017

 

 

 

115,890

 

 

 

—

 

 

 

120,907

 

Restricted investments

 

 

3,786

 

 

 

—

 

 

 

3,786

 

 

 

—

 

 

 

3,786

 

Loans held for sale

 

 

3,302

 

 

 

 

 

 

3,302

 

 

 

—

 

 

 

3,302

 

Loans, net

 

 

1,422,653

 

 

 

—

 

 

 

—

 

 

 

1,331,484

 

 

 

1,331,484

 

Bank owned life insurance

 

 

31,172

 

 

 

—

 

 

 

31,172

 

 

 

—

 

 

 

31,172

 

Accrued interest receivable

 

 

5,009

 

 

 

—

 

 

 

5,009

 

 

 

—

 

 

 

5,009

 

Derivative assets

 

 

1,079

 

 

 

—

 

 

 

1,079

 

 

 

—

 

 

 

1,079

 

Financial liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

$

1,766,524

 

 

$

—

 

 

$

1,767,145

 

 

$

—

 

 

$

1,767,145

 

Federal funds purchased

 

 

172

 

 

 

172

 

 

 

—

 

 

 

—

 

 

 

172

 

Federal Home Loan Bank advances, long-term

 

 

40,000

 

 

 

—

 

 

 

40,276

 

 

 

—

 

 

 

40,276

 

Subordinated debt, net of unamortized issuance costs

 

 

29,545

 

 

 

—

 

 

 

25,752

 

 

 

—

 

 

 

25,752

 

Accrued interest payable

 

 

1,374

 

 

 

—

 

 

 

1,374

 

 

 

—

 

 

 

1,374

 

Derivative liabilities

 

 

1,124

 

 

 

—

 

 

 

1,124

 

 

 

—

 

 

 

1,124

 

 

28

TABLE OF CONTENTS

 

 

 

Fair Value Measurements at

 

 

 

December 31, 2024

 

 

 

Using

 

 

 

Carrying Value
as of

 

 

Quoted Prices
in Active
Markets for
Identical
Assets

 

 

Significant
Other
Observable
Inputs

 

 

Significant
Unobservable
Inputs

 

 

Fair Value
as of

 

 

 

December 31, 2024

 

 

(Level 1)

 

 

(Level 2)

 

 

(Level 3)

 

 

December 31, 2024

 

 

 

(in thousands)

 

Financial assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and short-term investments

 

$

193,159

 

 

$

193,159

 

 

$

—

 

 

$

—

 

 

$

193,159

 

Securities

 

 

121,330

 

 

 

—

 

 

 

121,330

 

 

 

—

 

 

 

121,330

 

Restricted Investments

 

 

7,557

 

 

 

—

 

 

 

7,557

 

 

 

—

 

 

 

7,557

 

Loans held for sale

 

 

2,660

 

 

 

—

 

 

 

2,660

 

 

 

—

 

 

 

2,660

 

Loans, net

 

 

1,452,022

 

 

 

—

 

 

 

—

 

 

 

1,358,734

 

 

 

1,358,734

 

Bank owned life insurance

 

 

30,621

 

 

 

—

 

 

 

30,621

 

 

 

—

 

 

 

30,621

 

Accrued interest receivable

 

 

5,149

 

 

 

—

 

 

 

5,149

 

 

 

—

 

 

 

5,149

 

Derivative assets

 

 

1,559

 

 

 

—

 

 

 

1,559

 

 

 

—

 

 

 

1,559

 

Financial liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

$

1,575,156

 

 

$

—

 

 

$

1,575,743

 

 

$

—

 

 

$

1,575,743

 

Federal Home Loan Bank advances, short-term

 

 

25,000

 

 

 

—

 

 

 

25,006

 

 

 

—

 

 

 

25,006

 

Federal Home Loan Bank advances, long-term

 

 

95,000

 

 

 

—

 

 

 

95,242

 

 

 

—

 

 

 

95,242

 

Subordinated debt, net of unamortized issuance costs

 

 

29,512

 

 

 

—

 

 

 

26,148

 

 

 

—

 

 

 

26,148

 

Accrued interest payable

 

 

2,249

 

 

 

—

 

 

 

2,249

 

 

 

—

 

 

 

2,249

 

Derivative liabilities

 

 

1,466

 

 

 

—

 

 

 

1,466

 

 

 

—

 

 

 

1,466

 

 

 

 

NOTE 9. Change in Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss includes unrealized gains and losses on available for sale securities and changes in benefit obligations and plan assets for the post retirement benefit plan. Changes to accumulated other comprehensive loss are presented net of their tax effect as a component of equity. Reclassifications out of accumulated other comprehensive loss are recorded in the Consolidated Statements of Operations either as a gain or loss.

29

TABLE OF CONTENTS

Changes to accumulated other comprehensive loss by component are shown in the following table for the periods indicated:

 

 

 

Three Months Ended

 

 

 

June 30,

 

 

 

2025

 

 

2024

 

 

 

Unrealized
Gains and
Losses on
Available
for Sale
Securities

 

 

Change in
Benefit
Obligations
and Plan
Assets for
the Post
Retirement
Benefit
Plan

 

 

Total

 

 

Unrealized
Gains and
Losses on
Available
for Sale
Securities

 

 

Change in
Benefit
Obligations
and Plan
Assets for
the Post
Retirement
Benefit
Plan

 

 

Total

 

 

 

(dollars in thousands)

 

 

(dollars in thousands)

 

April 1

 

$

(6,632

)

 

$

5

 

 

$

(6,627

)

 

$

(19,827

)

 

$

10

 

 

$

(19,817

)

Other comprehensive (loss) income before reclassifications

 

 

(848

)

 

 

—

 

 

 

(848

)

 

 

1,334

 

 

 

—

 

 

 

1,334

 

Tax effect of current period changes

 

 

179

 

 

 

—

 

 

 

179

 

 

 

(280

)

 

 

—

 

 

 

(280

)

Current period changes net of taxes

 

 

(669

)

 

 

—

 

 

 

(669

)

 

 

1,054

 

 

 

—

 

 

 

1,054

 

June 30

 

$

(7,301

)

 

$

5

 

 

$

(7,296

)

 

$

(18,773

)

 

$

10

 

 

$

(18,763

)

 

 

 

Six Months Ended

 

 

 

June 30,

 

 

 

2025

 

 

2024

 

 

 

Unrealized
Gains and
Losses on
Available
for Sale
Securities

 

 

Change in
Benefit
Obligations
and Plan
Assets for
the Post
Retirement
Benefit
Plan

 

 

Total

 

 

Unrealized
Gains and
Losses on
Available
for Sale
Securities

 

 

Change in
Benefit
Obligations
and Plan
Assets for
the Post
Retirement
Benefit
Plan

 

 

Total

 

 

 

(dollars in thousands)

 

 

(dollars in thousands)

 

January 1

 

$

(18,645

)

 

$

5

 

 

$

(18,640

)

 

$

(18,020

)

 

$

14

 

 

$

(18,006

)

Other comprehensive income (loss) before reclassifications

 

 

26,783

 

 

 

—

 

 

 

26,783

 

 

 

(953

)

 

 

(5

)

 

 

(958

)

Reclassification of realized losses into earnings

 

 

(12,425

)

 

 

—

 

 

 

(12,425

)

 

 

—

 

 

 

—

 

 

 

—

 

Tax effect of current period changes

 

 

(3,014

)

 

 

—

 

 

 

(3,014

)

 

 

200

 

 

 

1

 

 

 

201

 

Current period changes net of taxes

 

 

11,344

 

 

 

—

 

 

 

11,344

 

 

 

(753

)

 

 

(4

)

 

 

(757

)

June 30

 

$

(7,301

)

 

$

5

 

 

$

(7,296

)

 

$

(18,773

)

 

$

10

 

 

$

(18,763

)

 

For the six months ended June 30, 2025, the reclassification out of accumulated other comprehensive loss represents the realized loss on the sale of available for sale securities, which appears as loss on the sale of securities in the Consolidated Statements of Operations. The tax benefit related to this reclassification was $2.6 million and was included in income tax expense in the Consolidated Statements of Operations.

30

TABLE OF CONTENTS

NOTE 10. Other Real Estate Owned & Repossessed Assets

The following table is a summary of other real estate owned (“OREO”) and repossessed asset activity for the six months ended June 30, 2025 and 2024 and the year ended December 31, 2024:

 

 

 

Six Months Ended

 

 

Year Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

December 31,

 

 

June 30,

 

 

 

2025

 

 

2024

 

 

2024

 

 

 

(in thousands)

 

Balance, beginning

 

$

514

 

 

$

304

 

 

$

304

 

Transfer from loans

 

 

186

 

 

 

525

 

 

 

111

 

Sales proceeds

 

 

(381

)

 

 

(111

)

 

 

(12

)

Loss on sales

 

 

(133

)

 

 

(204

)

 

 

—

 

Valuation adjustments

 

 

—

 

 

 

—

 

 

 

—

 

Balance, ending

 

$

186

 

 

$

514

 

 

$

403

 

 

 

The balance at June 30, 2025 and December 31, 2024 represents repossessed marine vessels and at June 30, 2024, the balance represents repossessed assets including a marine vessel and commercial vehicles.

 

There was one loan collateralized by residential real estate with a balance of $98 thousand in the process of foreclosure at June 30, 2025 and none at December 31, 2024.

NOTE 11. Qualified Affordable Housing Project Investments

The Company invests in qualified affordable housing projects. The general purpose of these investments is to encourage and assist participants in investing in low-income residential rental properties located in the Commonwealth of Virginia, develop and implement strategies to maintain projects as low-income housing, provide tax credits and other tax benefits to investors, and to preserve and protect project assets.

At June 30, 2025 and December 31, 2024, the balance of the investment for qualified affordable housing projects was $1.1 million and $1.3 million, respectively. These balances are reflected in other assets on the Consolidated Balance Sheets. Total unfunded commitments related to the investments in qualified affordable housing projects totaled zero at both June 30, 2025 and December 31, 2024.

During the three months ended June 30, 2025 and June 30, 2024, the Company recognized amortization expense of $67 thousand and $74 thousand, respectively. Amortization expense during the six months ended June 30, 2025 and 2024 was $134 thousand and $147 thousand, respectively. Amortization expense is included in income tax expense on the Consolidated Statements of Operations.

Total estimated credits to be received during 2025 are $275 thousand based on the most recent quarterly estimates received from the funds. Total tax credits and other tax benefits recognized during the six months ended June 30, 2025 and 2024, were $138 thousand and $153 thousand, respectively.

 

NOTE 12. Recent Accounting Pronouncements and Other Authoritative Guidance

Pending Adoption

In December 2023, the Financial Accounting Standards Board ("FASB") issued ASU 2023-09, "Income Taxes (Topic 740), Improvements to Income Tax Disclosures." The amendments in this ASU require an entity to disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold, which is greater than five percent of the amount computed by multiplying pretax income by the entity's applicable statutory rate, on an annual basis.

31

TABLE OF CONTENTS

Additionally, the amendments in this ASU require an entity to disclose the amount of income taxes paid (net of refunds received) disaggregated by federal, state, and foreign taxes and the amount of income taxes paid (net of refunds received) disaggregated by individual jurisdictions that are equal to or greater than five percent of total income taxes paid (net of refunds received). Lastly, the amendments in this ASU require an entity to disclose income (or loss) from continuing operations before income tax expense (or benefit) disaggregated between domestic and foreign and income tax expense (or benefit) from continuing operations disaggregated by federal, state, and foreign. This ASU was effective for the Company on January 1, 2025 and will be presented in its annual financial statements on Form 10-K for the year ended December 31, 2025. The Company does not expect there to be a material impact on its consolidated financial statements.

 

Other accounting standards that have been issued by the FASB or other standards-setting bodies are not currently expected to have a material effect on the Company's financial position, results of operations or cash flows.

 

 

 

NOTE 13. Revenue Recognition

 

Substantially all of the Company's revenue from contracts with customers that is within the scope of ASC 606, "Revenue from Contracts with Customers" is reported within noninterest income. A limited amount of other in-scope items such as gains and losses on other real estate owned are recorded in noninterest expense. The recognition of interest income and certain sources of noninterest income (e.g. gains on securities transactions, bank owned life insurance income, etc.) are governed by other areas of U.S. GAAP. Significant revenue streams that are within the scope of ASC 606 and included in noninterest income are discussed in the following paragraphs.

Income from Fiduciary Activities

Trust asset management fee income is primarily comprised of fees earned from the management and administration of trusts and other customer assets. The Company’s performance obligation is generally satisfied over time and the resulting fees are recognized monthly, based upon the month-end market value of the assets under management and the applicable fee rate. Payment is generally received a few days after month end through a direct charge to customers’ accounts. The Company does not earn performance-based incentives. Optional services such as real estate sales and tax return preparation services are also available to existing trust and asset management customers. The Company’s performance obligation for these transactional-based services is generally satisfied, and related revenue recognized, at a point in time (i.e., as incurred). Payment is received shortly after services are rendered.

Service Charges on Deposit Accounts

Service charges on deposit accounts are principally comprised of overdrawn account fees, account maintenance charges and other activity based fees. The Company’s performance obligations on revenue generated from deposit accounts are generally satisfied immediately, when the transaction occurs, or by month-end. Typically, the duration of a contract does not extend beyond the services performed. Due to the short duration of most customer contracts which generate these sources of noninterest income, no significant judgments must be made in the determination of the amount and timing of revenue recognized.

Other Service Charges and Fees

The majority of the Company’s noninterest income is derived from short term contracts associated with services provided for other ancillary services such as ATM fees, brokerage commissions and loan servicing fees. The Company’s performance obligations on revenue generated from these ancillary services are generally satisfied immediately, when the transaction occurs, or by month-end. Typically, the duration of a contract does not extend beyond the services performed. Due to the short duration of most customer contracts which generate these sources of noninterest income, no significant judgments must be made in the determination of the amount and timing of revenue recognized.

The Company earns interchange fees from credit cardholder transactions conducted through the Visa payment network. Interchange fees from cardholder transactions represent a percentage of the underlying transaction value and are recognized no less than monthly.

32

TABLE OF CONTENTS

Noninterest income (loss) disaggregated by major source, for the three and six months ended June 30, 2025 and 2024 consisted of the following:

 

 

 

Three Months Ended
June 30,

 

 

Six Months Ended
June 30,

 

 

 

2025

 

 

2024

 

 

2025

 

 

2024

 

 

 

(in thousands)

 

Noninterest income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

Wealth management fees (1):

 

 

 

 

 

 

 

 

 

 

 

 

Trust asset management fees

 

$

1,320

 

 

$

1,041

 

 

$

2,629

 

 

$

2,064

 

Brokerage commissions

 

 

330

 

 

 

232

 

 

 

702

 

 

 

665

 

Service charges on deposit accounts (1):

 

 

 

 

 

 

 

 

 

 

 

 

Overdrawn account fees

 

 

390

 

 

 

348

 

 

 

764

 

 

 

703

 

Monthly and other service charges

 

 

127

 

 

 

108

 

 

 

245

 

 

 

207

 

Other service charges and fees:

 

 

 

 

 

 

 

 

 

 

 

 

Interchange fees (1)

 

 

920

 

 

 

882

 

 

 

1,765

 

 

 

1,707

 

ATM fees (1)

 

 

101

 

 

 

94

 

 

 

183

 

 

 

173

 

Other charges and fees (2)

 

 

39

 

 

 

188

 

 

 

84

 

 

 

253

 

(Loss) on the sale and disposal of bank premises and equipment (1)

 

 

—

 

 

 

(11

)

 

 

(16

)

 

 

(11

)

(Loss) on sale of securities

 

 

—

 

 

 

—

 

 

 

(12,425

)

 

 

—

 

Gain on sale of loans

 

 

1,104

 

 

 

492

 

 

 

1,533

 

 

 

653

 

Small business investment company income

 

 

133

 

 

 

259

 

 

 

153

 

 

 

385

 

Bank owned life insurance income

 

 

278

 

 

 

269

 

 

 

551

 

 

 

537

 

Other operating income (3)

 

 

175

 

 

 

403

 

 

 

195

 

 

 

449

 

Total noninterest income (loss)

 

$

4,917

 

 

$

4,305

 

 

$

(3,637

)

 

$

7,785

 

 

(1)
Income within the scope of Topic 606.
(2)
Includes income within the scope of Topic 606 of $61 thousand and $196 thousand for the three months ended June 30, 2025 and 2024, respectively, and $94 thousand and $231 thousand for the six months ended June 30, 2025 and 2024, respectively. The remaining balances are outside the scope of Topic 606.
(3)
Includes income within the scope of Topic 606 of $142 thousand and $392 thousand for the three months ended June 30, 2025 and 2024, respectively and $171 thousand and $429 thousand for the six months ended June 30, 2025 and 2024, respectively. The remaining balances are outside the scope of Topic 606.

Contract Balances

The Company’s noninterest revenue streams are largely based on transactional activity, or standard month-end revenue accruals such as asset management fees based on month-end market values. Consideration is often received immediately or shortly after the Company satisfies its performance obligation and revenue is recognized. The Company does not typically enter into long-term revenue contracts with customers, and therefore, does not experience significant contract balances. As of June 30, 2025 and December 31, 2024, the Company did not have any significant contract balances.

NOTE 14. Borrowings

On March 31, 2022, the Company entered into Subordinated Note Purchase Agreements with certain purchasers pursuant to which the Company issued and sold $30.0 million in aggregate principal amount of its 4.50% Fixed-to-Floating Rate Subordinated Notes due April 1, 2032 (the “Notes”).

The Notes were structured to qualify as Tier 2 capital for regulatory capital purposes at the holding company and bear an initial interest rate of 4.50% until April 1, 2027, with interest during this period payable semi-annually in arrears. From and including April 1, 2027, to but excluding the maturity date or early redemption date, the interest rate will reset quarterly to an annual floating rate equal to three-month SOFR, plus 2.35%, with interest during this period payable quarterly in arrears. The Notes are redeemable by the Company at its option, in whole or in part, on or after April 1, 2027.

33

TABLE OF CONTENTS

Initial debt issuance costs were $673 thousand. The debt balance of $30.0 million is presented net of unamortized issuance costs of $455 thousand at June 30, 2025.

The Company had $40.0 million in total borrowings with the Federal Home Loan Bank of Atlanta ("FHLB") at June 30, 2025, classified as long-term borrowings. The interest rate on the $40 million long-term borrowings with the FHLB is 4.83% and is due in 2026. At December 31, 2024, the Company had $95.0 million in long-term and $25.0 million in short-term outstanding borrowings with the FHLB. The Company had $80.5 million in irrevocable letters of credit at June 30, 2025 with the FHLB to secure public deposits.

NOTE 15. Derivatives

The Company uses derivative financial instruments primarily to manage risks to the Company associated with changing interest rates, and to assist customers with their risk management objectives. Derivative contracts that are not designated in a qualifying hedging relationships include customer accommodation loan swaps.

On August 15, 2024, the Company executed a 2-year, 3.862% pay-fixed portfolio layer method fair value swap, designated as a hedging instrument, with a total notional amount of $35.0 million. The Company receives a variable rate equal to the daily secured overnight financing rate ("SOFR"). This swap will terminate on August 15, 2026. The Company designated the fair value swap under the portfolio layer method ("PLM"). Under this method, the hedged item is designated as a hedged layer of a closed portfolio of financial loans that is anticipated to remain outstanding for the designated hedged period. Adjustments will be made to record the swap at fair value as either an other asset or other liability on the Consolidated Balance Sheets, with changes in fair value recognized in net loans. The carrying value of the fair value swap on the Consolidated Balance Sheets will also be adjusted through loan interest income, based on changes in the fair value attributable to changes in the hedged risk.

The following table represents the carrying value of the portfolio layer method hedged asset and the cumulative fair value hedging adjustment included in the carrying value of the hedged asset as of June 30, 2025 and December 31, 2024.

 

 

 

June 30, 2025

 

 

December 31, 2024

 

 

 

Carrying Amount of Hedged Asset

 

 

Cumulative Amount of Fair Value Adjustment

 

 

Carrying Amount of Hedged Asset

 

 

Cumulative Amount of Fair Value Adjustment

 

 

 

(in thousands)

 

Loans receivable (1)

 

$

35,060

 

 

$

60

 

 

$

34,916

 

 

$

(84

)

(1) These amounts include the amortized cost basis of closed portfolios of fixed rate loans used to designate hedging relationships in which the hedged item is the stated amount of assets in the closed portfolio anticipated to be outstanding for the hedged period. As of June 30, 2025, the amortized cost basis of the closed portfolio used in this hedging relationship was $493.4 million and the cumulative basis adjustment associated with this hedging relationship was $60 thousand. At June 30, 2025, the amount of the designated hedged item was $35.0 million.

 

The following table summarizes the effect of the fair value hedging relationship recognized in the Consolidated Statements of Operations for the three and six months ended June 30, 2025.

 

 

 

Three Months Ended

Six Months Ended

 

 

 

June 30,

June 30,

 

 

 

2025

 

 

2025

 

 

 

(in thousands)

 

Hedged asset

 

$

41

 

 

$

83

 

Fair value derivative designated as hedging instrument

 

 

3

 

 

 

5

 

Total gain recognized in the consolidated statement of operations within interest and fees on loans

 

$

44

 

 

$

88

 

 

34

TABLE OF CONTENTS

The Company enters into interest rate swaps with certain qualifying commercial loan customers to meet their interest rate risk management needs. The Bank simultaneously enters into interest rate swaps with dealer counterparties, with identical notional amounts and offsetting terms. The net result of these interest rate swaps is that the customer pays a fixed rate of interest and the Company receives a floating rate. These back-to-back loan swaps are derivative financial instruments and are reported at fair value in “other assets” and “other liabilities” in the Consolidated Balance Sheets. Changes in the fair value of loan swaps are recorded in other noninterest income and sum to zero because of the offsetting terms of the swaps with borrowers and the swaps with dealer counterparties.

The following tables summarize key elements of the Company's derivative instruments at June 30, 2025 and December 31, 2024.

 

 

June 30, 2025

 

 

 

Notional Amount

 

 

Assets

 

 

Liabilities

 

 

 

(in thousands)

 

Derivatives designated as hedging instruments:

 

 

 

 

 

 

 

 

 

Fair value swap

 

$

35,000

 

 

$

—

 

 

$

45

 

 

 

 

 

 

 

 

 

 

 

Derivatives not designated as hedging instruments:

 

 

 

 

 

 

 

 

 

Customer-related interest rate swap contracts:

 

 

 

 

 

 

 

 

 

Matched interest rate swaps with borrower

 

$

37,590

 

 

$

530

 

 

$

549

 

Matched interest rate swaps with counterparty

 

 

37,590

 

 

 

549

 

 

 

530

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2024

 

 

 

Notional Amount

 

 

Assets

 

 

Liabilities

 

 

 

(in thousands)

 

Derivatives designated as hedging instruments:

 

 

 

 

 

 

 

 

 

Fair value swap

 

$

35,000

 

 

$

93

 

 

$

—

 

 

 

 

 

 

 

 

 

 

 

Derivatives not designated as hedging instruments:

 

 

 

 

 

 

 

 

 

Customer-related interest rate swap contracts:

 

 

 

 

 

 

 

 

 

Matched interest rate swaps with borrower

 

$

44,203

 

 

$

276

 

 

$

1,190

 

Matched interest rate swaps with counterparty

 

 

44,203

 

 

 

1,190

 

 

 

276

 

 

 

 

NOTE 16. Business Segments

The Company has three reportable operating segments: community banking, marine lending and wealth management.

The community banking segment offers a wide range of retail and community banking services in the form of loan and deposit products. Revenues consist primarily of net interest income related to investments in non-marine loans and securities and outstanding deposits and borrowings, fees earned on deposit accounts and debit card interchange activity. During the first quarter of 2025 the Company sold available for sale securities with an amortized cost of $99.2 million, which resulted in a net realized pre-tax loss of $12.4 million. This loss on the sale of securities is the main driver of the community banking segment's reported net loss, total noninterest loss and income tax benefit for the six months ended June 30, 2025.

Revenue from marine lending operations consist primarily of net interest income related to commercial and consumer marine vessel loans originated through August 2023, at which time the Company ceased accepting new marine lending business. The balance of the marine loan portfolio, which constitutes a significant portion of the Company's assets, revenues, and earnings, totaled $196.4 million and $210.1 million at June 30, 2025 and December 31, 2024, respectively. This balance will continue to decline as the loans are repaid.

35

TABLE OF CONTENTS

The wealth management segment offers both a trust department and investment services. Trust department services include a full range of personal and retirement plan services, and investment services products include, among other products, annuities, IRA's, life insurance, fixed income investing, and full service or discount brokerage services. Non-deposit investment products are offered through a third-party service provider.

Financial information of the parent company is included in the "All Other" category. The parent company's revenue and expenses are comprised primarily of interest expense associated with subordinated debt.

The Company's segment structure reflects the financial information and reports used by our chief operating decision maker to make decisions regarding the business, including resource allocations and performance. Our Chief Executive Officer is the chief operating decision maker ("CODM"). We evaluate performance and allocate resources based on the operating income of each operating segment. The CODM uses segment operating income in the annual budget process. The operating income of each operating segment includes the revenues of the segment less expenses that are directly related to those revenues. Operating overhead, shared costs and share-based compensation costs are included in Community Banking. As such, expenses may not be representative of the costs expected to be incurred if the specific business segments operated as stand-alone entities. The Company expects it will continue to evaluate its business segments and internal reporting structure, including the production of discrete financial information to the CODM.

The following tables provide income and asset information as of June 30, 2025 and December 31, 2024 and for three and six months ended June 30, 2025 and 2024, which are included within the Consolidated Balance Sheets and Consolidated Statements of Operations.

 

36

TABLE OF CONTENTS

 

 

Three Months Ended

 

 

 

June 30, 2025

 

 

 

Community Banking

 

 

Marine Lending

 

 

Wealth Management

 

 

All Other

 

 

Eliminations

 

 

Consolidated

 

 

 

(in thousands)

 

Interest Income

 

$

22,158

 

 

$

2,657

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

24,815

 

Interest Expense

 

 

7,724

 

 

 

1,038

 

 

 

—

 

 

 

355

 

 

 

—

 

 

 

9,117

 

Net Interest Income (Expense)

 

 

14,434

 

 

 

1,619

 

 

 

—

 

 

 

(355

)

 

 

—

 

 

 

15,698

 

Gain on sales of loans

 

 

1,104

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1,104

 

Other noninterest income

 

 

2,120

 

 

 

—

 

 

 

1,693

 

 

 

—

 

 

 

—

 

 

 

3,813

 

Net Revenue (Expense)

 

 

17,658

 

 

 

1,619

 

 

 

1,693

 

 

 

(355

)

 

 

—

 

 

 

20,615

 

Provision for (recovery of) credit losses

 

 

794

 

 

 

(126

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

668

 

Salaries and employee benefits

 

 

7,276

 

 

 

—

 

 

 

543

 

 

 

26

 

 

 

—

 

 

 

7,845

 

Occupancy expenses

 

 

577

 

 

 

—

 

 

 

21

 

 

 

—

 

 

 

—

 

 

 

598

 

Professional fees

 

 

521

 

 

 

10

 

 

 

—

 

 

 

110

 

 

 

—

 

 

 

641

 

Data processing fees

 

 

618

 

 

 

—

 

 

 

15

 

 

 

—

 

 

 

—

 

 

 

633

 

Other noninterest expense

 

 

3,347

 

 

 

116

 

 

 

197

 

 

 

22

 

 

 

—

 

 

 

3,682

 

Total Noninterest Expenses

 

 

12,339

 

 

 

126

 

 

 

776

 

 

 

158

 

 

 

—

 

 

 

13,399

 

Income (loss) before taxes

 

 

4,525

 

 

 

1,619

 

 

 

917

 

 

 

(513

)

 

 

—

 

 

 

6,548

 

Income tax expense (benefit)

 

 

855

 

 

 

339

 

 

 

192

 

 

 

(108

)

 

 

—

 

 

 

1,278

 

Net Income (Loss)

 

$

3,670

 

 

$

1,280

 

 

$

725

 

 

$

(405

)

 

$

—

 

 

$

5,270

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

 

$

262

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

262

 

Depreciation and amortization

 

 

447

 

 

 

—

 

 

 

25

 

 

 

17

 

 

 

—

 

 

 

489

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

June 30, 2024

 

 

 

Community Banking

 

 

Marine Lending

 

 

Wealth Management

 

 

All Other

 

 

Eliminations

 

 

Consolidated

 

 

 

(in thousands)

 

Interest Income

 

$

18,558

 

 

$

3,180

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

21,738

 

Interest Expense

 

 

7,815

 

 

 

1,412

 

 

 

—

 

 

 

355

 

 

 

—

 

 

 

9,582

 

Net Interest Income (Expense)

 

 

10,743

 

 

 

1,768

 

 

 

—

 

 

 

(355

)

 

 

—

 

 

 

12,156

 

Gain on sales of loans

 

 

492

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

492

 

Other noninterest income

 

 

2,540

 

 

 

—

 

 

 

1,273

 

 

 

—

 

 

 

—

 

 

 

3,813

 

Net Revenue (Expense)

 

 

13,775

 

 

 

1,768

 

 

 

1,273

 

 

 

(355

)

 

 

—

 

 

 

16,461

 

Provision for (recovery of) credit losses

 

 

207

 

 

 

(26

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

181

 

Salaries and employee benefits

 

 

6,912

 

 

 

—

 

 

 

416

 

 

 

25

 

 

 

—

 

 

 

7,353

 

Occupancy expenses

 

 

448

 

 

 

—

 

 

 

22

 

 

 

—

 

 

 

—

 

 

 

470

 

Professional fees

 

 

438

 

 

 

13

 

 

 

—

 

 

 

60

 

 

 

—

 

 

 

511

 

Data processing fees

 

 

557

 

 

 

—

 

 

 

1

 

 

 

—

 

 

 

—

 

 

 

558

 

Other noninterest expense

 

 

3,250

 

 

 

122

 

 

 

236

 

 

 

10

 

 

 

—

 

 

 

3,618

 

Total Noninterest Expenses

 

 

11,605

 

 

 

135

 

 

 

675

 

 

 

95

 

 

 

—

 

 

 

12,510

 

Income (loss) before taxes

 

 

1,963

 

 

 

1,659

 

 

 

598

 

 

 

(450

)

 

 

—

 

 

 

3,770

 

Income tax expense (benefit)

 

 

205

 

 

 

349

 

 

 

125

 

 

 

(94

)

 

 

—

 

 

 

585

 

Net Income (Loss)

 

$

1,758

 

 

$

1,310

 

 

$

473

 

 

$

(356

)

 

$

—

 

 

$

3,185

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

37

TABLE OF CONTENTS

Capital expenditures

 

$

421

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

421

 

Depreciation and amortization

 

 

245

 

 

 

—

 

 

 

31

 

 

 

17

 

 

 

—

 

 

$

293

 

38

TABLE OF CONTENTS

 

 

Six Months Ended

 

 

 

June 30, 2025

 

 

 

Community Banking

 

 

Marine Lending

 

 

Wealth Management

 

 

All Other

 

 

Eliminations

 

 

Consolidated

 

 

 

(in thousands)

 

Interest Income

 

$

42,954

 

 

$

5,363

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

48,317

 

Interest Expense

 

 

16,340

 

 

 

2,234

 

 

 

—

 

 

 

709

 

 

 

—

 

 

 

19,283

 

Net Interest Income (Expense)

 

 

26,614

 

 

 

3,129

 

 

 

—

 

 

 

(709

)

 

 

—

 

 

 

29,034

 

Gain on sales of loans

 

 

1,533

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1,533

 

(Loss) on the sale of securities

 

 

(12,425

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(12,425

)

Other noninterest income

 

 

3,838

 

 

 

—

 

 

 

3,417

 

 

 

—

 

 

 

—

 

 

 

7,255

 

Net Revenue (Expense)

 

 

19,560

 

 

 

3,129

 

 

 

3,417

 

 

 

(709

)

 

 

—

 

 

 

25,397

 

Provision for (recovery of) credit losses

 

 

2,171

 

 

 

(270

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1,901

 

Salaries and employee benefits

 

 

13,971

 

 

 

—

 

 

 

1,001

 

 

 

52

 

 

 

—

 

 

 

15,024

 

Occupancy expenses

 

 

1,219

 

 

 

—

 

 

 

41

 

 

 

—

 

 

 

—

 

 

 

1,260

 

Professional fees

 

 

1,020

 

 

 

10

 

 

 

—

 

 

 

174

 

 

 

—

 

 

 

1,204

 

Data processing fees

 

 

1,148

 

 

 

—

 

 

 

35

 

 

 

—

 

 

 

—

 

 

 

1,183

 

Other noninterest expense

 

 

6,693

 

 

 

220

 

 

 

382

 

 

 

22

 

 

 

—

 

 

 

7,317

 

Total Noninterest Expenses

 

 

24,051

 

 

 

230

 

 

 

1,459

 

 

 

248

 

 

 

—

 

 

 

25,988

 

(Loss) income before taxes

 

 

(6,662

)

 

 

3,169

 

 

 

1,958

 

 

 

(957

)

 

 

—

 

 

 

(2,492

)

Income tax (benefit) expense

 

 

(1,651

)

 

 

665

 

 

 

411

 

 

 

(213

)

 

 

—

 

 

 

(788

)

Net (Loss) Income

 

$

(5,011

)

 

$

2,504

 

 

$

1,547

 

 

$

(744

)

 

$

—

 

 

$

(1,704

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

 

$

799

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

799

 

Depreciation and amortization

 

 

841

 

 

 

—

 

 

 

57

 

 

 

34

 

 

 

—

 

 

 

932

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended

 

 

 

June 30, 2024

 

 

 

Community Banking

 

 

Marine Lending

 

 

Wealth Management

 

 

All Other

 

 

Eliminations

 

 

Consolidated

 

 

 

(in thousands)

 

Interest Income

 

$

36,999

 

 

$

6,642

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

43,641

 

Interest Expense

 

 

15,509

 

 

 

2,852

 

 

 

—

 

 

 

709

 

 

 

—

 

 

 

19,070

 

Net Interest Income (Expense)

 

 

21,490

 

 

 

3,790

 

 

 

—

 

 

 

(709

)

 

 

—

 

 

 

24,571

 

Gain on sales of loans

 

 

653

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

653

 

(Loss) on the sale of securities

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Other noninterest income

 

 

4,403

 

 

 

—

 

 

 

2,729

 

 

 

—

 

 

 

—

 

 

 

7,132

 

Net Revenue (Expense)

 

 

26,546

 

 

 

3,790

 

 

 

2,729

 

 

 

(709

)

 

 

—

 

 

 

32,356

 

Provision for credit losses

 

 

293

 

 

 

363

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

656

 

Salaries and employee benefits

 

 

13,624

 

 

 

22

 

 

 

842

 

 

 

50

 

 

 

—

 

 

 

14,538

 

Occupancy expenses

 

 

994

 

 

 

—

 

 

 

45

 

 

 

—

 

 

 

—

 

 

 

1,039

 

Professional fees

 

 

856

 

 

 

13

 

 

 

—

 

 

 

148

 

 

 

—

 

 

 

1,017

 

Data processing fees

 

 

1,121

 

 

 

—

 

 

 

2

 

 

 

—

 

 

 

—

 

 

 

1,123

 

Other noninterest expense

 

 

6,384

 

 

 

318

 

 

 

458

 

 

 

10

 

 

 

—

 

 

 

7,170

 

Total Noninterest Expenses

 

 

22,979

 

 

 

353

 

 

 

1,347

 

 

 

208

 

 

 

—

 

 

 

24,887

 

Income (loss) before taxes

 

 

3,274

 

 

 

3,074

 

 

 

1,382

 

 

 

(917

)

 

 

—

 

 

 

6,813

 

Income tax expense (benefit)

 

 

321

 

 

 

646

 

 

 

290

 

 

 

(177

)

 

 

—

 

 

 

1,080

 

Net Income (Loss)

 

$

2,953

 

 

$

2,428

 

 

$

1,092

 

 

$

(740

)

 

$

—

 

 

$

5,733

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

39

TABLE OF CONTENTS

Other data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

 

$

512

 

 

$

—

 

 

$

3

 

 

$

—

 

 

$

—

 

 

$

515

 

Depreciation and amortization

 

 

583

 

 

 

—

 

 

 

63

 

 

 

34

 

 

 

—

 

 

 

680

 

 

 

 

Community Banking

 

 

Marine Lending

 

 

Wealth Management

 

 

All Other

 

 

Eliminations

 

 

Consolidated

 

Total assets at June 30, 2025

 

$

1,827,117

 

 

$

202,276

 

 

$

890

 

 

$

4,797

 

 

$

—

 

 

$

2,035,080

 

Total assets at December 31, 2024

 

 

1,645,219

 

 

 

218,055

 

 

 

955

 

 

 

1,986

 

 

 

—

 

 

 

1,866,215

 

 

40

TABLE OF CONTENTS

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The purpose of this discussion is to focus on important factors affecting the Company’s financial condition, results of operations, liquidity and capital resources. This discussion should be read in conjunction with the Company’s Consolidated Financial Statements and the Notes to the Consolidated Financial Statements presented in Part I, Item 1, Financial Statements, of this Form 10-Q and Part II, Item 8, Financial Statements and Supplementary Data, of the 2024 Form 10-K.

GENERAL

Eagle Financial Services, Inc. is a bank holding company which owns 100% of the stock of Bank of Clarke (the “Bank” and, collectively with Eagle Financial Services, Inc., the “Company”, “we”, “us” or “our”). Accordingly, the results of operations for the Company are dependent upon the operations of the Bank. The Bank conducts a commercial banking business which consists of attracting deposits from the general public and investing those funds in commercial, consumer and real estate loans and municipal and U.S. government agency securities. The Bank’s deposits are insured by the Federal Deposit Insurance Corporation to the maximum extent permitted by law. At June 30, 2025, the Company had total assets of $2.04 billion, net loans of $1.42 billion, total deposits of $1.77 billion, and shareholders’ equity of $179.6 million. The Company’s net loss was $1.7 million for the six months ended June 30, 2025.

During the first quarter of 2025 the Company executed a balance sheet repositioning of its investment securities portfolio, selling available for sale securities with an amortized cost balance of $99.2 million resulting in a net realized pre-tax loss of $12.4 million and reinvesting $66.0 million into purchases of available for sale securities. Additionally, the Company completed an underwritten public offering of 1,796,875 shares of its common stock at a public offering price of $32.00 per share. Net proceeds from the offering were $53.5 million. These transactions are further described below.

MANAGEMENT’S STRATEGY

The Company strives to be an outstanding financial institution in its market by building solid sustainable relationships with: (1) its customers, by providing highly personalized customer service, a network of conveniently placed branches and ATMs, a competitive variety of products/services and courteous, professional employees, (2) its employees, by providing generous benefits, a positive work environment, advancement opportunities and incentives to exceed expectations, (3) its communities, by participating in local concerns, providing monetary support, supporting employee volunteerism and providing employment opportunities, and (4) its shareholders, by providing sound profits and returns, sustainable growth, regular dividends and committing to its local, independent status.

OPERATING STRATEGY

The Bank is a locally managed financial institution as well as predominately locally owned. While the Company expanded its ownership to institutional investors though a public offering of its common stock in February 2025, its operating strategy remains the same. This operating strategy allows the Bank to be flexible and responsive in the products and services it offers and to further grow by lending funds to local residents and businesses at a competitive price that reflects the inherent risk of lending. The Bank strives to fund these loans through deposits gathered from local residents and businesses. The Bank prices its deposits by comparing alternative sources of funds and selecting the lowest cost available. When deposits are not adequate to fund asset growth, the Bank relies on borrowings, both short and long term. The Bank’s primary source of borrowed funds is the Federal Home Loan Bank of Atlanta which offers numerous terms and rate structures to the Bank.

As interest rates change, the Bank attempts to maintain its net interest margin by changing the price, terms, and mix of its financial assets and liabilities. The Bank also earns fees on services provided through its trust department, secondary market mortgage activities, BOLI, and deposit operations. The Bank also incurs noninterest expenses such as compensating employees, maintaining and acquiring fixed assets, and purchasing goods and services necessary to support its daily operations.

41

TABLE OF CONTENTS

The Bank has a marketing department which seeks to develop new business. This is accomplished through an ongoing calling program whereby account officers visit with existing and potential customers to discuss the products and services offered. The Bank utilizes traditional advertising such as television commercials, radio ads, newspaper ads, and billboards as well as electronic materials, emails, and social media posts.

LENDING POLICIES

Administration and supervision over the lending process is provided by the Bank’s Credit Administration Department. The principal risk associated with the Bank’s loan portfolio is the creditworthiness of its borrowers. In an effort to manage this risk, the Bank’s policy gives loan amount approval limits to individual loan officers based on their position and level of experience. Credit risk is increased or decreased, depending on the type of loan and prevailing economic conditions. In consideration of the different types of loans in the portfolio, the risk associated with real estate mortgage loans, commercial loans and consumer loans varies based on employment levels, consumer confidence, fluctuations in the value of real estate and other conditions that affect the ability of borrowers to repay debt.

The Company has written policies and procedures to help manage credit risk. The Company utilizes a loan review process that includes formulation of portfolio management strategy, guidelines for underwriting standards and risk assessment, procedures for ongoing identification and management of credit deterioration, and regular portfolio reviews to establish loss exposure and to ascertain compliance with the Company’s policies.

The Bank uses a tiered approach to approve credit requests consisting of individual lending authorities, joint approval of Co-Approval officers (Executive, Regional Credit Officer, Small Business Credit Officer), and a director loan committee. Lending limits for individuals are set by the Board of Directors and are determined by loan purpose, collateral type, and internal risk rating of the borrower. The highest individual authority (Executive) is assigned to the Bank’s President/ Chief Executive Officer, Chief Banking Officer and Chief Credit Officer (approval authority only). Two Executive officers may combine their authority to approve loan requests to borrowers with credit exposure up to $10.0 million on a secured basis and $6.0 million unsecured. Three Executive officers may combine to approve loan requests to borrowers with credit exposure up to $15.0 million on a secured basis and $9.0 million unsecured. Consumer Central Lenders are individual lenders who have been assigned to an Approval Category (A through F) based upon their level of experience and job function. Consumer Central Lenders can co-approve consumer, home equity lines of credit and home equity loan requests up to their stated authorities. Officers in Categories A through F have lesser authorities and with approval of an Executive officer may extend loans to borrowers with exposure of $5.0 million on a secured basis and $3.0 million unsecured. Officers in Categories A through F can also utilize the co-approval of the Regional and Small Business Credit Officers to extend loans with exposures up to $2.5 million and $1.5 million respectively on a secured basis, and up to $1 million and $750 thousand respectively on an unsecured basis. Loans exceeding $15.0 million and up to the Bank’s legal lending limit can be approved by the Risk Committee consisting of four directors (three directors constituting a quorum). The Director’s Loan Committee also reviews and approves changes to the Bank’s Loan Policy as presented by management.

The following sections discuss the major loan categories within the total loan portfolio:

One-to-Four-Family Residential Real Estate Lending

Residential lending activity may be generated by the Bank’s loan officer solicitations, referrals by real estate professionals, and existing or new bank customers. Loan applications are taken by a Bank loan officer. As part of the application process, information is gathered concerning income, employment and credit history of the applicant. The valuation of residential collateral is provided by independent fee appraisers who have been approved by the Bank’s Directors Loan Committee. In connection with residential real estate loans, the Bank requires title insurance, hazard insurance and, if applicable, flood insurance. In addition to traditional residential mortgage loans secured by a first or junior lien on the property, the Bank offers home equity lines of credit.

42

TABLE OF CONTENTS

Commercial Real Estate Lending

Commercial real estate loans are secured by various types of commercial real estate in the Bank’s market area, including multi-family residential buildings, commercial buildings and offices, small shopping centers and churches. Commercial real estate loan originations are obtained through broker referrals, direct solicitation of developers and continued business from customers. In its underwriting of commercial real estate, the Bank’s loan to original appraised value ratio is generally 80% or less. Commercial real estate lending entails significant additional risk as compared with residential mortgage lending. Commercial real estate loans typically involve larger loan balances concentrated with single borrowers or groups of related borrowers. Additionally, the repayment of loans secured by income producing properties is typically dependent on the successful operation of a business or a real estate project and thus may be subject, to a greater extent, to adverse conditions in the real estate market or the economy, in general. The Bank’s commercial real estate loan underwriting criteria require an examination of debt service coverage ratios, the borrower’s creditworthiness, prior credit history and reputation, and the Bank typically requires personal guarantees or endorsements of the borrowers’ principal owners.

Construction and Land Development Lending

The Bank makes local construction loans, primarily residential, and land acquisition and development loans. The construction loans are secured by residential houses under construction and the underlying land for which the loan was obtained. The average life of most construction loans is less than one year and the Bank offers both fixed and variable rate interest structures. The interest rate structure offered to customers depends on the total amount of these loans outstanding and the impact of the interest rate structure on the Bank’s overall interest rate risk. There are two characteristics of construction lending which impact its overall risk as compared to residential mortgage lending. First, there is more concentration risk due to the extension of a large loan balance through several lines of credit to a single developer or contractor. Second, there is more collateral risk due to the fact that loan funds are provided to the borrower based upon the estimated value of the collateral after completion. This could cause an inaccurate estimate of the amount needed to complete construction or an excessive loan-to-value ratio. To mitigate the risks associated with construction lending, the Bank generally limits loan amounts to 80% of the estimated appraised value of the finished construction project. The Bank also obtains a first lien on the property as security for its construction loans and typically requires personal guarantees from the borrower’s principal owners. Finally, the Bank performs inspections of the construction projects to ensure that the percentage of construction completed correlates with the amount of draws on the construction line of credit.

Commercial and Industrial Lending

Commercial business loans generally have more risk than residential mortgage loans, but have higher yields. To manage these risks, the Bank generally obtains appropriate collateral and personal guarantees from the borrower’s principal owners and monitors the financial condition of its business borrowers. Residential mortgage loans generally are made on the basis of the borrower’s ability to make repayment from employment and other income and are secured by real estate whose value tends to be readily ascertainable. In contrast, commercial business loans typically are made on the basis of the borrower’s ability to make repayment from cash flow from its business and are secured by business assets, such as commercial real estate, accounts receivable, equipment and inventory. As a result, the availability of funds for the repayment of commercial business loans is substantially dependent on the success of the business itself. Furthermore, the collateral for commercial business loans may depreciate over time and generally cannot be appraised with as much precision as residential real estate.

43

TABLE OF CONTENTS

Consumer Lending

The Bank offers various secured and unsecured consumer loans, which include personal installment loans, personal lines of credit, automobile loans, and credit card loans. The Bank originates its consumer loans within its geographic market area and these loans are generally made to customers with whom the Bank has an existing relationship. Consumer loans generally entail greater risk than residential mortgage loans, particularly in the case of consumer loans which are unsecured or secured by rapidly depreciable assets such as automobiles. In such cases, any repossessed collateral on a defaulted consumer loan may not provide an adequate source of repayment of the outstanding loan balance as a result of the greater likelihood of damage, loss or depreciation. Consumer loan collections are dependent on the borrower’s continuing financial stability, and thus are more likely to be adversely affected by job loss, divorce, illness or personal bankruptcy. Furthermore, the application of various federal and state laws, including federal and state bankruptcy and insolvency laws, may limit the amount which can be recovered on such loans.

The underwriting standards employed by the Bank for consumer loans include a determination of the applicant’s payment history on other debts and an assessment of ability to meet existing obligations and payments on the proposed loan. The stability of the applicant’s monthly income may be determined by verification of gross monthly income from primary employment, and from any verifiable secondary income. Although creditworthiness of the applicant is the primary consideration, the underwriting process also includes an analysis of the value of the security in relation to the proposed loan amount.

 

Marine Lending

The Bank’s marine loan portfolio is comprised of retail marine vessel loans originated through August 2023, at which time the Company ceased accepting new marine lending business. At present, the Company expects to hold the retained outstanding loans until they are ultimately repaid. Retail loans were generally limited to premium manufacturers with established relationships with the Company which have a vested interest in the secondary market pricing of their respective brand due to the limited inventory available for resale. Consequently, while not contractually committed, manufacturers will often support secondary resale values which can have the effect of reducing losses from non-performing retail marine loans. Retail borrowers generally have very high credit scores, substantial down payments, substantial net worth, personal liquidity, and excess cash flow.

 

 

44

TABLE OF CONTENTS

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The financial statements of the Company are prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The financial information contained within these statements is, to a significant extent, based on measurements of the financial effects of transactions and events that have already occurred. A variety of factors could affect the ultimate value that is obtained when earning income, recognizing an expense, recovering an asset or relieving a liability. In addition, GAAP itself may change from one previously acceptable method to another method. Although the economics of the transactions would be the same, the timing of events that would impact the transactions could change.

 

Allowance for Credit Losses on Loans

The Company establishes the allowance for credit losses through charges to earnings in the form of a provision for credit losses. Loan losses are charged against the allowance for credit losses for the difference between the carrying value of the loan and the estimated net realizable value or fair value of the collateral, if collateral dependent, when management believes that the collectability of the principal is unlikely. Subsequent recoveries, if any, are credited to the allowance. The allowance represents management’s current estimate of expected credit losses over the contractual term of loans held for investment, and is recorded at an amount that, in management’s judgment, reduces the recorded investment in loans to the net amount expected to be collected. Management’s judgment in determining the level of the allowance is based on evaluations of historical loan losses, current conditions and reasonable and supportable forecasts relevant to the collectability of loans. The measurement of the allowance for credit losses is based in part on forecasts of unemployment, inflation, as well as the consumer price index, and may also consider other factors, which we believe to be indicative of risk factors related to collectability. Management also assesses the risk of credit losses arising from changes in economic conditions; the nature and volume of the loan portfolio; the volume and severity of delinquencies and adversely classified loan balances; lending policy and procedures; credit administration and lending staff; loan review; concentrations of credit and the value of underlying collateral in determining the recorded balance of the allowance for credit losses. This evaluation is inherently subjective because it requires estimates that are susceptible to significant revision as more information becomes available. In evaluating the level of the allowance, we consider a range of possible assumptions and outcomes related to the various factors identified above. Refer to the 2024 Form 10-K for additional detail concerning the determination of the allowance for credit losses on loans.

NON-GAAP FINANCIAL MEASURES

This report refers to certain financial measures that are computed under a basis other than GAAP ("non-GAAP"). The Company uses certain non-GAAP financial measures, including tax-equivalent net interest income and efficiency ratio, to provide meaningful supplemental information regarding the Company's operational performance and to enhance investors' overall understanding of such financial performance. The methodology for determining these non-GAAP measures may differ among companies. Non-GAAP measures are supplemental and not a substitute for, or more important than, financial measures prepared in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures which may be presented by other companies.

45

TABLE OF CONTENTS

FORWARD LOOKING STATEMENTS

The Company makes forward looking statements in this report that are subject to risks and uncertainties. These forward looking statements include statements regarding our expectations, intentions or objectives concerning our profitability, liquidity, allowance for loan losses, interest rate sensitivity, market risk, growth strategy, and financial and other goals. The words “believes,” “expects,” “may,” “will,” “should,” "could," “projects,” “contemplates,” “anticipates,” “forecasts,” “intends,” or other similar words or terms are intended to identify forward looking statements. These forward looking statements are subject to significant uncertainties because they are based upon or are affected by factors including:

•
difficult market conditions in our industry;
•
the ability to successfully manage growth or implement growth strategies if the Bank is unable to identify attractive markets, locations or opportunities to expand in the future or if the Bank is unable to successfully integrate new branches, business lines or other growth opportunities into its existing operations;
•
competition with other banks and financial institutions, and companies outside of the banking industry, including those companies that have substantially greater access to capital and other resources;
•
the successful management of interest rate risk;
•
risks inherent in making loans such as repayment risks and fluctuating collateral values;
•
changes in general economic and business conditions in the Bank’s market area;
•
reliance on the Bank’s management team, including the ability to attract and retain key personnel;
•
changes in interest rates and interest rate policies;
•
maintaining capital levels adequate to support growth;
•
maintaining cost controls and asset qualities as new branches are opened or acquired;
•
demand, development and acceptance of new products and services;
•
deposit flows;
•
the Bank's ability to manage liquidity;
•
the cost and availability of secondary funding sources;
•
effects of soundness of other financial institutions
•
problems with technology utilized by the Bank;
•
changing trends in customer profiles and behavior;
•
geopolitical conditions, including acts or threats of terrorism, international hostilities, or actions taken by the U.S. or other governments in response to acts or threats of terrorism and/or military conflicts, which could impact business and economic conditions in the U.S. and abroad;
•
the economic impact of duties, tariffs or other barriers or restrictions on trade, any retaliatory counter measures, or the volatility and uncertainty arising there from;
•
the Company's potential exposure to fraud, negligence, computer theft, and cyber-crime;
•
potential impact on us of existing and future legislation and regulations;
•
changes in accounting policies and banking and other law and regulations; and
•
other factors described in Item 1A., "Risk Factors," in the Company's 2024 Form 10-K.

Because of these uncertainties, actual future results may be materially different from the results indicated by these forward looking statements. In addition, past results of operations do not necessarily indicate future results.

RESULTS OF OPERATIONS

Net Income (Loss)

Net income for the three months ended June 30, 2025, was $5.3 million compared to $3.2 million for the three months ended June 30, 2024 and, for the six months ended June 30, 2025 and 2024, net (loss) income was ($1.7 million) and $5.7 million, respectively.

46

TABLE OF CONTENTS

Earnings (loss) per share, basic and diluted, were $0.98 and $0.89 for the three months ended June 30, 2025 and 2024, respectively, and $(0.34) and $1.61 for the six months ended June 30, 2025 and 2024, respectively.

Return on average assets ("ROA") measures how efficiently the Company uses its assets to produce net income. Factors reflected within this efficiency include the Company’s asset mix, funding sources, pricing, fee generation, and cost control. The ROA of the Company, on an annualized basis, for the three months ended June 30, 2025 and 2024 was 1.09% and 0.72%, respectively. For the six months ended June 30, 2025 and 2024 annualized ROA was (0.18)% and 0.65%, respectively.

Return on average equity ("ROE") measures the utilization of shareholders’ equity in generating net income. This measurement is affected by the same factors as ROA with consideration to how much of the Company’s assets are funded by shareholders. The ROE of the Company, on an annualized basis, for the three months ended June 30, 2025 and 2024 was 11.93% and 11.89%, respectively, and for the six months ended June 30, 2025 and 2024 was (2.19)% and 10.71%, respectively.

The Company's operating results for the six months ended June 30, 2025 were significantly impacted by the recognized loss on the sale of available for sale securities as part of its balance sheet repositioning strategy completed in the first quarter of 2025. The sale resulted in a net of tax loss of $9.8 million, or $(1.97) per share, and reduced ROA and ROE, on an annualized basis, by 1.03% and 12.62%, respectively, for the six months ended June 30, 2025. The balance sheet repositioning resulted in an increase in interest and dividend income earned on the available for sale investment securities portfolio for three and six months ended June 30, 2025 of $362 thousand and $291 thousand, respectively, compared to the same periods in 2024.

 

Net Interest Income

Net interest income is our primary source of revenue, representing the difference between interest and fees earned on interest-earning assets and the interest paid on deposits and other interest-bearing liabilities. The level of net interest income is impacted primarily by variations in the volume and mix of these assets and liabilities, as well as changes in interest rates. Net interest income was $15.7 million and $12.2 million for the three months ended June 30, 2025 and 2024, respectively, an increase of $3.5 million, or 29.1%. Net interest income was $29.0 million and $24.6 million for the six months ended June 30, 2025 and 2024, respectively, which represents an increase of $4.4 million, or 18.2%. The year-over-year increases for both periods primarily reflects the impact of the balance sheet repositioning strategy, which raised capital and cash on hand and replaced lower-yielding investment securities with higher yielding securities. Declining average rates paid on interest-bearing deposits and maturities of FHLB advances also impacted net interest income.

The Company's net interest spread and net interest margin increased 19 basis points and 24 basis points, respectively, for the six months ended June 30, 2025 compared to six months ended June 30, 2024. For the three months ended June 30, 2025, the Company's net interest spread and net interest margin increased 43 basis points and 50 basis points, respectively, compared to the three months ended June 30, 2024.

Total interest and dividend income was $48.3 million and $43.7 million for the six months ended June 30, 2025 and 2024, respectively, which represents an increase of $4.6 million, or 10.71%. Total interest and dividend income for the three months ended June 30, 2025 and 2024 was $24.8 million and $21.7 million, respectively, which represents an increase of $3.1 million, or 14.15%. The increases in interest income during the 2025 periods were driven by increases in the average balance of the interest-earning assets, specifically federal funds sold and deposits in other banks, and increases in the average yield on securities driven by the newly restructured securities portfolio, mostly offset by a decline in the yield earned on federal funds sold and deposits in other banks. Average interest-earning assets increased $157.4 million, or 9.41%, during the six months ended June 30, 2025 compared to the six months ended June 30, 2024, while the average yield on earning assets increased by eight basis points over the same period, primarily reflecting a 104 basis point increase attributable to the securities portfolio offset by an 88 basis point decrease attributable to federal funds sold and interest-bearing deposits in other banks. For the three months ended June 30, 2025 the average balance of earning assets increased $166.7 million and the average yield increased 19 basis points compared to the three months ended June 30, 2024. The 19 basis point increase was largely comprised of a 175 basis point increase in the securities portfolio average yield and an 88 basis point decrease in the average yield on federal funds sold and interest-bearing deposits in other banks.

47

TABLE OF CONTENTS

Total interest expense was $19.3 million and $19.1 million for the six months ended June 30, 2025 and 2024, respectively, which represents an increase of $213 thousand, or 1.12%. Total interest expense was $9.1 million and $9.6 million for the three months ended June 30, 2025 and 2024, respectively, which represents a decrease of $465 thousand, or 4.85%. Balance growth in higher paying deposit accounts partially offset by lower rates paid on these deposits and balance declines in FHLB advances were the main drivers for the change in interest expense during the six months ended June 30, 2025 compared to the same period in 2024. The $213 thousand increase in interest expense during the six months ended June 30, 2025 is comprised of a $1.8 million, or 12.24%, increase attributable primarily to time deposit accounts and a $1.6 million, or 47.19%, decrease attributable to FHLB advances. Time deposits contributed $1.6 million of the $1.8 million increase in deposit interest expense due to average balance increases of $39.1 million and $57.0 million on time deposits of $250,000 or more and time deposits of less than $250,000, respectively, and declines in the average rate paid of 27 basis points and 19 basis points, respectively. During the six months ended June 30, 2025 and 2024 the average balance of total interest-bearing deposits was $1.19 billion and $1.05 billion, respectively, and the average rate paid was 2.85% for both the six months ended June 30, 2025 and 2024. Competition for and rates paid on deposit accounts continues to be strong. The $1.6 million decrease in interest expense on FHLB advances was due to advance maturities during the six months ended June 30, 2025 reducing the average balance by $70.0 million compared to the 2024 prior year period. These matured advances were not replaced as the Company has reduced its reliance on wholesale borrowings since completing its capital raise during the first quarter of 2025.

The decrease in interest expense during the three months ended June 30, 2025 compared to the three months ended June 30, 2024 of $465 thousand is comprised of a $748 thousand, or 9.95%, increase attributable to deposit accounts and a decrease of $1.2 million, or 70.85%, attributable to FHLB advances. Higher-paying time deposits contributed $599 thousand of the increase in deposit interest expense reflecting an $89.8 million increase in average balance of time deposits, net of declines in the average rate paid of 39 basis points on time deposits of $250,000 or more and 35 basis points on time deposits of less than $250,000. The average rate paid on total interest-bearing deposits for the three months ended June 30, 2025 was 2.78% compared to 2.88% for the three months ended June 30, 2024. The decrease in interest expense on FHLB advances during the three months ended June 30, 2025 reflects lower borrowing levels as advances have not been replaced upon their maturity. The average balance of FHLB advances was $40.8 million and $145.1 million with an average rate of 4.90% and 4.74% during the three months ended June 30, 2025 and 2024, respectively.

The net interest margin was 3.20% and 2.96% for the six months ended June 30, 2025 and 2024, respectively, and 3.42% and 2.92% for the three months ended June 30, 2025 and 2024, respectively. The net interest margin is calculated on a tax-equivalent basis. Tax-equivalent net interest income (Non-GAAP) is calculated by adding the tax benefit on certain securities and loans, whose interest is tax-exempt, to total interest income then subtracting total interest expense. The tax rate used to calculate the tax benefit was 21% for 2025 and 2024.

Net interest margin has improved during the three and six months ended June 30, 2025 primarily due to the repositioning of the securities portfolio during the first quarter of 2025, retention of maturing time deposits at lower rates, and the reduction in FHLB advances. Ongoing margin pressures include deposit pricing, the Bank's continued strategy of originating mortgage loans for sale, and an increase in nonaccrual loans during the six months ended June 30, 2025.

48

TABLE OF CONTENTS

The following table shows interest income on earning assets and related average yields as well as interest expense on interest-bearing liabilities and related average rates paid for the three months ended June 30, 2025 and 2024 (dollars in thousands):

 

 

 

June 30, 2025

 

 

June 30, 2024

 

 

 

 

 

 

Interest

 

 

Average

 

 

 

 

 

Interest

 

 

Average

 

 

 

Average

 

 

Income/

 

 

Yield/

 

 

Average

 

 

Income/

 

 

Yield/

 

Assets:

 

Balance

 

 

Expense

 

 

Rate (2)

 

 

Balance

 

 

Expense

 

 

Rate (2)

 

Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

$

115,712

 

 

$

1,260

 

 

 

4.37

 %

 

$

137,588

 

 

$

893

 

 

 

2.61

 %

Tax-Exempt (1)

 

 

—

 

 

 

—

 

 

 

—

%

 

 

492

 

 

 

5

 

 

 

4.13

 %

Total Securities

 

$

115,712

 

 

$

1,260

 

 

 

4.37

 %

 

$

138,080

 

 

$

898

 

 

 

2.62

 %

Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 

1,419,117

 

 

 

20,309

 

 

 

5.74

 %

 

 

1,424,304

 

 

 

19,421

 

 

 

5.48

 %

Non-accrual

 

 

16,337

 

 

 

—

 

 

 

—

%

 

 

4,600

 

 

 

—

 

 

 

—

%

Tax-Exempt (1)

 

 

9,999

 

 

 

126

 

 

 

5.04

 %

 

 

10,603

 

 

 

132

 

 

 

5.01

 %

Total Loans

 

$

1,445,453

 

 

$

20,435

 

 

 

5.67

 %

 

$

1,439,507

 

 

$

19,553

 

 

 

5.46

 %

Federal funds sold and interest-bearing deposits in other banks

 

 

281,749

 

 

 

3,146

 

 

 

4.48

 %

 

 

98,672

 

 

 

1,316

 

 

 

5.36

 %

Total earning assets

 

$

1,842,914

 

 

$

24,841

 

 

 

5.41

 %

 

$

1,676,259

 

 

$

21,767

 

 

 

5.22

 %

Allowance for credit losses

 

 

(15,439

)

 

 

 

 

 

 

 

 

(14,604

)

 

 

 

 

 

 

Total non-earning assets

 

 

105,484

 

 

 

 

 

 

 

 

 

105,467

 

 

 

 

 

 

 

Total assets

 

$

1,932,959

 

 

 

 

 

 

 

 

$

1,767,122

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders' Equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOW accounts

 

$

303,498

 

 

$

1,632

 

 

 

2.16

 %

 

$

258,965

 

 

$

1,538

 

 

 

2.39

 %

Money market accounts

 

 

273,415

 

 

 

1,521

 

 

 

2.23

 %

 

 

261,557

 

 

 

1,463

 

 

 

2.25

 %

Savings accounts

 

 

130,166

 

 

 

36

 

 

 

0.11

 %

 

 

136,370

 

 

 

39

 

 

 

0.12

 %

Time deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$250,000 and more

 

 

174,030

 

 

 

1,911

 

 

 

4.41

 %

 

 

138,531

 

 

 

1,652

 

 

 

4.80

 %

Less than $250,000

 

 

310,108

 

 

 

3,163

 

 

 

4.09

 %

 

 

255,776

 

 

 

2,823

 

 

 

4.44

 %

Total interest-bearing deposits

 

$

1,191,217

 

 

$

8,263

 

 

 

2.78

 %

 

$

1,051,199

 

 

$

7,515

 

 

 

2.88

 %

Federal funds purchased

 

 

2

 

 

 

—

 

 

NM

 

 

 

15

 

 

 

—

 

 

NM

 

Federal Home Loan Bank advances

 

 

40,824

 

 

 

499

 

 

 

4.90

 %

 

 

145,110

 

 

 

1,712

 

 

 

4.74

 %

Subordinated debt

 

 

29,535

 

 

 

355

 

 

 

4.82

 %

 

 

29,467

 

 

 

355

 

 

 

4.84

 %

Total interest-bearing liabilities

 

$

1,261,578

 

 

$

9,117

 

 

 

2.90

 %

 

$

1,225,791

 

 

$

9,582

 

 

 

3.14

 %

Noninterest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Demand deposits

 

 

473,911

 

 

 

 

 

 

 

 

 

417,128

 

 

 

 

 

 

 

Other Liabilities

 

 

20,286

 

 

 

 

 

 

 

 

 

16,489

 

 

 

 

 

 

 

Total liabilities

 

$

1,755,775

 

 

 

 

 

 

 

 

$

1,659,408

 

 

 

 

 

 

 

Shareholders' equity

 

 

177,184

 

 

 

 

 

 

 

 

 

107,714

 

 

 

 

 

 

 

Total liabilities and shareholders' equity

 

$

1,932,959

 

 

 

 

 

 

 

 

$

1,767,122

 

 

 

 

 

 

 

Net interest income

 

 

 

 

$

15,724

 

 

 

 

 

 

 

 

$

12,185

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest spread

 

 

 

 

 

 

 

 

2.51

 %

 

 

 

 

 

 

 

 

2.08

 %

Interest expense as a percent of average earning assets

 

 

 

 

 

 

 

 

1.98

 %

 

 

 

 

 

 

 

 

2.30

 %

Net interest margin

 

 

 

 

 

 

 

 

3.42

 %

 

 

 

 

 

 

 

 

2.92

 %

 

(1)
Income and yields are reported on a tax-equivalent basis using a federal tax rate of 21% (Non-GAAP).
(2)
Annualized.

NM - Not Meaningful

49

TABLE OF CONTENTS

The following table shows interest income on earning assets and related average yields as well as interest expense on interest-bearing liabilities and related average rates paid for the six months ended June 30, 2025 and 2024 (dollars in thousands):

 

 

 

June 30, 2025

 

 

June 30, 2024

 

 

 

 

 

 

Interest

 

 

Average

 

 

 

 

 

Interest

 

 

Average

 

 

 

Average

 

 

Income/

 

 

Yield/

 

 

Average

 

 

Income/

 

 

Yield/

 

Assets:

 

Balance

 

 

Expense

 

 

Rate (2)

 

 

Balance

 

 

Expense

 

 

Rate (2)

 

Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

$

116,535

 

 

$

2,104

 

 

 

3.64

 %

 

$

140,144

 

 

$

1,808

 

 

 

2.59

 %

Tax-Exempt (1)

 

 

175

 

 

 

4

 

 

 

4.49

 %

 

 

496

 

 

 

10

 

 

 

4.10

 %

Total Securities

 

$

116,710

 

 

$

2,108

 

 

 

3.64

 %

 

$

140,640

 

 

$

1,818

 

 

 

2.60

 %

Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 

1,430,666

 

 

 

40,180

 

 

 

5.66

 %

 

 

1,429,088

 

 

 

39,279

 

 

 

5.53

 %

Non-accrual

 

 

10,182

 

 

 

—

 

 

 

—

%

 

 

5,109

 

 

 

—

 

 

 

—

%

Tax-Exempt (1)

 

 

10,064

 

 

 

253

 

 

 

5.06

 %

 

 

10,654

 

 

 

265

 

 

 

5.00

 %

Total Loans

 

$

1,450,912

 

 

$

40,433

 

 

 

5.62

 %

 

$

1,444,851

 

 

$

39,544

 

 

 

5.50

 %

Federal funds sold and interest-bearing deposits in other banks

 

 

263,367

 

 

 

5,830

 

 

 

4.46

 %

 

 

88,054

 

 

 

2,337

 

 

 

5.34

 %

Total earning assets

 

$

1,830,989

 

 

$

48,371

 

 

 

5.33

 %

 

$

1,673,545

 

 

$

43,699

 

 

 

5.25

 %

Allowance for credit losses

 

 

(15,334

)

 

 

 

 

 

 

 

 

(14,570

)

 

 

 

 

 

 

Total non-earning assets

 

 

104,113

 

 

 

 

 

 

 

 

 

104,174

 

 

 

 

 

 

 

Total assets

 

$

1,919,768

 

 

 

 

 

 

 

 

$

1,763,149

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders' Equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOW accounts

 

$

289,558

 

 

$

3,095

 

 

 

2.16

 %

 

$

257,623

 

 

$

3,035

 

 

 

2.37

 %

Money market accounts

 

 

273,776

 

 

 

3,033

 

 

 

2.23

 %

 

 

262,656

 

 

 

2,876

 

 

 

2.20

 %

Savings accounts

 

 

131,528

 

 

 

73

 

 

 

0.11

 %

 

 

137,554

 

 

 

80

 

 

 

0.12

 %

Time deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$250,000 and more

 

 

180,006

 

 

 

4,026

 

 

 

4.51

 %

 

 

140,912

 

 

 

3,353

 

 

 

4.78

 %

Less than $250,000

 

 

310,799

 

 

 

6,540

 

 

 

4.24

 %

 

 

253,815

 

 

 

5,595

 

 

 

4.43

 %

Total interest-bearing deposits

 

$

1,185,667

 

 

$

16,767

 

 

 

2.85

 %

 

$

1,052,560

 

 

$

14,939

 

 

 

2.85

 %

Federal funds purchased

 

 

5

 

 

 

—

 

 

NM

 

 

 

13

 

 

 

—

 

 

NM

 

Federal Home Loan Bank advances

 

 

75,497

 

 

 

1,807

 

 

 

4.83

 %

 

 

145,495

 

 

 

3,422

 

 

 

4.73

 %

Subordinated debt

 

 

29,526

 

 

 

709

 

 

 

4.84

 %

 

 

29,459

 

 

 

709

 

 

 

4.84

 %

Total interest-bearing liabilities

 

$

1,290,695

 

 

$

19,283

 

 

 

3.01

 %

 

$

1,227,527

 

 

$

19,070

 

 

 

3.12

 %

Noninterest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Demand deposits

 

 

450,559

 

 

 

 

 

 

 

 

 

411,147

 

 

 

 

 

 

 

Other Liabilities

 

 

21,671

 

 

 

 

 

 

 

 

 

16,878

 

 

 

 

 

 

 

Total liabilities

 

$

1,762,925

 

 

 

 

 

 

 

 

$

1,655,552

 

 

 

 

 

 

 

Shareholders' equity

 

 

156,843

 

 

 

 

 

 

 

 

 

107,597

 

 

 

 

 

 

 

Total liabilities and shareholders' equity

 

$

1,919,768

 

 

 

 

 

 

 

 

$

1,763,149

 

 

 

 

 

 

 

Net interest income

 

 

 

 

$

29,088

 

 

 

 

 

 

 

 

$

24,629

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest spread

 

 

 

 

 

 

 

 

2.32

 %

 

 

 

 

 

 

 

 

2.13

 %

Interest expense as a percent of average earning assets

 

 

 

 

 

 

 

 

2.12

 %

 

 

 

 

 

 

 

 

2.29

 %

Net interest margin

 

 

 

 

 

 

 

 

3.20

 %

 

 

 

 

 

 

 

 

2.96

 %

 

(1)
Income and yields are reported on a tax-equivalent basis using a federal tax rate of 21% (Non-GAAP).
(2)
Annualized.

NM - Not Meaningful

50

TABLE OF CONTENTS

The following table reconciles tax-equivalent net interest income, which is not a measurement under GAAP, to net interest income.

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2025

 

 

2024

 

 

2025

 

 

2024

 

 

 

(in thousands)

 

 

(in thousands)

 

GAAP Financial Measurements:

 

 

 

 

 

 

 

 

 

 

 

 

Interest Income - Loans

 

$

20,409

 

 

$

19,525

 

 

$

40,380

 

 

$

39,488

 

Interest Income - Securities and Other Interest-Earnings Assets

 

 

4,406

 

 

 

2,213

 

 

 

7,937

 

 

 

4,153

 

Interest Expense - Deposits

 

 

8,263

 

 

 

7,515

 

 

 

16,767

 

 

 

14,939

 

Interest Expense - Other Borrowings

 

 

854

 

 

 

2,067

 

 

 

2,516

 

 

 

4,131

 

Total Net Interest Income

 

$

15,698

 

 

$

12,156

 

 

$

29,034

 

 

$

24,571

 

Non-GAAP Financial Measurements:

 

 

 

 

 

 

 

 

 

 

 

 

Add: Tax Benefit on Tax-Exempt Interest Income - Loans (1)

 

$

26

 

 

$

28

 

 

$

53

 

 

$

56

 

Add: Tax Benefit on Tax-Exempt Interest Income - Securities (1)

 

 

—

 

 

 

1

 

 

 

1

 

 

 

2

 

Total Tax Benefit on Tax-Exempt Interest Income

 

$

26

 

 

$

29

 

 

$

54

 

 

$

58

 

Tax-Equivalent Net Interest Income

 

$

15,724

 

 

$

12,185

 

 

$

29,088

 

 

$

24,629

 

 

(1)
Tax benefit was calculated using the federal statutory tax rate of 21%.

The tax-equivalent yield on earning assets was 5.33% for the six months ended June 30, 2025 compared to 5.25% for the six months ended June 30, 2024, an increase of eight basis points during the current year period. The tax-equivalent yield on securities increased 104 basis points for the six months ended June 30, 2025, compared to the six months ended June 30, 2024. The tax equivalent yield on loans increased 12 basis points from 5.50% for the six months ended June 30, 2024 to 5.62% for the same time period in 2025. For the three months ended June 30, 2025 and 2024, the tax-equivalent yield on earning assets was 5.41% and 5.22%, respectively, an increase of 19 basis points in the current year period. The tax-equivalent yields on securities and loans also increased during the three month period in 2025 compared to 2024 by 175 basis points and 21 basis points, respectively.

The increase in the tax-equivalent yield on earning assets for the three and six months ended June 30, 2025 reflects the impact of the balance sheet repositioning transactions, which replaced lower-yielding investment securities with higher yielding securities, higher yielding loan originations, and increased average balances of federal funds sold and interest-bearing deposits in other banks, which were bolstered by the impact of the proceeds received from the public offering and increased deposit balances.

The average rate on interest-bearing liabilities decreased 11 basis points to 3.01% from 3.12% for the six months ended June 30, 2025 compared to the corresponding 2024 period and decreased 24 basis points to 2.90% for the three months ended June 30, 2025 compared to 3.14% for the three months ended June 30, 2024. The average rate on interest-bearing deposits remained the same at 2.85% for the six months ended June 30, 2025 and 2024 and decreased ten basis points to 2.78% during the three months ended June 30, 2025 compared to 2.88% during the three months ended June 30, 2024, reflecting declining rates on higher paying time deposits. The average rate on FHLB advances increased 16 basis points from 4.74% and increased 10 basis points from 4.73% for the three and six months ended June 30, 2024, respectively, to 4.90% and 4.83% for the three and six months ended June 30, 2025. The increases in the average rate on FHLB advances were due to the maturity of lower cost advances during the first and early-second quarter of 2025, compared to the remaining outstanding advance of $40.0 million at June 30, 2025 with a rate of 4.83%. The Company's reliance on wholesale borrowings has lessened since completing its capital raise in February 2025 and therefore, maturing advances were not replaced with new advances.

 

51

TABLE OF CONTENTS

Provision for Credit Losses

The provision for credit losses is based upon management’s estimate of the amount required to maintain an adequate allowance for credit losses. The Company's calculation of the provision for credit losses consists of changes in the allowance for credit losses on loans and the reserve for unfunded loan commitments. The allowance for credit losses on loans represents management’s current estimate of expected credit losses over the contractual term of loans held for investment, and is recorded at an amount that, in management’s judgment, reduces the recorded investment in loans to the net amount expected to be collected. Management’s judgment in determining the level of the allowance is based on evaluations of historical loan losses, current conditions and reasonable and supportable forecasts relevant to the collectability of loans. This evaluation is inherently subjective because it requires estimates that are susceptible to significant revision as more information becomes available. The amount of provision for credit losses on loans is affected by several factors including the growth rate of loans, net charge-offs (recoveries), and the estimated amount of expected losses within the loan portfolio.

The provision for credit losses for the six months ended June 30, 2025 and 2024 was $1.9 million and $656 thousand, respectively. The provision for credit losses for the three months ended June 30, 2025 and 2024 was $668 thousand and $181 thousand, respectively. The provision for credit losses for the six months ended June 30, 2025 resulted largely from a $3.1 million provision against the commercial real estate portfolio due to charge-offs of $971 thousand and specific reserves of $1.1 million, reflecting one individually evaluated relationship of four loans totaling $11.5 million. Additional specific reserves of $381 thousand represent five commercial and industrial loan relationships with loan balances totaling $1.2 million. Partially offsetting these increases were recoveries and decreases in loan balances.

Noninterest Income

Total noninterest income (loss) was $4.9 million and $4.3 million for the three months ended June 30, 2025 and 2024, respectively and for the six months ended June 30, 2025 and 2024 was $(3.6) million and $7.8 million, respectively. Management reviews the activities which generate noninterest income on an ongoing basis. The following table provides the components of noninterest income for the three and six months ended June 30, 2025 and 2024, which are included within the respective Consolidated Statements of Operations headings. Variances that the Company believes require explanation are discussed below the table.

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

(dollars in thousands)

 

2025

 

 

2024

 

 

$ Change

 

 

% Change

 

 

2025

 

 

2024

 

 

$ Change

 

 

% Change

 

Wealth management fees

 

$

1,650

 

 

$

1,273

 

 

$

377

 

 

 

30

%

 

$

3,331

 

 

$

2,729

 

 

$

602

 

 

 

22

%

Service charges on deposit accounts

 

 

517

 

 

 

456

 

 

 

61

 

 

 

13

%

 

 

1,009

 

 

 

910

 

 

 

99

 

 

 

11

%

Other service charges and fees

 

 

1,060

 

 

 

1,164

 

 

 

(104

)

 

 

(9

)%

 

 

2,032

 

 

 

2,133

 

 

 

(101

)

 

 

(5

)%

(Loss) on sale of securities

 

 

—

 

 

 

—

 

 

 

—

 

 

NM

 

 

 

(12,425

)

 

 

—

 

 

 

(12,425

)

 

NM

 

(Loss) on disposal of bank premises and equipment

 

 

—

 

 

 

(11

)

 

 

11

 

 

NM

 

 

 

(16

)

 

 

(11

)

 

 

(5

)

 

 

45

%

Gain on sale of loans

 

 

1,104

 

 

 

492

 

 

 

612

 

 

 

124

%

 

 

1,533

 

 

 

653

 

 

 

880

 

 

 

135

%

Small business investment company income

 

 

133

 

 

 

259

 

 

 

(126

)

 

 

(49

)%

 

 

153

 

 

 

385

 

 

 

(232

)

 

 

(60

)%

Bank owned life insurance income

 

 

278

 

 

 

269

 

 

 

9

 

 

 

3

%

 

 

551

 

 

 

537

 

 

 

14

 

 

 

3

%

Other operating income

 

 

175

 

 

 

403

 

 

 

(228

)

 

 

(57

)%

 

 

195

 

 

 

449

 

 

 

(254

)

 

 

(57

)%

Total noninterest income (loss)

 

$

4,917

 

 

$

4,305

 

 

$

612

 

 

 

14

%

 

$

(3,637

)

 

$

7,785

 

 

$

(11,422

)

 

 

(147

)%

 

NM - Not Meaningful

 

Wealth management fee income increased from 2024 to 2025. Wealth management fee income is comprised of income from fiduciary activities as well as commissions from the sale of non-deposit investment products. The amount of income from fiduciary activities is determined by the number of active accounts and total assets under management which has increased over the 2024 year period.

52

TABLE OF CONTENTS

Additionally, per transaction fees for estates and other services have also contributed to the year over year increase in revenue.

Other service charges and fees decreased primarily due to a higher level of collection fees experienced during the three and six months ended June 30, 2024 compared to three and six months ended June 30, 2025.

The Company executed balance sheet repositioning transactions within its investment securities portfolio during March 2025. The sale of $99.2 million of available for sale debt securities, with a fair value of $86.8 million, resulted in a net pre-tax loss of $12.4 million during the six months ended June 30, 2025. Management utilized the proceeds from the public offering capital raise completed in February 2025 to enable the balance sheet repositioning.

Gain on sale of loans increased during the three and six months ended June 30, 2025 when compared to the same period in 2024. The Company sold $50.8 million in mortgage loans on the secondary market, consisting of $32.0 million of loans originated for sale and a pool of $18.8 million residential mortgage loans held for investment, and $9.9 million SBA commercial loans during the six months ended June 30, 2025. This compares to loan sales consisting of $25.5 million in mortgage loans and $2.6 million SBA commercial loans during the six months ended June 30, 2024. Loan sales resulted in gains of $1.5 million and $653 thousand during the six months ended June 30, 2025 and 2024, respectively. Gain on loan sales during the three months ended June 30, 2025 and 2024 was $1.1 million and $492 thousand, respectively, reflecting sales of $17.1 million mortgage loans and $8.4 million SBA commercial loans. The Company intends to continue originating mortgage loans for sale, whereas the mortgage portfolio sale was completed early in the 2025 quarter, at par, and ahead of the Company's public offering in order to bolster on-balance sheet liquidity.

Income from holdings in small business investment companies decreased $126 thousand and $232 thousand the three and six months ended June 30, 2025, respectively, compared to the same period in 2024. The decreases during the current year period can be mainly attributed to lower cash distributions received, based on the results of their performance and timing of distributions.

Other operating income decreased for the three and six months ended June 30, 2025 due to the receipt of a BOLI settlement, which resulted in a gain of $254 thousand during the three and six months ended June 30, 2024.

53

TABLE OF CONTENTS

Noninterest Expenses

Total noninterest expenses increased $889 thousand, or 7.11%, for the three months ended June 30, 2025 and $1.1 million, or 4.42%, for the six months ended June 30, 2025 compared to the same periods in 2024. The following table presents the components of noninterest expense for the three and six months ended June 30, 2025 and 2024, which are included within the respective Consolidated Statements of Operations headings. Variances that the Company believes require explanation are discussed below the table.

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

(dollars in thousands)

 

2025

 

 

2024

 

 

$ Change

 

 

% Change

 

 

2025

 

 

2024

 

 

$ Change

 

 

% Change

 

Salaries and employee benefits

 

$

7,845

 

 

$

7,353

 

 

$

492

 

 

 

7

 %

 

$

15,024

 

 

$

14,538

 

 

$

486

 

 

 

3

 %

Occupancy expenses

 

 

598

 

 

 

470

 

 

 

128

 

 

 

27

 %

 

 

1,260

 

 

 

1,039

 

 

 

221

 

 

 

21

 %

Equipment expenses

 

 

401

 

 

 

401

 

 

 

—

 

 

 

—

%

 

 

824

 

 

 

774

 

 

 

50

 

 

 

6

 %

Advertising and marketing expenses

 

 

152

 

 

 

245

 

 

 

(93

)

 

 

(38

)%

 

 

335

 

 

 

482

 

 

 

(147

)

 

 

(30

)%

Stationary and supplies

 

 

35

 

 

 

32

 

 

 

3

 

 

 

9

 %

 

 

77

 

 

 

56

 

 

 

21

 

 

 

38

 %

ATM network fees

 

 

332

 

 

 

373

 

 

 

(41

)

 

 

(11

)%

 

 

694

 

 

 

753

 

 

 

(59

)

 

 

(8

)%

Loss on sale of repossessed assets

 

 

—

 

 

 

—

 

 

 

—

 

 

NM

 

 

 

133

 

 

 

—

 

 

 

133

 

 

NM

 

FDIC assessment

 

 

254

 

 

 

351

 

 

 

(97

)

 

 

(28

)%

 

 

576

 

 

 

760

 

 

 

(184

)

 

 

(24

)%

Computer software expense

 

 

325

 

 

 

221

 

 

 

104

 

 

 

47

 %

 

 

607

 

 

 

454

 

 

 

153

 

 

 

34

 %

Bank franchise tax

 

 

381

 

 

 

338

 

 

 

43

 

 

 

13

 %

 

 

748

 

 

 

669

 

 

 

79

 

 

 

12

 %

Professional fees

 

 

641

 

 

 

511

 

 

 

130

 

 

 

25

 %

 

 

1,204

 

 

 

1,017

 

 

 

187

 

 

 

18

 %

Data processing fees

 

 

633

 

 

 

558

 

 

 

75

 

 

 

13

 %

 

 

1,183

 

 

 

1,123

 

 

 

60

 

 

 

5

 %

Other operating expenses

 

 

1,802

 

 

 

1,657

 

 

 

145

 

 

 

9

 %

 

 

3,323

 

 

 

3,222

 

 

 

101

 

 

 

3

 %

Total noninterest expenses

 

$

13,399

 

 

$

12,510

 

 

$

889

 

 

 

7

 %

 

$

25,988

 

 

$

24,887

 

 

$

1,101

 

 

 

4

 %

 

NM - Not Meaningful

Salaries and employee benefits increased during the three and six months ended June 30, 2025 over 2024, reflecting increases in salaries, commission and employee insurance expense, partially offset by a decrease in the annual incentive plan expense. The Company's number of full-time equivalent employees ("FTE's") has increased from 244 at June 30, 2024 to 245 at June 30, 2025.

Occupancy expenses increased during the three and six months ended June 30, 2025 largely due to the impact of the sales-leaseback transaction of the Company's operating center and branch building in December 2024. Rental expense, net of building depreciation increased $137 thousand and $250 thousand, during the three and six months ended June 30, 2025, respectively, compared to the 2024 periods. The increase in rental expense also reflects a new long-term lease executed during the first quarter of 2025 as the Company is moving its current loan production office and establishing a full-service branch in McLean, Viriginia.

Advertising and marketing expenses decreased during the three and six months ended June 30, 2025 compared to the same periods in 2024, reflecting fewer advertising campaigns and a marketing bonus credit related to the Bank's credit card provider relationship.

Three repossessed marine vessels were sold during the first quarter of 2025, resulting in the recognition of a $133 thousand loss during the six months ended June 30, 2025. There were no sales of repossessed assets during the three months ended June 30, 2025 or the three and six months ended June 30, 2024.

FDIC assessment expense, which is based in part on asset size and capital levels, decreased during the three and six months ended June 30, 2025 over 2024. The decrease in FDIC assessment reflects an improvement in the capital and financial ratio portion of the assessment rate, due to the capital raise completed in early 2025.

54

TABLE OF CONTENTS

Computer software expenses increased during the three and six months ended June 30, 2025 as the Company continues to invest in technology to enhance systems security and drive operational efficiencies.

Professional fees increased during the three and six months ended June 30, 2025 compared to the same periods in 2024 primarily due to legal fees related to loan matters and outside recruitment services.

Other operating expenses increased by $145 thousand, or 8.75%, and $101 thousand, or 3.13%, during the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024, largely reflecting a higher level of fraudulent activity related to customer accounts and higher expenses related to volume based costs and loan collection costs.

The efficiency ratio of the Company was 64.91% and 77.00% for the three months ended June 30, 2025 and 2024, respectively. The efficiency ratio of the Company was 68.23% and 77.36% for the six months ended June 30, 2025 and 2024, respectively. The improvement in the efficiency ratio during 2025 reflects an increase in net interest and noninterest income. The efficiency ratio is not a measurement under GAAP. It is calculated by dividing noninterest expense by the sum of tax equivalent net interest income and noninterest income (loss). The Company adjusts for non-recurring items such as gains and losses on the investment portfolio and other gains/losses from OREO, repossessed assets, disposals of bank premises and equipment, etc. The tax rate utilized is 21%. The Company calculates and reviews this ratio as a means of evaluating operational efficiency.

The calculation of the efficiency ratio for the three and six months ended June 30, 2025 and 2024 was as follows:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2025

 

 

2024

 

 

2025

 

 

2024

 

 

 

(in thousands)

 

 

(in thousands)

 

Summary of Operating Results:

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest expenses (GAAP)

 

$

13,399

 

 

$

12,510

 

 

$

25,988

 

 

$

24,887

 

Less: Loss on sale of repossessed assets

 

 

—

 

 

 

—

 

 

 

133

 

 

 

—

 

Adjusted noninterest expenses (Non-GAAP)

 

$

13,399

 

 

$

12,510

 

 

$

25,855

 

 

$

24,887

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

 

15,698

 

 

 

12,156

 

 

 

29,034

 

 

 

24,571

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest income (loss) (GAAP)

 

 

4,917

 

 

 

4,305

 

 

 

(3,637

)

 

 

7,785

 

Less: (Loss) on the sale and disposal of premises and equipment

 

 

—

 

 

 

(11

)

 

 

(16

)

 

 

(11

)

Less: (Loss) on the sale of securities

 

 

—

 

 

 

—

 

 

 

(12,425

)

 

 

—

 

Less: Income from life insurance proceeds

 

 

—

 

 

 

254

 

 

 

—

 

 

 

254

 

Adjusted noninterest income (Non-GAAP)

 

$

4,917

 

 

$

4,062

 

 

$

8,804

 

 

$

7,542

 

Tax equivalent adjustment (1)

 

 

26

 

 

 

29

 

 

 

54

 

 

 

58

 

Total net interest income and noninterest income, adjusted (Non-GAAP)

 

$

20,641

 

 

$

16,247

 

 

$

37,892

 

 

$

32,171

 

 

 

 

 

 

 

 

 

 

 

 

 

Efficiency ratio

 

 

64.91

 %

 

 

77.00

 %

 

 

68.23

 %

 

 

77.36

 %

 

(1)
Includes tax-equivalent adjustments on loans and securities using the federal statutory tax rate of 21%.

 

Income Taxes

Income tax expense of $1.3 million and $585 thousand was recognized during the three months ended June 30, 2025 and 2024, respectively. For the six months ended June 30, 2025 an income tax benefit of $788 thousand was recognized compared to income tax expense of $1.1 million during the six months ended June 30, 2024. The effective tax rate was 19.52% and 15.52% for the three months ended June 30, 2025 and 2024, respectively. The effective tax (benefit) rate for six months ended June 30, 2025 and 2024 was (31.62%) and 15.85%, respectively. The year over year comparisons include tax-exempt income on investment securities and loans, BOLI income, income tax credits on qualified affordable housing project investments, and qualified rehabilitation credits.

55

TABLE OF CONTENTS

Additionally, during the six months ended June 30, 2025, the effective tax (benefit) rate was also impacted by the balance sheet repositioning transactions. Qualified affordable housing project investments are discussed in Note 11 to the Consolidated Financial Statements.

 

Business Segments

The Company has three reportable operating segments: community banking, marine lending and wealth management. See Note 16 to the Consolidated Financial Statements.

The following table presents a summarized statement of operations for the community banking business segment for the three and six months ended June 30, 2025 and 2024:

 

 

 

For the Three Months Ended June 30,

 

 

For the Six Months Ended June 30,

 

(dollars in thousands)

 

2025

 

 

2024

 

 

$ Change

 

 

% Change

 

 

2025

 

 

2024

 

 

$ Change

 

 

% Change

 

Net Interest Income

 

$

14,434

 

 

$

10,743

 

 

$

3,691

 

 

 

34

 %

 

$

26,614

 

 

$

21,490

 

 

$

5,124

 

 

 

24

 %

Gain on sales of loans

 

 

1,104

 

 

 

492

 

 

 

612

 

 

 

124

 %

 

 

1,533

 

 

 

653

 

 

 

880

 

 

 

135

 %

(Loss) on the sale of securities

 

 

—

 

 

 

—

 

 

 

—

 

 

NM

 

 

 

(12,425

)

 

 

—

 

 

 

(12,425

)

 

NM

 

Other noninterest income

 

 

2,120

 

 

 

2,540

 

 

 

(420

)

 

 

(17

)%

 

 

3,838

 

 

 

4,403

 

 

 

(565

)

 

 

(13

)%

Net Revenue

 

 

17,658

 

 

 

13,775

 

 

 

3,883

 

 

 

28

 %

 

 

19,560

 

 

 

26,546

 

 

 

(6,986

)

 

 

(26

)%

Provision for credit losses

 

 

794

 

 

 

207

 

 

 

587

 

 

 

284

 %

 

 

2,171

 

 

 

293

 

 

 

1,878

 

 

 

641

 %

Noninterest expense

 

 

12,339

 

 

 

11,605

 

 

 

734

 

 

 

6

 %

 

 

24,051

 

 

 

22,979

 

 

 

1,072

 

 

 

5

 %

Income (Loss) before taxes

 

 

4,525

 

 

 

1,963

 

 

 

2,562

 

 

 

131

 %

 

 

(6,662

)

 

 

3,274

 

 

 

(9,936

)

 

 

(303

)%

Income tax expense (benefit)

 

 

855

 

 

 

205

 

 

 

650

 

 

 

316

 %

 

 

(1,651

)

 

 

321

 

 

 

(1,972

)

 

 

(614

)%

Net Income (Loss)

 

$

3,670

 

 

$

1,758

 

 

$

1,912

 

 

 

109

 %

 

$

(5,011

)

 

$

2,953

 

 

$

(7,964

)

 

 

(270

)%

Net interest income increased during the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024 primarily due to income earned on: i) non-marine loans; ii) the investment securities portfolio, which was restructured in the first quarter of 2025 to sell and replace lower yielding investments with higher yielding securities; iii) higher levels of earning deposit balances in other other banks; and iv) reduction in borrowings expense as FHLB advances have matured. These increases were partially offset by an increase in interest-bearing deposit expense due to growth in average balances. Higher levels of interest-earning deposits balances in other banks reflects proceeds received from the capital raise and sales of available for sale securities completed during the first quarter of 2025, as well as increases in customer deposit balances.

Provision for credit losses increased primarily due to charge-offs totaling $971 thousand and a specific reserve of $1.1 million related to a $11.5 million commercial real estate loan relationship, partially offset by recoveries and decreases in loan balances.

Loss on the sale of securities resulted from the Company's execution of balance sheet repositioning transactions within its investment securities portfolio in March 2025. Available for sale debt securities totaling $99.2 million, with a fair value of $86.8 million, were sold resulting in a net pre-tax loss of $12.4 million.

The decrease in income tax expense during the six months ended June 30, 2025 was directly related to the recognized loss on the sale of securities.

56

TABLE OF CONTENTS

The following table presents a summarized statement of operations for the marine lending segment for the three and six months ended June 30, 2025 and 2024:

 

 

 

For the Three Months Ended June 30,

 

 

For the Six Months Ended June 30,

 

(dollars in thousands)

 

2025

 

 

2024

 

 

$ Change

 

 

% Change

 

 

2025

 

 

2024

 

 

$ Change

 

 

% Change

 

Net Interest Income

 

$

1,619

 

 

$

1,768

 

 

$

(149

)

 

 

(8

)%

 

$

3,129

 

 

$

3,790

 

 

$

(661

)

 

 

(17

)%

Net Revenue

 

 

1,619

 

 

 

1,768

 

 

 

(149

)

 

 

(8

)%

 

 

3,129

 

 

 

3,790

 

 

 

(661

)

 

 

(17

)%

(Recovery of) provision for credit losses

 

 

(126

)

 

 

(26

)

 

 

(100

)

 

 

385

 %

 

 

(270

)

 

 

363

 

 

 

(633

)

 

 

(174

)%

Noninterest expense

 

 

126

 

 

 

135

 

 

 

(9

)

 

 

(7

)%

 

 

230

 

 

 

353

 

 

 

(123

)

 

 

(35

)%

Income before taxes

 

 

1,619

 

 

 

1,659

 

 

 

(40

)

 

 

(2

)%

 

 

3,169

 

 

 

3,074

 

 

 

95

 

 

 

3

 %

Income tax expense

 

 

339

 

 

 

349

 

 

 

(10

)

 

 

(3

)%

 

 

665

 

 

 

646

 

 

 

19

 

 

 

3

 %

Net Income

 

$

1,280

 

 

$

1,310

 

 

$

(30

)

 

 

(2

)%

 

$

2,504

 

 

$

2,428

 

 

$

76

 

 

 

3

 %

 

Marine Lending net revenues declined $149 thousand and $661 thousand for the three and six months ended June 30, 2025 compared to the corresponding periods in 2024. This was due to pay downs in the portfolio, which are not being replaced with new loan originations. The marine loan portfolio totaled $196.4 million and $236.9 million at June 30, 2025 and June 30, 2024, respectively.

Provision for credit losses declined reflecting declining loan balances, net of charge-off activity.

The following table presents a summarized statement of operations for the wealth management segment for the three and six months ended June 30, 2025 and 2024:

 

 

 

For the Three Months Ended June 30,

 

 

For the Six Months Ended June 30,

 

(dollars in thousands)

 

2025

 

 

2024

 

 

$ Change

 

 

% Change

 

 

2025

 

 

2024

 

 

$ Change

 

 

% Change

 

Other noninterest income

 

 

1,693

 

 

 

1,273

 

 

 

420

 

 

 

33

 %

 

$

3,417

 

 

$

2,729

 

 

$

688

 

 

 

25

 %

Net Revenue

 

 

1,693

 

 

 

1,273

 

 

 

420

 

 

 

33

 %

 

 

3,417

 

 

 

2,729

 

 

 

688

 

 

 

25

 %

Provision for credit losses

 

 

—

 

 

 

—

 

 

 

—

 

 

 

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

 

Noninterest expense

 

 

776

 

 

 

675

 

 

 

101

 

 

 

15

 %

 

 

1,459

 

 

 

1,347

 

 

 

112

 

 

 

8

 %

Income before taxes

 

 

917

 

 

 

598

 

 

 

319

 

 

 

53

 %

 

 

1,958

 

 

 

1,382

 

 

 

576

 

 

 

42

 %

Income tax expense

 

 

192

 

 

 

125

 

 

 

67

 

 

 

54

 %

 

 

411

 

 

 

290

 

 

 

121

 

 

 

42

 %

Net Income

 

$

725

 

 

$

473

 

 

$

252

 

 

 

53

 %

 

$

1,547

 

 

$

1,092

 

 

$

455

 

 

 

42

 %

 

Net revenue increased during the three and six months ended June 30, 2025 over the 2024 periods due to increases in trust services income reflecting fees earned on a higher level of assets under management and estate settlements and increases in investment sales revenue.

 

FINANCIAL CONDITION

Two significant events impacting the Company's financial condition occurred during the first quarter of 2025. On February 13, 2025, the Company completed an underwritten public offering of 1,796,875 shares of its common stock at a public offering price of $32.00 per share. The net proceeds from the offering were $53.5 million. During March 2025, the Company executed balance sheet repositioning transactions within its investment securities portfolio.

57

TABLE OF CONTENTS

The execution of these events was to support continued organic growth and capital generation. These are further described in their corresponding paragraphs below.

Securities

Total securities available for sale were $120.9 million at June 30, 2025, compared to $121.3 million at December 31, 2024. This represents a decrease of $423 thousand, or 0.35%. The Company purchased $91.2 million of securities during the six months ended June 30, 2025. The Company had total maturities, calls, and principal repayments of $6.9 million and sales of $99.2 million during the six months ended June 30, 2025. Note 4 to the Consolidated Financial Statements provides additional details about the Company’s securities portfolio at June 30, 2025 and December 31, 2024. The Company had a net unrealized loss on available for sale securities of $9.2 million at June 30, 2025 as compared to a net unrealized loss of $23.6 million at December 31, 2024. Unrealized gains or losses on available for sale securities are reported within shareholders’ equity, net of the related deferred tax effect, as accumulated other comprehensive income (loss).

During March 2025, balance sheet repositioning transactions were comprised of sales of available for sale debt securities with an amortized cost balance of $99.2 million (fair value of $86.8 million) and a weighted average yield of 1.72%, with proceeds reinvested into purchases of $66.0 million of available for sale debt securities with a weighted average yield of 4.72%. The total sales of $99.2 million represented 68.48% of December 31, 2024 securities balance. The majority of these repositioning sales and purchases consisted of mortgage-backed securities. The sale of debt securities resulted in a net pre-tax realized loss of $12.4 million (after-tax of $9.8 million) that was recognized in the first quarter of 2025. In addition to the repositioning transactions, the Company purchased U.S. Treasury notes totaling $9.9 million prior to the repositioning to maintain pledging levels throughout the repositioning period and has also made subsequent purchases.

The primary cause of the unrealized losses at June 30, 2025 and December 31, 2024 was changes in market interest rates, rather than other market conditions or credit concerns of the issuers over the time between purchase and measurement periods. 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 Company concluded a credit loss did not exist.

Loan Portfolio

The Company’s primary use of funds is supporting lending activities from which it derives the greatest amount of interest income. Gross loans were $1.44 billion and $1.47 billion at June 30, 2025 and December 31, 2024, respectively. This represents a decrease of $28.4 million, or 1.94%, during the six months ended June 30, 2025. The ratio of gross loans to deposits decreased during the six months ended June 30, 2025 from 93.14% at December 31, 2024 to 81.44% at June 30, 2025 reflecting the decrease in gross loans, compounded by a 12.15% increase in deposits during the same time period.

The loan portfolio consists primarily of loans for owner-occupied single-family dwellings and loans secured by commercial real estate. Note 5 to the Consolidated Financial Statements provides the composition of the loan portfolio at June 30, 2025 and December 31, 2024. During the six months ended June 30, 2025, through the normal course of business, $60.7 million in loans were sold, consisting primarily of mortgage loans. Included in total loans sold was a pool of residential mortgage loans totaling $18.8 million, which was sold at par. This pool was sold in January 2025, ahead of the Company's public offering, to bolster on-balance sheet liquidity. Loan sales resulted in net gains of $1.5 million during the six months ended June 30, 2025. Loan sales, paydowns within the marine portfolio, and significant payoffs of commercial and industrial loans related to the sales of two customers' businesses caused the balance of gross loans to experience a net decline, while being partially offset by modest loans originations, primarily secured by real estate.

Residential real estate loans, consisting of first liens, junior liens and home equity loans, were $346.4 million, or 24.08%, and $361.8 million, or 24.66%, of total loans at June 30, 2025 and December 31, 2024, respectively. The decrease of $15.4 million, or 4.26%, is primarily due to the portfolio loan sale.

58

TABLE OF CONTENTS

Commercial real estate loans (including multifamily loans) were $661.7 million, or 45.99%, and $639.9 million, or 43.62%, of total loans at June 30, 2025 and December 31, 2024, respectively, representing an increase of $21.7 million, or 3.40%, during the six months ended June 30, 2025. Owner occupied commercial real estate loans experienced a $16.6 million increase during the six months ended June 30, 2025 due to a large construction loan being converted to permanent financing, and non-owner occupied and multifamily commercial real estate loans increased $5.1 million during the same period.

Construction and secured by farmland loans totaled $76.1 million at June 30, 2025 compared to $95.2 million at December 31, 2024, a decrease of $19.1 million, or 20.11%. The majority of this decrease was a large construction loan which converted to permanent financing in the owner-occupied commercial real estate pool.

Marine loans were $196.4 million, or 13.65%, and $210.1 million, or 14.32%, of total loans at June 30, 2025 and December 31, 2024, respectively, representing a decrease of $13.7 million, or 6.50%. The decline in marine loans reflects paydowns and payoffs only as the Company is no longer accepting new marine business. At present, the Company expects to hold the retained outstanding loans until they are ultimately repaid.

Allowance for Credit Losses on Loans

The purpose of, and the methods for, measuring the allowance for credit losses on loans are discussed in Note 1 to the Consolidated Financial Statements in the 2024 Form 10-K. Note 5 to the Consolidated Financial Statements shows the activity within the allowance for credit losses on loans during the three and six months ended June 30, 2025 and 2024 and the year ended December 31, 2024. Charged-off loans were $1.4 million and $877 thousand for the six months ended June 30, 2025 and 2024, respectively. Of the total charge-offs during the six months ended June 30, 2025, $971 thousand, or 68.82%, was due to one commercial real estate relationship totaling $11.5 million. Recoveries were $361 thousand and $609 thousand for the six months ended June 30, 2025 and 2024, respectively. This resulted in net charge-offs of $1.1 million and $268 thousand for the six months ended June 30, 2025 and 2024, respectively. The annualized ratio of net charge-offs to average loans was 0.15% and 0.04% for the six months ended June 30, 2025 and 2024, respectively. The allowance for credit losses on loans as a percentage of loans was 1.11% at June 30, 2025 and 1.02% at December 31, 2024. The increase as compared to December 31, 2024 was mainly attributable to net loan charge-offs and specific reserves during the three months ended June 30, 2025.

Management believes that the allowance for credit losses on loans is currently adequate to absorb the current expected losses in the loan portfolio.

Credit Risk, Nonperforming Assets and Other Assets

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans individually to classify the loans as to credit risk on a quarterly basis. Loans risk rated as special mention, which exhibit negative trends and potential weaknesses, including stale financial information, totaled $51.0 million at June 30, 2025 compared to $50.1 million at December 31, 2024. Loans risk rated as classified, include substandard, doubtful, and loss loans, totaled $19.1 million and $4.5 million at June 30, 2025 and December 31, 2024, respectively. All other loans were classified as pass, exhibiting acceptable history of profits, cash flow ability and liquidity. The increase in classified loans of $14.6 million was primarily due to two large commercial real estate relationships being placed on nonaccrual status during the first quarter of 2025, including a $2.2 million owner-occupied relationship and an $11.5 million non-owner occupied relationship. Additionally, in the second quarter of 2025, a $400 thousand commercial and industrial loan secured by business assets was placed on nonaccural status.

Nonperforming assets consist of nonaccrual loans, repossessed assets, OREO (foreclosed properties), and loans past due 90 days or more and still accruing as detailed in the table below.

59

TABLE OF CONTENTS

 

 

June 30, 2025

 

 

December 31, 2024

 

Nonaccrual loans

 

$

16,735

 

 

$

2,072

 

Loans past due 90 days or more and accruing interest

 

 

593

 

 

 

—

 

Other real estate owned and repossessed assets

 

 

186

 

 

 

514

 

Total nonperforming assets

 

$

17,514

 

 

$

2,586

 

 

 

 

 

 

 

Allowance for credit losses on loans

 

$

15,979

 

 

$

15,027

 

 

 

 

 

 

 

Gross loans

 

$

1,438,632

 

 

$

1,467,049

 

 

 

 

 

 

 

Allowance for credit losses on loans to nonperforming assets

 

 

91

 %

 

 

581

 %

 

 

 

 

 

 

Allowance for credit losses on loans to total loans

 

 

1.11

 %

 

 

1.02

 %

 

 

 

 

 

 

Allowance for credit losses on loans to nonaccrual loans

 

 

95

 %

 

 

725

 %

 

 

 

 

 

 

Nonaccrual loans to total loans

 

 

1.16

 %

 

 

0.14

 %

 

 

 

 

 

 

Non-performing assets to period end loans, other real estate owned and repossessed assets

 

 

1.22

 %

 

 

0.18

 %

 

Nonperforming assets increased by $14.9 million during the six months ended June 30, 2025. Nonaccrual loans were $16.7 million and $2.1 million at June 30, 2025 and December 31, 2024, respectively. There was $186 thousand in OREO and repossessed assets at June 30, 2025 and $514 thousand at December 31, 2024. Loans past due 90 days or more and still accruing at June 30, 2025 totaled $593 thousand and $0 at December 31, 2024. The percentage of nonperforming assets to loans, OREO and repossessed assets was 1.22% at June 30, 2025 and 0.18% at December 31, 2024.

Total past due loans, as disclosed in Note 5 to the Consolidated Financial Statements, increased to $22.3 million at June 30, 2025 compared to $4.5 million at December 31, 2024. The $17.7 million increase in past due loans primarily reflects loans secured by real estate. One non-owner occupied commercial real estate relationship accounts for $11.5 million of the total increase, comprised of four residential multifamily income producing properties. The largest of the four properties had a corresponding loan balance of $5.9 million. This property was offered for sale on July 8, 2025, for $5.7 million with the Bank agreeing to a short sale of $4.8 million, thereby creating a deficiency balance of $1.1 million after consideration of past due taxes and other costs. Although the property owner has entered into an agreement to pay back the deficiency balance and collateralized the note with the remaining three properties and two additional properties, the Bank has allocated a specific reserve for the full amount of the deficiency balance.

During the six months ended June 30, 2025, nonaccrual loans increased by $14.6 million and totaled $16.7 million at June 30, 2025 compared to $2.1 million at December 31, 2024. The increase was primarily due to an $11.5 million non-owner occupied commercial real estate relationship secured by multi-family housing units, which has a specific reserve of $1.1 million (described previously) and a $2.2 million owner-occupied commercial real estate relationship, which is fully collateralized. Management evaluates the financial condition of borrowers and the value of any collateral on nonaccrual loans. The results of these evaluations are used to estimate the amount of losses which may be realized on the disposition of these nonaccrual loans and are reflected in the allowance for credit losses on loans. At June 30, 2025 there were specific reserves of $1.5 million required including $1.1 million for one non-owner occupied commercial real estate relationship and $381 thousand allocated on four commercial business loan relationships due to a potential deficiency in collateral value, compared to $248 thousand at December 31, 2024.

Loans are placed on nonaccrual status when collection of principal and interest is doubtful, generally when a loan becomes 90 days past due. There are three negative implications for earnings when a loan is placed on non-accrual status. First, all interest accrued but unpaid at the date that the loan is placed on non-accrual status is either deducted from interest income or written off as a loss.

60

TABLE OF CONTENTS

Second, accruals of interest are discontinued until it becomes certain that both principal and interest can be repaid. Finally, there may be actual losses to principal that require additional provisions for credit losses to be charged against earnings.

For real estate loans, upon foreclosure, the balance of the loan is transferred to OREO and carried at the fair value of the property based on current appraisals and other current market trends, less estimated selling costs. If a write down of the OREO property is necessary at the time of foreclosure, the amount is charged-off to the allowance for credit losses. A review of the recorded property value is performed in conjunction with normal quarterly reviews, and if market conditions indicate that the recorded value exceeds the fair value, additional write downs of the property value are charged directly to operations.

Deposits

Total deposits were $1.77 billion and $1.58 billion at June 30, 2025 and December 31, 2024, respectively. This represents an increase of $191.4 million or 12.15% during the six months ended June 30, 2025. The majority of this increase was due to large deposits in non-interest bearing accounts totaling $151.7 million received during the second quarter 2025 primarily related to sales proceeds of two customers' businesses. Note 6 to the Consolidated Financial Statements provides the composition of total deposits at June 30, 2025 and December 31, 2024. The total increase in deposits was primarily in non-core accounts, which increased $142.4 million while core accounts increased $48.9 million. During the six months ended June 30, 2025, noninterest demand deposits experienced an increase of $168.4 million, while savings and interest bearing demand deposits increased $49.0 million. Total time deposits decreased $26.1 million during the six months ended June 30, 2025 reflecting decreases of $8.6 million for time deposits with balances less than $250,000 and $17.4 million in time deposits with balances $250,000 and more. Marketing efforts, including rate specials, have been utilized to maintain maturing accounts and to acquire new time deposit accounts. Core deposits, consisting of checking accounts, NOW accounts, money market accounts, regular savings accounts and time deposits less than $250,000, totaled $1.35 billion, or 76.32% of total deposits at June 30, 2025 compared to $1.30 billion, or 82.49%, of total deposits at December 31, 2024. At June 30, 2025 core deposits also excluded the $151.7 million balance related to the business sales proceeds mentioned previously. At June 30, 2025, over 75% of deposits were fully FDIC insured.

 

CAPITAL RESOURCES

The Bank continues to be a well capitalized financial institution. Total shareholders’ equity at June 30, 2025 was $179.6 million, reflecting a percentage of total assets of 8.83%, as compared to $119.0 million and 6.38% at December 31, 2024. The $60.7 million increase in shareholders’ equity was primarily due to net proceeds of $53.5 million received from the completion of an underwritten public offering of 1,796,875 shares of its common stock at a public offering price of $32.00 per share. An additional increase of $11.3 million is due to a decrease in unrealized losses on the securities available for sale portfolio largely reflecting the impact of the balance sheet repositioning. These increases in shareholders' equity were partially offset by a net operating loss of $1.7 million and $2.8 million in dividends declared for the six months ended June 30, 2025. The Company's net operating loss of $1.7 million was directly impacted by the balance sheet repositioning for which a loss on the sale of securities of $12.4 million was recognized. During the six months ended June 30, 2025 and 2024, the Company declared dividends of $0.62 and $0.60 per share, respectively. The Company has a Dividend Investment Plan that allows shareholders to reinvest dividends in Company stock.

At June 30, 2025, the Bank met all capital adequacy requirements and had regulatory capital ratios in excess of the levels established for well-capitalized institutions. The Bank monitors these ratios on a quarterly basis and has several strategies, including without limitation the issuance of common stock, to ensure that these ratios remain above regulatory minimums. The Bank's capital amounts and ratios are presented using the Federal Reserve's risk-based capital framework.

Effective January 1, 2015, the Federal Reserve issued final risk-based capital rules to align with the Basel III regulatory capital framework and meet certain requirements of the Dodd-Frank Act. The final rules require the Bank to comply with the following minimum capital ratios: (i) a common equity Tier 1 capital ratio of 4.5% of risk-weighted assets; (ii) a Tier 1 capital ratio of 6.0% of risk-weighted assets; (iii) a total capital ratio of 8.0% of risk-weighted assets; and (iv) a leverage ratio of 4.0% of total assets.

61

TABLE OF CONTENTS

In addition, a capital conservation buffer requirement of 2.5% was effective January 1, 2019. The capital conservation buffer is designed to absorb losses during periods of economic stress. Banking institutions with any ratio (excluding the leverage ratio) above the minimum but below the conservation buffer will face constraints on dividends, equity repurchases, and compensation based on the amount of the shortfall. The capital conservation buffer rule requires the Bank to maintain (i) a minimum ratio of common equity Tier 1 to risk-weighted assets of at least 4.5%, plus a 2.5% “capital conservation buffer” (which is added to the 4.5% common equity Tier 1 ratio, effectively resulting in a minimum ratio of common equity Tier 1 to risk-weighted assets of at least 7.0%), (ii) a minimum ratio of Tier 1 capital to risk-weighted assets of at least 6.0%, plus the 2.5% capital conservation buffer (which is added to the 6.0% Tier 1 capital ratio, effectively resulting in a minimum Tier 1 capital ratio of 8.5%), (iii) a minimum ratio of total capital to risk-weighted assets of at least 8.0%, plus the 2.5% capital conservation buffer (which is added to the 8.0% total capital ratio, effectively resulting in a minimum total capital ratio of 10.5%), and (iv) a minimum leverage ratio of 4.0%, calculated as the ratio of Tier 1 capital to average assets.

At June 30, 2025 and December 31, 2024, the Bank's capital ratios were as follows: Common equity Tier 1 capital was 14.14% and 11.04%, respectively, Tier 1 risk-based capital was 14.14% and 11.04%, respectively, Total risk-based capital was 15.20% and 12.00%, respectively, and Tier 1 leverage was 10.92% and 8.79%, respectively. The increase in the Bank's capital ratios was due to the completion of the Company's public offering in February 2025.

Pursuant to the Federal Reserve’s Small Bank Holding Company and Savings and Loan Holding Company Policy Statement, qualifying bank holding companies with total consolidated assets of less than $3 billion, such as the Company, are not subject to consolidated regulatory capital requirements.

On March 31, 2022, the Company entered into Subordinated Note Purchase Agreements with certain purchasers pursuant to which the Company issued and sold $30.0 million in aggregate principal amount of its 4.50% Fixed-to-Floating Rate Subordinated Notes due April 1, 2032. See Note 13 to the Consolidated Financial Statements included in this Form 10-Q, for discussion of subordinated debt.

 

LIQUIDITY

Liquidity management involves meeting the present and future financial obligations of the Company with the sale or maturity of assets or with the occurrence of additional liabilities. Liquidity needs are met with cash on hand, deposits in banks, federal funds sold, unpledged securities classified as available for sale and loans maturing within one year. At June 30, 2025, liquid assets totaled $535.9 million as compared to $335.9 million at December 31, 2024. These amounts represented 28.88% and 19.22% of total liabilities at June 30, 2025 and December 31, 2024, respectively. The increase during the first half of 2025 reflects the increased cash on hand from the net proceeds of the capital raise and higher levels of deposits. The Company generally attempts to minimize liquidity demand by primarily utilizing core deposits to fund asset growth. Securities provide a constant source of liquidity through paydowns and maturities. Also, the Company maintains short-term borrowing arrangements, namely federal funds lines of credit, with larger financial institutions as an additional source of liquidity. The Bank’s membership with the Federal Home Loan Bank of Atlanta provides a source of borrowings with numerous rate and term structures. The Company’s senior management monitors the liquidity position regularly and attempts to maintain a position which utilizes available funds most efficiently.

OFF-BALANCE SHEET ARRANGEMENTS AND CONTRACTUAL OBLIGATIONS

There have been no material changes in off-balance sheet arrangements and contractual obligations as reported in the 2024 Form 10-K.

62

TABLE OF CONTENTS

Item 3. Quantitative and Qualitative Disclosures about Market Risk

There have been no material changes in Quantitative and Qualitative Disclosures about Market Risk as reported in the 2024 Form 10-K.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

The Company, under the supervision and with the participation of management, including the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the design and operation of its disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were effective as of June 30, 2025 to ensure that information required to be disclosed by the Company in reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms and that such information is accumulated and communicated to the Company’s management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Internal Control over Financial Reporting

Management is also responsible for establishing and maintaining adequate internal control over the Company’s financial reporting (as defined in Rule 13a-15(f) promulgated under the Securities Exchange Act of 1934, as amended). The Company is currently using the 2013 COSO Framework.

There were no changes in the Company’s internal control over financial reporting during the Company’s three months ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

63

TABLE OF CONTENTS

PART II - OTHER INFORMATION

There are no material pending legal proceedings to which the Company is a party or of which the property of the Company is subject.

Item 1A. Risk Factors

There were no material changes to the Company’s risk factors as disclosed in its Annual Report on Form 10-K for the year ended December 31, 2024.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table details the Company's purchases of its common stock during the second quarter of 2025 pursuant to its Stock Repurchase Program ("the Program"). On June 18, 2025, the Board of Directors of the Company re-authorized the purchase of up to 150,000 shares for repurchase under the Program. The Program expires on June 30, 2026.

 

 

 

Issuer Purchases of Equity Securities

 

 

 

Total Number
of Shares
Purchased

 

 

Average Price
Paid Per Share

 

 

Total Number
of Shares
Purchased as
Part of
Publicly
Announced Plan

 

 

Maximum
Number of
Shares that
may Yet Be
Purchased
Under the
Plan

 

 

 

 

 

 

 

 

 

 

 

 

140,774

 

April 1 - April 30, 2025

 

 

—

 

 

$

—

 

 

 

—

 

 

 

140,774

 

May 1 - May 31, 2025

 

 

291

 

 

 

30.15

 

 

 

291

 

 

 

140,483

 

June 1 - June 30, 2025

 

 

1,141

 

 

 

36.25

 

 

 

1,432

 

 

 

139,342

 

 

 

1,432

 

 

$

35.01

 

 

 

1,432

 

 

 

139,342

 

 

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

None.

Item 5. Other Information

During the fiscal quarter ended June 30, 2025, none of our directors or officers (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934) adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408(a) of Regulation S-K).

64

TABLE OF CONTENTS

Item 6. Exhibits

The following exhibits are filed with this Form 10-Q or incorporated by reference to previous filings. This list includes the exhibit index:

 

31.1

 

Certification by Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 

 

 

31.2

 

Certification by Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 

 

 

32.1

 

Certification by Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

 

101

 

The following materials from the Eagle Financial Services, Inc. Quarterly Report on Form 10-Q for the quarter ended June 30, 2025 formatted in Inline Extensible Business Reporting Language (XBRL): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Comprehensive Income (iv) Consolidated Statements of Changes in Shareholders' Equity, (v) Consolidated Statements of Cash Flows and (vi) notes to Consolidated Financial Statements.

 

 

 

104

 

The cover page from the Eagle Financial Services, Inc. Quarterly Report on Form 10-Q for the quarter ended June 30, 2025 formatted in Inline XBRL (included with Exhibit 101).

 

 

 

 

 

 

 

 

 

 

 

 

65

TABLE OF CONTENTS

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized, this 13th day of August, 2025.

Eagle Financial Services, Inc.

 

By:

 

 

/S/ BRANDON C. LOREY

 

 

 

Brandon C. Lorey

President and Chief Executive Officer

 

 

 

By:

 

 

/S/ KATHLEEN J. CHAPPELL

 

 

 

Kathleen J. Chappell

Executive Vice President, Chief Financial Officer

 

66

EX-31.1 2 efsi-ex31_1.htm EX-31.1 EX-31.1

 

EXHIBIT 31.1

CERTIFICATION BY CHIEF EXECUTIVE OFFICER PURSUANT TO RULES 13a-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Brandon C. Lorey, certify that:

1.
I have reviewed the quarterly report on Form 10-Q of Eagle Financial Services, Inc. for the period ended June 30, 2025;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

 

Date: August 13, 2025

By:

/s/ BRANDON C. LOREY

Brandon C. Lorey

President and Chief Executive Officer

 

 
EX-31.2 3 efsi-ex31_2.htm EX-31.2 EX-31.2

 

EXHIBIT 31.2

CERTIFICATION BY CHIEF EXECUTIVE OFFICER PURSUANT TO RULES 13a-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Kathleen J. Chappell, certify that:

1.
I have reviewed the quarterly report on Form 10-Q of Eagle Financial Services, Inc. for the period ended June 30, 2025;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

 

Date: August 13, 2025

By:

/s/ KATHLEEN J. CHAPPELL

Kathleen J. Chappell

Executive Vice President and Chief Financial Officer

 

 
EX-32.1 4 efsi-ex32_1.htm EX-32.1 EX-32.1

 

EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report on Form 10-Q of Eagle Financial Services, Inc. (the “Company”) for the period ending June 30, 2025 to be filed with the Securities and Exchange Commission (the “Report”), the undersigned Chief Executive Officer and Chief Financial Officer of the Company hereby certify, pursuant to 18 U.S.C. Code Section 1350, as adopted pursuant to Code Section 906 of the Sarbanes-Oxley Act of 2002, that, to our knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

 

Date: August 13, 2025

By:

/s/ BRANDON C. LOREY

Brandon C. Lorey

President and Chief Executive Officer

 

 

 

 

 

 

 

/s/ KATHLEEN J. CHAPPELL

 

 

 

Kathleen J. Chappell

 

 

 

Executive Vice President and Chief Financial Officer