EFSI · Eagle Financial Services, Inc.

Eagle Financial Services, Inc. reported first quarter 2026 net income of $3.7 million, a 13.7% decline from $4.3 million in Q4 2025 primarily due to lower interest and dividend income and higher provision for credit losses, though up significantly from a $7.0 million loss in Q1 2025 driven by a $12.4 million after-tax loss on securities sales from balance sheet repositioning. Adjusted net income excluding that prior-year loss was $2.8 million, showing year-over-year growth from higher net interest income (+$2.6 million) and gain on loan sales (+$583 thousand), offset by elevated noninterest expenses (+$1.6 million). Net interest income rose 19.2% year-over-year to $15.9 million with margin expansion to 3.63%, benefiting from securities portfolio repositioning (sold low-yield $99.2 million at 1.72%, bought higher-yield $76.0 million at 4.72%) and runoff of high-cost deposits; quarter-over-quarter dip reflected 2.6% lower loan interest income amid stable $1.46 billion average loans. Noninterest income fell 8.0% sequentially to $4.9 million on lower wealth management fees, but surged from prior-year loss excluding securities sale. Expenses declined 8.5% from prior quarter to $14.2 million on lower salaries/incentives, though up 12.9% year-over-year from higher staffing (233 to 253 FTEs) and other operating costs. CEO Brandon Lorey highlighted core progress with margin gains, efficiency improvement to 67.97%, stable asset quality, and strong capital/liquidity supporting customer focus. A $0.31 dividend underscores capital return confidence amid steady execution.