UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Date of report (Date of earliest event reported): |
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November 15, 2023 |
Evans Bancorp, Inc.
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(Exact Name of Registrant as Specified in Charter)
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New York |
001-35021 |
16-1332767 |
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of Incorporation) |
File Number) |
Identification No.) |
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6460 Main Street, Williamsville, New York |
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14221 |
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Registrant’s Telephone Number, Including Area Code: |
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716-926-2000 |
Not Applicable
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Former Name or Former Address, if Changed Since Last Report
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
Common Stock, $0.50 par value |
EVBN |
NYSE American |
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Section 7 – Regulation FD
Item 7.01 Regulation FD Disclosure.
Evans Bancorp, Inc. (“Evans”) intends to present the materials attached as Exhibit 99.1 to this Current Report on Form 8-K (the “Earnings Release Presentation”) from time to time in presentations to investors and other stakeholders.
This information (including Exhibit 99.1) is being furnished under Item 7.01 of this Form 8-K and shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (“Exchange Act”) or otherwise subject to the liabilities of that section, and such information shall not be deemed incorporated by reference in any filing of Evans under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Section 9 – Financial Statements and Exhibits
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit 99.1 – Evans Bancorp Investor Presentation.
Exhibit 104 – The cover page from this Current Report on Form 8-K, formatted in Inline XBRL
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on behalf by the undersigned hereunto duly authorized.
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Evans Bancorp, Inc. |
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November 15, 2023 |
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By: |
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/s/ John B. Connerton |
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Name: |
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John B. Connerton |
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Title: |
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Chief Financial Officer & Treasurer |
Piper Sandler & Co
East Coast Financial Services Conference
November 16, 2023
David J. Nasca
President & Chief Executive Officer
John B. Connerton EVP & Chief Financial Officer Creating scale and sophistication to leverage in a resurgent WNY market
Evans Bancorp Inc.
Evans BancorpEx. 99.1
Safe Harbor Statement
This presentation includes "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 BancorpEx. 99.1
Evans Bancorp, Inc. (NYSE American: EVBN)
Building a preeminent community financial institution
Increasing competitive advantages with top tier talent and differentiated client experiences
A Century of serving Western New York
Established: 1920
Branches: 18
Insurance Locations: 8
Recent Price $25.90
52 week range $23.20 - $40.57
Market Capitalization $141 million
Total shares outstanding 5.4 million
Ownership – Insider 5%
Institutional 63%
Evans BancorpEx. 99.1
Evans Core Values
Evans BancorpEx. 99.1
Evans to Sell Insurance Business
Captures valuation premium and provides capital to strategically redeploy across the core banking franchise
Sale Price $40.0 M Net Gain $15.1 M LTM Insurance Agency Revenue ~3.9x LTM Earnings ~20.3x
Pro Forma Capital Impact* TCE/TA 7.47% +112 bps Tier 1 Leverage 10.58% +119 bps Total Risked Based Capital 14.80% +151 bps Tangible Book Value / Share $29.77 +18.9% Market Share By Deposits $72.8B
Evans BancorpEx. 99.1
Opportunity for Continued Growth
Growing in market dominated by two top 25 banks
Source: FDIC, as of June 30, 2023 (Metropolitan Statistical Area: Buffalo-Cheektowaga, NY)
Evans BancorpEx. 99.1
Total Assets
Building platform for increased future earnings power
Recent decline reflects reduction in investment securities
Acquired Fairport Savings Bank
May 1, 2020
11% CAGR
Evans BancorpEx. 99.1
Total Loans
Loan pipeline continues to be solid at
$67 million
Expect total commercial loan growth to be approximately 3% in 2023
Q3 23 up 5% Y/Y on higher commercial real estate loans and residential mortgages, partially offset by lower commercial and industrial loans
9% CAGR
Evans BancorpEx. 99.1
Commercial Loan Portfolio by Industry
Total Portfolio: $1.2 billion
Well diversified
Strong credit quality
Stable multi-family market
Office Portfolio:
Weighted avg risk rating 3.55
LTV for Office Portfolio is 54%
Evans BancorpEx. 99.1
Credit Fundamentals
Solid underwriting discipline and proactive portfolio management
In-market focus and deep customer relationships
NPAs to Total Loans + OREO
Net Charge Offs to Average Loans
Evans BancorpEx. 99.1
Liquidity
Diversified deposit base, as well as other alternative sources of funding
Executing well against stiff competition – retaining key deposit relationships
Uninsured and uncollateralized deposits steady at 18% in Q3 2023
10% CAGR
LTD Ratio
Evans BancorpEx. 99.1
Deposit Composition and Product Growth
Demand: + 1% or $5M
NOW: + 7% or $21M
Savings: - 4% or $28M
Time: + 7% or $21M
Q3 2023 Composition:
1.80 billion
Savings & Money Market
Demand & NOW
Time Deposits
Evans BancorpEx. 99.1
Securities Portfolio
9/30/23 AFS total $334.5M down 9% Y/Y
Securities 16% of total assets
97% of total portfolio AFS
Conservative mix
Municipal, 6%
Treasury, 11%
Agency MBS, 22%
Agency CMBS, 33%
Agency, 28%
Evans BancorpEx. 99.1
Non-Interest Income Composition
Q3 2023 TTM Non-Interest Income:
$18.8 Million
Announced agreement to sell the insurance business to Arthur J. Gallagher on Nov 7, 2023
Expect to close in the fourth quarter of 2023
Transaction provides ~20 years of insurance earnings and return of capital for other initiatives
Q3 2023 TTM Non-Interest Income:
$18.8 Million
Bank-owned Life Insurance, 5%
Other Income, 23%
Bank Charges, 14%
Insurance Service & Fees, 58%
Evans BancorpEx. 99.1
Net Interest Margin
Interest rate pressure and significant competition have driven deposit costs higher
Expect 15 to 20 basis points of NIM compression in the fourth quarter of 2023
Evans BancorpEx. 99.1
Expense Management
Focusing on controlling costs and efforts to improve efficiencies
Total expenses down 5% since 2021
Non-Interest Expense
Evans BancorpEx. 99.1
Net Income
(in millions, except per share data)
NIM pressure partially offset by:
Non-interest income growth
Expense management focus
5% CAGR
Earnings per Share - Diluted
*2020 included $6 million of one-time FSB merger-related expenses
Evans BancorpEx. 99.1
Results Accruing to Shareholders
Dividend Payment
6% CAGR
Book Value per Share without AOCI with AOCI
Dividend Yield
Dividend Payout Ratio
* SNL represents banks >$1B <$5B
Evans BancorpEx. 99.1
Evans Strategic Objectives
Evans BancorpEx. 99.1
Strategic Objectives (2023)
Commercial and Residential Lending
Commercial:
Expect to achieve low to mid-single digit loan growth
Significant experience and talent were added to the Commercial Real Estate and Commercial & Industrial Teams in both Buffalo and
Rochester, New York, expanding penetration in those markets and introducing new contacts and clients to Evans
Residential:
A more substantial mortgage program adds diversity to our revenue stream and complements our insurance agency and large and successful commercial banking business
Evans Insurance Agency
Building out strong sales talent to further strengthen and competitively support existing business retention and new policy sales
Status
On track; expect ~3% commercial loan growth in 2023
Residential has been challenged given current rate environment
Monetized business; additional capital provides flexibility for other initiatives
Evans BancorpEx. 99.1
Strategic Objectives (2023)
Technology Evolution
Aligned to focus on advancing customer experience, operational efficiency and scalability
Goal to deliver strong and stable IT support for Bank growth
Focus on Talent
Talent and culture are true differentiators for Evans and key determinants for our success
Learning and development efforts, combined with consistent company and manager-led communication and programs, and focus on team empowerment and diversity
Concentrated heavily on preparing our team for the continuously changing environment and future technology enhancements
Community
Evans seeks to meet its values and honor its stewardship as a community based financial institution
Continue to support community projects and contribute our resources and business expertise to programs and entities that enrich our community
Status
Completed phase 1 of multi-year commercial efficiency initiative; Digital banking projects on track
Ongoing focus with strong retention rates and continuing commitment to DEI and inclusive strategic plan; Corporate realignment completed in Q2
Ongoing focus with numerous community focused events and other involvement (both dollar investments and people resources)
Evans BancorpEx. 99.1
Investment Highlights
Strong and growing franchise in resurgent WNY
Strong operating fundamentals
Steady deposit base and loan growth
Lower-risk balance sheet with solid capital base
Strong liquidity to support robust loan pipeline and investments to drive growth and earnings
Market expansion with acquisition of FSB Bancorp
Value creation: leverage strength of Evans commercial bank and combined mortgage operation
Created team to continue to gain market share
Top tier talent
Seasoned management team with deep relationships
Technology infrastructure to support operational sophistication and customer experience
Shareholder return orientation
Solid dividend payout
Evans BancorpEx. 99.1
Management Team
David J. Nasca, President and Chief Executive Officer
John B. Connerton, EVP, Chief Financial Officer
Mary Ellen Frandina, EVP, Chief Administrative Officer
Kenneth D. Pawlak, EVP, Chief Commercial Banking Officer
Nicholas J. Snyder, EVP, Retail Distribution and Corporate Operations
Aaron M. Whitehouse, President, The Evans Agency, LLC
Jen Zorn, EVP, Chief Information Officer
Audrey J. Meyers, SVP, Chief Retail Banking Officer
Evans BancorpEx. 99.1
Piper Sandler & Co
East Coast Financial Services Conference
November 16, 2023
Evans Bancorp Inc.
Evans BancorpEx. 99.1