1. EFSI's Q2 2025 net income reached $5.3 million, up from previous losses. 2. The board announced a cash dividend of $0.31 per share payable August 2025. 3. Net interest income increased by 17.7% to $15.7 million this quarter. 4. Efficiency ratio decreased significantly from 72.20% to 64.91% in Q2 2025. 5. Total assets increased by 6.86%, mainly driven by deposit growth.
The substantial recovery in net income and dividend declaration may attract investor interest, historically leading to positive stock movement for EFSI.
Strong financial results, robust net income growth, and dividend announcement are highly relevant to EFSI’s future performance.
Immediate investors may react positively to the quarterly earnings and dividend, impacting stock price in the near term.
BERRYVILLE, Va., July 24, 2025 /PRNewswire/ -- Eagle Financial Services, Inc. (NASDAQ: EFSI) (the "Company"), the holding company for Bank of Clarke, whose divisions include Bank of Clarke Wealth Management, announced its second quarter 2025 results. On July 24, 2025, the Board of Directors announced a quarterly common stock cash dividend of $0.31 per common share, payable on August 15, 2025, to shareholders of record on August 4, 2025. The following table presents selected financial performance highlights for the periods indicated:
June 30, March 31, June 30, 2025, 2025, 2024 (in thousands)
Note: (1) Non-GAAP financial measure - Excluding the tax effective impact of the loss on sale of securities for the three months ended March 31, 2025. See the "Reconciliation of GAAP to Non-GAAP Performance Highlights" table for a reconciliation of these measures to comparable measures calculated in accordance with GAAP.
Brandon Lorey, President and CEO, stated, "We are very pleased to report record net income of $5.3 million and earnings per share of $0.98, results that are in line with our expectations for the quarter. The full-quarter impact of post-capital raise execution, along with the strategic repositioning of the securities portfolio, contributed to a 44-basis point expansion in net interest margin and an annualized return on assets of 1.09%. Additionally, the continued transition from higher-cost borrowings to lower-cost deposits is strengthening our funding profile and positioning us for long-term balance sheet efficiency. I would like to extend my sincere appreciation to the entire EFSI and Bank of Clarke team for their steadfast commitment to our shareholders, communities, and customers."
Total net income (loss) for the quarters ended June 30, 2025 and March 31, 2025 was $5.3 million and ($7.0 million), respectively. Total net (loss) for the quarter ended March 31, 2025 included a loss on sale of securities of $12.4 million related to an executed balance sheet repositioning. Net income, as adjusted to exclude the one-time effect of this significant transaction, for the quarter ended March 31, 2025 was $2.8 million. For the quarter ended June 30, 2025, net income increased $2.4 million or 85.4% from the adjusted quarter ended March 31, 2025 and increased $2.1 million or 65.5% from the quarter ended June 30, 2024. Net income was $3.2 million for the quarter ended June 30, 2024. The increase from the quarter ended March 31, 2025 was due to an increase in net interest income and gain on loans held for sale as well as a lower provision, partially offset by an increase in salaries and employee benefits expense during the quarter ended June 30, 2025.
The increase from the quarter ended June 30, 2024 was due largely to an increase in net interest income, wealth management fee income and gain on loans held for sale and partially offset by an increase in salaries and employee benefits expense during the quarter ended June 30, 2025.
Total loan interest income was $20.4 million and $20.0 million for the quarters ended June 30, 2025 and March 31, 2025, respectively. Total loan interest income was $19.5 million for the quarter ended June 30, 2024. Total loan interest income increased $438 thousand or 2.2% from the quarter ended March 31, 2025 to the quarter ended June 30, 2025.
This increase is due mainly to the first quarter reversal of $202 thousand in accrued interest income for one loan relationship totaling $12.5 million with a weighted average yield of 8.73% that was placed in nonaccrual status. Average loans did decrease slightly from $1.46 billion for the quarter ended March 31, 2025 to $1.45 billion for the quarter ended June 30, 2025.
Interest and dividend income from the investment portfolio was $1.3 million for the quarter ended June 30, 2025 compared to $848 thousand for the quarter ended March 31, 2025. Interest and dividend income from the investment portfolio was $897 thousand for the quarter ended June 30, 2024.
The tax equivalent yield on average investments for the quarter ended June 30, 2025 was 4.37%, up 144 basis points from 2.93% for the quarter ended March 31, 2025 and up 175 basis points from 2.62% for the quarter ended June 30, 2024. The increase in yield was due largely to lower yielding investments sold during the first quarter of 2025 being replaced with higher yielding securities.
Total interest expense was $9.1 million and $10.2 million for the three months ended June 30, 2025 and March 31, 2025, respectively, and $9.6 million for three months ended June 30, 2024. The decrease in interest expense between the quarter ended June 30, 2025 and the quarter ended June 30, 2024 was due to the $1.2 million decrease in FHLB interest expense, partially offset by increased interest expense on deposits due to growth in interest-bearing deposit accounts year over year.
Net interest income for the quarter ended June 30, 2025 was $15.7 million reflecting an increase of 17.7% from the quarter ended March 31, 2025 and an increase of 29.1% from the quarter ended June 30, 2024.
The objective of the Company's liquidity management is to ensure the continuous availability of funds to satisfy the credit needs of customers and the demands of depositors, creditors, and investors.
Certain information contained in this discussion may include "forward-looking statements" within the meaning of the Securities Act and the Securities Exchange Act. Factors that could adversely affect the operations and future prospects include changes in interest rates, economic conditions, and the regulatory climate.
Eagle Financial Services' Chief Executive Officer, Brandon Lorey, and Chief Financial Officer, Kate Chappell, will hold a listen-only conference call and webcast to discuss second quarter results on Friday, July 25, 2025, at 10 a.m. eastern time. Those wishing to listen to the conference call should call one of the following numbers and reference the Conference ID below:
Conference ID: 3461943 and press #
A replay of the call and webcast will be accessible at investors.bankofclarke.bank.