Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Evans Bancorp Reports Net Income of $2.3 Million In First Quarter 2024 By: Evans Bancorp, Inc. via Business Wire April 30, 2024 at 16:15 PM EDT Evans Bancorp, Inc. (the “Company” or “Evans”) (NYSE American: EVBN), a community financial services company serving Western New York since 1920, today reported results of operations for the first quarter ended March 31, 2024. HIGHLIGHTS First quarter net interest margin of 2.79% expanded 4 basis points sequentially Total loan balances of $1.7 billion up $63 million, or 4%, year-over-year Robust loan pipeline of $95 million Total deposits of $1.9 billion increased $173 million, or 10%, in the quarter, and were up $41 million, or 2%, from the end of last year’s first quarter Comparative periods include business activity relating to The Evans Agency (TEA) prior to the sale to Arthur J. Gallagher & Co. on November 30, 2023 Net income was $2.3 million, or $0.42 per diluted share, in the first quarter of 2024, compared with $10.2 million, or $1.85 per diluted share, in the fourth quarter of 2023 and $5.8 million, or $1.06 per diluted share, in last year’s first quarter. Net income for the fourth quarter of 2023 included a gain of $14 million, net of taxes, from the sale of TEA, $1.5 million of insurance revenue recognized prior to the sale, and a pretax loss on the sale of investment securities of $5 million. The change in net income from prior-year period was due to lower net interest income of $3.4 million, an increase in loan provision of $0.9 million, and a decrease in non-interest income of $1.8 million, partially offset by a decrease in non-interest expense of $1.6 million. Return on average equity was 5.28% for the first quarter of 2024, compared with 25.73% in the fourth quarter of 2023 and 14.97% in the first quarter of 2023. David J. Nasca, President and CEO of Evans Bancorp, Inc., commented, “First quarter results reflect solid performance across key business segments. Against a continuing challenging environment our net interest margin demonstrated resilience, expanding slightly. While the cost of funding continues to rise, the rate of increase is decelerating, which implies a positive outlook. Success in deposit gathering during the quarter lays a strong foundation for future asset growth. We are particularly optimistic relative to our significant loan pipeline approximating $95 million. The pipeline expansion has been bolstered by strategic investments in our commercial banking team, notably within the Rochester market area. This talent has us positioned favorably to capitalize on emerging opportunities. We continue to have a relentless focus on expense management as operating efficiency fortifies our results and, along with the capital that was strengthened last quarter with the proceeds from the sale of our insurance agency, supports our position as we navigate through economic pressure which is expected to persist for a period of time.” Net Interest Income ($ in thousands) 1Q 2024 4Q 2023 1Q 2023 Interest income $ 25,374 $ 25,205 $ 23,365 Interest expense 11,467 11,259 6,040 Net interest income 13,907 13,946 17,325 Provision for credit losses 266 282 (654) Net interest income after provision $ 13,641 $ 13,664 $ 17,979 Net interest income of $13.9 million was flat compared with the fourth quarter of 2023 but was $3.4 million, or 20%, lower from last year’s first quarter as a result of higher interest expense related to the increased cost of interest-bearing liabilities produced by competitive pricing on deposits. First quarter net interest margin of 2.79% increased 4 basis points from the trailing fourth quarter but decreased 67 basis points from the prior-year period. The yield on loans increased 13 basis points compared with the fourth quarter and 40 basis points year-over-year. The cost of interest-bearing liabilities was 3.04% compared with 2.87% in the fourth quarter of 2023 and 1.65% in the first quarter of 2023. The $0.3 million provision for credit losses in the current quarter was due to slower prepayment rates, and higher net loan charge-offs, partially offset by improving economic factors. Asset Quality ($ in thousands) 1Q 2024 4Q 2023 1Q 2023 Total non-performing loans $ 27,977 $ 27,325 $ 24,084 Total net loan charge-offs 93 11 (4) Non-performing loans / Total loans 1.62 % 1.59 % 1.45 % Net loan charge-offs / Average loans 0.02 % - % - % Allowance for loan losses / Total loans 1.29 % 1.28 % 1.30 % Non-Interest Income ($ in thousands) 1Q 2024 4Q 2023 1Q 2023 Deposit service charges $ 681 $ 670 $ 613 Insurance service and fee revenue 149 1,613 2,429 Bank-owned life insurance 246 230 224 Interchange fee income 466 510 493 Gain on sale of insurance agency - 20,160 - Loss on sale of investment securities - (5,044) - Other income 725 412 354 Total non-interest income $ 2,267 $ 18,551 $ 4,113 Total non-interest income was down $16.3 million from the sequential quarter. The reduction from the fourth quarter of 2023 was due to the gain on sale of TEA of $20.2 million and $1.5 million in TEA insurance revenue offset by the $5.0 million investment loss, which were all recognized in the sequential quarter. The remaining increase in non-interest income from the fourth quarter was primarily due to an increase in the value of mortgage servicing rights. Total non-interest income was down $1.8 million when compared with the first quarter of 2023. The majority of the reduction was related to $2.3 million in TEA insurance revenue recognized in the first quarter of 2023. This was offset by an increase in the value of mortgage servicing rights during the first quarter of 2024. Non-Interest Expense ($ in thousands) 1Q 2024 4Q 2023 1Q 2023 Salaries and employee benefits $ 7,837 $ 10,251 $ 9,413 Occupancy 1,157 1,078 1,173 Advertising and public relations 171 296 156 Professional services 895 1,003 883 Technology and communications 1,409 1,545 1,356 Amortization of intangibles 4 67 100 FDIC insurance 325 350 350 Other expenses 1,129 1,710 1,071 Total non-interest expenses $ 12,927 $ 16,300 $ 14,502 Non-interest expenses decreased $3.4 million from the sequential quarter and $1.6 million from the prior-year period. The decrease in non-interest expenses from the fourth quarter of 2023 was due to lower incentive accruals of $2.1 million and $1.0 million of non-interest expenses related to TEA, primarily salaries and employee benefits that were recognized during the fourth quarter of 2023 prior to the sale. In addition, $0.3 million of charitable contributions and $0.1 million of pension settlement expenses of which both were included in other expenses during the sequential quarter. The decrease in non-interest expenses from the first quarter of 2023 was due to $1.8 million of non-interest expenses relating to TEA, of which salaries and employee benefits was $1.5 million. During the first quarter of 2023 salaries and employee benefits, excluding the $1.5 million related to TEA, was $7.9 million, flat with the first quarter of 2024. The remaining increase in total non-interest expense of $0.2 million was due to higher technology and communications expenses recognized by the Bank during the first quarter of 2024. The Company’s GAAP efficiency ratio, or noninterest expenses divided by the sum of net interest income and noninterest income, was 79.92% in the first quarter of 2024, 50.2% in the fourth quarter of 2023, and 67.6% in the first quarter of 2023. Income tax expense was $0.6 million, for an effective tax rate of 21.7%, in the first quarter of 2024 compared with 36.1% in the fourth quarter of 2023 and 23.6% in last year’s first quarter. The elevated tax rate in the fourth quarter of 2023 reflected the sale of TEA which included significant non-deductible goodwill expense. Balance Sheet Highlights “We strategically strengthened our balance sheet during the current quarter. We added $55 million of brokered deposits at favorable rates and lengthened maturities of approximately $40 million of overnight borrowings in order to manage interest rate risk. Overall, we are confident in our ability to navigate the evolving market dynamics and expect our current liquidity position to be the foundation that supports expected commercial loan growth of approximately 5% in 2024,” commented John Connerton, Chief Financial Officer of Evans Bank. Total assets were $2.26 billion as of March 31, 2024, an increase of $151 million, or 7%, since December 31, 2023, and $112 million, or 5%, since March 31, 2023. Interest-bearing deposits at banks increased $161 million from both comparative periods. In addition, when compared with the prior-year period, loan growth increased $63 million, partially offset by a decrease in investment securities of $98 million. Since March 31, 2023, commercial real estate loans increased $76 million, while commercial and industrial loans were down $15 million. Investment securities were $272 million at March 31, 2024, $6 million lower than the end of the fourth quarter of 2023 and $98 million lower than the end of last year’s first quarter. The Company sold $78 million of investment securities during the fourth quarter of 2023 and used the proceeds to reduce short-term borrowings. The primary objectives of the Company’s investment portfolio are to provide liquidity, secure municipal deposits, and maximize income while preserving the safety of principal. The Company has the positive intent and ability to hold the remaining portfolio through recovery of value. Total deposits of $1.89 billion increased $173 million, or 10%, from December 31, 2023, and $41 million, or 2%, from the end of last year’s first quarter. The change from the sequential quarter largely reflected an increase in brokered time deposits and deposits from municipal relationships. From a product perspective, deposit increases were in municipal saving deposits of $69 million, brokered time deposits of $55 million, NOW deposits of $37 million, demand deposits of $9 million, and consumer time deposits of $6 million. Offsetting those increases were lower commercial savings of $3 million. While the Company has not experienced a significant outflow of deposits, in the event of such occurrences, it has access to alternate sources of funding to meet withdrawal demands. At March 31, 2024, Evans has $43 million borrowed at FHLB. Given the current collateral available at FHLB, advances up to $382 million can be drawn on the FHLB via the Company’s overnight line of credit. Additionally, Evans has the ability to borrow from the Federal Reserve. At March 31, 2024, Evans had $88 million in short-term borrowings with the Federal Reserve and $5 million in additional availability to borrow against collateral. Capital Management The Company has consistently maintained regulatory capital ratios measurably above the Federal “well capitalized” standard, including a Tier 1 leverage ratio of 10.52% at March 31, 2024 compared with 10.37% at December 31, 2023 and 9.13% at March 31, 2023. Book value per share was $31.62 at March 31, 2024 compared with $32.40 at December 31, 2023 and $28.97 at March 31, 2023. Reflected in the book value changes are the Federal Reserve’s aggressive interest rate hikes that have resulted in significant unrealized losses on investment securities. As of March 31, 2024, this amounted to $7.83 per share impact to book value. Such unrealized gains and losses are due to changes in interest rates and represent the difference, net of applicable income tax effect, between the estimated fair value and amortized cost of investment securities classified as available-for-sale. Non-GAAP tangible book value per share was $31.29 at March 31, 2024 compared with $32.07 at December 31, 2023 and $26.44 at March 31, 2023. The increase over the prior-year period reflected the sale of TEA, which resulted in significant value creation including growth in tangible book value. On February 20, 2024, the Company declared a cash dividend of $0.66 per common share, which was paid on April 9, 2024. Webcast and Conference Call The Company will host a conference call and webcast on Tuesday, April 30, 2024 at 4:45 p.m. ET. Management will review the financial and operating results for the first quarter of 2024, as well as the Company’s strategy and outlook. A question and answer session will follow. The conference call can be accessed by calling (201) 689-8471. Alternatively, the webcast can be monitored at www.evansbancorp.com. A telephonic replay will be available from 8:00 p.m. ET on the day of the teleconference until Tuesday, May 14, 2024. To listen to the archived call, dial (412) 317-6671 and enter conference ID number 13745903, or access the webcast replay at www.evansbancorp.com, where a transcript will be posted once available. About Evans Bancorp, Inc. Evans Bancorp, Inc. is a financial holding company and the parent company of Evans Bank, N.A., a commercial bank with $2.3 billion in assets and $1.9 billion in deposits at March 31, 2024. Evans Bank is a full-service community bank with 18 branches providing comprehensive financial services to consumer, business and municipal customers throughout Western New York. Evans Investment Services provides non-deposit investment products, such as annuities and mutual funds. Evans Bancorp, Inc. and Evans Bank routinely post news and other important information on their websites, at www.evansbancorp.com and www.evansbank.com. Safe Harbor Statement: This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, but are not limited to, statements concerning future business, revenue and earnings. These statements are not historical facts or guarantees of future performance, events or results. There are risks, uncertainties and other factors that could cause the actual results of Evans Bancorp to differ materially from the results expressed or implied by such statements. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include the impacts from competitive pressures among financial services companies, interest rate trends, general economic conditions, changes in legislation or regulatory requirements, effectiveness at achieving stated goals and strategies, and difficulties in achieving operating efficiencies. These risks and uncertainties are more fully described in Evans Bancorp’s Annual and Quarterly Reports filed with the Securities and Exchange Commission. Forward-looking statements speak only as of the date they are made. Evans Bancorp undertakes no obligation to publicly update or revise forward-looking information, whether as a result of new, updated information, future events or otherwise. EVANS BANCORP, INC. AND SUBSIDIARIES SELECTED FINANCIAL DATA (UNAUDITED) (in thousands, except shares and per share data) 3/31/2024 12/31/2023 9/30/2023 6/30/2023 3/31/2023 ASSETS Interest-bearing deposits at banks $ 164,400 $ 3,798 $ 7,468 $ 10,334 $ 3,832 Securities AFS 268,476 275,680 334,460 351,595 365,929 Securities HTM 3,611 2,059 2,170 2,241 3,707 Loans 1,721,876 1,720,946 1,704,400 1,670,753 1,658,576 Allowance for credit losses (22,287) (22,114) (21,846) (21,368) (21,523) Goodwill and intangible assets 1,858 1,862 13,629 13,729 13,829 All other assets 122,010 126,432 134,462 127,679 123,920 Total assets $ 2,259,944 $ 2,108,663 $ 2,174,743 $ 2,154,963 $ 2,148,270 LIABILITIES AND STOCKHOLDERS' EQUITY Demand deposits $ 399,558 $ 390,238 $ 447,306 $ 442,195 $ 483,958 NOW deposits 381,798 345,279 324,219 303,159 268,283 Savings deposits 715,495 649,621 698,653 726,687 807,532 Time deposits 394,515 333,623 335,228 314,574 290,141 Total deposits 1,891,366 1,718,761 1,805,406 1,786,615 1,849,914 Securities sold under agreement to repurchase 6,873 9,475 13,447 19,185 9,264 Subordinated debt 31,203 31,177 31,152 31,126 31,101 Other borrowings 131,023 145,123 151,252 140,386 79,637 Other liabilities 24,884 25,908 22,551 18,167 20,103 Total stockholders' equity $ 174,595 $ 178,219 $ 150,935 $ 159,484 $ 158,251 SHARES AND CAPITAL RATIOS Common shares outstanding 5,521,009 5,499,772 5,483,591 5,477,505 5,462,763 Book value per share $ 31.62 $ 32.40 $ 27.52 $ 29.12 $ 28.97 Tangible book value per share (Non-GAAP) $ 31.29 $ 32.07 $ 25.04 $ 26.61 $ 26.44 Tier 1 leverage ratio 10.52 % 10.37 % 9.40 % 9.43 % 9.13 % Tier 1 risk-based capital ratio 13.63 % 13.80 % 12.04 % 12.73 % 12.55 % Total risk-based capital ratio 14.89 % 15.05 % 13.29 % 13.98 % 13.80 % ASSET QUALITY DATA Total non-performing loans $ 27,977 $ 27,325 $ 27,311 $ 27,789 $ 24,084 Total net loan charge-offs (recoveries) 93 11 35 35 (4) Other real estate owned (OREO) $ - $ - $ - $ - $ - Non-performing loans/Total loans 1.62 % 1.59 % 1.60 % 1.66 % 1.45 % Net loan charge-offs (recoveries)/Average loans 0.02 % - % 0.01 % 0.01 % - % Allowance for credit losses/Total loans 1.29 % 1.28 % 1.28 % 1.28 % 1.30 % EVANS BANCORP, INC AND SUBSIDIARIES SELECTED OPERATIONS DATA (UNAUDITED) (in thousands, except share and per share data) 2024 2023 2023 2023 2023 First Quarter Fourth Quarter Third Quarter Second Quarter First Quarter Interest income $ 25,374 $ 25,205 $ 24,292 $ 23,988 $ 23,365 Interest expense 11,467 11,259 10,036 8,307 6,040 Net interest income 13,907 13,946 14,256 15,681 17,325 Provision for credit losses 266 282 506 (116) (654) Net interest income after provision for credit losses 13,641 13,664 13,750 15,797 17,979 Deposit service charges 681 670 665 645 613 Insurance service and fee revenue 149 1,613 3,498 2,720 2,429 Bank-owned life insurance 246 230 239 238 224 Interchange fee income 466 510 516 528 493 Gain on sale of insurance agency - 20,160 - - - Loss on sale of investment securities - (5,044) - - - Other income 725 412 638 570 354 Total non-interest income 2,267 18,551 5,556 4,701 4,113 Salaries and employee benefits 7,837 10,251 8,735 8,649 9,413 Occupancy 1,157 1,078 1,109 1,145 1,173 Advertising and public relations 171 296 348 407 156 Professional services 895 1,003 869 808 883 Technology and communications 1,409 1,545 1,517 1,542 1,356 Amortization of intangibles 4 67 100 100 100 FDIC insurance 325 350 350 350 350 Other expenses 1,129 1,710 1,379 1,171 1,071 Total non-interest expenses 12,927 16,300 14,407 14,172 14,502 Income before income taxes 2,981 15,915 4,899 6,326 7,590 Income tax provision 647 5,741 1,281 1,394 1,790 Net income 2,334 10,174 3,618 4,932 5,800 PER SHARE DATA Net income per common share-diluted $ 0.42 $ 1.85 $ 0.66 $ 0.90 $ 1.06 Cash dividends per common share $ 0.66 $ - $ 0.66 $ - $ 0.66 Weighted average number of diluted shares 5,519,244 5,497,029 5,490,600 5,474,462 5,475,790 PERFORMANCE RATIOS Return on average total assets 0.44 % 1.90 % 0.67 % 0.91 % 1.07 % Return on average stockholders' equity 5.28 % 25.73 % 9.06 % 12.25 % 14.97 % Return on average tangible common stockholders' equity (Non-GAAP)* 5.33 % 27.37 % 9.90 % 13.39 % 16.44 % Efficiency ratio 79.92 % 50.16 % 72.72 % 69.53 % 67.65 % Efficiency ratio (Non-GAAP)** 79.90 % 93.40 % 72.21 % 69.04 % 67.18 % * The calculation of the average tangible common stockholders' equity ratio excludes goodwill and intangible assets from average stockholders equity. ** The calculation of the non-GAAP efficiency ratio excludes amortization of intangibles, gains and losses from investment securities, gains from sale of subsidiaries, merger-related expenses and the impact of historic tax credit transactions. EVANS BANCORP, INC AND SUBSIDIARIES SELECTED AVERAGE BALANCES AND YIELDS/RATES (UNAUDITED) (in thousands) 2024 2023 2023 2023 2023 First Quarter Fourth Quarter Third Quarter Second Quarter First Quarter AVERAGE BALANCES Loans, net $ 1,703,320 $ 1,682,177 $ 1,658,132 $ 1,646,502 $ 1,641,162 Investment securities 280,975 327,303 355,870 373,922 382,329 Interest-bearing deposits at banks 18,889 5,916 9,883 7,235 9,824 Total interest-earning assets 2,003,184 2,015,396 2,023,885 2,027,659 2,033,315 Non interest-earning assets 117,646 128,915 135,896 129,793 133,936 Total Assets $ 2,120,830 $ 2,144,311 $ 2,159,781 $ 2,157,452 $ 2,167,251 NOW 347,908 333,893 311,624 281,910 260,242 Savings 658,656 687,223 708,724 776,020 796,793 Time deposits 342,358 335,646 325,667 304,575 257,733 Total interest-bearing deposits 1,348,922 1,356,762 1,346,015 1,362,505 1,314,768 Borrowings 166,948 197,363 192,277 163,338 173,053 Total interest-bearing liabilities 1,515,870 1,554,125 1,538,292 1,525,843 1,487,821 Demand deposits 404,053 409,115 441,149 451,990 503,945 Other non-interest bearing liabilities 23,943 22,880 20,529 18,532 20,487 Stockholders' equity 176,964 158,191 159,811 161,087 154,998 Total Liabilities and Equity $ 2,120,830 $ 2,144,311 $ 2,159,781 $ 2,157,452 $ 2,167,251 Average tangible common stockholders' equity (Non-GAAP)* 175,103 148,673 146,122 147,299 141,111 YIELD/RATE Loans, net 5.56 % 5.43 % 5.25 % 5.26 % 5.16 % Investment securities 2.53 % 2.53 % 2.48 % 2.47 % 2.53 % Interest-bearing deposits at banks 1.68 % 6.38 % 5.29 % 4.45 % 3.97 % Total interest-earning assets 5.09 % 4.96 % 4.76 % 4.75 % 4.66 % NOW 2.30 % 2.12 % 1.79 % 1.24 % 0.75 % Savings 2.25 % 2.09 % 1.85 % 1.58 % 0.95 % Time deposits 4.24 % 3.83 % 3.45 % 3.10 % 2.63 % Total interest-bearing deposits 2.77 % 2.53 % 2.22 % 1.85 % 1.24 % Borrowings 5.25 % 5.27 % 5.14 % 4.98 % 4.74 % Total interest-bearing liabilities 3.04 % 2.87 % 2.59 % 2.18 % 1.65 % Interest rate spread 2.05 % 2.09 % 2.17 % 2.57 % 3.01 % Contribution of interest-free funds 0.74 % 0.66 % 0.62 % 0.53 % 0.45 % Net interest margin 2.79 % 2.75 % 2.79 % 3.10 % 3.46 % * Average tangible common stockholders' equity excludes goodwill and intangible assets from average stockholders equity. View source version on businesswire.com: https://www.businesswire.com/news/home/20240430748925/en/Contacts For more information: John B. Connerton Executive Vice President and Chief Financial Officer (716) 926-2000 jconnerton@evansbank.com -OR- Deborah K. Pawlowski/Craig Mychajluk Kei Advisors LLC (716) 843-3908 dpawlowski@keiadvisors.com cmychajluk@keiadvisors.com Media: Kathleen Rizzo Young Group VP/Public & Community Relations Director (716) 343-5562 krizzoyoung@evansbank.com Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
Evans Bancorp Reports Net Income of $2.3 Million In First Quarter 2024 By: Evans Bancorp, Inc. via Business Wire April 30, 2024 at 16:15 PM EDT Evans Bancorp, Inc. (the “Company” or “Evans”) (NYSE American: EVBN), a community financial services company serving Western New York since 1920, today reported results of operations for the first quarter ended March 31, 2024. HIGHLIGHTS First quarter net interest margin of 2.79% expanded 4 basis points sequentially Total loan balances of $1.7 billion up $63 million, or 4%, year-over-year Robust loan pipeline of $95 million Total deposits of $1.9 billion increased $173 million, or 10%, in the quarter, and were up $41 million, or 2%, from the end of last year’s first quarter Comparative periods include business activity relating to The Evans Agency (TEA) prior to the sale to Arthur J. Gallagher & Co. on November 30, 2023 Net income was $2.3 million, or $0.42 per diluted share, in the first quarter of 2024, compared with $10.2 million, or $1.85 per diluted share, in the fourth quarter of 2023 and $5.8 million, or $1.06 per diluted share, in last year’s first quarter. Net income for the fourth quarter of 2023 included a gain of $14 million, net of taxes, from the sale of TEA, $1.5 million of insurance revenue recognized prior to the sale, and a pretax loss on the sale of investment securities of $5 million. The change in net income from prior-year period was due to lower net interest income of $3.4 million, an increase in loan provision of $0.9 million, and a decrease in non-interest income of $1.8 million, partially offset by a decrease in non-interest expense of $1.6 million. Return on average equity was 5.28% for the first quarter of 2024, compared with 25.73% in the fourth quarter of 2023 and 14.97% in the first quarter of 2023. David J. Nasca, President and CEO of Evans Bancorp, Inc., commented, “First quarter results reflect solid performance across key business segments. Against a continuing challenging environment our net interest margin demonstrated resilience, expanding slightly. While the cost of funding continues to rise, the rate of increase is decelerating, which implies a positive outlook. Success in deposit gathering during the quarter lays a strong foundation for future asset growth. We are particularly optimistic relative to our significant loan pipeline approximating $95 million. The pipeline expansion has been bolstered by strategic investments in our commercial banking team, notably within the Rochester market area. This talent has us positioned favorably to capitalize on emerging opportunities. We continue to have a relentless focus on expense management as operating efficiency fortifies our results and, along with the capital that was strengthened last quarter with the proceeds from the sale of our insurance agency, supports our position as we navigate through economic pressure which is expected to persist for a period of time.” Net Interest Income ($ in thousands) 1Q 2024 4Q 2023 1Q 2023 Interest income $ 25,374 $ 25,205 $ 23,365 Interest expense 11,467 11,259 6,040 Net interest income 13,907 13,946 17,325 Provision for credit losses 266 282 (654) Net interest income after provision $ 13,641 $ 13,664 $ 17,979 Net interest income of $13.9 million was flat compared with the fourth quarter of 2023 but was $3.4 million, or 20%, lower from last year’s first quarter as a result of higher interest expense related to the increased cost of interest-bearing liabilities produced by competitive pricing on deposits. First quarter net interest margin of 2.79% increased 4 basis points from the trailing fourth quarter but decreased 67 basis points from the prior-year period. The yield on loans increased 13 basis points compared with the fourth quarter and 40 basis points year-over-year. The cost of interest-bearing liabilities was 3.04% compared with 2.87% in the fourth quarter of 2023 and 1.65% in the first quarter of 2023. The $0.3 million provision for credit losses in the current quarter was due to slower prepayment rates, and higher net loan charge-offs, partially offset by improving economic factors. Asset Quality ($ in thousands) 1Q 2024 4Q 2023 1Q 2023 Total non-performing loans $ 27,977 $ 27,325 $ 24,084 Total net loan charge-offs 93 11 (4) Non-performing loans / Total loans 1.62 % 1.59 % 1.45 % Net loan charge-offs / Average loans 0.02 % - % - % Allowance for loan losses / Total loans 1.29 % 1.28 % 1.30 % Non-Interest Income ($ in thousands) 1Q 2024 4Q 2023 1Q 2023 Deposit service charges $ 681 $ 670 $ 613 Insurance service and fee revenue 149 1,613 2,429 Bank-owned life insurance 246 230 224 Interchange fee income 466 510 493 Gain on sale of insurance agency - 20,160 - Loss on sale of investment securities - (5,044) - Other income 725 412 354 Total non-interest income $ 2,267 $ 18,551 $ 4,113 Total non-interest income was down $16.3 million from the sequential quarter. The reduction from the fourth quarter of 2023 was due to the gain on sale of TEA of $20.2 million and $1.5 million in TEA insurance revenue offset by the $5.0 million investment loss, which were all recognized in the sequential quarter. The remaining increase in non-interest income from the fourth quarter was primarily due to an increase in the value of mortgage servicing rights. Total non-interest income was down $1.8 million when compared with the first quarter of 2023. The majority of the reduction was related to $2.3 million in TEA insurance revenue recognized in the first quarter of 2023. This was offset by an increase in the value of mortgage servicing rights during the first quarter of 2024. Non-Interest Expense ($ in thousands) 1Q 2024 4Q 2023 1Q 2023 Salaries and employee benefits $ 7,837 $ 10,251 $ 9,413 Occupancy 1,157 1,078 1,173 Advertising and public relations 171 296 156 Professional services 895 1,003 883 Technology and communications 1,409 1,545 1,356 Amortization of intangibles 4 67 100 FDIC insurance 325 350 350 Other expenses 1,129 1,710 1,071 Total non-interest expenses $ 12,927 $ 16,300 $ 14,502 Non-interest expenses decreased $3.4 million from the sequential quarter and $1.6 million from the prior-year period. The decrease in non-interest expenses from the fourth quarter of 2023 was due to lower incentive accruals of $2.1 million and $1.0 million of non-interest expenses related to TEA, primarily salaries and employee benefits that were recognized during the fourth quarter of 2023 prior to the sale. In addition, $0.3 million of charitable contributions and $0.1 million of pension settlement expenses of which both were included in other expenses during the sequential quarter. The decrease in non-interest expenses from the first quarter of 2023 was due to $1.8 million of non-interest expenses relating to TEA, of which salaries and employee benefits was $1.5 million. During the first quarter of 2023 salaries and employee benefits, excluding the $1.5 million related to TEA, was $7.9 million, flat with the first quarter of 2024. The remaining increase in total non-interest expense of $0.2 million was due to higher technology and communications expenses recognized by the Bank during the first quarter of 2024. The Company’s GAAP efficiency ratio, or noninterest expenses divided by the sum of net interest income and noninterest income, was 79.92% in the first quarter of 2024, 50.2% in the fourth quarter of 2023, and 67.6% in the first quarter of 2023. Income tax expense was $0.6 million, for an effective tax rate of 21.7%, in the first quarter of 2024 compared with 36.1% in the fourth quarter of 2023 and 23.6% in last year’s first quarter. The elevated tax rate in the fourth quarter of 2023 reflected the sale of TEA which included significant non-deductible goodwill expense. Balance Sheet Highlights “We strategically strengthened our balance sheet during the current quarter. We added $55 million of brokered deposits at favorable rates and lengthened maturities of approximately $40 million of overnight borrowings in order to manage interest rate risk. Overall, we are confident in our ability to navigate the evolving market dynamics and expect our current liquidity position to be the foundation that supports expected commercial loan growth of approximately 5% in 2024,” commented John Connerton, Chief Financial Officer of Evans Bank. Total assets were $2.26 billion as of March 31, 2024, an increase of $151 million, or 7%, since December 31, 2023, and $112 million, or 5%, since March 31, 2023. Interest-bearing deposits at banks increased $161 million from both comparative periods. In addition, when compared with the prior-year period, loan growth increased $63 million, partially offset by a decrease in investment securities of $98 million. Since March 31, 2023, commercial real estate loans increased $76 million, while commercial and industrial loans were down $15 million. Investment securities were $272 million at March 31, 2024, $6 million lower than the end of the fourth quarter of 2023 and $98 million lower than the end of last year’s first quarter. The Company sold $78 million of investment securities during the fourth quarter of 2023 and used the proceeds to reduce short-term borrowings. The primary objectives of the Company’s investment portfolio are to provide liquidity, secure municipal deposits, and maximize income while preserving the safety of principal. The Company has the positive intent and ability to hold the remaining portfolio through recovery of value. Total deposits of $1.89 billion increased $173 million, or 10%, from December 31, 2023, and $41 million, or 2%, from the end of last year’s first quarter. The change from the sequential quarter largely reflected an increase in brokered time deposits and deposits from municipal relationships. From a product perspective, deposit increases were in municipal saving deposits of $69 million, brokered time deposits of $55 million, NOW deposits of $37 million, demand deposits of $9 million, and consumer time deposits of $6 million. Offsetting those increases were lower commercial savings of $3 million. While the Company has not experienced a significant outflow of deposits, in the event of such occurrences, it has access to alternate sources of funding to meet withdrawal demands. At March 31, 2024, Evans has $43 million borrowed at FHLB. Given the current collateral available at FHLB, advances up to $382 million can be drawn on the FHLB via the Company’s overnight line of credit. Additionally, Evans has the ability to borrow from the Federal Reserve. At March 31, 2024, Evans had $88 million in short-term borrowings with the Federal Reserve and $5 million in additional availability to borrow against collateral. Capital Management The Company has consistently maintained regulatory capital ratios measurably above the Federal “well capitalized” standard, including a Tier 1 leverage ratio of 10.52% at March 31, 2024 compared with 10.37% at December 31, 2023 and 9.13% at March 31, 2023. Book value per share was $31.62 at March 31, 2024 compared with $32.40 at December 31, 2023 and $28.97 at March 31, 2023. Reflected in the book value changes are the Federal Reserve’s aggressive interest rate hikes that have resulted in significant unrealized losses on investment securities. As of March 31, 2024, this amounted to $7.83 per share impact to book value. Such unrealized gains and losses are due to changes in interest rates and represent the difference, net of applicable income tax effect, between the estimated fair value and amortized cost of investment securities classified as available-for-sale. Non-GAAP tangible book value per share was $31.29 at March 31, 2024 compared with $32.07 at December 31, 2023 and $26.44 at March 31, 2023. The increase over the prior-year period reflected the sale of TEA, which resulted in significant value creation including growth in tangible book value. On February 20, 2024, the Company declared a cash dividend of $0.66 per common share, which was paid on April 9, 2024. Webcast and Conference Call The Company will host a conference call and webcast on Tuesday, April 30, 2024 at 4:45 p.m. ET. Management will review the financial and operating results for the first quarter of 2024, as well as the Company’s strategy and outlook. A question and answer session will follow. The conference call can be accessed by calling (201) 689-8471. Alternatively, the webcast can be monitored at www.evansbancorp.com. A telephonic replay will be available from 8:00 p.m. ET on the day of the teleconference until Tuesday, May 14, 2024. To listen to the archived call, dial (412) 317-6671 and enter conference ID number 13745903, or access the webcast replay at www.evansbancorp.com, where a transcript will be posted once available. About Evans Bancorp, Inc. Evans Bancorp, Inc. is a financial holding company and the parent company of Evans Bank, N.A., a commercial bank with $2.3 billion in assets and $1.9 billion in deposits at March 31, 2024. Evans Bank is a full-service community bank with 18 branches providing comprehensive financial services to consumer, business and municipal customers throughout Western New York. Evans Investment Services provides non-deposit investment products, such as annuities and mutual funds. Evans Bancorp, Inc. and Evans Bank routinely post news and other important information on their websites, at www.evansbancorp.com and www.evansbank.com. Safe Harbor Statement: This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, but are not limited to, statements concerning future business, revenue and earnings. These statements are not historical facts or guarantees of future performance, events or results. There are risks, uncertainties and other factors that could cause the actual results of Evans Bancorp to differ materially from the results expressed or implied by such statements. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include the impacts from competitive pressures among financial services companies, interest rate trends, general economic conditions, changes in legislation or regulatory requirements, effectiveness at achieving stated goals and strategies, and difficulties in achieving operating efficiencies. These risks and uncertainties are more fully described in Evans Bancorp’s Annual and Quarterly Reports filed with the Securities and Exchange Commission. Forward-looking statements speak only as of the date they are made. Evans Bancorp undertakes no obligation to publicly update or revise forward-looking information, whether as a result of new, updated information, future events or otherwise. EVANS BANCORP, INC. AND SUBSIDIARIES SELECTED FINANCIAL DATA (UNAUDITED) (in thousands, except shares and per share data) 3/31/2024 12/31/2023 9/30/2023 6/30/2023 3/31/2023 ASSETS Interest-bearing deposits at banks $ 164,400 $ 3,798 $ 7,468 $ 10,334 $ 3,832 Securities AFS 268,476 275,680 334,460 351,595 365,929 Securities HTM 3,611 2,059 2,170 2,241 3,707 Loans 1,721,876 1,720,946 1,704,400 1,670,753 1,658,576 Allowance for credit losses (22,287) (22,114) (21,846) (21,368) (21,523) Goodwill and intangible assets 1,858 1,862 13,629 13,729 13,829 All other assets 122,010 126,432 134,462 127,679 123,920 Total assets $ 2,259,944 $ 2,108,663 $ 2,174,743 $ 2,154,963 $ 2,148,270 LIABILITIES AND STOCKHOLDERS' EQUITY Demand deposits $ 399,558 $ 390,238 $ 447,306 $ 442,195 $ 483,958 NOW deposits 381,798 345,279 324,219 303,159 268,283 Savings deposits 715,495 649,621 698,653 726,687 807,532 Time deposits 394,515 333,623 335,228 314,574 290,141 Total deposits 1,891,366 1,718,761 1,805,406 1,786,615 1,849,914 Securities sold under agreement to repurchase 6,873 9,475 13,447 19,185 9,264 Subordinated debt 31,203 31,177 31,152 31,126 31,101 Other borrowings 131,023 145,123 151,252 140,386 79,637 Other liabilities 24,884 25,908 22,551 18,167 20,103 Total stockholders' equity $ 174,595 $ 178,219 $ 150,935 $ 159,484 $ 158,251 SHARES AND CAPITAL RATIOS Common shares outstanding 5,521,009 5,499,772 5,483,591 5,477,505 5,462,763 Book value per share $ 31.62 $ 32.40 $ 27.52 $ 29.12 $ 28.97 Tangible book value per share (Non-GAAP) $ 31.29 $ 32.07 $ 25.04 $ 26.61 $ 26.44 Tier 1 leverage ratio 10.52 % 10.37 % 9.40 % 9.43 % 9.13 % Tier 1 risk-based capital ratio 13.63 % 13.80 % 12.04 % 12.73 % 12.55 % Total risk-based capital ratio 14.89 % 15.05 % 13.29 % 13.98 % 13.80 % ASSET QUALITY DATA Total non-performing loans $ 27,977 $ 27,325 $ 27,311 $ 27,789 $ 24,084 Total net loan charge-offs (recoveries) 93 11 35 35 (4) Other real estate owned (OREO) $ - $ - $ - $ - $ - Non-performing loans/Total loans 1.62 % 1.59 % 1.60 % 1.66 % 1.45 % Net loan charge-offs (recoveries)/Average loans 0.02 % - % 0.01 % 0.01 % - % Allowance for credit losses/Total loans 1.29 % 1.28 % 1.28 % 1.28 % 1.30 % EVANS BANCORP, INC AND SUBSIDIARIES SELECTED OPERATIONS DATA (UNAUDITED) (in thousands, except share and per share data) 2024 2023 2023 2023 2023 First Quarter Fourth Quarter Third Quarter Second Quarter First Quarter Interest income $ 25,374 $ 25,205 $ 24,292 $ 23,988 $ 23,365 Interest expense 11,467 11,259 10,036 8,307 6,040 Net interest income 13,907 13,946 14,256 15,681 17,325 Provision for credit losses 266 282 506 (116) (654) Net interest income after provision for credit losses 13,641 13,664 13,750 15,797 17,979 Deposit service charges 681 670 665 645 613 Insurance service and fee revenue 149 1,613 3,498 2,720 2,429 Bank-owned life insurance 246 230 239 238 224 Interchange fee income 466 510 516 528 493 Gain on sale of insurance agency - 20,160 - - - Loss on sale of investment securities - (5,044) - - - Other income 725 412 638 570 354 Total non-interest income 2,267 18,551 5,556 4,701 4,113 Salaries and employee benefits 7,837 10,251 8,735 8,649 9,413 Occupancy 1,157 1,078 1,109 1,145 1,173 Advertising and public relations 171 296 348 407 156 Professional services 895 1,003 869 808 883 Technology and communications 1,409 1,545 1,517 1,542 1,356 Amortization of intangibles 4 67 100 100 100 FDIC insurance 325 350 350 350 350 Other expenses 1,129 1,710 1,379 1,171 1,071 Total non-interest expenses 12,927 16,300 14,407 14,172 14,502 Income before income taxes 2,981 15,915 4,899 6,326 7,590 Income tax provision 647 5,741 1,281 1,394 1,790 Net income 2,334 10,174 3,618 4,932 5,800 PER SHARE DATA Net income per common share-diluted $ 0.42 $ 1.85 $ 0.66 $ 0.90 $ 1.06 Cash dividends per common share $ 0.66 $ - $ 0.66 $ - $ 0.66 Weighted average number of diluted shares 5,519,244 5,497,029 5,490,600 5,474,462 5,475,790 PERFORMANCE RATIOS Return on average total assets 0.44 % 1.90 % 0.67 % 0.91 % 1.07 % Return on average stockholders' equity 5.28 % 25.73 % 9.06 % 12.25 % 14.97 % Return on average tangible common stockholders' equity (Non-GAAP)* 5.33 % 27.37 % 9.90 % 13.39 % 16.44 % Efficiency ratio 79.92 % 50.16 % 72.72 % 69.53 % 67.65 % Efficiency ratio (Non-GAAP)** 79.90 % 93.40 % 72.21 % 69.04 % 67.18 % * The calculation of the average tangible common stockholders' equity ratio excludes goodwill and intangible assets from average stockholders equity. ** The calculation of the non-GAAP efficiency ratio excludes amortization of intangibles, gains and losses from investment securities, gains from sale of subsidiaries, merger-related expenses and the impact of historic tax credit transactions. EVANS BANCORP, INC AND SUBSIDIARIES SELECTED AVERAGE BALANCES AND YIELDS/RATES (UNAUDITED) (in thousands) 2024 2023 2023 2023 2023 First Quarter Fourth Quarter Third Quarter Second Quarter First Quarter AVERAGE BALANCES Loans, net $ 1,703,320 $ 1,682,177 $ 1,658,132 $ 1,646,502 $ 1,641,162 Investment securities 280,975 327,303 355,870 373,922 382,329 Interest-bearing deposits at banks 18,889 5,916 9,883 7,235 9,824 Total interest-earning assets 2,003,184 2,015,396 2,023,885 2,027,659 2,033,315 Non interest-earning assets 117,646 128,915 135,896 129,793 133,936 Total Assets $ 2,120,830 $ 2,144,311 $ 2,159,781 $ 2,157,452 $ 2,167,251 NOW 347,908 333,893 311,624 281,910 260,242 Savings 658,656 687,223 708,724 776,020 796,793 Time deposits 342,358 335,646 325,667 304,575 257,733 Total interest-bearing deposits 1,348,922 1,356,762 1,346,015 1,362,505 1,314,768 Borrowings 166,948 197,363 192,277 163,338 173,053 Total interest-bearing liabilities 1,515,870 1,554,125 1,538,292 1,525,843 1,487,821 Demand deposits 404,053 409,115 441,149 451,990 503,945 Other non-interest bearing liabilities 23,943 22,880 20,529 18,532 20,487 Stockholders' equity 176,964 158,191 159,811 161,087 154,998 Total Liabilities and Equity $ 2,120,830 $ 2,144,311 $ 2,159,781 $ 2,157,452 $ 2,167,251 Average tangible common stockholders' equity (Non-GAAP)* 175,103 148,673 146,122 147,299 141,111 YIELD/RATE Loans, net 5.56 % 5.43 % 5.25 % 5.26 % 5.16 % Investment securities 2.53 % 2.53 % 2.48 % 2.47 % 2.53 % Interest-bearing deposits at banks 1.68 % 6.38 % 5.29 % 4.45 % 3.97 % Total interest-earning assets 5.09 % 4.96 % 4.76 % 4.75 % 4.66 % NOW 2.30 % 2.12 % 1.79 % 1.24 % 0.75 % Savings 2.25 % 2.09 % 1.85 % 1.58 % 0.95 % Time deposits 4.24 % 3.83 % 3.45 % 3.10 % 2.63 % Total interest-bearing deposits 2.77 % 2.53 % 2.22 % 1.85 % 1.24 % Borrowings 5.25 % 5.27 % 5.14 % 4.98 % 4.74 % Total interest-bearing liabilities 3.04 % 2.87 % 2.59 % 2.18 % 1.65 % Interest rate spread 2.05 % 2.09 % 2.17 % 2.57 % 3.01 % Contribution of interest-free funds 0.74 % 0.66 % 0.62 % 0.53 % 0.45 % Net interest margin 2.79 % 2.75 % 2.79 % 3.10 % 3.46 % * Average tangible common stockholders' equity excludes goodwill and intangible assets from average stockholders equity. View source version on businesswire.com: https://www.businesswire.com/news/home/20240430748925/en/Contacts For more information: John B. Connerton Executive Vice President and Chief Financial Officer (716) 926-2000 jconnerton@evansbank.com -OR- Deborah K. Pawlowski/Craig Mychajluk Kei Advisors LLC (716) 843-3908 dpawlowski@keiadvisors.com cmychajluk@keiadvisors.com Media: Kathleen Rizzo Young Group VP/Public & Community Relations Director (716) 343-5562 krizzoyoung@evansbank.com
Evans Bancorp, Inc. (the “Company” or “Evans”) (NYSE American: EVBN), a community financial services company serving Western New York since 1920, today reported results of operations for the first quarter ended March 31, 2024. HIGHLIGHTS First quarter net interest margin of 2.79% expanded 4 basis points sequentially Total loan balances of $1.7 billion up $63 million, or 4%, year-over-year Robust loan pipeline of $95 million Total deposits of $1.9 billion increased $173 million, or 10%, in the quarter, and were up $41 million, or 2%, from the end of last year’s first quarter Comparative periods include business activity relating to The Evans Agency (TEA) prior to the sale to Arthur J. Gallagher & Co. on November 30, 2023 Net income was $2.3 million, or $0.42 per diluted share, in the first quarter of 2024, compared with $10.2 million, or $1.85 per diluted share, in the fourth quarter of 2023 and $5.8 million, or $1.06 per diluted share, in last year’s first quarter. Net income for the fourth quarter of 2023 included a gain of $14 million, net of taxes, from the sale of TEA, $1.5 million of insurance revenue recognized prior to the sale, and a pretax loss on the sale of investment securities of $5 million. The change in net income from prior-year period was due to lower net interest income of $3.4 million, an increase in loan provision of $0.9 million, and a decrease in non-interest income of $1.8 million, partially offset by a decrease in non-interest expense of $1.6 million. Return on average equity was 5.28% for the first quarter of 2024, compared with 25.73% in the fourth quarter of 2023 and 14.97% in the first quarter of 2023. David J. Nasca, President and CEO of Evans Bancorp, Inc., commented, “First quarter results reflect solid performance across key business segments. Against a continuing challenging environment our net interest margin demonstrated resilience, expanding slightly. While the cost of funding continues to rise, the rate of increase is decelerating, which implies a positive outlook. Success in deposit gathering during the quarter lays a strong foundation for future asset growth. We are particularly optimistic relative to our significant loan pipeline approximating $95 million. The pipeline expansion has been bolstered by strategic investments in our commercial banking team, notably within the Rochester market area. This talent has us positioned favorably to capitalize on emerging opportunities. We continue to have a relentless focus on expense management as operating efficiency fortifies our results and, along with the capital that was strengthened last quarter with the proceeds from the sale of our insurance agency, supports our position as we navigate through economic pressure which is expected to persist for a period of time.” Net Interest Income ($ in thousands) 1Q 2024 4Q 2023 1Q 2023 Interest income $ 25,374 $ 25,205 $ 23,365 Interest expense 11,467 11,259 6,040 Net interest income 13,907 13,946 17,325 Provision for credit losses 266 282 (654) Net interest income after provision $ 13,641 $ 13,664 $ 17,979 Net interest income of $13.9 million was flat compared with the fourth quarter of 2023 but was $3.4 million, or 20%, lower from last year’s first quarter as a result of higher interest expense related to the increased cost of interest-bearing liabilities produced by competitive pricing on deposits. First quarter net interest margin of 2.79% increased 4 basis points from the trailing fourth quarter but decreased 67 basis points from the prior-year period. The yield on loans increased 13 basis points compared with the fourth quarter and 40 basis points year-over-year. The cost of interest-bearing liabilities was 3.04% compared with 2.87% in the fourth quarter of 2023 and 1.65% in the first quarter of 2023. The $0.3 million provision for credit losses in the current quarter was due to slower prepayment rates, and higher net loan charge-offs, partially offset by improving economic factors. Asset Quality ($ in thousands) 1Q 2024 4Q 2023 1Q 2023 Total non-performing loans $ 27,977 $ 27,325 $ 24,084 Total net loan charge-offs 93 11 (4) Non-performing loans / Total loans 1.62 % 1.59 % 1.45 % Net loan charge-offs / Average loans 0.02 % - % - % Allowance for loan losses / Total loans 1.29 % 1.28 % 1.30 % Non-Interest Income ($ in thousands) 1Q 2024 4Q 2023 1Q 2023 Deposit service charges $ 681 $ 670 $ 613 Insurance service and fee revenue 149 1,613 2,429 Bank-owned life insurance 246 230 224 Interchange fee income 466 510 493 Gain on sale of insurance agency - 20,160 - Loss on sale of investment securities - (5,044) - Other income 725 412 354 Total non-interest income $ 2,267 $ 18,551 $ 4,113 Total non-interest income was down $16.3 million from the sequential quarter. The reduction from the fourth quarter of 2023 was due to the gain on sale of TEA of $20.2 million and $1.5 million in TEA insurance revenue offset by the $5.0 million investment loss, which were all recognized in the sequential quarter. The remaining increase in non-interest income from the fourth quarter was primarily due to an increase in the value of mortgage servicing rights. Total non-interest income was down $1.8 million when compared with the first quarter of 2023. The majority of the reduction was related to $2.3 million in TEA insurance revenue recognized in the first quarter of 2023. This was offset by an increase in the value of mortgage servicing rights during the first quarter of 2024. Non-Interest Expense ($ in thousands) 1Q 2024 4Q 2023 1Q 2023 Salaries and employee benefits $ 7,837 $ 10,251 $ 9,413 Occupancy 1,157 1,078 1,173 Advertising and public relations 171 296 156 Professional services 895 1,003 883 Technology and communications 1,409 1,545 1,356 Amortization of intangibles 4 67 100 FDIC insurance 325 350 350 Other expenses 1,129 1,710 1,071 Total non-interest expenses $ 12,927 $ 16,300 $ 14,502 Non-interest expenses decreased $3.4 million from the sequential quarter and $1.6 million from the prior-year period. The decrease in non-interest expenses from the fourth quarter of 2023 was due to lower incentive accruals of $2.1 million and $1.0 million of non-interest expenses related to TEA, primarily salaries and employee benefits that were recognized during the fourth quarter of 2023 prior to the sale. In addition, $0.3 million of charitable contributions and $0.1 million of pension settlement expenses of which both were included in other expenses during the sequential quarter. The decrease in non-interest expenses from the first quarter of 2023 was due to $1.8 million of non-interest expenses relating to TEA, of which salaries and employee benefits was $1.5 million. During the first quarter of 2023 salaries and employee benefits, excluding the $1.5 million related to TEA, was $7.9 million, flat with the first quarter of 2024. The remaining increase in total non-interest expense of $0.2 million was due to higher technology and communications expenses recognized by the Bank during the first quarter of 2024. The Company’s GAAP efficiency ratio, or noninterest expenses divided by the sum of net interest income and noninterest income, was 79.92% in the first quarter of 2024, 50.2% in the fourth quarter of 2023, and 67.6% in the first quarter of 2023. Income tax expense was $0.6 million, for an effective tax rate of 21.7%, in the first quarter of 2024 compared with 36.1% in the fourth quarter of 2023 and 23.6% in last year’s first quarter. The elevated tax rate in the fourth quarter of 2023 reflected the sale of TEA which included significant non-deductible goodwill expense. Balance Sheet Highlights “We strategically strengthened our balance sheet during the current quarter. We added $55 million of brokered deposits at favorable rates and lengthened maturities of approximately $40 million of overnight borrowings in order to manage interest rate risk. Overall, we are confident in our ability to navigate the evolving market dynamics and expect our current liquidity position to be the foundation that supports expected commercial loan growth of approximately 5% in 2024,” commented John Connerton, Chief Financial Officer of Evans Bank. Total assets were $2.26 billion as of March 31, 2024, an increase of $151 million, or 7%, since December 31, 2023, and $112 million, or 5%, since March 31, 2023. Interest-bearing deposits at banks increased $161 million from both comparative periods. In addition, when compared with the prior-year period, loan growth increased $63 million, partially offset by a decrease in investment securities of $98 million. Since March 31, 2023, commercial real estate loans increased $76 million, while commercial and industrial loans were down $15 million. Investment securities were $272 million at March 31, 2024, $6 million lower than the end of the fourth quarter of 2023 and $98 million lower than the end of last year’s first quarter. The Company sold $78 million of investment securities during the fourth quarter of 2023 and used the proceeds to reduce short-term borrowings. The primary objectives of the Company’s investment portfolio are to provide liquidity, secure municipal deposits, and maximize income while preserving the safety of principal. The Company has the positive intent and ability to hold the remaining portfolio through recovery of value. Total deposits of $1.89 billion increased $173 million, or 10%, from December 31, 2023, and $41 million, or 2%, from the end of last year’s first quarter. The change from the sequential quarter largely reflected an increase in brokered time deposits and deposits from municipal relationships. From a product perspective, deposit increases were in municipal saving deposits of $69 million, brokered time deposits of $55 million, NOW deposits of $37 million, demand deposits of $9 million, and consumer time deposits of $6 million. Offsetting those increases were lower commercial savings of $3 million. While the Company has not experienced a significant outflow of deposits, in the event of such occurrences, it has access to alternate sources of funding to meet withdrawal demands. At March 31, 2024, Evans has $43 million borrowed at FHLB. Given the current collateral available at FHLB, advances up to $382 million can be drawn on the FHLB via the Company’s overnight line of credit. Additionally, Evans has the ability to borrow from the Federal Reserve. At March 31, 2024, Evans had $88 million in short-term borrowings with the Federal Reserve and $5 million in additional availability to borrow against collateral. Capital Management The Company has consistently maintained regulatory capital ratios measurably above the Federal “well capitalized” standard, including a Tier 1 leverage ratio of 10.52% at March 31, 2024 compared with 10.37% at December 31, 2023 and 9.13% at March 31, 2023. Book value per share was $31.62 at March 31, 2024 compared with $32.40 at December 31, 2023 and $28.97 at March 31, 2023. Reflected in the book value changes are the Federal Reserve’s aggressive interest rate hikes that have resulted in significant unrealized losses on investment securities. As of March 31, 2024, this amounted to $7.83 per share impact to book value. Such unrealized gains and losses are due to changes in interest rates and represent the difference, net of applicable income tax effect, between the estimated fair value and amortized cost of investment securities classified as available-for-sale. Non-GAAP tangible book value per share was $31.29 at March 31, 2024 compared with $32.07 at December 31, 2023 and $26.44 at March 31, 2023. The increase over the prior-year period reflected the sale of TEA, which resulted in significant value creation including growth in tangible book value. On February 20, 2024, the Company declared a cash dividend of $0.66 per common share, which was paid on April 9, 2024. Webcast and Conference Call The Company will host a conference call and webcast on Tuesday, April 30, 2024 at 4:45 p.m. ET. Management will review the financial and operating results for the first quarter of 2024, as well as the Company’s strategy and outlook. A question and answer session will follow. The conference call can be accessed by calling (201) 689-8471. Alternatively, the webcast can be monitored at www.evansbancorp.com. A telephonic replay will be available from 8:00 p.m. ET on the day of the teleconference until Tuesday, May 14, 2024. To listen to the archived call, dial (412) 317-6671 and enter conference ID number 13745903, or access the webcast replay at www.evansbancorp.com, where a transcript will be posted once available. About Evans Bancorp, Inc. Evans Bancorp, Inc. is a financial holding company and the parent company of Evans Bank, N.A., a commercial bank with $2.3 billion in assets and $1.9 billion in deposits at March 31, 2024. Evans Bank is a full-service community bank with 18 branches providing comprehensive financial services to consumer, business and municipal customers throughout Western New York. Evans Investment Services provides non-deposit investment products, such as annuities and mutual funds. Evans Bancorp, Inc. and Evans Bank routinely post news and other important information on their websites, at www.evansbancorp.com and www.evansbank.com. Safe Harbor Statement: This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, but are not limited to, statements concerning future business, revenue and earnings. These statements are not historical facts or guarantees of future performance, events or results. There are risks, uncertainties and other factors that could cause the actual results of Evans Bancorp to differ materially from the results expressed or implied by such statements. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include the impacts from competitive pressures among financial services companies, interest rate trends, general economic conditions, changes in legislation or regulatory requirements, effectiveness at achieving stated goals and strategies, and difficulties in achieving operating efficiencies. These risks and uncertainties are more fully described in Evans Bancorp’s Annual and Quarterly Reports filed with the Securities and Exchange Commission. Forward-looking statements speak only as of the date they are made. Evans Bancorp undertakes no obligation to publicly update or revise forward-looking information, whether as a result of new, updated information, future events or otherwise. EVANS BANCORP, INC. AND SUBSIDIARIES SELECTED FINANCIAL DATA (UNAUDITED) (in thousands, except shares and per share data) 3/31/2024 12/31/2023 9/30/2023 6/30/2023 3/31/2023 ASSETS Interest-bearing deposits at banks $ 164,400 $ 3,798 $ 7,468 $ 10,334 $ 3,832 Securities AFS 268,476 275,680 334,460 351,595 365,929 Securities HTM 3,611 2,059 2,170 2,241 3,707 Loans 1,721,876 1,720,946 1,704,400 1,670,753 1,658,576 Allowance for credit losses (22,287) (22,114) (21,846) (21,368) (21,523) Goodwill and intangible assets 1,858 1,862 13,629 13,729 13,829 All other assets 122,010 126,432 134,462 127,679 123,920 Total assets $ 2,259,944 $ 2,108,663 $ 2,174,743 $ 2,154,963 $ 2,148,270 LIABILITIES AND STOCKHOLDERS' EQUITY Demand deposits $ 399,558 $ 390,238 $ 447,306 $ 442,195 $ 483,958 NOW deposits 381,798 345,279 324,219 303,159 268,283 Savings deposits 715,495 649,621 698,653 726,687 807,532 Time deposits 394,515 333,623 335,228 314,574 290,141 Total deposits 1,891,366 1,718,761 1,805,406 1,786,615 1,849,914 Securities sold under agreement to repurchase 6,873 9,475 13,447 19,185 9,264 Subordinated debt 31,203 31,177 31,152 31,126 31,101 Other borrowings 131,023 145,123 151,252 140,386 79,637 Other liabilities 24,884 25,908 22,551 18,167 20,103 Total stockholders' equity $ 174,595 $ 178,219 $ 150,935 $ 159,484 $ 158,251 SHARES AND CAPITAL RATIOS Common shares outstanding 5,521,009 5,499,772 5,483,591 5,477,505 5,462,763 Book value per share $ 31.62 $ 32.40 $ 27.52 $ 29.12 $ 28.97 Tangible book value per share (Non-GAAP) $ 31.29 $ 32.07 $ 25.04 $ 26.61 $ 26.44 Tier 1 leverage ratio 10.52 % 10.37 % 9.40 % 9.43 % 9.13 % Tier 1 risk-based capital ratio 13.63 % 13.80 % 12.04 % 12.73 % 12.55 % Total risk-based capital ratio 14.89 % 15.05 % 13.29 % 13.98 % 13.80 % ASSET QUALITY DATA Total non-performing loans $ 27,977 $ 27,325 $ 27,311 $ 27,789 $ 24,084 Total net loan charge-offs (recoveries) 93 11 35 35 (4) Other real estate owned (OREO) $ - $ - $ - $ - $ - Non-performing loans/Total loans 1.62 % 1.59 % 1.60 % 1.66 % 1.45 % Net loan charge-offs (recoveries)/Average loans 0.02 % - % 0.01 % 0.01 % - % Allowance for credit losses/Total loans 1.29 % 1.28 % 1.28 % 1.28 % 1.30 % EVANS BANCORP, INC AND SUBSIDIARIES SELECTED OPERATIONS DATA (UNAUDITED) (in thousands, except share and per share data) 2024 2023 2023 2023 2023 First Quarter Fourth Quarter Third Quarter Second Quarter First Quarter Interest income $ 25,374 $ 25,205 $ 24,292 $ 23,988 $ 23,365 Interest expense 11,467 11,259 10,036 8,307 6,040 Net interest income 13,907 13,946 14,256 15,681 17,325 Provision for credit losses 266 282 506 (116) (654) Net interest income after provision for credit losses 13,641 13,664 13,750 15,797 17,979 Deposit service charges 681 670 665 645 613 Insurance service and fee revenue 149 1,613 3,498 2,720 2,429 Bank-owned life insurance 246 230 239 238 224 Interchange fee income 466 510 516 528 493 Gain on sale of insurance agency - 20,160 - - - Loss on sale of investment securities - (5,044) - - - Other income 725 412 638 570 354 Total non-interest income 2,267 18,551 5,556 4,701 4,113 Salaries and employee benefits 7,837 10,251 8,735 8,649 9,413 Occupancy 1,157 1,078 1,109 1,145 1,173 Advertising and public relations 171 296 348 407 156 Professional services 895 1,003 869 808 883 Technology and communications 1,409 1,545 1,517 1,542 1,356 Amortization of intangibles 4 67 100 100 100 FDIC insurance 325 350 350 350 350 Other expenses 1,129 1,710 1,379 1,171 1,071 Total non-interest expenses 12,927 16,300 14,407 14,172 14,502 Income before income taxes 2,981 15,915 4,899 6,326 7,590 Income tax provision 647 5,741 1,281 1,394 1,790 Net income 2,334 10,174 3,618 4,932 5,800 PER SHARE DATA Net income per common share-diluted $ 0.42 $ 1.85 $ 0.66 $ 0.90 $ 1.06 Cash dividends per common share $ 0.66 $ - $ 0.66 $ - $ 0.66 Weighted average number of diluted shares 5,519,244 5,497,029 5,490,600 5,474,462 5,475,790 PERFORMANCE RATIOS Return on average total assets 0.44 % 1.90 % 0.67 % 0.91 % 1.07 % Return on average stockholders' equity 5.28 % 25.73 % 9.06 % 12.25 % 14.97 % Return on average tangible common stockholders' equity (Non-GAAP)* 5.33 % 27.37 % 9.90 % 13.39 % 16.44 % Efficiency ratio 79.92 % 50.16 % 72.72 % 69.53 % 67.65 % Efficiency ratio (Non-GAAP)** 79.90 % 93.40 % 72.21 % 69.04 % 67.18 % * The calculation of the average tangible common stockholders' equity ratio excludes goodwill and intangible assets from average stockholders equity. ** The calculation of the non-GAAP efficiency ratio excludes amortization of intangibles, gains and losses from investment securities, gains from sale of subsidiaries, merger-related expenses and the impact of historic tax credit transactions. EVANS BANCORP, INC AND SUBSIDIARIES SELECTED AVERAGE BALANCES AND YIELDS/RATES (UNAUDITED) (in thousands) 2024 2023 2023 2023 2023 First Quarter Fourth Quarter Third Quarter Second Quarter First Quarter AVERAGE BALANCES Loans, net $ 1,703,320 $ 1,682,177 $ 1,658,132 $ 1,646,502 $ 1,641,162 Investment securities 280,975 327,303 355,870 373,922 382,329 Interest-bearing deposits at banks 18,889 5,916 9,883 7,235 9,824 Total interest-earning assets 2,003,184 2,015,396 2,023,885 2,027,659 2,033,315 Non interest-earning assets 117,646 128,915 135,896 129,793 133,936 Total Assets $ 2,120,830 $ 2,144,311 $ 2,159,781 $ 2,157,452 $ 2,167,251 NOW 347,908 333,893 311,624 281,910 260,242 Savings 658,656 687,223 708,724 776,020 796,793 Time deposits 342,358 335,646 325,667 304,575 257,733 Total interest-bearing deposits 1,348,922 1,356,762 1,346,015 1,362,505 1,314,768 Borrowings 166,948 197,363 192,277 163,338 173,053 Total interest-bearing liabilities 1,515,870 1,554,125 1,538,292 1,525,843 1,487,821 Demand deposits 404,053 409,115 441,149 451,990 503,945 Other non-interest bearing liabilities 23,943 22,880 20,529 18,532 20,487 Stockholders' equity 176,964 158,191 159,811 161,087 154,998 Total Liabilities and Equity $ 2,120,830 $ 2,144,311 $ 2,159,781 $ 2,157,452 $ 2,167,251 Average tangible common stockholders' equity (Non-GAAP)* 175,103 148,673 146,122 147,299 141,111 YIELD/RATE Loans, net 5.56 % 5.43 % 5.25 % 5.26 % 5.16 % Investment securities 2.53 % 2.53 % 2.48 % 2.47 % 2.53 % Interest-bearing deposits at banks 1.68 % 6.38 % 5.29 % 4.45 % 3.97 % Total interest-earning assets 5.09 % 4.96 % 4.76 % 4.75 % 4.66 % NOW 2.30 % 2.12 % 1.79 % 1.24 % 0.75 % Savings 2.25 % 2.09 % 1.85 % 1.58 % 0.95 % Time deposits 4.24 % 3.83 % 3.45 % 3.10 % 2.63 % Total interest-bearing deposits 2.77 % 2.53 % 2.22 % 1.85 % 1.24 % Borrowings 5.25 % 5.27 % 5.14 % 4.98 % 4.74 % Total interest-bearing liabilities 3.04 % 2.87 % 2.59 % 2.18 % 1.65 % Interest rate spread 2.05 % 2.09 % 2.17 % 2.57 % 3.01 % Contribution of interest-free funds 0.74 % 0.66 % 0.62 % 0.53 % 0.45 % Net interest margin 2.79 % 2.75 % 2.79 % 3.10 % 3.46 % * Average tangible common stockholders' equity excludes goodwill and intangible assets from average stockholders equity. 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For more information: John B. Connerton Executive Vice President and Chief Financial Officer (716) 926-2000 jconnerton@evansbank.com -OR- Deborah K. Pawlowski/Craig Mychajluk Kei Advisors LLC (716) 843-3908 dpawlowski@keiadvisors.com cmychajluk@keiadvisors.com Media: Kathleen Rizzo Young Group VP/Public & Community Relations Director (716) 343-5562 krizzoyoung@evansbank.com