Attached files
file | filename |
---|---|
8-K - LIVE FILING - EVANS BANCORP INC | htm_48183.htm |
IMMEDIATE RELEASE
Evans Bancorp Reports Second Quarter 2013 Net Income up 28.7%
HAMBURG, NY, July 25, 2013 Evans Bancorp, Inc. (the Company or Evans) (NYSE MKT: EVBN), a community financial services company serving Western New York since 1920, today reported its results of operations for the second quarter ended June 30, 2013.
HIGHLIGHTS OF THE 2013 SECOND QUARTER
| Net income increased 28.7% to $1.9 million in the 2013 second quarter, or $0.46 per diluted share, from $1.5 million, or $0.36 per diluted share, in the second quarter of 2012. |
| Second quarter net interest income of $7.0 million increased 1.8% over the prior year period; Non-interest income grew 5.8% to $3.2 million, and represented 31.5% of total revenue. |
| Expense management drove 0.9% decrease in total non-interest expense from prior year period. |
| Loans increased 2.2% over the prior-year period and 3.5% from the trailing first quarter to $607.4 million; Annualized loan growth rate was 13.8%. |
| Return on average equity improved to 9.86% in the second quarter of 2013 compared with 8.33% in the prior year period. |
Net income was $1.9 million in the second quarter of 2013, up 28.7% from net income of $1.5 million in the second quarter of 2012. The improvement in net income reflected a combination of higher net interest income, which resulted from growing interest earning assets, higher non-interest income, lower non-interest expense, and a $0.2 million year-over-year reduction in the provision for loan and lease losses. Return on average equity was 9.86% for the second quarter of 2013, compared with 8.33% in the second quarter of 2012.
For the six months ended June 30, 2013, Evans recorded net income of $3.7 million, or $0.89 per diluted share, a 3.5% decrease from net income of $3.9 million, or $0.94 per diluted share, in the same period in 2012. The return on average equity was 9.71% for the six-month period ended June 30, 2013, compared with 10.93% in the same period in 2012.
We are off to a very strong start through the first half of the year, with results very close to last year, in which we had all-time record earnings. Loan balances have grown in the second quarter as we realized closings from the strong loan pipeline built earlier in the year, said David J. Nasca, Evans Bank President & CEO. Additionally, the company continues to benefit from increasing business activity, strong asset quality, and focused expense management.
Net Interest Income
Net interest income was $7.0 million for the 2013 second quarter, up 1.8% when compared with the second quarter of 2012 and up 2.6% from the trailing first quarter of 2013. Growth in interest-earning assets drove the increase from the second quarter of 2012 and offset net interest margin contraction relative to the same period in prior year.
Net interest margin in the 2013 second quarter increased to 3.68%, compared with 3.63% in the trailing first quarter. Net interest margin was down from the 2012 second quarter rate of 3.85%. The reduction in net interest margin from prior year period is due to a 43 basis point decrease in the yield on interest-earning assets, offset by a 32 basis point decrease in pricing on Evans interest bearing liabilities.
The provision for loan and lease losses in the second quarter of 2013 was $80 thousand. The
prior-year period had a provision of $301 thousand, and the trailing first quarter of 2013 had a
provision of
$450 thousand. The lower provision in the quarter was the result of a reduction in reserve on one
commercial real estate loan and improved historical charge-off performance.
Non-Interest Income
Non-interest income of $3.2 million was 31.5% of total revenue in the second quarter of 2013, up 5.8% compared with the prior-year period. Insurance agency revenue of $1.7 million was up $83 thousand, or 5.0%, from the 2012 second quarter, due mostly to increases in profit sharing. Service charges on deposits increased 15.8% to $506 thousand from the prior-year period as a result of growing commercial deposit transactional relationships which have historically higher fees. Compared with the first quarter of 2013, total non-interest income decreased by 2.9% mostly due to seasonal decreases in insurance revenue.
Non-Interest Expense
Total non-interest expense was $7.3 million in the second quarter of 2013, a decrease of 0.9% from
the second quarter of 2012. Overall strong expense control drove these results. Personnel
expenses, the largest expense item for the Company, was unchanged from the prior-year period. Also
helping to reduce expenses were lower advertising and professional services expenses. Advertising
was down $100 thousand, or 29.8%, compared with the second quarter of 2012 and professional
services were
$87 thousand, or 15.3%, lower than the prior-year period.
As a result, the Companys second quarter efficiency ratio decreased to 70.43% compared with 72.75% during the prior-year period.
Income tax expense for the quarter ended June 30, 2013, was $1.0 million, representing an effective tax rate of 33.2%, compared with an effective tax rate of 34.9% in the second quarter of 2012.
Balance Sheet Highlights
Total assets grew to $816.3 million at June 30, 2013, up 4.9% from $778.1 million on June 30, 2012, and down 0.9% from $823.7 million at the end of the 2013 first quarter. Loans were $607.4 million at June 30, 2013, an increase of 2.2% from $594.6 million at June 30, 2012, and up 3.5% from $587.2 million at March 31, 2013.
Investment securities were $99.3 million at June 30, 2013, up 1.1% from the end of the first quarter of 2013 and up 2.6% from $96.8 million as of the end of second quarter of 2012. Other assets increased $25.6 million over last years second quarter, the majority of which was in Fed Funds balances due to deposit growth outpacing loan growth.
Total deposits increased $38.5 million, or 5.9%, to $692.4 million at June 30, 2013, from $653.9 million at June 30, 2012, and decreased $5.9 million, or 0.8%, from the 2013 first quarter-end. The year-over-year growth was attributable to deposit increases in commercial demand deposits and consumer savings deposits. The Companys Better Checking product (included in the NOW category), along with its complementary Better Savings product, continues to be successful in acquiring new customers, deepening existing relationships and increasing fee income. The decline from the first quarter of 2013 was due to seasonal outflows of municipal deposits.
Asset Quality
Net charge-offs (recoveries) to average total loans and leases ratio was (0.02%) for the second quarter of 2013, down from 0.30% in the second quarter of 2012 and down from 0.02% in the first quarter of 2013. The improved charge-off percentage remains below industry standards and reflects the Banks focus on maintaining strong credit fundamentals.
The ratio of non-performing loans and leases to total loans and leases increased to 2.21% at June 30, 2013, from 1.37% and 1.77% at March 31, 2013, and June 30, 2012, respectively. During the second quarter of 2013, there was a $5.4 million increase in non-performing loans and leases due mainly to one commercial real estate loan. The loan is well collateralized, and the Bank has active interest from other third parties.
The ratio of the allowance for loan and lease losses to total loans and leases was 1.69% at June 30, 2013, compared with 1.73% at March 31, 2013, and 1.78% at the end of 2012 second quarter. The level of non-performing loans and leases increased, resulting in a decreased coverage ratio of 76.2% at June 30, 2013, compared with 126.4% at March 31, 2013 and 96.8% at June 30, 2012.
Gary A. Kajtoch, Executive Vice President and CFO commented, Our non-performing loan balance went up significantly this quarter almost exclusively due to one commercial real estate loan which we had been monitoring. We are confident in the fundamentals of this credit and believe we have appropriate coverage.
Capital Management
The Company consistently maintains regulatory capital ratios measurably above the federal well capitalized standard, including a Tier 1 leverage ratio of 10.06% at June 30, 2013. Book value per share was $18.41 at June 30, 2013, compared with $18.26 at March 31, 2013, and $17.40 at June 30, 2012. Tangible book value per share at June 30, 2013 was $16.43, up 7.1% from the end of the second quarter of 2012 and up 1.0% from the first quarter of 2013.
Outlook
Mr. Nasca concluded, Per our plans, net interest income growth continues to be complemented with a focus on growth in non-interest income revenue streams resulting from expanded business relationships with customers and prospects. Evans is able to expand these relationships by providing a customized set of services and solutions to uniquely meet customers needs and drive shareholder value.
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 $816 million in assets and $692 million in deposits at June 30, 2013. Evans is
a
full-service community bank, with 13 branches, providing comprehensive financial services to
consumer, business and municipal customers throughout Western New York. Evans Bancorps
wholly-owned insurance subsidiary, The Evans Agency, LLC, provides property and casualty insurance
through 7 insurance offices in the Western New York region. 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 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 Bancorps 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.
For more information contact: | -OR- | |||
Gary A. Kajtoch Executive Vice President and Chief Financial Officer |
Deborah K. Pawlowski Kei Advisors LLC |
|||
Phone: (716) 926-2000 Email: gkajtoch@evansbank.com |
Phone: (716) 843-3908 Email: dpawlowski@keiadvisors.com |
|||
TABLES FOLLOW
EVANS BANCORP, INC. AND SUBSIDIARIES |
||||||||||||||||||||||||||||||||||||
SELECTED FINANCIAL DATA (UNAUDITED) |
||||||||||||||||||||||||||||||||||||
(in thousands except shares and per share data) |
||||||||||||||||||||||||||||||||||||
6/30/2013 | 3/31/2013 | 12/31/2012 | 9/30/2012 | 6/30/2012 | ||||||||||||||||||||||||||||||||
ASSETS |
||||||||||||||||||||||||||||||||||||
Investment Securities |
$ | 99,329 | $ | 98,220 | $ | 95,807 | $ | 95,912 | $ | 96,802 | ||||||||||||||||||||||||||
Loans |
607,442 | 587,157 | 581,283 | 596,176 | 594,569 | |||||||||||||||||||||||||||||||
Leases |
337 | 929 | 1,612 | 2,440 | 3,355 | |||||||||||||||||||||||||||||||
Allowance for loan and lease losses |
(10,259 | ) | (10,154 | ) | (9,732 | ) | (10,208 | ) | (10,658 | ) | ||||||||||||||||||||||||||
Goodwill and intangible assets |
8,305 | 8,367 | 8,429 | 8,492 | 8,569 | |||||||||||||||||||||||||||||||
All other assets |
111,120 | 139,195 | 132,277 | 106,496 | 85,486 | |||||||||||||||||||||||||||||||
Total assets |
$ | 816,274 | $ | 823,714 | $ | 809,676 | $ | 799,308 | $ | 778,122 | ||||||||||||||||||||||||||
LIABILITIES AND STOCKHOLDERS EQUITY |
||||||||||||||||||||||||||||||||||||
Demand deposits |
$ | 132,820 | $ | 123,084 | $ | 123,405 | $ | 126,251 | $ | 116,231 | ||||||||||||||||||||||||||
NOW deposits |
67,736 | 73,016 | 65,753 | 62,946 | 63,535 | |||||||||||||||||||||||||||||||
Regular savings deposits |
379,782 | 391,739 | 380,924 | 375,859 | 365,875 | |||||||||||||||||||||||||||||||
Time deposits |
112,076 | 110,461 | 108,910 | 107,674 | 108,279 | |||||||||||||||||||||||||||||||
Total deposits |
692,414 | 698,300 | 678,992 | 672,730 | 653,920 | |||||||||||||||||||||||||||||||
Borrowings |
34,872 | 37,113 | 42,441 | 39,411 | 40,185 | |||||||||||||||||||||||||||||||
Other liabilities |
11,703 | 11,806 | 13,416 | 13,185 | 11,736 | |||||||||||||||||||||||||||||||
Total stockholders equity |
$ | 77,285 | $ | 76,495 | $ | 74,827 | $ | 73,982 | $ | 72,281 | ||||||||||||||||||||||||||
SHARES AND CAPITAL RATIOS |
||||||||||||||||||||||||||||||||||||
Common shares outstanding |
4,198,596 | 4,190,257 | 4,171,473 | 4,151,985 | 4,153,332 | |||||||||||||||||||||||||||||||
Book value per share |
$ | 18.41 | $ | 18.26 | $ | 17.94 | $ | 17.82 | $ | 17.40 | ||||||||||||||||||||||||||
Tangible book value per share |
$ | 16.43 | $ | 16.26 | $ | 15.92 | $ | 15.77 | $ | 15.34 | ||||||||||||||||||||||||||
Tier 1 leverage ratio |
10.06 | % | 9.87 | % | 9.69 | % | 9.71 | % | 9.77 | % | ||||||||||||||||||||||||||
Tier 1 risk-based capital ratio |
14.17 | % | 14.02 | % | 13.41 | % | 12.96 | % | 12.92 | % | ||||||||||||||||||||||||||
Total risk-based capital ratio |
15.42 | % | 15.28 | % | 14.67 | % | 14.22 | % | 14.18 | % | ||||||||||||||||||||||||||
ASSET QUALITY DATA |
||||||||||||||||||||||||||||||||||||
Total non-performing loans and leases |
$ | 13,456 | $ | 8,036 | $ | 8,229 | $ | 9,415 | $ | 11,008 | ||||||||||||||||||||||||||
Total net loan and lease charge-offs |
(25 | ) | 28 | 346 | 459 | 433 | ||||||||||||||||||||||||||||||
Non-performing loans and leases/Total loans and leases |
2.21 | % | 1.37 | % | 1.38 | % | 1.53 | % | 1.77 | % | ||||||||||||||||||||||||||
Net loan and lease charge-offs (recoveries) /Average
loans and leases |
(0.02 | %) | 0.02 | % | 0.24 | % | 0.31 | % | 0.30 | % | ||||||||||||||||||||||||||
Allowance for loans and leases to total loans and leases |
1.69 | % | 1.73 | % | 1.67 | % | 1.71 | % | 1.78 | % |
EVANS BANCORP, INC AND SUBSIDIARIES | ||||||||||||||||||||||||||||||||||||||||
SELECTED OPERATIONS DATA (UNAUDITED) | ||||||||||||||||||||||||||||||||||||||||
(in thousands except share and per share data) | ||||||||||||||||||||||||||||||||||||||||
2013 | 2013 | 2012 | 2012 | 2012 | ||||||||||||||||||||||||||||||||||||
Second Quarter | First Quarter | Fourth Quarter | Third Quarter | Second Quarter | ||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||
Interest income |
7,993 | 7,956 | 8,409 | 8,309 | 8,289 | |||||||||||||||||||||||||||||||||||
Interest expense |
991 | 1,130 | 1,309 | 1,364 | 1,408 | |||||||||||||||||||||||||||||||||||
Net interest income |
7,002 | 6,826 | 7,100 | 6,945 | 6,881 | |||||||||||||||||||||||||||||||||||
Provision for loan and lease losses |
80 | 450 | (129 | ) | 9 | 301 | ||||||||||||||||||||||||||||||||||
Net interest income after provision |
6,922 | 6,376 | 7,229 | 6,936 | 6,580 | |||||||||||||||||||||||||||||||||||
Deposit service charges |
506 | 482 | 498 | 487 | 437 | |||||||||||||||||||||||||||||||||||
Insurance service and fee revenue |
1,726 | 1,999 | 1,604 | 1,774 | 1,643 | |||||||||||||||||||||||||||||||||||
Bank-owned life insurance |
129 | 113 | 120 | 118 | 134 | |||||||||||||||||||||||||||||||||||
Other income |
853 | 716 | 1,060 | 837 | 824 | |||||||||||||||||||||||||||||||||||
Total non-interest income |
3,214 | 3,310 | 3,282 | 3,216 | 3,038 | |||||||||||||||||||||||||||||||||||
Salaries and employee benefits |
4,225 | 4,289 | 4,083 | 4,778 | 4,229 | |||||||||||||||||||||||||||||||||||
Occupancy |
738 | 816 | 776 | 679 | 645 | |||||||||||||||||||||||||||||||||||
Repairs and maintenance |
187 | 178 | 213 | 210 | 177 | |||||||||||||||||||||||||||||||||||
Advertising and public relations |
236 | 124 | 214 | 119 | 336 | |||||||||||||||||||||||||||||||||||
Professional services |
480 | 454 | 463 | 356 | 567 | |||||||||||||||||||||||||||||||||||
Technology and communications |
340 | 291 | 337 | 320 | 276 | |||||||||||||||||||||||||||||||||||
Amortization of intangibles |
62 | 62 | 63 | 77 | 105 | |||||||||||||||||||||||||||||||||||
FDIC insurance |
165 | 138 | 130 | 118 | 139 | |||||||||||||||||||||||||||||||||||
Other expenses |
824 | 724 | 926 | 699 | 848 | |||||||||||||||||||||||||||||||||||
Total non-interest expenses |
7,257 | 7,076 | 7,204 | 7,356 | 7,323 | |||||||||||||||||||||||||||||||||||
Income before income taxes |
2,879 | 2,610 | 3,307 | 2,796 | 2,295 | |||||||||||||||||||||||||||||||||||
Income tax provision |
956 | 794 | 1,185 | 660 | 800 | |||||||||||||||||||||||||||||||||||
Net income |
$ | 1,923 | $ | 1,816 | $ | 2,122 | $ | 2,136 | $ | 1,495 | ||||||||||||||||||||||||||||||
PER SHARE DATA |
||||||||||||||||||||||||||||||||||||||||
Net income per common share-diluted |
$ | 0.46 | $ | 0.43 | $ | 0.51 | $ | 0.51 | $ | 0.36 | ||||||||||||||||||||||||||||||
Cash dividends per common share |
$ | 0.00 | $ | 0.00 | $ | 0.24 | $ | 0.22 | $ | 0.00 | ||||||||||||||||||||||||||||||
Weighted average number of diluted shares |
4,219,428 | 4,210,595 | 4,180,578 | 4,177,567 | 4,156,868 | |||||||||||||||||||||||||||||||||||
PERFORMANCE RATIOS |
||||||||||||||||||||||||||||||||||||||||
Return on average total assets |
0.94 | % | 0.89 | % | 1.05 | % | 1.07 | % | 0.77 | % | ||||||||||||||||||||||||||||||
Return on average stockholders equity |
9.86 | % | 9.55 | % | 11.33 | % | 11.60 | % | 8.33 | % | ||||||||||||||||||||||||||||||
Efficiency ratio |
70.43 | % | 69.20 | % | 68.78 | % | 71.64 | % | 72.75 | % |
EVANS BANCORP, INC AND SUBSIDIARIES | ||||||||||||||||||||||||||||||
SELECTED AVERAGE BALANCES AND YIELDS/RATES (UNAUDITED) | ||||||||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||
2013 | 2013 | 2012 | 2012 | 2012 | ||||||||||||||||||||||||||
|
Second Quarter | First Quarter | Fourth Quarter | Third Quarter | Second Quarter | |||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
AVERAGE BALANCES
|
||||||||||||||||||||||||||||||
(dollars in thousands)
|
||||||||||||||||||||||||||||||
Loans and leases, net
|
$ | 585,431 | $ | 575,953 | $ | 585,453 | $ | 590,200 | $ | 574,639 | ||||||||||||||||||||
Investment securities
|
100,027 | 98,120 | 101,135 | 99,347 | 101,053 | |||||||||||||||||||||||||
Interest bearing deposits at banks
|
74,617 | 78,426 | 63,797 | 48,619 | 39,198 | |||||||||||||||||||||||||
Total interest-earning assets
|
760,075 | 752,499 | 750,385 | 738,166 | 714,890 | |||||||||||||||||||||||||
Non interest-earning assets
|
60,814 | 61,314 | 58,617 | 57,776 | 58,261 | |||||||||||||||||||||||||
Total Assets
|
$ | 820,889 | $ | 813,813 | $ | 809,002 | $ | 795,942 | $ | 773,151 | ||||||||||||||||||||
NOW
|
69,698 | 67,836 | 62,245 | 62,283 | 60,472 | |||||||||||||||||||||||||
Regular savings
|
356,616 | 359,434 | 355,327 | 352,378 | 336,798 | |||||||||||||||||||||||||
Muni-Vest savings
|
28,916 | 21,348 | 28,991 | 21,792 | 26,821 | |||||||||||||||||||||||||
Time deposits
|
111,615 | 110,209 | 108,447 | 108,179 | 109,170 | |||||||||||||||||||||||||
Total interest-bearing deposits
|
566,845 | 558,827 | 555,010 | 544,632 | 533,261 | |||||||||||||||||||||||||
Other borrowings
|
36,704 | 43,693 | 41,948 | 39,883 | 40,619 | |||||||||||||||||||||||||
Total interest-bearing liabilities
|
603,549 | 602,520 | 596,958 | 584,515 | 573,880 | |||||||||||||||||||||||||
Demand deposits
|
128,369 | 122,359 | 124,741 | 124,590 | 115,033 | |||||||||||||||||||||||||
Other non-interest bearing liabilities
|
10,991 | 12,857 | 12,408 | 13,186 | 12,471 | |||||||||||||||||||||||||
Stockholders equity
|
77,980 | 76,077 | 74,895 | 73,651 | 71,766 | |||||||||||||||||||||||||
Total Liabilities and Equity
|
$ | 820,889 | $ | 813,813 | $ | 809,002 | $ | 795,942 | $ | 773,151 | ||||||||||||||||||||
YIELD/RATE
|
||||||||||||||||||||||||||||||
Loans and leases, net
|
4.97 | % | 5.04 | % | 5.26 | % | 5.13 | % | 5.23 | % | ||||||||||||||||||||
Investment securities
|
2.68 | % | 2.80 | % | 2.74 | % | 2.93 | % | 2.98 | % | ||||||||||||||||||||
Interest bearing deposits at banks
|
0.24 | % | 0.09 | % | 0.09 | % | 0.12 | % | 0.15 | % | ||||||||||||||||||||
Total interest-earning assets
|
4.21 | % | 4.23 | % | 4.48 | % | 4.50 | % | 4.64 | % | ||||||||||||||||||||
NOW
|
0.49 | % | 0.67 | % | 1.05 | % | 1.03 | % | 0.99 | % | ||||||||||||||||||||
Regular savings
|
0.29 | % | 0.35 | % | 0.46 | % | 0.54 | % | 0.57 | % | ||||||||||||||||||||
Muni-Vest savings
|
0.22 | % | 0.28 | % | 0.30 | % | 0.29 | % | 0.30 | % | ||||||||||||||||||||
Time deposits
|
1.62 | % | 1.63 | % | 1.70 | % | 1.67 | % | 1.80 | % | ||||||||||||||||||||
Total interest-bearing deposits
|
0.57 | % | 0.64 | % | 0.76 | % | 0.81 | % | 0.86 | % | ||||||||||||||||||||
Other borrowings
|
1.97 | % | 2.20 | % | 2.45 | % | 2.59 | % | 2.58 | % | ||||||||||||||||||||
Total interest-bearing liabilities
|
0.66 | % | 0.75 | % | 0.88 | % | 0.93 | % | 0.98 | % | ||||||||||||||||||||
Interest rate spread
|
3.55 | % | 3.48 | % | 3.60 | % | 3.57 | % | 3.66 | % | ||||||||||||||||||||
Contribution of interest-free funds
|
0.13 | % | 0.15 | % | 0.18 | % | 0.19 | % | 0.19 | % | ||||||||||||||||||||
Net interest margin
|
3.68 | % | 3.63 | % | 3.78 | % | 3.76 | % | 3.85 | % |