Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil Hydroworld Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Evans Bancorp Reports Net Income of $3.6 Million in Third Quarter 2023 By: Evans Bancorp, Inc. via Business Wire October 26, 2023 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 third quarter ended September 30, 2023. HIGHLIGHTS Total loan balances of $1.7 billion up 2% in the quarter and 5% year-over-year Net income of $3.6 million reflected continued net interest margin pressure, partially offset by prudent expense management Total non-interest expense declined 9% to $14.4 million over last year’s third quarter Net interest margin of 2.79% declined 31 basis points sequentially, of which 8 basis points was attributable to the reversal of interest income from one non-accrual commercial loan in the quarter Net income was $3.6 million, or $0.66 per diluted share, in the third quarter of 2023, compared with $4.9 million, or $0.90 per diluted share, in the second quarter of 2023 and $5.9 million, or $1.06 per diluted share, in last year’s third quarter. The change from the second quarter of 2023 reflected a decrease in net interest income, increased provision for credit losses and higher non-interest expense, partially offset by higher non-interest income. The change from the prior year’s third quarter was largely due to a reduction in net interest income and lower non-interest income, partially offset by lower non-interest expense and provision for credit losses. Return on average equity was 9.06% for the third quarter of 2023, compared with 12.25% in the second quarter of 2023 and 14.15% in the third quarter of 2022. David J. Nasca, President and CEO of Evans Bancorp, Inc., said, “Third quarter results were solid from a growth and operating performance standpoint and position the Company strongly in a challenging business environment. The net interest margin continued to be pressured by rate headwinds, especially related to funding costs, as anticipated. The margin was also impacted by a reversal of interest income from one large, longtime credit client. Absent that reduction, our margin was in line with expectations. Deposits and liquidity are stable. In addition, our associates have performed well in lending and business development despite market dynamics, making inroads with new clients and cementing existing relationships, as evidenced by our 8% annualized loan growth in the quarter. We continue to take proactive steps to manage costs and expenditures by focusing on operating efficiency and providing exceptional experience to our valued clients.” Net Interest Income ($ in thousands) 3Q 2023 2Q 2023 3Q 2022 Interest income $ 24,292 $ 23,988 $ 20,487 Interest expense 10,036 8,307 1,299 Net interest income 14,256 15,681 19,188 Provision for credit losses 506 (116 ) 1,328 Net interest income after provision $ 13,750 $ 15,797 $ 17,860 Net interest income of $14.3 million was down $1.4 million, or 9%, from the second quarter and $4.9 million, or 26%, from last year’s third quarter as a result of higher interest expense related to the increased cost of interest-bearing liabilities produced by competitive pricing on deposits. Third quarter net interest margin of 2.79% declined 31 basis points over the trailing second quarter and 93 basis points from the prior-year period. Impacting net interest margin by 8 basis points was the reversal of approximately $0.4 million of interest income primarily resulting from one large commercial loan that was put on non-accrual status during the quarter. The yield on loans remained flat compared with the second quarter but improved 78 basis points year-over-year. The cost of interest-bearing liabilities was 2.59% compared with 2.18% in the second quarter of 2023 and 0.36% in the third quarter of 2022. The $0.5 million provision for credit losses in the current quarter was largely due to loan growth. Asset Quality ($ in thousands) 3Q 2023 2Q 2023 3Q 2022 Total non-performing loans $ 27,311 $ 27,789 $ 25,961 Total net loan charge-offs (recoveries) 35 35 1,518 Non-performing loans / Total loans 1.60 % 1.66 % 1.60 % Net loan charge-offs / Average loans 0.01 % 0.01 % 0.38 % Allowance for loan losses / Total loans 1.28 % 1.28 % 1.15 % “Our balance sheet remains strong as spot deposit levels were up slightly in the quarter, and while there are product shifts still occurring, we are broadly seeing more stabilization,” commented John Connerton, Chief Financial Officer of Evans Bank. “Our loan pipeline continues to be solid at $67 million, and is centered on high quality credits, which is reflected in our credit performance as we continue to navigate the current market by adhering to our prudent underwriting standards.” Non-Interest Income ($ in thousands) 3Q 2023 2Q 2023 3Q 2022 Deposit service charges $ 665 $ 645 $ 782 Insurance service and fee revenue 3,498 2,720 3,383 Bank-owned life insurance 239 238 161 Interchange fee income 516 528 532 Other income 638 570 909 Total non-interest income $ 5,556 $ 4,701 $ 5,767 Total non-interest income increased $0.9 million, or 18%, from the second quarter of 2023, but was down $0.2 million, or 4%, from last year’s third quarter on the strength of insurance revenues offset by deposit service charges and other income decreases. The change in deposit service charges since last year’s third quarter was largely due to the Bank’s implementation of reduced overdraft and non-sufficient funds (NSF) fees during the fourth quarter of 2022. The increase in insurance service and fee revenue from the sequential second quarter reflects seasonally higher commercial lines insurance commissions and profit-sharing revenue. The increase from the prior year was primarily due to increased personal lines commissions resulting from higher premiums. Other income decreased $0.3 million from last year’s third quarter primarily due to a $0.2 million final payment received in connection with a historic tax credit investment during the third quarter of 2022. Non-Interest Expense ($ in thousands) 3Q 2023 2Q 2023 3Q 2022 Salaries and employee benefits $ 8,735 $ 8,649 $ 10,450 Occupancy 1,109 1,145 1,118 Advertising and public relations 348 407 417 Professional services 869 808 839 Technology and communications 1,517 1,542 1,339 Amortization of intangibles 100 100 100 FDIC insurance 350 350 255 Other expenses 1,379 1,171 1,273 Total non-interest expenses $ 14,407 $ 14,172 $ 15,791 Total non-interest expense increased $0.2 million, or 2%, from the second quarter of 2023, but was down $1.4 million, or 9%, from last year’s third quarter. Salaries and employee benefits were down $1.7 million, or 16%, from last year’s comparative period, largely due to lower incentive accruals of $1.3 million and reduced staff expenses through consolidation of branches and back-office operations. These decreases were partially offset by merit increases and strategic hires. When compared with the second quarter, salaries and employee benefits were relatively flat due to cost management efforts. Technology and communications increased $0.2 million from last year’s third quarter primarily due to higher software costs. The Company’s GAAP efficiency ratio, or noninterest expenses divided by the sum of net interest income and noninterest income, was 72.7% in the third quarter of 2023, 69.5% in the second quarter of 2023, and 63.3% in the third quarter of 2022. Income tax expense was $1.3 million, for an effective tax rate of 26.2%, in the third quarter of 2023 compared with 22.0% in the second quarter of 2023 and 25.2% in last year’s third quarter. Balance Sheet Highlights Total assets were $2.17 billion as of September 30, 2023, an increase of less than 1% since June 30, 2023, and were up 2% from $2.13 billion at September 30, 2022. The change from last year’s third quarter was due to an increase in loan balances of $78 million, or 5%, partially offset by a reduction in investment securities of $40 million, or 11%. The loan balance increase reflects higher commercial real estate loans of $88 million and residential mortgages of $7 million, partially offset by commercial and industrial loans which decreased $15 million. Investment securities were $337 million at September 30, 2023, $17 million lower than the end of the second quarter of 2023 and $40 million lower than the end of last year’s third quarter. The decrease reflects changes in unrealized gains and losses on investment securities and maturities within the available-for-sale investment portfolio. 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. Total deposits of $1.81 billion increased $19 million, or 1%, from June 30, 2023, but decreased $68 million, or 4%, from the end of last year’s third quarter. The change from last year’s third quarter reflected deposit decreases in consumer savings of $158 million, demand deposits of $112 million, commercial savings of $60 million, and brokered deposits of $6 million. Offsetting those decreases were higher consumer time deposits of $204 million, NOW deposits of $61 million and municipal 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. As of September 30, 2023, Evans had $19 million in overnight borrowings at the FHLB. Given the current collateral available at FHLB, advances up to $312 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 and participates in the Bank Term Funding Program. At September 30, 2023, Evans had $126 million in short-term borrowings with the Federal Reserve and $35.1 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 9.40% at September 30, 2023 compared with 9.43% at June 30, 2023 and 9.00% at September 30, 2022. Book value per share was $27.52 at September 30, 2023 compared with $29.12 at June 30, 2023 and $27.20 at September 30, 2022. 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, which reduced book value per share at September 30, 2023 by $1.61 when compared with the linked quarter. 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. Tangible book value per share was $25.04 at September 30, 2023 compared with $26.61 at June 30, 2023 and $24.65 at September 30, 2022. In October 2023, the Company paid a semi-annual cash dividend of $0.66 per common share. Cash dividends totaled $1.32 per common share during 2023, up 5% over 2022. Webcast and Conference Call The Company will host a conference call and webcast on Thursday, October 26, 2023 at 4:45 p.m. ET. Management will review the financial and operating results for the third quarter of 2023, 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 Thursday, November 9, 2023. To listen to the archived call, dial (412) 317-6671 and enter conference ID number 13741201, 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 $2.2 billion in assets and $1.8 billion in deposits at September 30, 2023. Evans is a full-service community bank with 18 branches providing comprehensive financial services to consumer, business and municipal customers throughout Western New York. Evans Insurance Agency, a wholly owned subsidiary, provides life insurance, employee benefits, and property and casualty insurance through eight offices in the Western New York region. 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 COVID-19, 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) 9/30/2023 6/30/2023 3/31/2023 12/31/2022 9/30/2022 ASSETS Interest-bearing deposits at banks $ 7,468 $ 10,334 $ 3,832 $ 6,258 $ 6,813 Securities AFS 334,460 351,595 365,929 364,326 369,141 Securities HTM 2,170 2,241 3,707 6,949 7,572 Loans 1,704,400 1,670,753 1,658,576 1,672,369 1,626,457 Allowance for credit losses (21,846 ) (21,368 ) (21,523 ) (19,438 ) (18,630 ) Goodwill and intangible assets 13,629 13,729 13,829 13,929 14,029 All other assets 134,462 127,679 123,920 134,117 124,323 Total assets $ 2,174,743 $ 2,154,963 $ 2,148,270 $ 2,178,510 $ 2,129,705 LIABILITIES AND STOCKHOLDERS' EQUITY Demand deposits $ 447,306 $ 442,195 $ 483,958 $ 493,710 $ 558,805 NOW deposits 324,219 303,159 268,283 273,359 263,648 Savings deposits 698,653 726,687 807,532 801,943 913,383 Time deposits 335,228 314,574 290,141 202,667 137,910 Total deposits 1,805,406 1,786,615 1,849,914 1,771,679 1,873,746 Securities sold under agreement to repurchase 13,447 19,185 9,264 7,147 9,812 Subordinated debt 31,152 31,126 31,101 31,075 31,050 Other borrowings 151,252 140,386 79,637 193,001 42,594 Other liabilities 22,551 18,167 20,103 21,615 22,652 Total stockholders' equity $ 150,935 $ 159,484 $ 158,251 $ 153,993 $ 149,850 SHARES AND CAPITAL RATIOS Common shares outstanding 5,483,591 5,477,505 5,462,763 5,437,048 5,509,917 Book value per share $ 27.52 $ 29.12 $ 28.97 $ 28.32 $ 27.20 Tangible book value per share $ 25.04 $ 26.61 $ 26.44 $ 25.76 $ 24.65 Tier 1 leverage ratio 9.40 % 9.43 % 9.13 % 9.13 % 9.00 % Tier 1 risk-based capital ratio 12.04 % 12.73 % 12.55 % 12.29 % 12.40 % Total risk-based capital ratio 13.29 % 13.98 % 13.80 % 13.48 % 13.57 % ASSET QUALITY DATA Total non-performing loans $ 27,311 $ 27,789 $ 24,084 $ 24,728 $ 25,961 Total net loan charge-offs (recoveries) 35 35 (4 ) 115 1,518 Other real estate owned (OREO) $ - $ - $ - $ - $ 1,162 Non-performing loans/Total loans 1.60 % 1.66 % 1.45 % 1.48 % 1.60 % Net loan charge-offs (recoveries)/Average loans 0.01 % 0.01 % - % 0.03 % 0.38 % Allowance for credit losses/Total loans 1.28 % 1.28 % 1.30 % 1.16 % 1.15 % EVANS BANCORP, INC AND SUBSIDIARIES SELECTED OPERATIONS DATA (UNAUDITED) (in thousands, except share and per share data) 2023 2023 2023 2022 2022 Third Quarter Second Quarter First Quarter Fourth Quarter Third Quarter Interest income $ 24,292 $ 23,988 $ 23,365 $ 22,381 $ 20,487 Interest expense 10,036 8,307 6,040 3,167 1,299 Net interest income 14,256 15,681 17,325 19,214 19,188 Provision for credit losses 506 (116 ) (654 ) 923 1,328 Net interest income after provision for credit losses 13,750 15,797 17,979 18,291 17,860 Deposit service charges 665 645 613 684 782 Insurance service and fee revenue 3,498 2,720 2,429 2,204 3,383 Bank-owned life insurance 239 238 224 221 161 Interchange fee income 516 528 493 507 532 Other income 638 570 354 845 909 Total non-interest income 5,556 4,701 4,113 4,461 5,767 Salaries and employee benefits 8,735 8,649 9,413 9,498 10,450 Occupancy 1,109 1,145 1,173 1,190 1,118 Advertising and public relations 348 407 156 125 417 Professional services 869 808 883 871 839 Technology and communications 1,517 1,542 1,356 1,437 1,339 Amortization of intangibles 100 100 100 100 100 FDIC insurance 350 350 350 250 255 Other expenses 1,379 1,171 1,071 1,429 1,273 Total non-interest expenses 14,407 14,172 14,502 14,900 15,791 Income before income taxes 4,899 6,326 7,590 7,852 7,836 Income tax provision 1,281 1,394 1,790 1,809 1,972 Net income 3,618 4,932 5,800 6,043 5,864 PER SHARE DATA Net income per common share-diluted $ 0.66 $ 0.90 $ 1.06 $ 1.10 $ 1.06 Cash dividends per common share $ 0.66 $ - $ 0.66 $ - $ 0.64 Weighted average number of diluted shares 5,490,600 5,474,462 5,475,790 5,500,810 5,546,764 PERFORMANCE RATIOS Return on average total assets 0.67 % 0.91 % 1.07 % 1.12 % 1.08 % Return on average stockholders' equity 9.06 % 12.25 % 14.97 % 16.07 % 14.15 % Return on average tangible common stockholders' equity* 9.90 % 13.39 % 16.44 % 17.72 % 15.46 % Efficiency ratio 72.72 % 69.53 % 67.65 % 62.94 % 63.28 % Efficiency ratio (Non-GAAP)** 72.21 % 69.04 % 67.18 % 62.51 % 62.88 % * 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, 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) 2023 2023 2023 2022 2022 Third Quarter Second Quarter First Quarter Fourth Quarter Third Quarter AVERAGE BALANCES Loans, net $ 1,658,132 $ 1,646,502 $ 1,641,162 $ 1,627,028 $ 1,597,382 Investment securities 355,870 373,922 382,329 382,125 406,703 Interest-bearing deposits at banks 9,883 7,235 9,824 10,416 42,788 Total interest-earning assets 2,023,885 2,027,659 2,033,315 2,019,569 2,046,873 Non interest-earning assets 135,896 129,793 133,936 135,035 122,321 Total Assets $ 2,159,781 $ 2,157,452 $ 2,167,251 $ 2,154,604 $ 2,169,194 NOW 311,624 281,910 260,242 265,313 269,359 Savings 708,724 776,020 796,793 874,816 964,051 Time deposits 325,667 304,575 257,733 174,362 132,319 Total interest-bearing deposits 1,346,015 1,362,505 1,314,768 1,314,491 1,365,729 Borrowings 192,277 163,338 173,053 151,259 65,990 Total interest-bearing liabilities 1,538,292 1,525,843 1,487,821 1,465,750 1,431,719 Demand deposits 441,149 451,990 503,945 518,666 549,625 Other non-interest bearing liabilities 20,529 18,532 20,487 19,798 22,073 Stockholders' equity 159,811 161,087 154,998 150,390 165,777 Total Liabilities and Equity $ 2,159,781 $ 2,157,452 $ 2,167,251 $ 2,154,604 $ 2,169,194 Average tangible common stockholders' equity* 146,122 147,299 141,111 136,406 151,690 YIELD/RATE Loans, net 5.25 % 5.26 % 5.16 % 4.88 % 4.47 % Investment securities 2.48 % 2.47 % 2.53 % 2.36 % 2.23 % Interest-bearing deposits at banks 5.29 % 4.45 % 3.97 % 3.16 % 2.01 % Total interest-earning assets 4.76 % 4.75 % 4.66 % 4.40 % 3.97 % NOW 1.79 % 1.24 % 0.75 % 0.36 % 0.10 % Savings 1.85 % 1.58 % 0.95 % 0.33 % 0.19 % Time deposits 3.45 % 3.10 % 2.63 % 1.61 % 0.64 % Total interest-bearing deposits 2.22 % 1.85 % 1.24 % 0.51 % 0.22 % Borrowings 5.14 % 4.98 % 4.74 % 3.88 % 3.27 % Total interest-bearing liabilities 2.59 % 2.18 % 1.65 % 0.86 % 0.36 % Interest rate spread 2.17 % 2.57 % 3.01 % 3.54 % 3.61 % Contribution of interest-free funds 0.62 % 0.53 % 0.45 % 0.23 % 0.11 % Net interest margin 2.79 % 3.10 % 3.46 % 3.77 % 3.72 % * 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/20231026198410/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 $3.6 Million in Third Quarter 2023 By: Evans Bancorp, Inc. via Business Wire October 26, 2023 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 third quarter ended September 30, 2023. HIGHLIGHTS Total loan balances of $1.7 billion up 2% in the quarter and 5% year-over-year Net income of $3.6 million reflected continued net interest margin pressure, partially offset by prudent expense management Total non-interest expense declined 9% to $14.4 million over last year’s third quarter Net interest margin of 2.79% declined 31 basis points sequentially, of which 8 basis points was attributable to the reversal of interest income from one non-accrual commercial loan in the quarter Net income was $3.6 million, or $0.66 per diluted share, in the third quarter of 2023, compared with $4.9 million, or $0.90 per diluted share, in the second quarter of 2023 and $5.9 million, or $1.06 per diluted share, in last year’s third quarter. The change from the second quarter of 2023 reflected a decrease in net interest income, increased provision for credit losses and higher non-interest expense, partially offset by higher non-interest income. The change from the prior year’s third quarter was largely due to a reduction in net interest income and lower non-interest income, partially offset by lower non-interest expense and provision for credit losses. Return on average equity was 9.06% for the third quarter of 2023, compared with 12.25% in the second quarter of 2023 and 14.15% in the third quarter of 2022. David J. Nasca, President and CEO of Evans Bancorp, Inc., said, “Third quarter results were solid from a growth and operating performance standpoint and position the Company strongly in a challenging business environment. The net interest margin continued to be pressured by rate headwinds, especially related to funding costs, as anticipated. The margin was also impacted by a reversal of interest income from one large, longtime credit client. Absent that reduction, our margin was in line with expectations. Deposits and liquidity are stable. In addition, our associates have performed well in lending and business development despite market dynamics, making inroads with new clients and cementing existing relationships, as evidenced by our 8% annualized loan growth in the quarter. We continue to take proactive steps to manage costs and expenditures by focusing on operating efficiency and providing exceptional experience to our valued clients.” Net Interest Income ($ in thousands) 3Q 2023 2Q 2023 3Q 2022 Interest income $ 24,292 $ 23,988 $ 20,487 Interest expense 10,036 8,307 1,299 Net interest income 14,256 15,681 19,188 Provision for credit losses 506 (116 ) 1,328 Net interest income after provision $ 13,750 $ 15,797 $ 17,860 Net interest income of $14.3 million was down $1.4 million, or 9%, from the second quarter and $4.9 million, or 26%, from last year’s third quarter as a result of higher interest expense related to the increased cost of interest-bearing liabilities produced by competitive pricing on deposits. Third quarter net interest margin of 2.79% declined 31 basis points over the trailing second quarter and 93 basis points from the prior-year period. Impacting net interest margin by 8 basis points was the reversal of approximately $0.4 million of interest income primarily resulting from one large commercial loan that was put on non-accrual status during the quarter. The yield on loans remained flat compared with the second quarter but improved 78 basis points year-over-year. The cost of interest-bearing liabilities was 2.59% compared with 2.18% in the second quarter of 2023 and 0.36% in the third quarter of 2022. The $0.5 million provision for credit losses in the current quarter was largely due to loan growth. Asset Quality ($ in thousands) 3Q 2023 2Q 2023 3Q 2022 Total non-performing loans $ 27,311 $ 27,789 $ 25,961 Total net loan charge-offs (recoveries) 35 35 1,518 Non-performing loans / Total loans 1.60 % 1.66 % 1.60 % Net loan charge-offs / Average loans 0.01 % 0.01 % 0.38 % Allowance for loan losses / Total loans 1.28 % 1.28 % 1.15 % “Our balance sheet remains strong as spot deposit levels were up slightly in the quarter, and while there are product shifts still occurring, we are broadly seeing more stabilization,” commented John Connerton, Chief Financial Officer of Evans Bank. “Our loan pipeline continues to be solid at $67 million, and is centered on high quality credits, which is reflected in our credit performance as we continue to navigate the current market by adhering to our prudent underwriting standards.” Non-Interest Income ($ in thousands) 3Q 2023 2Q 2023 3Q 2022 Deposit service charges $ 665 $ 645 $ 782 Insurance service and fee revenue 3,498 2,720 3,383 Bank-owned life insurance 239 238 161 Interchange fee income 516 528 532 Other income 638 570 909 Total non-interest income $ 5,556 $ 4,701 $ 5,767 Total non-interest income increased $0.9 million, or 18%, from the second quarter of 2023, but was down $0.2 million, or 4%, from last year’s third quarter on the strength of insurance revenues offset by deposit service charges and other income decreases. The change in deposit service charges since last year’s third quarter was largely due to the Bank’s implementation of reduced overdraft and non-sufficient funds (NSF) fees during the fourth quarter of 2022. The increase in insurance service and fee revenue from the sequential second quarter reflects seasonally higher commercial lines insurance commissions and profit-sharing revenue. The increase from the prior year was primarily due to increased personal lines commissions resulting from higher premiums. Other income decreased $0.3 million from last year’s third quarter primarily due to a $0.2 million final payment received in connection with a historic tax credit investment during the third quarter of 2022. Non-Interest Expense ($ in thousands) 3Q 2023 2Q 2023 3Q 2022 Salaries and employee benefits $ 8,735 $ 8,649 $ 10,450 Occupancy 1,109 1,145 1,118 Advertising and public relations 348 407 417 Professional services 869 808 839 Technology and communications 1,517 1,542 1,339 Amortization of intangibles 100 100 100 FDIC insurance 350 350 255 Other expenses 1,379 1,171 1,273 Total non-interest expenses $ 14,407 $ 14,172 $ 15,791 Total non-interest expense increased $0.2 million, or 2%, from the second quarter of 2023, but was down $1.4 million, or 9%, from last year’s third quarter. Salaries and employee benefits were down $1.7 million, or 16%, from last year’s comparative period, largely due to lower incentive accruals of $1.3 million and reduced staff expenses through consolidation of branches and back-office operations. These decreases were partially offset by merit increases and strategic hires. When compared with the second quarter, salaries and employee benefits were relatively flat due to cost management efforts. Technology and communications increased $0.2 million from last year’s third quarter primarily due to higher software costs. The Company’s GAAP efficiency ratio, or noninterest expenses divided by the sum of net interest income and noninterest income, was 72.7% in the third quarter of 2023, 69.5% in the second quarter of 2023, and 63.3% in the third quarter of 2022. Income tax expense was $1.3 million, for an effective tax rate of 26.2%, in the third quarter of 2023 compared with 22.0% in the second quarter of 2023 and 25.2% in last year’s third quarter. Balance Sheet Highlights Total assets were $2.17 billion as of September 30, 2023, an increase of less than 1% since June 30, 2023, and were up 2% from $2.13 billion at September 30, 2022. The change from last year’s third quarter was due to an increase in loan balances of $78 million, or 5%, partially offset by a reduction in investment securities of $40 million, or 11%. The loan balance increase reflects higher commercial real estate loans of $88 million and residential mortgages of $7 million, partially offset by commercial and industrial loans which decreased $15 million. Investment securities were $337 million at September 30, 2023, $17 million lower than the end of the second quarter of 2023 and $40 million lower than the end of last year’s third quarter. The decrease reflects changes in unrealized gains and losses on investment securities and maturities within the available-for-sale investment portfolio. 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. Total deposits of $1.81 billion increased $19 million, or 1%, from June 30, 2023, but decreased $68 million, or 4%, from the end of last year’s third quarter. The change from last year’s third quarter reflected deposit decreases in consumer savings of $158 million, demand deposits of $112 million, commercial savings of $60 million, and brokered deposits of $6 million. Offsetting those decreases were higher consumer time deposits of $204 million, NOW deposits of $61 million and municipal 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. As of September 30, 2023, Evans had $19 million in overnight borrowings at the FHLB. Given the current collateral available at FHLB, advances up to $312 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 and participates in the Bank Term Funding Program. At September 30, 2023, Evans had $126 million in short-term borrowings with the Federal Reserve and $35.1 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 9.40% at September 30, 2023 compared with 9.43% at June 30, 2023 and 9.00% at September 30, 2022. Book value per share was $27.52 at September 30, 2023 compared with $29.12 at June 30, 2023 and $27.20 at September 30, 2022. 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, which reduced book value per share at September 30, 2023 by $1.61 when compared with the linked quarter. 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. Tangible book value per share was $25.04 at September 30, 2023 compared with $26.61 at June 30, 2023 and $24.65 at September 30, 2022. In October 2023, the Company paid a semi-annual cash dividend of $0.66 per common share. Cash dividends totaled $1.32 per common share during 2023, up 5% over 2022. Webcast and Conference Call The Company will host a conference call and webcast on Thursday, October 26, 2023 at 4:45 p.m. ET. Management will review the financial and operating results for the third quarter of 2023, 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 Thursday, November 9, 2023. To listen to the archived call, dial (412) 317-6671 and enter conference ID number 13741201, 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 $2.2 billion in assets and $1.8 billion in deposits at September 30, 2023. Evans is a full-service community bank with 18 branches providing comprehensive financial services to consumer, business and municipal customers throughout Western New York. Evans Insurance Agency, a wholly owned subsidiary, provides life insurance, employee benefits, and property and casualty insurance through eight offices in the Western New York region. 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 COVID-19, 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) 9/30/2023 6/30/2023 3/31/2023 12/31/2022 9/30/2022 ASSETS Interest-bearing deposits at banks $ 7,468 $ 10,334 $ 3,832 $ 6,258 $ 6,813 Securities AFS 334,460 351,595 365,929 364,326 369,141 Securities HTM 2,170 2,241 3,707 6,949 7,572 Loans 1,704,400 1,670,753 1,658,576 1,672,369 1,626,457 Allowance for credit losses (21,846 ) (21,368 ) (21,523 ) (19,438 ) (18,630 ) Goodwill and intangible assets 13,629 13,729 13,829 13,929 14,029 All other assets 134,462 127,679 123,920 134,117 124,323 Total assets $ 2,174,743 $ 2,154,963 $ 2,148,270 $ 2,178,510 $ 2,129,705 LIABILITIES AND STOCKHOLDERS' EQUITY Demand deposits $ 447,306 $ 442,195 $ 483,958 $ 493,710 $ 558,805 NOW deposits 324,219 303,159 268,283 273,359 263,648 Savings deposits 698,653 726,687 807,532 801,943 913,383 Time deposits 335,228 314,574 290,141 202,667 137,910 Total deposits 1,805,406 1,786,615 1,849,914 1,771,679 1,873,746 Securities sold under agreement to repurchase 13,447 19,185 9,264 7,147 9,812 Subordinated debt 31,152 31,126 31,101 31,075 31,050 Other borrowings 151,252 140,386 79,637 193,001 42,594 Other liabilities 22,551 18,167 20,103 21,615 22,652 Total stockholders' equity $ 150,935 $ 159,484 $ 158,251 $ 153,993 $ 149,850 SHARES AND CAPITAL RATIOS Common shares outstanding 5,483,591 5,477,505 5,462,763 5,437,048 5,509,917 Book value per share $ 27.52 $ 29.12 $ 28.97 $ 28.32 $ 27.20 Tangible book value per share $ 25.04 $ 26.61 $ 26.44 $ 25.76 $ 24.65 Tier 1 leverage ratio 9.40 % 9.43 % 9.13 % 9.13 % 9.00 % Tier 1 risk-based capital ratio 12.04 % 12.73 % 12.55 % 12.29 % 12.40 % Total risk-based capital ratio 13.29 % 13.98 % 13.80 % 13.48 % 13.57 % ASSET QUALITY DATA Total non-performing loans $ 27,311 $ 27,789 $ 24,084 $ 24,728 $ 25,961 Total net loan charge-offs (recoveries) 35 35 (4 ) 115 1,518 Other real estate owned (OREO) $ - $ - $ - $ - $ 1,162 Non-performing loans/Total loans 1.60 % 1.66 % 1.45 % 1.48 % 1.60 % Net loan charge-offs (recoveries)/Average loans 0.01 % 0.01 % - % 0.03 % 0.38 % Allowance for credit losses/Total loans 1.28 % 1.28 % 1.30 % 1.16 % 1.15 % EVANS BANCORP, INC AND SUBSIDIARIES SELECTED OPERATIONS DATA (UNAUDITED) (in thousands, except share and per share data) 2023 2023 2023 2022 2022 Third Quarter Second Quarter First Quarter Fourth Quarter Third Quarter Interest income $ 24,292 $ 23,988 $ 23,365 $ 22,381 $ 20,487 Interest expense 10,036 8,307 6,040 3,167 1,299 Net interest income 14,256 15,681 17,325 19,214 19,188 Provision for credit losses 506 (116 ) (654 ) 923 1,328 Net interest income after provision for credit losses 13,750 15,797 17,979 18,291 17,860 Deposit service charges 665 645 613 684 782 Insurance service and fee revenue 3,498 2,720 2,429 2,204 3,383 Bank-owned life insurance 239 238 224 221 161 Interchange fee income 516 528 493 507 532 Other income 638 570 354 845 909 Total non-interest income 5,556 4,701 4,113 4,461 5,767 Salaries and employee benefits 8,735 8,649 9,413 9,498 10,450 Occupancy 1,109 1,145 1,173 1,190 1,118 Advertising and public relations 348 407 156 125 417 Professional services 869 808 883 871 839 Technology and communications 1,517 1,542 1,356 1,437 1,339 Amortization of intangibles 100 100 100 100 100 FDIC insurance 350 350 350 250 255 Other expenses 1,379 1,171 1,071 1,429 1,273 Total non-interest expenses 14,407 14,172 14,502 14,900 15,791 Income before income taxes 4,899 6,326 7,590 7,852 7,836 Income tax provision 1,281 1,394 1,790 1,809 1,972 Net income 3,618 4,932 5,800 6,043 5,864 PER SHARE DATA Net income per common share-diluted $ 0.66 $ 0.90 $ 1.06 $ 1.10 $ 1.06 Cash dividends per common share $ 0.66 $ - $ 0.66 $ - $ 0.64 Weighted average number of diluted shares 5,490,600 5,474,462 5,475,790 5,500,810 5,546,764 PERFORMANCE RATIOS Return on average total assets 0.67 % 0.91 % 1.07 % 1.12 % 1.08 % Return on average stockholders' equity 9.06 % 12.25 % 14.97 % 16.07 % 14.15 % Return on average tangible common stockholders' equity* 9.90 % 13.39 % 16.44 % 17.72 % 15.46 % Efficiency ratio 72.72 % 69.53 % 67.65 % 62.94 % 63.28 % Efficiency ratio (Non-GAAP)** 72.21 % 69.04 % 67.18 % 62.51 % 62.88 % * 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, 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) 2023 2023 2023 2022 2022 Third Quarter Second Quarter First Quarter Fourth Quarter Third Quarter AVERAGE BALANCES Loans, net $ 1,658,132 $ 1,646,502 $ 1,641,162 $ 1,627,028 $ 1,597,382 Investment securities 355,870 373,922 382,329 382,125 406,703 Interest-bearing deposits at banks 9,883 7,235 9,824 10,416 42,788 Total interest-earning assets 2,023,885 2,027,659 2,033,315 2,019,569 2,046,873 Non interest-earning assets 135,896 129,793 133,936 135,035 122,321 Total Assets $ 2,159,781 $ 2,157,452 $ 2,167,251 $ 2,154,604 $ 2,169,194 NOW 311,624 281,910 260,242 265,313 269,359 Savings 708,724 776,020 796,793 874,816 964,051 Time deposits 325,667 304,575 257,733 174,362 132,319 Total interest-bearing deposits 1,346,015 1,362,505 1,314,768 1,314,491 1,365,729 Borrowings 192,277 163,338 173,053 151,259 65,990 Total interest-bearing liabilities 1,538,292 1,525,843 1,487,821 1,465,750 1,431,719 Demand deposits 441,149 451,990 503,945 518,666 549,625 Other non-interest bearing liabilities 20,529 18,532 20,487 19,798 22,073 Stockholders' equity 159,811 161,087 154,998 150,390 165,777 Total Liabilities and Equity $ 2,159,781 $ 2,157,452 $ 2,167,251 $ 2,154,604 $ 2,169,194 Average tangible common stockholders' equity* 146,122 147,299 141,111 136,406 151,690 YIELD/RATE Loans, net 5.25 % 5.26 % 5.16 % 4.88 % 4.47 % Investment securities 2.48 % 2.47 % 2.53 % 2.36 % 2.23 % Interest-bearing deposits at banks 5.29 % 4.45 % 3.97 % 3.16 % 2.01 % Total interest-earning assets 4.76 % 4.75 % 4.66 % 4.40 % 3.97 % NOW 1.79 % 1.24 % 0.75 % 0.36 % 0.10 % Savings 1.85 % 1.58 % 0.95 % 0.33 % 0.19 % Time deposits 3.45 % 3.10 % 2.63 % 1.61 % 0.64 % Total interest-bearing deposits 2.22 % 1.85 % 1.24 % 0.51 % 0.22 % Borrowings 5.14 % 4.98 % 4.74 % 3.88 % 3.27 % Total interest-bearing liabilities 2.59 % 2.18 % 1.65 % 0.86 % 0.36 % Interest rate spread 2.17 % 2.57 % 3.01 % 3.54 % 3.61 % Contribution of interest-free funds 0.62 % 0.53 % 0.45 % 0.23 % 0.11 % Net interest margin 2.79 % 3.10 % 3.46 % 3.77 % 3.72 % * 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/20231026198410/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 third quarter ended September 30, 2023. HIGHLIGHTS Total loan balances of $1.7 billion up 2% in the quarter and 5% year-over-year Net income of $3.6 million reflected continued net interest margin pressure, partially offset by prudent expense management Total non-interest expense declined 9% to $14.4 million over last year’s third quarter Net interest margin of 2.79% declined 31 basis points sequentially, of which 8 basis points was attributable to the reversal of interest income from one non-accrual commercial loan in the quarter Net income was $3.6 million, or $0.66 per diluted share, in the third quarter of 2023, compared with $4.9 million, or $0.90 per diluted share, in the second quarter of 2023 and $5.9 million, or $1.06 per diluted share, in last year’s third quarter. The change from the second quarter of 2023 reflected a decrease in net interest income, increased provision for credit losses and higher non-interest expense, partially offset by higher non-interest income. The change from the prior year’s third quarter was largely due to a reduction in net interest income and lower non-interest income, partially offset by lower non-interest expense and provision for credit losses. Return on average equity was 9.06% for the third quarter of 2023, compared with 12.25% in the second quarter of 2023 and 14.15% in the third quarter of 2022. David J. Nasca, President and CEO of Evans Bancorp, Inc., said, “Third quarter results were solid from a growth and operating performance standpoint and position the Company strongly in a challenging business environment. The net interest margin continued to be pressured by rate headwinds, especially related to funding costs, as anticipated. The margin was also impacted by a reversal of interest income from one large, longtime credit client. Absent that reduction, our margin was in line with expectations. Deposits and liquidity are stable. In addition, our associates have performed well in lending and business development despite market dynamics, making inroads with new clients and cementing existing relationships, as evidenced by our 8% annualized loan growth in the quarter. We continue to take proactive steps to manage costs and expenditures by focusing on operating efficiency and providing exceptional experience to our valued clients.” Net Interest Income ($ in thousands) 3Q 2023 2Q 2023 3Q 2022 Interest income $ 24,292 $ 23,988 $ 20,487 Interest expense 10,036 8,307 1,299 Net interest income 14,256 15,681 19,188 Provision for credit losses 506 (116 ) 1,328 Net interest income after provision $ 13,750 $ 15,797 $ 17,860 Net interest income of $14.3 million was down $1.4 million, or 9%, from the second quarter and $4.9 million, or 26%, from last year’s third quarter as a result of higher interest expense related to the increased cost of interest-bearing liabilities produced by competitive pricing on deposits. Third quarter net interest margin of 2.79% declined 31 basis points over the trailing second quarter and 93 basis points from the prior-year period. Impacting net interest margin by 8 basis points was the reversal of approximately $0.4 million of interest income primarily resulting from one large commercial loan that was put on non-accrual status during the quarter. The yield on loans remained flat compared with the second quarter but improved 78 basis points year-over-year. The cost of interest-bearing liabilities was 2.59% compared with 2.18% in the second quarter of 2023 and 0.36% in the third quarter of 2022. The $0.5 million provision for credit losses in the current quarter was largely due to loan growth. Asset Quality ($ in thousands) 3Q 2023 2Q 2023 3Q 2022 Total non-performing loans $ 27,311 $ 27,789 $ 25,961 Total net loan charge-offs (recoveries) 35 35 1,518 Non-performing loans / Total loans 1.60 % 1.66 % 1.60 % Net loan charge-offs / Average loans 0.01 % 0.01 % 0.38 % Allowance for loan losses / Total loans 1.28 % 1.28 % 1.15 % “Our balance sheet remains strong as spot deposit levels were up slightly in the quarter, and while there are product shifts still occurring, we are broadly seeing more stabilization,” commented John Connerton, Chief Financial Officer of Evans Bank. “Our loan pipeline continues to be solid at $67 million, and is centered on high quality credits, which is reflected in our credit performance as we continue to navigate the current market by adhering to our prudent underwriting standards.” Non-Interest Income ($ in thousands) 3Q 2023 2Q 2023 3Q 2022 Deposit service charges $ 665 $ 645 $ 782 Insurance service and fee revenue 3,498 2,720 3,383 Bank-owned life insurance 239 238 161 Interchange fee income 516 528 532 Other income 638 570 909 Total non-interest income $ 5,556 $ 4,701 $ 5,767 Total non-interest income increased $0.9 million, or 18%, from the second quarter of 2023, but was down $0.2 million, or 4%, from last year’s third quarter on the strength of insurance revenues offset by deposit service charges and other income decreases. The change in deposit service charges since last year’s third quarter was largely due to the Bank’s implementation of reduced overdraft and non-sufficient funds (NSF) fees during the fourth quarter of 2022. The increase in insurance service and fee revenue from the sequential second quarter reflects seasonally higher commercial lines insurance commissions and profit-sharing revenue. The increase from the prior year was primarily due to increased personal lines commissions resulting from higher premiums. Other income decreased $0.3 million from last year’s third quarter primarily due to a $0.2 million final payment received in connection with a historic tax credit investment during the third quarter of 2022. Non-Interest Expense ($ in thousands) 3Q 2023 2Q 2023 3Q 2022 Salaries and employee benefits $ 8,735 $ 8,649 $ 10,450 Occupancy 1,109 1,145 1,118 Advertising and public relations 348 407 417 Professional services 869 808 839 Technology and communications 1,517 1,542 1,339 Amortization of intangibles 100 100 100 FDIC insurance 350 350 255 Other expenses 1,379 1,171 1,273 Total non-interest expenses $ 14,407 $ 14,172 $ 15,791 Total non-interest expense increased $0.2 million, or 2%, from the second quarter of 2023, but was down $1.4 million, or 9%, from last year’s third quarter. Salaries and employee benefits were down $1.7 million, or 16%, from last year’s comparative period, largely due to lower incentive accruals of $1.3 million and reduced staff expenses through consolidation of branches and back-office operations. These decreases were partially offset by merit increases and strategic hires. When compared with the second quarter, salaries and employee benefits were relatively flat due to cost management efforts. Technology and communications increased $0.2 million from last year’s third quarter primarily due to higher software costs. The Company’s GAAP efficiency ratio, or noninterest expenses divided by the sum of net interest income and noninterest income, was 72.7% in the third quarter of 2023, 69.5% in the second quarter of 2023, and 63.3% in the third quarter of 2022. Income tax expense was $1.3 million, for an effective tax rate of 26.2%, in the third quarter of 2023 compared with 22.0% in the second quarter of 2023 and 25.2% in last year’s third quarter. Balance Sheet Highlights Total assets were $2.17 billion as of September 30, 2023, an increase of less than 1% since June 30, 2023, and were up 2% from $2.13 billion at September 30, 2022. The change from last year’s third quarter was due to an increase in loan balances of $78 million, or 5%, partially offset by a reduction in investment securities of $40 million, or 11%. The loan balance increase reflects higher commercial real estate loans of $88 million and residential mortgages of $7 million, partially offset by commercial and industrial loans which decreased $15 million. Investment securities were $337 million at September 30, 2023, $17 million lower than the end of the second quarter of 2023 and $40 million lower than the end of last year’s third quarter. The decrease reflects changes in unrealized gains and losses on investment securities and maturities within the available-for-sale investment portfolio. 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. Total deposits of $1.81 billion increased $19 million, or 1%, from June 30, 2023, but decreased $68 million, or 4%, from the end of last year’s third quarter. The change from last year’s third quarter reflected deposit decreases in consumer savings of $158 million, demand deposits of $112 million, commercial savings of $60 million, and brokered deposits of $6 million. Offsetting those decreases were higher consumer time deposits of $204 million, NOW deposits of $61 million and municipal 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. As of September 30, 2023, Evans had $19 million in overnight borrowings at the FHLB. Given the current collateral available at FHLB, advances up to $312 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 and participates in the Bank Term Funding Program. At September 30, 2023, Evans had $126 million in short-term borrowings with the Federal Reserve and $35.1 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 9.40% at September 30, 2023 compared with 9.43% at June 30, 2023 and 9.00% at September 30, 2022. Book value per share was $27.52 at September 30, 2023 compared with $29.12 at June 30, 2023 and $27.20 at September 30, 2022. 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, which reduced book value per share at September 30, 2023 by $1.61 when compared with the linked quarter. 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. Tangible book value per share was $25.04 at September 30, 2023 compared with $26.61 at June 30, 2023 and $24.65 at September 30, 2022. In October 2023, the Company paid a semi-annual cash dividend of $0.66 per common share. Cash dividends totaled $1.32 per common share during 2023, up 5% over 2022. Webcast and Conference Call The Company will host a conference call and webcast on Thursday, October 26, 2023 at 4:45 p.m. ET. Management will review the financial and operating results for the third quarter of 2023, 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 Thursday, November 9, 2023. To listen to the archived call, dial (412) 317-6671 and enter conference ID number 13741201, 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 $2.2 billion in assets and $1.8 billion in deposits at September 30, 2023. Evans is a full-service community bank with 18 branches providing comprehensive financial services to consumer, business and municipal customers throughout Western New York. Evans Insurance Agency, a wholly owned subsidiary, provides life insurance, employee benefits, and property and casualty insurance through eight offices in the Western New York region. 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 COVID-19, 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) 9/30/2023 6/30/2023 3/31/2023 12/31/2022 9/30/2022 ASSETS Interest-bearing deposits at banks $ 7,468 $ 10,334 $ 3,832 $ 6,258 $ 6,813 Securities AFS 334,460 351,595 365,929 364,326 369,141 Securities HTM 2,170 2,241 3,707 6,949 7,572 Loans 1,704,400 1,670,753 1,658,576 1,672,369 1,626,457 Allowance for credit losses (21,846 ) (21,368 ) (21,523 ) (19,438 ) (18,630 ) Goodwill and intangible assets 13,629 13,729 13,829 13,929 14,029 All other assets 134,462 127,679 123,920 134,117 124,323 Total assets $ 2,174,743 $ 2,154,963 $ 2,148,270 $ 2,178,510 $ 2,129,705 LIABILITIES AND STOCKHOLDERS' EQUITY Demand deposits $ 447,306 $ 442,195 $ 483,958 $ 493,710 $ 558,805 NOW deposits 324,219 303,159 268,283 273,359 263,648 Savings deposits 698,653 726,687 807,532 801,943 913,383 Time deposits 335,228 314,574 290,141 202,667 137,910 Total deposits 1,805,406 1,786,615 1,849,914 1,771,679 1,873,746 Securities sold under agreement to repurchase 13,447 19,185 9,264 7,147 9,812 Subordinated debt 31,152 31,126 31,101 31,075 31,050 Other borrowings 151,252 140,386 79,637 193,001 42,594 Other liabilities 22,551 18,167 20,103 21,615 22,652 Total stockholders' equity $ 150,935 $ 159,484 $ 158,251 $ 153,993 $ 149,850 SHARES AND CAPITAL RATIOS Common shares outstanding 5,483,591 5,477,505 5,462,763 5,437,048 5,509,917 Book value per share $ 27.52 $ 29.12 $ 28.97 $ 28.32 $ 27.20 Tangible book value per share $ 25.04 $ 26.61 $ 26.44 $ 25.76 $ 24.65 Tier 1 leverage ratio 9.40 % 9.43 % 9.13 % 9.13 % 9.00 % Tier 1 risk-based capital ratio 12.04 % 12.73 % 12.55 % 12.29 % 12.40 % Total risk-based capital ratio 13.29 % 13.98 % 13.80 % 13.48 % 13.57 % ASSET QUALITY DATA Total non-performing loans $ 27,311 $ 27,789 $ 24,084 $ 24,728 $ 25,961 Total net loan charge-offs (recoveries) 35 35 (4 ) 115 1,518 Other real estate owned (OREO) $ - $ - $ - $ - $ 1,162 Non-performing loans/Total loans 1.60 % 1.66 % 1.45 % 1.48 % 1.60 % Net loan charge-offs (recoveries)/Average loans 0.01 % 0.01 % - % 0.03 % 0.38 % Allowance for credit losses/Total loans 1.28 % 1.28 % 1.30 % 1.16 % 1.15 % EVANS BANCORP, INC AND SUBSIDIARIES SELECTED OPERATIONS DATA (UNAUDITED) (in thousands, except share and per share data) 2023 2023 2023 2022 2022 Third Quarter Second Quarter First Quarter Fourth Quarter Third Quarter Interest income $ 24,292 $ 23,988 $ 23,365 $ 22,381 $ 20,487 Interest expense 10,036 8,307 6,040 3,167 1,299 Net interest income 14,256 15,681 17,325 19,214 19,188 Provision for credit losses 506 (116 ) (654 ) 923 1,328 Net interest income after provision for credit losses 13,750 15,797 17,979 18,291 17,860 Deposit service charges 665 645 613 684 782 Insurance service and fee revenue 3,498 2,720 2,429 2,204 3,383 Bank-owned life insurance 239 238 224 221 161 Interchange fee income 516 528 493 507 532 Other income 638 570 354 845 909 Total non-interest income 5,556 4,701 4,113 4,461 5,767 Salaries and employee benefits 8,735 8,649 9,413 9,498 10,450 Occupancy 1,109 1,145 1,173 1,190 1,118 Advertising and public relations 348 407 156 125 417 Professional services 869 808 883 871 839 Technology and communications 1,517 1,542 1,356 1,437 1,339 Amortization of intangibles 100 100 100 100 100 FDIC insurance 350 350 350 250 255 Other expenses 1,379 1,171 1,071 1,429 1,273 Total non-interest expenses 14,407 14,172 14,502 14,900 15,791 Income before income taxes 4,899 6,326 7,590 7,852 7,836 Income tax provision 1,281 1,394 1,790 1,809 1,972 Net income 3,618 4,932 5,800 6,043 5,864 PER SHARE DATA Net income per common share-diluted $ 0.66 $ 0.90 $ 1.06 $ 1.10 $ 1.06 Cash dividends per common share $ 0.66 $ - $ 0.66 $ - $ 0.64 Weighted average number of diluted shares 5,490,600 5,474,462 5,475,790 5,500,810 5,546,764 PERFORMANCE RATIOS Return on average total assets 0.67 % 0.91 % 1.07 % 1.12 % 1.08 % Return on average stockholders' equity 9.06 % 12.25 % 14.97 % 16.07 % 14.15 % Return on average tangible common stockholders' equity* 9.90 % 13.39 % 16.44 % 17.72 % 15.46 % Efficiency ratio 72.72 % 69.53 % 67.65 % 62.94 % 63.28 % Efficiency ratio (Non-GAAP)** 72.21 % 69.04 % 67.18 % 62.51 % 62.88 % * 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, 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) 2023 2023 2023 2022 2022 Third Quarter Second Quarter First Quarter Fourth Quarter Third Quarter AVERAGE BALANCES Loans, net $ 1,658,132 $ 1,646,502 $ 1,641,162 $ 1,627,028 $ 1,597,382 Investment securities 355,870 373,922 382,329 382,125 406,703 Interest-bearing deposits at banks 9,883 7,235 9,824 10,416 42,788 Total interest-earning assets 2,023,885 2,027,659 2,033,315 2,019,569 2,046,873 Non interest-earning assets 135,896 129,793 133,936 135,035 122,321 Total Assets $ 2,159,781 $ 2,157,452 $ 2,167,251 $ 2,154,604 $ 2,169,194 NOW 311,624 281,910 260,242 265,313 269,359 Savings 708,724 776,020 796,793 874,816 964,051 Time deposits 325,667 304,575 257,733 174,362 132,319 Total interest-bearing deposits 1,346,015 1,362,505 1,314,768 1,314,491 1,365,729 Borrowings 192,277 163,338 173,053 151,259 65,990 Total interest-bearing liabilities 1,538,292 1,525,843 1,487,821 1,465,750 1,431,719 Demand deposits 441,149 451,990 503,945 518,666 549,625 Other non-interest bearing liabilities 20,529 18,532 20,487 19,798 22,073 Stockholders' equity 159,811 161,087 154,998 150,390 165,777 Total Liabilities and Equity $ 2,159,781 $ 2,157,452 $ 2,167,251 $ 2,154,604 $ 2,169,194 Average tangible common stockholders' equity* 146,122 147,299 141,111 136,406 151,690 YIELD/RATE Loans, net 5.25 % 5.26 % 5.16 % 4.88 % 4.47 % Investment securities 2.48 % 2.47 % 2.53 % 2.36 % 2.23 % Interest-bearing deposits at banks 5.29 % 4.45 % 3.97 % 3.16 % 2.01 % Total interest-earning assets 4.76 % 4.75 % 4.66 % 4.40 % 3.97 % NOW 1.79 % 1.24 % 0.75 % 0.36 % 0.10 % Savings 1.85 % 1.58 % 0.95 % 0.33 % 0.19 % Time deposits 3.45 % 3.10 % 2.63 % 1.61 % 0.64 % Total interest-bearing deposits 2.22 % 1.85 % 1.24 % 0.51 % 0.22 % Borrowings 5.14 % 4.98 % 4.74 % 3.88 % 3.27 % Total interest-bearing liabilities 2.59 % 2.18 % 1.65 % 0.86 % 0.36 % Interest rate spread 2.17 % 2.57 % 3.01 % 3.54 % 3.61 % Contribution of interest-free funds 0.62 % 0.53 % 0.45 % 0.23 % 0.11 % Net interest margin 2.79 % 3.10 % 3.46 % 3.77 % 3.72 % * 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
