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| Share Name | Share Symbol | Market | Type |
|---|---|---|---|
| Evans Bancorp Inc | AMEX:EVBN | AMEX | Common Stock |
| Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|
| -0.98 | -2.34% | 40.85 | 42.46 | 40.35 | 42.46 | 16,748 | 21:18:18 |
From Jan 2024 to Jan 2025
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
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/
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
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