Eagle Financial Services Inc · NASDAQ:EFSI
Eagle Financial Services — IPO Roadshow (February 2025)
38 slides from Eagle Financial Services's IPO roadshow presentation, Feb 6, 2025
Slide 1: Issuer Free Writing Prospectus
Filed Pursuant to Rule 433 Issuer Free Writing Prospectus dated February 6, 2025 Relating to Preliminary Prospectus Supplement dated February 6, 2025 and Prospectus dated February 28, 2023 Registration No. 333-269804
Slide 2: Forward Looking Statements
Forward Looking Statements Forward Looking Statements Certain information contained in this Presentation (together with oral statements made in connection herewith, this “Presentation”) may include “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States P
Slide 3: Table of Contents
Table of Contents Introduction Detailed Financial Review Appendix
Slide 4: Common Stock Offering Summary
Common Stock Offering Summary Issuer Exchange / Ticker Base Offering Size Overallotment Option Lock-Up Sole Bookrunner Lead Manager Eagle Financial Services, Inc. OTCQX (NASDAQ Post-Offering) / EFSI $50.0 Million (100% Primary) 15% (100% Primary) 90 Days for the Company, Directors, Officers & Certai
Slide 5: 1. Introduction
1. Introduction
Slide 6: Company Overview
Company Overview The EFSI Story 2024 Financial Highlights WASHINGTON DC Arlington Annapolis Baltimore MARYLAND 95 81 EFSI Branches (13) EFSI LPO (2) VIRGINIA Berryville Winchester Eagle Financial Services, Inc. is the parent company for Bank of Clarke, was established over 140 years ago Commercial f
Slide 7: History of Asset Growth
Opened branch in Loudoun County, VA WASHINGTON DC Arlington Annapolis Baltimore MARYLAND 95 81 Bank of Clarke opened for business Eagle Financial Services, Inc. was incorporated First expansion out of Clarke County and into Winchester City, VA and Frederick County, VA markets Expanded footprint in N
Slide 8: Investment Highlights
Experienced Leadership Team Attractive Markets of Operation Deep management team with community and regional banking experience in the Mid Atlantic Insider ownership of 12% as of 9/30/24 aligns shareholder interest with decision making Operate in 2 of the top 10 highest household income counties in
Slide 9: Management Team & Board of Directors
Seasoned Management Team Experienced and Balanced Board Management Team & Board of Directors Brandon Lorey President, Chief Executive Officer & Director Age: 56 Years in Banking: 35 EFSI Experience: 6 Kathleen Chappell Executive VP and Chief Financial Officer Age: 57 Years in Banking: 35 EFSI Experi
Slide 10: Our Markets
Our Markets Winchester, VA MSA The oldest city in Virginia west of the Blue Ridge mountains; founded in 1744 #9 small metro area for business and careers in America (Forbes, 2024) Major industries include education, health services, manufacturing and distribution Home to a “Best Regional Hospital” i
Slide 11: Dominant Market Share in Our Core Markets
Dominant Market Share in Our Core Markets Winchester, VA MSA Historical Growth in Winchester Deposits ($M) Loudoun County, VA EFSI 10-Year CAGR: 10% Source: S&P Capital IQ Pro; Deposit data as of 6/30/24 or as of 6/30 of each respective year Community banks defined as banks under $10 billion in asse
Slide 12: Metro vs. Community Markets
Metro(1) vs. Community Markets Loans and Deposits by Market Loans Deposits Current Balances by Market Dollars in millions Source: Company documents, US Census; data as of 12/31/14 and as of 12/31/24 Metro defined as a county with a population of over 250,000 at 2025 census estimates; Purcellville, V
Slide 13: Market Expansion Opportunities
Market Expansion Opportunities ’25 – ’30E Projected Population Growth (%) ’30E Projected Median Household Income ($) Source: S&P Capital IQ Pro; Demographic data as of 6/30/24 Note: Market opportunities are by county, unless otherwise specified = Current Market = LPO Market = Prospective Market EFSI
Slide 14: Creating Scarcity Value
Creating Scarcity Value Source: S&P Capital IQ Pro; Data as of 9/30/24 Includes all banks headquartered in VA and MD, excludes merger targets Virginia and Maryland Banks by Asset Size (1)
Slide 15: Strategic Objectives
Strategic Objectives Maintain focus on strong, profitable organic growth without compromising credit quality Increase operating revenue, manage down NIE/AA to peer levels, maximize operating earnings and grow tangible book value Increase utilization of technology to drive revenue and lower expenses
Slide 16: 2. Detailed Financial Review
2. Detailed Financial Review
Slide 17: Balance Sheet Growth
Gross Loans ($M) (1) Balance Sheet Growth Total Assets ($M) Total Deposits ($M) Source: Company documents; annual data as of 12/31 each year ended (1)Gross loans includes held for investment and held for sale loans CAGR: 16% CAGR: 18% CAGR: 15%
Slide 18: Operating Leverage
Operating Leverage Assets / Full-Time Employees ($M) Deposits / Branch ($M) Revenue and NIE ($M) Full-Time Employees 175 195 221 241 241 Branches 12 12 12 13 13 Source: Company documents; data as of or for the year ended each period Revenue defined as net interest income plus noninterest income; tot
Slide 19: Core Deposit Portfolio
Demand Deposit CAGR: 9% Core Deposit Portfolio Cost of Deposits (%) Deposit Composition Over Time ($M) Deposit Composition Core deposits (3) continue to fuel our organic loan growth Continued focus on commercial deposits; recently expanded treasury management product suite Implementing niche deposit
Slide 20: Loan Portfolio
Loan Portfolio Loan Composition 2019 2024 C&D: 50% CRE: 198% C&D: 45% CRE: 249% Continued focus on providing credit to small- and medium-sized businesses Granular loan portfolio with average loan size of $280k Currently prioritizing C&I over owner-occupied lending No shared national credit exposure
Slide 21: Loan Portfolio Detail
Loan Portfolio Detail C&I and Owner-Occupied CRE (%) Investment CRE (%) Total C&I and OOCRE Loans: $508 million C&I and OOCRE Loans / Total Loans: 34.6% Largest C&I and OOCRE Loan: $13.1 million Average C&I and OOCRE Loan Size: $406k Average Loan to Value: 33.9% Total Investment CRE Loans: $369 mill
Slide 22: Asset Quality
Asset Quality Nonperforming Assets by Type ($M) Reserves / Loans (%) (0.05%) 0.18% (0.09%) (0.02%) (0.05%) Comprehensive and conservative underwriting process Highly experienced bankers incentivized with equity ownership Commitment to a diverse loan portfolio while maintaining strong asset quality m
Slide 23: Noninterest Income Highlights
$21.6 (3) Noninterest Income Highlights Noninterest Income Sources ($M) Diversified Revenue Sources Recent expansion of Wealth Management division with several new hires in 2021, 2022 and January 2025 12 professionals dedicated to Wealth Management services Investment Management Personal Managed Por
Slide 24: Earnings, Book Value and Dividends
Earnings, Book Value and Dividends Earnings per Share ($) Net Income ($M) Dividend per Share ($) Tangible Book Value per Share ($)(1) Source: Company documents; data as of or for the year ended each period See appendix for reconciliation of non-GAAP metrics Core income defined as net income after ta
Slide 25: Yield and Cost Analysis
Yield and Cost Analysis Source: Company documents; annual data for the twelve months ended ended each year; quarterly data for the three months ended each quarter
Slide 26: Profitability Metrics
Profitability Metrics Return on Average Assets (ROAA)(%) NII / AA and NIE / AA (%) Return on Average Equity (ROAE) (%) Core Efficiency Ratio (%) (1) NII / Revenue 19.7% 19.3% 21.5% 21.3% 22.7% Source: Company documents; data for the year ended each period; quarterly data for each quarter ended, resp
Slide 27: Potential Securities Repositioning
Potential Securities Repositioning Potential Transaction Assumptions (1) Securities Portfolio Composition Potential Securities Sold: ~$78 million Pre-Tax Loss: ~$10.0 million Average Yield on Securities Sold: ~1.73% Securities to be Reinvested: ~$68 million @ Assumed ~4.75% Weighted Average Life: ~3
Slide 28: Potential Repositioning Accelerates Profitability
Potential Repositioning Accelerates Profitability Net Interest Margin (%) (1)(2) Core ROAA (%) (1) Source: Company documents; data for the twelve months ended 12/31/24, unless otherwise noted Note: Assumes 21% tax rate for illustrative purposes Note: Illustrative pro forma adjustments include the ba
Slide 29: Capital Ratios
Bank Level Leverage Ratio (%) Tangible Common Equity / Tangible Assets (%) Capital Ratios CET1 Ratio (%) Total Risk-Based Capital Ratio (%) Source: Company documents; data as of 12/31 each year ended See appendix for reconciliation of non-GAAP metrics Illustrative pro forma adjustments include the b
Slide 30: 3. Appendix
3. Appendix
Slide 31: Certificate of Deposit Maturity Schedule
Certificate of Deposit Maturity Schedule Source: Company documents; data as of 12/31/24 Dollars in thousands 4.18% $481 million in Certificate of Deposits Accounts as of 12/31/24 Weighted Average Cost of 4.53% 4.71% 4.59% 4.26% 3.78% 3.47% 2.98% 3.54% 4.61% Weighted Avg. Cost:
Slide 32: Loan Concentration Ratios
Loan Concentration Ratios Bank CRE Ratio Over time (%) Bank C&D Ratio Over time (%) Source: Company documents; annual data as of 12/31 each year ended Note: Illustrative pro forma adjustments include the base $50 million common equity raise plus the $7.5 million overallotment option less customary o
Slide 33: Funding and Sources of Liquidity
Funding and Sources of Liquidity Source: Company documents; data as of 12/31/24 $1.5 million of cash at the holding company as of December 31, 2024 Dividend capacity from the bank to the holding company of $34.4 million as of December 31, 2024 Unused lines of credit to purchase federal funds from co
Slide 34: Historical Financials
Historical Financials Source: Company documents Dollars in millions Note: Numbers may not match due to rounding See appendix for reconciliation of non-GAAP metrics; PTPP income defined as pre-tax, pre-provision income Gross loans includes held for investment and held for sale loans EFSI recorded no
Slide 35: Non-GAAP Reconciliation
Non-GAAP Reconciliation Source: Company documents Note: Numbers may not match due to rounding PTPP income defined as pre-tax, pre-provision income (1)
Slide 36: Non-GAAP Reconciliation
Non-GAAP Reconciliation Source: Company documents Note: Core net income additions and exclusions assume 21% tax rate for illustrative purposes Note: Quarterly ratios shown on an annualized basis Note: Calculations may not match due to rounding
Slide 37: Pro Forma Profitability Reconciliation
Pro Forma Profitability Reconciliation Source: Company documents; 2024 data as of the twelve months ended 12/31/24; Q4 ’24 data for the three months ended 12/31/24, ratios annualized Note: Assumes 21% tax rate for illustrative purposes Note: Net interest income shown on a fully tax equivalent basis
Slide 38: Pro Forma Capital Reconciliation
Pro Forma Capital Reconciliation Source: Company documents; 2024 data as of 12/31/24 Note: Assumes 21% tax rate for illustrative purposes Note: Illustrative pro forma adjustments include the base $50 million common equity raise plus the $7.5 million overallotment option less customary offering relat
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