IMMEDIATE RELEASE

Evans Bancorp Reports First Quarter
Net Income Up 27%

HAMBURG, NY, April 25, 2012 – Evans Bancorp, Inc. (the “Company” or “Evans”) (NYSE Amex: EVBN), a community financial services company serving Western New York since 1920, today reported its results of operations for the first quarter ended March 31, 2012.

HIGHLIGHTS OF THE 2012 FIRST QUARTER

$1.9 million, or $0.46 per diluted share, in the first quarter of 2011.

Net income grew to $2.4 million in the first quarter of 2012, up 26.9% from net income of $1.9 million in the first quarter of 2011. The improvement in net income reflected a combination of higher net interest income, which resulted from growing interest earning assets, and a $0.7 million year-over-year reduction in the provision for loan and lease losses due to the declining balance and improving credit quality trends in the leasing portfolio. The Company released $0.4 million in leasing provision in the 2012 first quarter compared with no leasing provision for the prior-year period. Return on average equity was 13.59% for the first quarter of 2012 compared with 11.71% in the first quarter of 2011.

David J. Nasca, President and CEO of Evans Bancorp, stated, “The strong earnings momentum the Bank has experienced continued in the first quarter of 2012 as we maintained core customer growth. The solid results are evidence of a growing awareness of what Evans has to offer as a community financial institution in the Western New York marketplace. We remain confident in this market and believe our investments in organic growth initiatives and overall risk management will contribute to our ability to drive performance.”

Net Interest Income
Net interest income was $6.9 million for the 2012 first quarter, up 8.8% compared with the first quarter of 2011 and flat compared with the fourth quarter of 2011. Growth in net interest-earning assets drove the increase from the first quarter of 2011 and offset the net interest margin contraction relative to the same period. The linked fourth quarter contained a $0.2 million adjustment in interest income due to the recovery of a previously marked down commercial loan acquired in the 2009 Waterford transaction. Excluding this adjustment, net interest income increased $0.1 million, or 2.2%, from the prior year’s fourth quarter. Core loans, which are defined as total loans and leases less national direct financing leases, were $575.2 million at March 31, 2012, an increase of 10.8% from $519.2 million at March 31, 2011, and down slightly from $577.4 million at December 31, 2011. Relatively flat performance in the first quarter of this year, compared with annualized growth of 11.8% in the fourth quarter of 2011, was primarily due to timing, as a significant number of loans were closed late in the fourth quarter of 2011. The majority of the loan growth since the first quarter of 2011 was in the commercial/industrial and commercial mortgage loan portfolios.

Investment securities were $112.5 million at March 31, 2012, up 8.4% from $103.8 million at the end of the fourth quarter of 2011 and up 15.1% from $97.7 million at the end of first quarter of 2011. The growth in the investment securities portfolio reflects the success of the Company in attracting core deposits in excess of the growth rate of loans.

Total deposits were $649.7 million at March 31, 2012, up 11.0%, or $64.5 million, from $585.1 million at March 31, 2011, and up 5.4%, or $33.5 million, from $616.2 million at December 31, 2011. Approximately $23.6 million of the growth in deposits since the end of the linked fourth quarter occurred in municipal deposits. There is typically seasonal growth in municipal deposits in the first quarter of the year due to municipal tax receipts. Municipal deposits are included in various categories, but are primarily concentrated in NOW and muni-vest savings. The remaining sequential and year-over-year growth was attributable to strong core deposit increases across a variety of products, including the Company’s Better Checking product (included in the NOW category) along with its complementary Better Savings product. These products have been successful in garnering new customers, rewarding existing customers for doing more business with the Bank and, ultimately, developing deeper customer relationships. Partially offsetting those gains was a decrease in time deposits due to the roll-off of higher rate promotional CD’s and decreased brokered time deposits.

Although the Bank experienced net interest margin compression due to declining interest rates throughout 2011, the margin remained relatively strong at 3.93% for the first quarter of 2012, flat compared with the fourth quarter rate of 3.92% (after adjusting for the one-time interest income adjustment) and down from 4.05% at March 31, 2011. As the low interest rate cycle matures, the Company’s loan and investment portfolios continue to re-price into lower yields, as evidenced by a decrease in yield on interest-earning assets of 35 basis points from the first quarter of 2011. The Company benefited from re-pricing its interest-bearing liabilities much earlier in the interest rate cycle and these rates have fallen less than its interest-earning assets in the past year. Accordingly, the cost of interest-bearing liabilities for the Company declined 26 basis points in the first quarter of 2012 from the first quarter of 2011. Additionally, the Company has been successful in attracting new customers, with most of that success coming in the premium-rate Better Checking and Better Savings products.

Allowance for Loan and Lease Losses and Asset Quality

Provision: The provision for loan and lease losses decreased to a release of $(0.2) million in the first quarter of 2012 from a provision of $0.5 million in the first quarter of 2011 and a provision of $0.8 million in the linked fourth quarter. The majority of the provision in the quarter was related to deterioration and charge-off of a $0.2 million commercial loan not previously identified as impaired. The first quarter benefitted from the release of $(0.4) million related to the continued improvement in the shrinking leasing portfolio’s credit quality.

Net charge-offs: There were net charge-offs to average total loans and leases of 0.32% in the first quarter of 2012 compared with 0.03% in the fourth quarter of 2011 and 0.33% in the first quarter of 2011. The charge-off percentage remains below industry standards and is indicative of the Bank’s historical credit quality.

Gary A. Kajtoch, Executive Vice President and CFO, noted, “We are closely monitoring the strength and breadth of the economic recovery. Our non-performing loans and leases have decreased during the quarter and, at 2.25%, our ratio of non-performing loans and leases to total loans and leases is at the lowest level in over a year. We will continue to apply our prudent underwriting standards in order to grow our portfolio while at the same time minimizing our exposure.”

As a result of the release of provision and the charge-offs during the first quarter of 2012, the ratio for the allowance for loan and lease losses to total loans and leases decreased to 1.86% at March 31, 2012, compared with 1.97% at December 31, 2011, and 1.97% at March 31, 2011. While the ratio decreased, the level of non-performing loans and leases decreased even further, resulting in an improved coverage ratio of 82.7% at March 31, 2012, compared with 75.7% at December 31, 2011.

Non-performing loans and leases: The ratio of non-performing loans and leases to total loans and leases decreased to 2.25% at March 31, 2012, from 2.60% and 2.53% at December 31, 2011, and March 31, 2011, respectively. In the first quarter of 2012, two commercial constructions loans for $1.2 million were converted to permanent loans that were current and accruing as of March 31, 2012, but were 90 days past their maturity date as of December 31, 2011. There was an additional $1.0 million decrease in non-performing loans and leases due to pay-offs ($0.5 million), improved performance in the leasing portfolio ($0.2 million), charge-offs ($0.2 million), and pay-downs ($0.1 million). The total coverage ratio for non-performing loans and leases was 82.74% at March 31, 2012, compared with 75.74% at December 31, 2011.

The FDIC-assisted acquisition of Waterford Village Bank in July of 2009 accounted for $2.5 million, or approximately 20%, of the Company’s $12.1 million in non-performing loans at March 31, 2012. These loans are included in a loss-sharing agreement with the FDIC, in which the FDIC bears at least 80% of the losses on these loans. On an adjusted basis, Evans’ coverage ratio for non-performing loans and leases was 104.8% at March 31, 2012, which includes the leasing portfolio mark of $0.4 million while excluding all of the FDIC-guaranteed Waterford loans.

Non-Interest Income

Non-interest income, which represented 32.4% of total revenue in the first quarter of 2012, declined 5.0%, or $0.2 million, to $3.3 million when compared with the first quarter of 2011, reflecting lower insurance agency revenue and a reduction in other income. Data center income, which is included in other income and declined $115 thousand from the prior year’s first quarter, is from Suchak Data Systems, LLC (“SDS”), a data processing company which was acquired by the Bank on December 31, 2008. The original contracted revenue generated by service agreements with other banks is expiring as expected. The Company is focusing on its original purpose for the purchase of SDS, which was to provide resources for its own internal bank processing needs. Insurance agency revenue of
$1.9 million was down $144 thousand, or 6.9%, when compared with the 2011 first quarter due mostly to a decrease in profit sharing revenue from the insurance carriers. The lower profit sharing is driven by higher loss ratios related to lower premium levels. Compared with the fourth quarter of 2011, TEA’s revenue was up $0.6 million, reflecting the typical revenue cycle seasonality.

Non-Interest Expense

Total non-interest expense was $6.9 million in the first quarter of 2012, an increase of $0.3 million, or 4.6%, from $6.6 million in the first quarter of 2011. The largest component of the increase was salaries and employee benefits, which was up $0.3 million, or 7.9%, to $4.2 million compared with the first quarter of 2011. This rise reflected merit increases awarded for 2011 performance, higher health care costs and increased staff, including commercial loan officers. These increases were partially offset by lower occupancy costs, mostly related to fully depreciated assets lowering depreciation expense and a reduction in FDIC insurance expense due to changes in the premium calculation adopted in the second quarter of 2011 by the FDIC.

As a result of the increase in non-interest expense and the decrease in non-interest income, the efficiency ratio slightly increased to 67.10% for the first quarter of 2012 from 66.36% for the first quarter of 2011.

Income tax expense for the quarter ended March 31, 2012, was $1.1 million, representing an effective tax rate of 31.7% compared with an effective tax rate of 29.6% in the first quarter of 2011. The effective tax rate increased because taxable income increased significantly while tax-exempt income was relatively flat.

Capital Management

The Company consistently maintains regulatory capital ratios measurably above the federal “well capitalized” standard, including a Tier 1 leverage ratio of 9.7% at March 31, 2012. Book value per share was $17.06 at March 31, 2012, compared with $16.72 at December 31, 2011, and $15.71 at March 31, 2011. Tangible book value per share at March 31, 2012, was $14.96, up 2.5% from the end of the fourth quarter of 2011 and up 11.0% from the same period in 2011.

Outlook

Mr. Nasca concluded, “We continue to make steady progress while facing the persistent challenge of increasing regulatory burden, capital requirements and margin compression due to low rates. We are well positioned to capitalize on the pending sale of HSBC and First Niagara branches, which has created an unprecedented opportunity to deliver our customer-centric community banking relationship model to the significant number of clients disrupted by this change. We believe we can be very effective in winning business related to the transition and improve our market share in Western New York.”

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 $776 million in assets, 13 branches and $650 million in deposits at March 31, 2012. Evans is a full-service community bank providing comprehensive financial services to consumer, business and municipal customers throughout Western New York. Evans Bancorp’s wholly-owned insurance subsidiary, The Evans Agency, LLC, provides property and casualty insurance through 12 insurance offices in the Western New York region. Evans Investment Services, Inc., a wholly-owned subsidiary of Evans Bank, 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 Web sites, 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 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.

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