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, 2024. The prior-year period includes
business activity relating to The Evans Agency (“TEA”) prior to the
sale to Arthur J. Gallagher & Co. on November 30, 2023.
HIGHLIGHTS
- Evans announced Definitive Agreement to merge with NBT Bancorp
Inc. during the third quarter
- Net income per share was $0.53 in the third quarter, which
included $0.6 million in merger-related expenses and an offsetting
gain from the sale of other real estate owned (OREO) property
- Third quarter net interest margin was 2.80%, up 9 basis points
sequentially driven by balance sheet adjustments in the first
quarter of 2024 and strategic deposit pricing
- Total loans grew by $67 million, or 4%, since year-end 2023,
and by $84 million, or 5%, compared with the prior-year period
- Maintained a strong loan pipeline of $83 million
- Total deposits rose by $182 million, or 11%, from December 31,
2023, and increased $95 million, or 5%, from the end of last year’s
third quarter
Net income of $2.9 million, or $0.53 per diluted share, in the
third quarter of 2024 was flat sequentially and reflected higher
net interest income of $0.7 million and an increase in non-interest
income of $0.6 million offset by higher provision for credit losses
of $0.3 million and an increase in non-interest expense of $1.0
million, which included $0.6 million of merger related costs. Last
year’s third quarter had net income of $3.6 million, or $0.66 per
diluted share. The change from the prior-year period reflected
higher net interest income of $0.8 million, which was more than
offset by the impact of the sale of TEA in 2023. Return on average
equity was 6.44% for the third quarter of 2024, compared with 6.76%
in the second quarter of 2024 and 9.06% in the third quarter of
2023.
David J. Nasca, President and CEO of Evans Bancorp, Inc.,
commented, “Evans delivered solid third quarter performance as the
rate environment began to improve, driven by growth in our lending
portfolio, and deposits, an expanded net interest margin, and
continued expense management discipline. We additionally benefited
from the sale of an OREO property during the quarter, which boosted
non-interest income and helped offset the initial $0.6 million in
merger-related costs incurred.
“As we look ahead, we are excited about the future for Evans as
we join with NBT Bancorp. This partnership provides a tremendous
opportunity to scale our service to customers and communities by
leveraging NBT's strong regional presence and shared community
banking values. Together, we are well positioned to deliver
long-term value to our shareholders and continue our tradition of
supporting the local markets we serve.”
On September 9, 2024, NBT Bancorp Inc. (“NBT”) (Nasdaq: NBTB)
and Evans announced that they entered into a definitive agreement
pursuant to which Evans will merge with and into NBT. In accord
with the merger agreement, NBT will acquire 100% of the outstanding
shares of Evans in exchange for common shares of NBT. The exchange
ratio will be fixed at 0.91 NBT shares for each share of Evans,
resulting in an aggregate transaction value of approximately $236
million based on NBT’s closing stock price of $46.28 on September
6, 2024. The merger was unanimously approved by the Boards of
Directors of both companies. The merger is expected to close in the
second quarter of 2025, subject to the satisfaction of customary
closing conditions, including approval by the shareholders of Evans
and the receipt of required regulatory approvals.
Net Interest Income
($ in thousands)
3Q 2024
2Q 2024
3Q 2023
Interest income
$
28,698
$
27,815
$
24,292
Interest expense
13,654
13,495
10,036
Net interest income
15,044
14,320
14,256
Provision for credit losses
570
297
506
Net interest income after provision
$
14,474
$
14,023
$
13,750
Net interest income of $15.0 million increased $0.7 million, or
5%, over the second quarter of 2024 due to higher average loans
originated and the Company’s investment strategy to strengthen the
balance sheet at the end of the first quarter of 2024. Compared
with last year’s third quarter, net interest income was higher by
$0.8 million, or 6%, due to higher average loan balances and the
stabilization of the net interest margin.
Third quarter net interest margin of 2.80% increased 9 basis
points from the trailing second quarter and was up 1 basis point
over the prior-year period. The yield on loans increased 17 basis
points compared with the second quarter and was up 55 basis points
year-over-year. The cost of interest-bearing liabilities was 3.28%
compared with 3.27% in the second quarter of 2024 and 2.59% in the
third quarter of 2023.
The $0.6 million provision for credit losses in the third
quarter was due to loan growth as well as slower prepayment rates.
The increase in non-performing loans of $7.5 million during the
quarter was due largely to one loan that is 90 days past due and
still accruing that is expected to be renewed early in the fourth
quarter.
Asset Quality
($ in thousands)
3Q 2024
2Q 2024
3Q 2023
Total non-performing loans
$
32,598
$
25,128
$
27,311
Total net loan charge-offs
40
22
35
Non-performing loans / Total loans
1.82
%
1.42
%
1.60
%
Net loan charge-offs / Average loans
0.01
%
0.01
%
0.01
%
Allowance for credit losses / Total
loans
1.29
%
1.28
%
1.28
%
Non-Interest Income
($ in thousands)
3Q 2024
2Q 2024
3Q 2023
Deposit service charges
$
699
$
667
$
665
Insurance service and fee revenue
186
176
3,498
Bank-owned life insurance
253
252
239
Interchange fee income
529
504
516
Other income
1,327
801
638
Total non-interest income
$
2,994
$
2,400
$
5,556
Total non-interest income increased $0.6 million from the
sequential quarter due to a gain on the sale of the one property
that the Company had in other real estate owned at the end of the
second quarter of 2024. That gain was recognized in the other
income category.
The $2.6 million reduction in non-interest income from the
prior-year period was due to lower insurance service and fee
revenue of $3.3 million driven by the sale of TEA, partially offset
by the sale of the other real estate owned.
Non-Interest Expense
($ in thousands)
3Q 2024
2Q 2024
3Q 2023
Salaries and employee benefits
$
7,539
$
7,330
$
8,735
Occupancy
1,088
1,089
1,109
Advertising and public relations
327
254
348
Professional services
992
870
869
Technology and communications
1,423
1,596
1,517
Amortization of intangibles
4
4
100
FDIC insurance
340
300
350
Merger related
600
-
-
Other expenses
1,274
1,115
1,379
Total non-interest expenses
$
13,587
$
12,558
$
14,407
Non-interest expenses increased $1.0 million from the sequential
quarter, which included $0.6 million of merger related expenses in
support of the planned merger with NBT.
Salaries and employee benefits, the largest component of
non-interest expenses, were up $0.2 million, or 3%, from the second
quarter of 2024 and down $1.2 million, or 14%, from the prior-year
period. Included in salaries and employee benefits during the third
quarter of 2024 was the funding of employee’s health savings
accounts. Compared with last year’s third quarter, the decrease was
primarily due to salaries and employee benefit expenses related to
TEA of $1.5 million, offset by merit increases given in the
beginning of the current year.
The Company’s GAAP efficiency ratio, or noninterest expenses
divided by the sum of net interest income and noninterest income,
was 75.32% in the third quarter of 2024, 75.11% in the second
quarter of 2024, and 72.72% in the third quarter of 2023.
Income tax expense was $0.9 million, for an effective tax rate
of 24.2%, in the third quarter of 2024 compared with 23.8% in the
second quarter of 2024 and 26.2% in last year’s third quarter.
Balance Sheet Highlights
Total assets were $2.28 billion as of September 30, 2024, an
increase of $171 million, or 8%, since December 31, 2023, and were
up $105 million, or 5%, since September 30, 2023. Interest-bearing
deposits at banks increased $103 million and $100 million,
respectively, from the comparative periods. In addition, loan
growth was $67 million, or 4%, since year end 2023 and $84 million,
or 5%, when compared with the prior-year period.
Investment securities were $276 million at September 30, 2024,
$8 million higher than the end of the second quarter of 2024 and
$61 million lower than the end of last year’s third 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 $1.90 billion increased $182 million, or 11%,
from December 31, 2023, and were up $95 million, or 5%, from the
end of last year’s third quarter.
At September 30, 2024, Evans had $40 million borrowed at FHLB.
Given the current collateral available at FHLB, advances up to $373
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 September 30, 2024, Evans had $88 million in
short-term borrowings with the Federal Reserve and $8 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 10.01% at September 30, 2024
compared with 10.04% at June 30, 2024 and 9.40% at September 30,
2023.
Book value per share was $33.58 at September 30, 2024 compared
with $32.15 at June 30, 2024 and $27.52 at September 30, 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 September 30,
2024, this amounted to $6.36 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 $33.25 at September
30, 2024 compared with $31.81 at June 30, 2024 and $25.04 at
September 30, 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 August 21, 2024, the Company declared a cash dividend of
$0.66 per common share, which was paid on October 10, 2024.
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 September 30,
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)
9/30/2024
6/30/2024
3/31/2024
12/31/2023
9/30/2023
ASSETS
Interest-bearing deposits at banks
$
107,296
$
110,042
$
164,400
$
3,798
$
7,468
Securities AFS
271,232
263,740
268,476
275,680
334,460
Securities HTM
4,376
3,626
3,611
2,059
2,170
Loans
1,787,957
1,765,116
1,721,876
1,720,946
1,704,400
Allowance for credit losses
(23,091)
(22,562)
(22,287)
(22,114)
(21,846)
Goodwill and intangible assets
1,850
1,854
1,858
1,862
13,629
All other assets
130,386
135,551
122,010
126,432
134,462
Total assets
$
2,280,006
$
2,257,367
$
2,259,944
$
2,108,663
$
2,174,743
LIABILITIES AND STOCKHOLDERS'
EQUITY
Demand deposits
$
435,358
$
397,535
$
399,558
$
390,238
$
447,306
NOW deposits
372,462
382,513
381,798
345,279
324,219
Savings deposits
706,849
710,596
715,495
649,621
698,653
Time deposits
386,049
400,897
394,515
333,623
335,228
Total deposits
1,900,718
1,891,541
1,891,366
1,718,761
1,805,406
Securities sold under agreement to
repurchase
8,282
7,684
6,873
9,475
13,447
Subordinated debt
31,254
31,228
31,203
31,177
31,152
Other borrowings
128,000
129,006
131,023
145,123
151,252
Other liabilities
25,905
20,259
24,884
25,908
22,551
Total stockholders' equity
$
185,847
$
177,649
$
174,595
$
178,219
$
150,935
SHARES AND CAPITAL RATIOS
Common shares outstanding
5,534,239
5,525,838
5,521,009
5,499,772
5,483,591
Book value per share
$
33.58
$
32.15
$
31.62
$
32.40
$
27.52
Tangible book value per share
(Non-GAAP)
$
33.25
$
31.81
$
31.29
$
32.07
$
25.04
Tier 1 leverage ratio
10.01
%
10.04
%
10.52
%
10.37
%
9.40
%
Tier 1 risk-based capital ratio
13.38
%
13.55
%
13.63
%
13.80
%
12.04
%
Total risk-based capital ratio
14.63
%
14.80
%
14.89
%
15.05
%
13.29
%
ASSET QUALITY DATA
Total non-performing loans
$
32,598
$
25,128
$
27,977
$
27,325
$
27,311
Total net loan charge-offs
(recoveries)
41
22
93
11
35
Other real estate owned (OREO)
$
-
$
6,902
$
-
$
-
$
-
Non-performing loans/Total loans
1.82
%
1.42
%
1.62
%
1.59
%
1.60
%
Net loan charge-offs (recoveries)/Average
loans
0.01
%
0.01
%
0.02
%
-
%
0.01
%
Allowance for credit losses/Total
loans
1.29
%
1.28
%
1.29
%
1.28
%
1.28
%
EVANS BANCORP, INC AND
SUBSIDIARIES
SELECTED OPERATIONS DATA
(UNAUDITED)
(in thousands, except share and per
share data)
2024
2024
2024
2023
2023
Third Quarter
Second Quarter
First Quarter
Fourth Quarter
Third Quarter
Interest income
$
28,698
$
27,815
$
25,374
$
25,205
$
24,292
Interest expense
13,654
13,495
11,467
11,259
10,036
Net interest income
15,044
14,320
13,907
13,946
14,256
Provision for credit losses
570
297
266
282
506
Net interest income after provision for
credit losses
14,474
14,023
13,641
13,664
13,750
Deposit service charges
699
667
681
670
665
Insurance service and fee revenue
186
176
149
1,613
3,498
Bank-owned life insurance
253
252
246
230
239
Interchange fee income
529
504
466
510
516
Gain on sale of other real estate
owned
598
-
-
-
-
Gain on sale of insurance agency
-
-
-
20,160
-
Loss on sale of investment securities
-
-
-
(5,044)
-
Other income
729
801
725
412
638
Total non-interest income
2,994
2,400
2,267
18,551
5,556
Salaries and employee benefits
7,539
7,330
7,837
10,251
8,735
Occupancy
1,088
1,089
1,157
1,078
1,109
Advertising and public relations
327
254
171
296
348
Professional services
992
870
895
1,003
869
Technology and communications
1,423
1,596
1,409
1,545
1,517
Amortization of intangibles
4
4
4
67
100
FDIC insurance
340
300
325
350
350
Merger related
600
-
-
-
-
Other expenses
1,274
1,115
1,129
1,710
1,379
Total non-interest expenses
13,587
12,558
12,927
16,300
14,407
Income before income taxes
3,881
3,865
2,981
15,915
4,899
Income tax provision
938
919
647
5,741
1,281
Net income
2,943
2,946
2,334
10,174
3,618
PER SHARE DATA
Net income per common share-diluted
$
0.53
$
0.53
$
0.42
$
1.85
$
0.66
Cash dividends per common share
$
0.66
$
-
$
0.66
$
-
$
0.66
Weighted average number of diluted
shares
5,542,694
5,530,120
5,519,244
5,497,029
5,490,600
PERFORMANCE RATIOS
Return on average total assets
0.52
%
0.52
%
0.44
%
1.90
%
0.67
%
Return on average stockholders' equity
6.44
%
6.76
%
5.28
%
25.73
%
9.06
%
Return on average tangible common
stockholders' equity (Non-GAAP)*
6.51
%
6.83
%
5.33
%
27.37
%
9.90
%
Efficiency ratio
75.32
%
75.11
%
79.92
%
50.16
%
72.72
%
Efficiency ratio (Non-GAAP)**
71.98
%
75.08
%
79.90
%
93.40
%
72.21
%
* 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
2024
2024
2023
2023
Third Quarter
Second Quarter
First Quarter
Fourth Quarter
Third Quarter
AVERAGE BALANCES
Loans, net
$
1,743,042
$
1,715,280
$
1,703,320
$
1,682,177
$
1,658,132
Investment securities
278,956
275,854
280,975
327,303
355,870
Interest-bearing deposits at banks
117,326
137,442
18,889
5,916
9,883
Total interest-earning assets
2,139,324
2,128,576
2,003,184
2,015,396
2,023,885
Non interest-earning assets
126,056
123,457
117,646
128,915
135,896
Total Assets
$
2,265,380
$
2,252,033
$
2,120,830
$
2,144,311
$
2,159,781
NOW
381,054
374,910
347,908
333,893
311,624
Savings
707,742
718,627
658,656
687,223
708,724
Time deposits
399,180
399,476
342,358
335,646
325,667
Total interest-bearing deposits
1,487,976
1,493,013
1,348,922
1,356,762
1,346,015
Borrowings
168,630
168,856
166,948
197,363
192,277
Total interest-bearing liabilities
1,656,606
1,661,869
1,515,870
1,554,125
1,538,292
Demand deposits
403,182
395,876
404,053
409,115
441,149
Other non-interest bearing liabilities
22,792
19,885
23,943
22,880
20,529
Stockholders' equity
182,800
174,403
176,964
158,191
159,811
Total Liabilities and Equity
$
2,265,380
$
2,252,033
$
2,120,830
$
2,144,311
$
2,159,781
Average tangible common stockholders'
equity (Non-GAAP)*
180,947
172,546
175,103
148,673
146,122
YIELD/RATE
Loans, net
5.80
%
5.63
%
5.56
%
5.43
%
5.25
%
Investment securities
2.48
%
2.63
%
2.53
%
2.53
%
2.48
%
Interest-bearing deposits at banks
5.31
%
5.86
%
1.68
%
6.38
%
5.29
%
Total interest-earning assets
5.34
%
5.26
%
5.09
%
4.96
%
4.76
%
NOW
2.62
%
2.50
%
2.30
%
2.12
%
1.79
%
Savings
2.56
%
2.53
%
2.25
%
2.09
%
1.85
%
Time deposits
4.41
%
4.52
%
4.24
%
3.83
%
3.45
%
Total interest-bearing deposits
3.07
%
3.05
%
2.77
%
2.53
%
2.22
%
Borrowings
5.09
%
5.16
%
5.25
%
5.27
%
5.14
%
Total interest-bearing liabilities
3.28
%
3.27
%
3.04
%
2.87
%
2.59
%
Interest rate spread
2.06
%
1.99
%
2.05
%
2.09
%
2.17
%
Contribution of interest-free funds
0.74
%
0.72
%
0.74
%
0.66
%
0.62
%
Net interest margin
2.80
%
2.71
%
2.79
%
2.75
%
2.79
%
* 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/20241031920276/en/
For more information contact: John B. Connerton Executive
Vice President and Chief Financial Officer (716) 926-2000
jconnerton@evansbank.com
-OR- Deborah K. Pawlowski/Craig Mychajluk Alliance
Advisors IR (716) 843-3908 dpawlowski@allianceadvisors.com
cmychajluk@allianceadvisors.com
Media Contact: Kathleen Rizzo Young Group VP/Public &
Community Relations Director (716) 343-5562
krizzoyoung@evansbank.com
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