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 Bancorp, Inc. (NYSE American: EVBN)
Building a preeminent community financial institution
Creating scale and sophistication to leverage in a resurgent
WNY market
Increasing competitive advantages with top tier talent and differentiated client experiences
A Century of serving Western New York
Established 1920Branches:18 Insurance Locations: 8
Recent Price $29.72
52 week range $23.20 - $40.57
Market Capitalization $162.4 million
Total Shares outstanding 5.4 million
Ownership - Insider 5%
Institutional 61%
Evans Core Values
Talent
Customer Focus
Ownership & Alignment
Integrity
Passion
Valuing Others
Opportunity for Continued Growth
Market Share by Deposits$64.4B
Evans 2.6%
Citizens 3.6%
Northwest Bank 3.9%
Bank of America 5.5%
All Others 4.0%
HSBC 5.4%
Key Bank 11.8%
M&T Bank 63.3%
Growing in market dominated by two top 25 banks
Total Assets
2019 $1,460.2
2020 $2,044.1
2021 $2,210.6
2022 $2,178.5
Q2 23 $2,155.0
Building platform for increased future earnings power
Recent decline reflects reduction in interest-bearing deposits at banks and investment securities
Acquired Fairport Savings Bank May 1, 2020
Total Loans
Total commercial loan growth expected to be approximately 3% in 2023
Q2 up 3.5% Y/Y: higher commercial real estate loans and residential mortgages, partially offset by lower commercial and industrial loans
Talent acquisition: ~50% increase in Commercial RM's since 2020
Commercial Loan Portfolio by Industry
Total Portfolio $1.1 billion
Well diversified Strong Credit Quality Stable multi-family market
Office Portfolio: Weighted avg risk rating 3.59
LTV for office portfolio is 54%
Hotel Retail Office Industrial Warehouse Other Multi-family Strip Plaza Raw land Other Land Dev residential land dev commercial 1-4 family medical assisted liv nursing
Credit fundamentals
NPAs to Total Loans + OREO
1.17% 2019
1.66% 2020
1.17% 2021
1.48% 2022
1.66% Q2 23
Net Charge offs to Average loans
0.06% 2018
0.03% 2019
0.01% 2020
0.03% 2021
0.11% 2022
0.01% Q 23
Solid underwriting discipline and proactive portfolio management In-market focus and deep customer relationships rise in non-performing loans in Q2 reflects single commercial credit of %6.5MM well collateralized and still accruing
SNL >$1B <$5B Peer Group
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 19% in Q2 2023
LTD Ration
97% 96% 81% 94% 94% 10% CAGR
$1,267.4 $1,771.4 $1,937.0 $1,771.7 $1,786.6
Deposit Composition and product growth
Q2 2023 composition $1.79 billion
Demand: - 9% or $42M
Now: - 13% or $35M
Savings: - 10% or $81M
Time: - 8% or $24M
Typical seasonal municipal outflows responsible for $48 million of Q2 declining
Savings & Money Market 41%
Demand & NOW 42%
Time Deposits 18%
Securities Portfolio
Municipal 6% Treasury 11% Agency 28% Agency CMBS 33% Agency MBS 22% 6/30/2023 AFS Total $351.6M Down 11% Y/Y Securities 16% of total assets 97% of total portfolio AFS Conservative mix
Non-interest Income Opportunity
Q2 2023 TTM Non-Interest Income $19.0 Million Bank-owned life insurance 5% Other income 25% Bank charges 14% Insurance Service & Fees 56%
Focus on:
Insurance employee benefits cash management Deposit service fees
Premier bank-owned insurance agency as a result of multiple successful acquisitions and growth
Net interest margin
3.36% 3.45% 3.31% 3.10% Interest rate pressure and significant competition have driven deposit costs higher
Expect 20 basis points of NIM compression in the third quarter 2023
Expectation is that nim pressure could moderate toward the end of the year
Expense management
Non-interest expense
$47.8 $59.9 $61.2 $59.9 $59.4 $18.2 $26.9 $22.6 $21.1 $21.4 $29.6 $33.0 $38.6 $38.9 $38.0 Other expenses Salaries & Employee benefits 2019 2020 2021 2022 Q2 23 TTM
Focusing on controlling costs and efforts to improve efficiencies Efficiency ration of 69.5% in Q2 2023 compared with SNL peer Group average of 65.2%
Net Income
NIM pressure partially offset by Non-interest income growth expense management focus
$17.0 $11.2 $24.0 $22.4 $22.6 $3.42 $2.13 $4.37 $4.04 $4.12 Earnings per share - diluted
Results accruing to shareholders
Dividend payment
$1.04 $1.16 $1.20 $1.26 $1.32
Book value per share without AOCI with AOCI
$30.64 $31.35 $34.57 $37.03 $38.23 $30.12 $31.21 $33.54 $28.32 $29.13
2019 2020 2021 2022 2023
Dividend Yield 3.35% 3.40% Dividend Payout Ratio 27.7% 31.4%
SNL EVBN
Peer Comparisons
EVBN Peers
ROAE
ROATCE
ROAA EFFICIENCY RATIO NIM Loans/deposits int cost: total deposits NPAs/loans & REO NCOs/Avg loans
Tang Equity/Tang Assets TRBC Ratio Price/Book Price/last-twelve-months EPS Dividend Yield
12.25 12.13 13.61 14.20 0.91 0.95 69.04 64.44 3.10 2.94 92.3 72.5 1.39 1.40 1.66 0.45 0.01 0.02 6.81 6.87 13.98 13.65 102.1 101.8 7.21 8.00 4.44 3.42
Evans strategic objectives
Strategic objectives to drive next level of growth
Commercial and residential lending
Commercial: expect to achieve 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
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
Investment Highlights
Strong and growing franchise in resurgent WNY
Diverse revenue mix, 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
Management team
David J Nasca President and chief executive office
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
Jen Zorn EVP Chief Information officer
Audrey J. Meyers, SVP, Chief Retail Banking Officer
Investor Presentation
August 2023
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Evans Bancorp Inc. published this content on 08 August 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 08 August 2023 23:13:49 UTC.