Condensed Financial Information - Parent Company Only

12 Months Ended

Dec. 31, 2016

Condensed Financial Information – Parent Company Only

EAGLE FINANCIAL SERVICES , INC.

(Parent Company Only)

Balance Sheets

December 31, 2016 and 2015

(dollars in thousands)



	2016			2015
Assets
Cash held in subsidiary bank	$	391		$	404
Due from banks	—			505
Loans, net of allowance	2,881			2,941
Investment in subsidiaries, at cost, plus undistributed net income	76,099			75,084
Other assets	45			4
Total assets	$	79,416		$	78,938

Liabilities and Shareholders’ Equity
Other liabilities	$	—		$	717
Total liabilities	$	—		$	717

Shareholders’ Equity
Preferred stock	$	—		$	—
Common stock	8,633			8,758
Surplus	12,642			13,730
Retained earnings	58,165			54,682
Accumulated other comprehensive (loss) income	(24		)	1,051
Total shareholders’ equity	$	79,416		$	78,221
Total liabilities and shareholders’ equity	$	79,416		$	78,938

EAGLE FINANCIAL SERVICES , INC.

(Parent Company Only)

Statements of Income

Years Ended December 31, 2016, 2015, and 2014

(dollars in thousands)



	2016			2015			2014
Income
Dividends from subsidiary bank	$	4,350		$	6,576		$	1,550
Interest and fees on loans	97			52			—
Other interest and dividends	2			11			183
Gain on redemption of trust preferred debt	—			2,424			—
Other income (loss)	149			(121		)	283
Total income	$	4,598		$	8,942		$	2,016

Expenses
Interest expense on borrowings	$	143		$	260		$	317
Other operating expenses	211			260			226
Total expenses	$	354		$	520		$	543
Income before income tax (benefit) expense and equity (deficit) in undistributed earnings of subsidiary bank	$	4,244		$	8,422		$	1,473

Income Tax (Benefit) Expense	(36		)	629			(37		)
Income before equity (deficit) in undistributed earnings of subsidiary bank	$	4,280		$	7,793		$	1,510

Equity (Deficit) in Undistributed Net Income of Subsidiary Bank	2,090			(896		)	5,630
Net income	$	6,370		$	6,897		$	7,140
Comprehensive income	$	5,295		$	6,633		$	8,150

EAGLE FINANCIAL SERVICES , INC.

(Parent Company Only)

Statements of Cash Flows

Years Ended December 31, 2016, 2015, and 2014

(dollars in thousands)



	2016			2015			2014
Cash Flows from Operating Activities
Net Income	$	6,370		$	6,897		$	7,140
Adjustments to reconcile net income to net cash provided by operating activities
(Recovery of) Provision for loan losses	(2		)	23			—
(Gain) on the sale of securities	—			(27		)	(283		)
(Gain) on the redemption of trust preferred capital notes	—			(2,424		)	—
Loss on derecognition of cash flow hedge	—			237			—
Fair value adjustment on derivative contract	(149		)	(88		)	—
Stock-based compensation expense	314			328			290
Undistributed earnings of subsidiary bank	(2,090		)	896			(5,630		)
Changes in assets and liabilities:
(Increase) decrease in other assets	(39		)	294			(10		)
(Decrease) increase in other liabilities	(568		)	814			1
Net cash provided by operating activities	$	3,836		$	6,950		$	1,508

Cash Flows from Investing Activities
Purchases of securities available for sale	$	—		$	—		$	(761	)
Proceeds from the sale of securities available for sale	—			1,009			1,865
Proceeds from maturities of securities available for sale	—			385			405
Net decrease (increase) in loans	62			(2,963		)	—
Net cash provided by (used in) investing activities	$	62		$	(1,569	)	$	1,509

Cash Flows from Financing Activities
Redemption of trust preferred capital notes	$	—		$	(4,793	)	$	—
Cash dividends paid	(2,354		)	(2,064		)	(1,944		)
Issuance of common stock, employee benefit plan	81			187			202
Retirement of common stock	(2,143		)	—			—
Net cash (used in) financing activities	$	(4,416	)	$	(6,670	)	$	(1,742	)
(Decrease) increase in cash	$	(518	)	$	(1,289	)	$	1,275

Cash
Beginning	$	909		$	2,198		$	923
Ending	$	391		$	909		$	2,198