UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 - ------------------------------------------------------------------------------- Form 10-Q X Quarterly Report Under Section 13 or 15(d) of the Securities --------- Exchange Act of 1934 For the quarterly period ended June 30, 2001 Transition Report Under Section 13 or 15(d) of the Exchange --------- Act - ------------------------------------------------------------------------------- EAGLE FINANCIAL SERVICES, INC (Exact name of registrant as specified in its charter) Virginia 54-1601306 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) Post Office Box 391 Berryville, Virginia 22611 (Address of principal executive offices) (Zip Code) (540) 955-2510 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all documents and 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 [X] No [ ] The number of shares of the Registrant's Common Stock ($2.50 par value) outstanding as of August 9, 2001 was 1,451,463. 1
EAGLE FINANCIAL SERVICES, INC. INDEX TO FORM 10-Q PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) .......................... 3 Consolidated Balance Sheets as of June 30, 2001 and December 31, 2000 ....................... 3 Consolidated Statements of Income for the Three and Six Months Ended June 30, 2001 and 2000 ................ 4 Consolidated Statements of Shareholders' Equity for the Six Months Ended June 30, 2001 and 2000 ............... 5 Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2001 and 2000 ............... 6 Notes to Consolidated Financial Statements ................ 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations ............. 8 Item 3. Quantitative and Qualitative Disclosures about Market Risk ......................................... 9 PART II. OTHER INFORMATION Item 1. Legal Proceedings .......................................... 10 Item 2. Changes in Securities ...................................... 10 Item 3. Defaults Upon Senior Securities ............................ 10 Item 4. Submission of Matters to a Vote of Security Holders ........ 10 Item 5. Other Information ......................................... 10 Item 6. Exhibits and reports on Form 8-K ........................... 11 2
PART I. FINANCIAL INFORMATION Item 1. Financial Statements Eagle Financial Services, Inc. and Subsidiary Consolidated Balance Sheets As of June 30, 2001 and December 31, 2000 June 30, 2001 Dec 31, 2000 ------------- ------------- Assets Cash and due from banks $ 8,110,307 $ 5,623,765 Federal funds sold 792,000 2,881,000 Securities available for sale, at fair value 15,403,086 11,662,805 Securities held to maturity (fair value: 2001,$23,752,018; 2000,$26,075,829) 23,594,381 26,295,851 Loans, net allowance for loan losses of $1,501,392 in 2001 and $1,340,086 in 2000 155,563,799 140,709,430 Bank premises and equipment, net 5,047,494 4,909,252 Other assets 4,354.437 4,091,185 ------------ ------------ Total assets $212,865,504 $196,133,288 ============ ============ Liabilities and Shareholders' Equity Liabilities Deposits: Noninterest bearing demand deposits $ 34,633,776 $ 28,189,351 Interest bearing demand deposits, money market and savings accounts 62,472,864 56,699,785 Time deposits 85,715,542 83,167,640 ------------ ------------ Total deposits $182,822,182 $168,056,776 Federal funds purchased and securities sold under agreements to repurchase 3,744,175 2,782,666 Federal Home Loan Bank advances 5,000,000 5,000,000 Other liabilities 994,048 1,028,360 Commitments and contingent liabilities 0 0 ------------ ------------ Total liabilities $192,560,405 $176,867,802 ------------ ------------ Shareholders' Equity Preferred Stock, $10 par value; 500,000 shares authorized and unissued $ 0 $ 0 Common Stock, $2.50 par value; authorized 5,000,000 shares; issued 2001, 1,451,464; issued 2000, 1,445,431 shares 3,628,660 3,613,578 Surplus 2,996,381 2,873,924 Retained Earnings 13,483,078 12,760,698 Accumulated other comprehensive income 196,980 17,286 ------------ ------------ Total shareholders' equity $ 20,305,099 $ 19,265,486 ------------ ------------ Total liabilities and shareholders' equity $212,865,504 $196,133,288 ============ ============ 3
Eagle Financial Services, Inc. and Subsidiary Consolidated Statements of Income For the Periods Ended June 30, 2001 and 2000 <TABLE> <CAPTION> Three Months Ended Six Months Ended June 30 June 30 2001 2000 2001 2000 ---------- ---------- ---------- ---------- <S> <C> Interest Income Interest and fees on loans $3,038,239 2,670,517 $5,969,083 $5,201,078 Interest on federal funds sold 5,305 4,351 9,255 4,351 Interest on securities held to maturity: Taxable interest income 228,247 275,074 482,591 559,534 Interest income exempt from federal income taxes 99,453 105,286 200,588 212,013 Interest and dividends on securities available for sale: Taxable interest income 180,810 118,073 326,668 241,576 Interest income exempt from federal income taxes 18,378 17,623 36,755 32,655 Dividends 35,882 33,096 71,019 62,409 Interest on deposits in banks 287 213 920 1,498 ---------- ---------- ---------- ---------- Total interest income $3,606,601 $3,224,233 $7,096,879 $6,315,114 ---------- ---------- ---------- ---------- Interest Expense Interest on deposits $1,447,970 $1,253,670 $2,901,647 $2,446,773 Interest on federal funds purchased and securities sold under agreements to repurchase 56,891 86,524 121,878 173,851 Interest on Federal Home Loan Bank advances 62,436 62,441 124,186 124,882 ---------- ---------- ---------- ---------- Total interest expense $1,567,297 $1,402,635 $3,147,711 $2,745,506 ---------- ---------- ---------- ---------- Net interest income $2,039,304 $1,821,598 $3,949,168 $3,569,608 Provision For Loan Losses 145,000 80,000 235,000 $ 170,000 ---------- ---------- ---------- ---------- Net interest income after provision for loan losses $1,894,304 $1,741,598 $3,714,168 $3,399,608 ---------- ---------- ---------- ---------- Other Income Trust Department income $ 131,993 $ 57,283 $ 278,622 $ 165,366 Service charges on deposits 238,573 187,824 435,994 364,252 Other service charges and fees 362,393 282,502 592,079 498,576 Securities gains 0 0 55,390 0 Other operating income 12,677 32,260 26,226 47,190 ---------- ---------- ---------- ---------- $ 745,636 $ 559,869 $1,388,311 $1,075,384 ---------- ---------- ---------- ---------- Other Expenses Salaries and wages $ 824,166 $ 717,832 $1,599,499 $1,409,557 Pension and other employee benefits 218,737 185,381 405,394 331,312 Occupancy expenses 106,621 122,001 221,037 245,915 Equipment expenses 180,767 157,719 336,058 294,345 Stationary and supplies 62,222 49,228 108,825 81,764 Credit card expense 56,723 53,013 102,796 95,244 ATM network fees 38,137 32,944 76,065 65,764 Postage 37,194 37,654 69,799 77,959 Other operating expenses 370,421 275,805 672,710 554,192 ---------- ---------- ---------- ---------- $1,894,988 $1,631,577 $3,592,183 $3,156,052 ---------- ---------- ---------- ---------- Income before income taxes $ 744,952 $ 669,890 $1,510,296 $1,318,940 Income Tax Expense 201,371 153,048 411,854 313,460 ---------- ---------- ---------- ---------- Net Income $ 543,581 $ 516,842 $1,098,442 $1,005,480 ========== ========== ========== ========== Net income per common share, basic and diluted $ 0.37 $ 0.36 $ 0.76 $ 0.70 ========== ========== ========== ========== </TABLE> 4
Eagle Financial Services, Inc. and Subsidiary Consolidated Statements of Shareholders' Equity For the Six Months Ended June 30, 2001 and 2000 <TABLE> <CAPTION> Accumulated Other Common Retained Comprehensive Comprehensive Stock Surplus Earnings Income (Loss) Income Total ------------ ------------ ------------- ------------- ------------- ----------- <S> <C> Balance, December 31, 1999 $3,581,992 $2,602,005 $11,407,018 $ (130,167) $17,460,848 Comprehensive income: Net income 1,005,480 $1,005,480 1,005,480 Other comprehensive income: Unrealized (loss) on securities available for sale, net of deferred income taxes of $27,729 (53,827) (53,827) (53,827) ------------ Total comprehensive income $ 951,653 ============ Issuance of common stock, employee benefit plan (1,352 shares) 3,380 22,423 25,803 Issuance of common stock, dividend investment plan (4,489 shares) 11,223 110,296 121,519 Dividends declared ($0.22 per share) (315,459) (315,459) Fractional shares purchased (7) (72) (79) ---------- ---------- ----------- ----------- ------------ Balance, June 30, 2000 $3,596,588 $2,734,652 $12,097,039 $ (183,994) $18,244,285 ========== ========== =========== =========== ============ Balance, December 31, 2000 $3,613,578 $2,873,924 $12,760,698 $ 17,286 $19,265,486 Comprehensive income: Net income 1,098,442 $1,098,442 1,098,442 Other comprehensive income: Unrealized gain on securities available for sale, net of deferred income taxes of $92,569 179,694 179,694 179,694 ----------- Total comprehensive income $1,278,136 =========== Issuance of common stock, dividend investment plan (6,036 shares) 15,091 122,538 137,629 Dividends declared ($0.26 per share) (376,062) (376,062) Fractional shares purchased (9) (81) (90) ---------- ---------- ----------- ---------- ------------- Balance, June 30, 2001 $3,628,660 $2,996,381 $13,483,078 $ 196,980 $20,305,099 ========== ========== =========== =========== ============= </TABLE> 5
Eagle Financial Services, Inc. and Subsidiary Consolidated Statements of Cash Flows For the Six Months Ended June 30, 2001 and 2000 Six Months Ended June 31 2001 2000 ------------ ------------ Cash Flows from Operating Activities Net income $ 1,098,442 $ 1,005,480 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 279,034 274,450 Amortization of intangible assets 22,525 22,525 (Gain) Loss on equity investment 3,433 (5,490) Provision for loan losses 235,000 170,000 Loss on sale of other real estate owned 0 299 (Gain) on sale of securities (55,390) 0 Premium amortization on securities, net 32,793 31,700 Changes in assets and liabilities: (Increase) in other assets (362,246) (402,313) Increase (decrease) in other liabilities (126,881) 126,186 ------------ ------------ Net cash provided by operating activities $ 1,126,710 $ 1,222,837 ------------ ------------ Cash Flows from Investing Activities Proceeds from maturities and principal payments on securities held to maturity $ 2,676,223 $ 2,145,907 Proceeds from maturities and principal payments on securities available for sale 4,621,242 1,513,198 Purchases of securities available for sale (8,081,416) (2,225,220) Purchases of bank premises and equipment (344,240) (164,970) Proceeds from sale of other real estate owned 0 2,701 Net (increase) in loans (15,089,369) (10,200,278) ------------ ------------ Net cash (used in) investing activities $(16,217,560) $ (8,928,662) ------------ ------------ Cash Flows from Financing Activities Net increase in demand deposits, money market and savings accounts $ 12,217,504 $ 3,198,244 Net increase in certificates of deposits 2,547,902 8,384,749 Net increase (decrease) in federal funds purchased and securities sold under agreements to repurchase 961,509 (3,786,462) Proceeds form issuance of common stock to ESOP 0 25,803 Cash dividends paid (238,433) (193,940) Fractional shares purchased (90) (79) ------------ ------------ Net cash provided by financing activities $ 15,488,392 $ 7,628,315 ------------ ------------ Increase (decrease) in cash and cash equivalents $ 397,542 $ (77,510) Cash and Cash Equivalents Beginning 8,504,765 6,420,162 ------------ ------------ Ending $ 8,902,307 $ 6,342,652 ============ ============ Supplemental Disclosures of Cash Flow Information Cash payments for: Interest $ 3,170,697 $ 2,740,263 ============ ============ Income taxes $ 556,868 $ 378,968 ============ ============ Supplemental Schedule of Non-Cash Investing and Financing Activities: Issuance of common stock, dividend investment plan $ 137,629 $ 121,519 ============ ============ Unrealized gain (loss) on securities available for sale $ 272,263 $ (81,556) ============ ============ 6
EAGLE FINANCIAL SERVICES, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2001 (1) The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principals from interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles. (2) In the opinion of management, the accompanying unaudited financial statements contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the financial position as of June 30, 2001 and December 31, 2000, the results of operations for the three and six month ended June 30, 2001 and 2000, and cash flows for the six months ended June 30, 2001 and 2000. The statements should be read in conjunction with the Notes to Consolidated Financial Statements included in the Company's Annual Report for the year ended December 31, 2000. (3) The results of operations for the three and six month periods ended June 30, 2001 and 2000, are not necessarily indicative of the results to be expected for the full year. (4) Securities held to maturity and available for sale as of June 30, 2001 and December 31, 2000, are: Jun 30, 2001 Dec 31, 2000 Held to Maturity Amortized Cost Amortized Cost - ------------------------------------------------------------------------------- U.S. Treasury securities $ 121,984 $ 121,983 Obligations of U.S. government corporations and agencies 2,498,908 3,501,765 Mortgage-backed securities 7,017,821 8,176,056 Obligations of states and political subdivisions 13,955,668 14,496,047 ----------- ----------- $23,594,381 $26,295,851 =========== =========== Jun 30, 2001 Dec 31, 2000 Fair Value Fair Value ----------- ------------ U.S. Treasury securities $ 125,050 $ 124,554 Obligations of U.S. government corporations and agencies 2,541,875 3,498,510 Mortgage-backed securities 7,017,350 8,103,514 Obligations of states and political subdivisions 14,067,743 14,349,251 ----------- ----------- $23,752,018 $26,075,829 =========== =========== Jun 30, 2001 Dec 31, 2000 Available for Sale Amortized Cost Amortized Cost - ------------------------------------------------------------------------------- Obligations of U.S. government corporations and agencies $ 500,035 $ 2,752,025 Mortgage-backed securities 3,004,673 4,162,991 Obligations of states and political Subdivisions 1,496,875 1,494,942 Corporate securities 8,165,680 1,192,125 Other 1,937,369 1,994,531 ----------- ----------- $15,104,632 $11,596,614 =========== =========== Jun 30, 2001 Dec 31, 2000 Fair Value Fair Value ------------ ------------ Obligations of U.S. government corporations and agencies $ 512,500 $ 2,762,237 Mortgage-backed securities 3,039,894 4,177,761 Obligations of states and political Subdivisions 1,546,117 1,535,210 Corporate securities 8,290,731 1,214,903 Other 2,013,844 1,932,694 ----------- ----------- $15,403,086 $11,622,805 =========== =========== (5) Net loans at June 30, 2001 and December 31, 2001 are summarized as follows (In Thousands): Jun 30, 2001 Dec 31, 2000 ------------ ------------ Loans secured by real estate: Construction and land development $ 7,078 $ 4,396 Secured by farmland 5,303 5,109 Secured by 1-4 family residential 82,877 75,809 Nonfarm, nonresidential loans 25,307 25,217 Loans to finance agricultural production 572 656 Commercial and industrial loans 14,111 10,749 Loans to individuals 20,905 18,749 Loans to U.S. state and political subdivisions 867 1,306 All other loans 49 66 ----------- ----------- Gross loans $ 157,069 $ 142,057 Less: Unearned income (4) (8) Allowance for loan losses (1,501) (1,340) ----------- ----------- Loans, net $ 155,564 $ 140,709 =========== =========== (6) Allowance for Loan Losses <TABLE> <CAPTION> Jun 30, 2001 Jun 30, 2000 Dec 31, 2000 ------------ ------------ ------------ <S> <C> Balance, beginning $ 1,340,086 $ 1,122,616 $ 1,122,616 Provision charged to operating expense 235,000 170,000 350,000 Recoveries added to the allowance 19,738 17,871 37,988 Loan losses charged to the allowance (93,432) (64,551) (170,518) ----------- ------------- ------------ Balance, ending $ 1,501,392 $ 1,245,936 $ 1,340,086 =========== ============= ============ </TABLE> (7) New Accounting Pronouncements There are no new accounting pronouncements to disclose within this Form 10-Q. 7
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations PERFORMANCE SUMMARY Net income of the company for the first six months of 2001 and 2000 was $1,098,442 and $1,005,480, respectively. This is an increase of $92,962 or 9.25%. Net interest income after provision for loan losses for the first six months of 2001 and 2000 was $3,714,168 and $3,399,608, respectively. This is an increase of $314,560 or 9.25%. This increase can be attributed to continued loan growth. Total noninterest income increased $312,927 or 29.10% from $1,075,384 for the first six months of 2000 to $1,388,311 for the first six months of 2001. This change can be attributed to increases in fees earned by the Trust Department and fees earned from the origination of secondary market mortgages. Total noninterest expenses increased $436,131 or 13.82% from $3,156,052 during the first six months of 2000 to $3,592,183 during the first six months of 2001. This change can be attributed to increases in compensation and benefits expense and increases in other operating expenses. Earnings per common share outstanding (basic and diluted) was $0.76 and $0.70 for the six months ended June 30, 2001 and 2000, respectively. Annualized return on average assets for the six month periods ended June 30, 2001 and 2000 was 1.10% and 1.12%, respectively. Annualized return on average equity for the six month periods ended June 30, 2001 and 2000 was 11.12% and 11.33%, respectively. PROVISION AND ALLOWANCE FOR LOAN LOSSES The provision for loan losses is based upon management's estimate of the amount required to maintain an adequate allowance for loan losses reflective of the risks in the loan portfolio. The Company reviews the adequacy of the allowance for loan losses monthly and utilizes the results of these evaluations to establish the provision for loan losses. The allowance is maintained at a level believed by management to absorb potential losses in the loan portfolio. The methodology considers specific identifications, specific and estimate pools, trends in delinquencies, local and regional economic trends, concentrations, commitments, off balance sheet exposure and other factors. The provision for loan losses for the six month periods ended June 30, 2001 and 2000 was $235,000 and $170,000, respectively. The allowance for loan losses increased $161,306 or 12.04% during the first six months of 2001 from $1,340,086 at December 31, 2000 to $1,501,392 at June 30, 2001. The allowance as a percentage of total loans increased from 0.94% as of December 31, 2000 to 0.96% as of June 30, 2001. The Company had net charge-offs of $73,694 and $46,680 for the first six months of 2001 and 2000, respectively. The ratio of net charge-offs to average loans was 0.05% and 0.04% for the first six months of 2001 and 2000, respectively. Loans past due greater than 90 days and still accruing interest increased from $46,713 at December 31, 2000 to $57,140 at June 30, 2001. Total nonaccrual loans were $93,766 at June 30, 2001. There were no nonaccrual loans as of December 31, 2000. Total impaired loans were $125,255 and $125,752 at June 30, 2001 and December 31, 2000, respectively Loans are viewed as potential problem loans when management questions the ability of the borrower to comply with current repayment terms. These loans are subject to constant review by management and their status is reviewed on a regular basis. The amount of problem loans as of June 30, 2001 was $301,752. Most of these loans are well secured and management expects to incur only immaterial losses on their disposition. BALANCE SHEET Total assets increased $16.8 million or 8.53% from $196.1 million at December 31, 2000 to $212.9 million at June 30, 2001. Securities increased $1.1 million or 2.85% during the first six months of 2001 from $37.9 million at December 31, 2000 to $39.0 million at June 30, 2001. Loans, net of unearned discounts increased $15.1 million or 10.57% during the same period from $142.0 million at December 31, 2000 to $157.1 million at June 30, 2001. Total liabilities increased $15.7 million or 8.87% during the first six months of 2001 from $176.9 million at December 31, 2000 to $192.6 million at June 30, 2001. Total deposits increased $14.7 million or 8.79% during the same period from $168.1 at December 31, 2000 to $182.8 million at June 30, 2001. Total shareholders' equity increased $1.0 million or 5.40% during the first six months of 2001 from $19.3 million at December 31, 2000 to $20.3 million at June 30, 2001. SHAREHOLDERS' EQUITY The Company continues to be a well capitalized financial institution. Shareholders' equity per share increased $0.66 or 4.95% from $13.33 per share at December 31, 2000 to $13.99 per share at June 30, 2001. During 2000 the Company paid $0.46 per share in dividends. The Company's 2001 total dividends for the first two quarters was $0.26 per share. The Company has a Dividend Investment Plan that reinvests the dividends of participating shareholders in Company stock. LIQUIDITY AND MARKET RISK Asset and liability management assures liquidity and maintains the balance between rate sensitive assets and liabilities. Liquidity management involves meeting the present and future financial obligations of the Company with the sale or maturity of assets or through the occurrence of additional liabilities. Liquidity needs are met with cash on hand, deposits in banks, federal funds sold, securities classified as available for sale and loans maturing within one year. Total liquid assets were $61.1 million at June 30, 2001 and $47.5 million at December 31, 2000. These amounts represent 31.73% and 26.85% of total liabilities as of June 30, 2001 and December 31, 2000, respectively. There have been no material changes in Quantitative and Qualitative Disclosures about Market Risk as reported at December 31, 2000 in the Company's Form 10-K. FORWARD LOOKING STATEMENTS Certain statements contained in this report that are not historical facts may be forward looking statements. The forward looking statements are subject to certain risks and uncertainties which could cause actual results to differ materially from historical or expected results. Readers are cautioned not to place undue reliance on these forward looking statements. 8
Item 3. Quantitative and Qualitative Disclosures about Market Risk The information required by Part I, Item 3., is incorporated herein by reference to the section titled LIQUIDITY AND MARKET RISK within Part I, Item 2 "Management's Discussion and Analysis of Financial Condition and Results of Operation." 9
PART II. OTHER INFORMATION Item 1. Legal proceedings. None. Item 2. Changes in securities. None. Item 3. Defaults upon senior securities. None. Item 4. Submission of matters to a vote of security holders. None. Item 5. Other Information. None. 10
Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits The following exhibits, when applicable, are filed with this Form 10-Q or incorporated by reference to previous filings. Number Description - ------ ----------- Exhibit 2. Not applicable. Exhibit 3. (i) Articles of Incorporation of Registrant (incorporated herein by reference to Exhibit 3.1 of Registrant's Form S-4 Registration Statement, Registration No. 33-43681.) (ii) Bylaws of Registrant (incorporated herein by reference to Exhibit 3.2 of Registrant's Form S-4 Registration Statement, Registration No. 33-43681) Exhibit 4. Not applicable. Exhibit 10. Material Contracts. 10.1 Description of Executive Supplemental Income Plan (incorporated by reference to Exhibit 10.1 to the Company's Annual Report on Form 10-K for the year ended December 31, 1996). 10.2 Lease Agreement between Bank of Clarke County (tenant) and Winchester Development Company (landlord) dated August 1, 1992 for the branch office at 625 East Jubal Early Drive, Winchester, Virginia (incorporated herein by reference to Exhibit 10.2 of the Company's Annual Report on Form 10-K for the year ended December 31, 1995). 10.3 Lease Agreement between Bank of Clarke County (tenant) and Winchester Real Estate Management, Inc. (landlord) dated March 20, 2000 for the branch office at 190 Campus Boulevard, Suite 120, Winchester, Virginia (incorporated herein by reference to Exhibit 10.5 of the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2000). Exhibit 11. Computation of Per Share Earnings (incorporated herein as Exhibit 11). Exhibit 15. Not applicable. Exhibit 18. Not applicable. Exhibit 19. Not applicable. Exhibit 22. Not applicable. Exhibit 23. Not applicable. Exhibit 24. Not applicable. Exhibit 27. Not applicable Exhibit 99. Not applicable. (b) Reports on Form 8-K. No reports on Form 8-K were filed by the registrant during the second quarter of 2001. 11
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. EAGLE FINANCIAL SERVICES, INC. Date: August 9, 2001 /s/ JOHN R. MILLESON -------------------------- John R. Milleson President and Chief Executive Officer Date: August 9, 2001 /s/ JAMES W. MCCARTY, JR. -------------------------- James W. McCarty, Jr. Vice President, Chief Financial Officer, and Secretary/Treasurer 12