Evans Bancorp Inc. (EVBN, Financial) filed Quarterly Report for the period ended 2009-06-30.
Evans Bancorp Inc. is a bank holding company and conducts its business through its wholly-owned subsidiary Evans National Bank and the Bank\'s wholly-owned subsidiaries ENB Associates Inc. and M&W Agency Inc. The principal business of the Company is commercial banking and consists of among other things attracting deposits from the general public and using these funds to extend credit and to invest in securities. The Bank offers a variety of loan products to its customers including commercial loans commercial and residential mortgage loans and consumer loans. Evans Bancorp Inc. has a market cap of $36.2 million; its shares were traded at around $12.99 with a P/E ratio of 10.5 and P/S ratio of 0.9. The dividend yield of Evans Bancorp Inc. stocks is 6.3%. Evans Bancorp Inc. had an annual average earning growth of 6.7% over the past 5 years.
Direct finance lease balances decreased $14.5 million or 26.2% from March 31, 2009 and $17.7 million or 30.2% from December 31, 2008. Starting in the third quarter of 2008, the leasing portfolios asset quality began to deteriorate. This deterioration accelerated in the first quarter of 2009. Non-performing leases increased to $2.1 million at June 30, 2009, from $0.8 million at December 31, 2008 and $1.6 million at March 31, 2009. Net leasing charge-offs in the second quarter of 2009 were $7.7 million (including $6.9 million for the mark-to-market adjustment), compared with $1.6 million in the first quarter of 2009 and $0.4 million in the second quarter of 2008. This rapid deterioration in the portfolio prompted management to take preventive measures such as credit tightening for new applicants and consolidation of ENLs broker network during the fourth quarter of 2008. However, in the first quarter of 2009 management decided that these measures were not enough and materially slowed new originations. Given the high risk of the portfolio in the current economic recession, in April 2009 management decided that the business model of ENL was no longer a good strategic fit, and decided to exit the national leasing business. As it was the Companys intent to sell the leasing portfolio as of June 30, 2009, the portfolio was marked to its market value and classified as held for sale on the Companys balance sheet.
The Bank sells these fixed rate residential mortgages to the Federal National Mortgage Association (FNMA), while maintaining the servicing rights for those mortgages. During the three month period ended June 30, 2009, the Bank sold mortgages to FNMA totaling $4.6 million, as compared with $0.9 million sold during the three month period ended June 30, 2008. During the six month period ended June 30, 2009, the Bank sold mortgages to FNMA totaling $8.8 million, as compared to $1.4 million sold during the six month period ended June 30, 2008. At June 30, 2009, the Bank had a loan servicing portfolio principal balance of $33.2 million upon which it earns servicing fees, as compared with $31.0 million at March 31, 2009 and $26.9 million at December 31, 2008.
26For the three and six month period ended June 30, 2009, gross interest income that would have been reported on non-accruing loans and leases had they been current was $127 thousand and $217 thousand. For the three and six month periods ended June 30, 2008, gross interest income that would have been reported on non-accruing loans and leases had they been current, was $14 thousand and $30 thousand, respectively. There was $6 thousand and $61 thousand of interest income on non-accruing loans and leases included in net income for the three and six month periods ended June 30, 2009. There was $12 thousand and $22 thousand of interest income on non-accruing loans and leases included in net income for the three and six month periods ended June 30, 2008.
Total deposits at June 30, 2009 were $451.3 million, reflecting an $8.8 million or 1.9% decrease from March 31, 2009 and a $47.3 million or 11.7% increase from December 31, 2008. Demand deposits at June 30, 2009 were $87.8 million, reflecting a $7.5 million or 9.4% increase from March 31, 2009 and an $11.9 million or 15.6% increase from December 31, 2008. Demand deposit balances fluctuate day-to-day based on the high volume of transactions normally associated with the demand product, and therefore average demand deposit growth is a better measure of sustained growth. Average demand deposits in the three month period ended June 30, 2009 were 7.7% higher than the first quarter of 2009, and 17.0% higher than the prior years second quarter. Much of the overall deposit growth in the quarter ended June 30, 2009 when compared with the prior year-end is attributable to an increase in regular savings deposits of $37.4 million, or 24.2%, to $191.6 million. The Company introduced a new money market savings product in 2008 and much of the continued growth in regular savings is due to this product. NOW deposits increased during the quarter ended June 30, 2009 by $2.5 million, or 26.1%, while muni-vest balances decreased during the same quarter by $14.2 million, or 31.0%. The decrease in muni-vest balances reflects the seasonal nature of municipal deposit balances. Municipal deposits trend higher in the first quarter when municipalities collect taxes. These deposits tend to diminish throughout the fiscal year as municipalities use the
Short-term borrowings from other correspondent banks and the FHLBNY was $6.2 million at June 30, 2009, a slight increase from $4.5 million at March 31, 2009, but a significant decrease from $30.7 million at December 31, 2008. Long-term borrowings were $27.0 million at June 30, 2009, reflecting an $8.8 million increase from March 31, 2009 and December 31, 2008. The Companys strong savings deposit growth has resulted in a decrease in its need for wholesale short-term borrowings. However, in an effort to mitigate interest rate risk with the growing variable rate savings balances and declining fixed rate time deposits, the Company increased its long-term fixed rate borrowings.
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Evans Bancorp Inc. is a bank holding company and conducts its business through its wholly-owned subsidiary Evans National Bank and the Bank\'s wholly-owned subsidiaries ENB Associates Inc. and M&W Agency Inc. The principal business of the Company is commercial banking and consists of among other things attracting deposits from the general public and using these funds to extend credit and to invest in securities. The Bank offers a variety of loan products to its customers including commercial loans commercial and residential mortgage loans and consumer loans. Evans Bancorp Inc. has a market cap of $36.2 million; its shares were traded at around $12.99 with a P/E ratio of 10.5 and P/S ratio of 0.9. The dividend yield of Evans Bancorp Inc. stocks is 6.3%. Evans Bancorp Inc. had an annual average earning growth of 6.7% over the past 5 years.
Highlight of Business Operations:
Total loans and leases grew to $424.8 at June 30, 2009, reflecting a $6.0 million or 1.4% increase from March 31, 2009 and a $17.0 million or 4.2% increase from December 31, 2008. Gross loans and leases are net of $0, $10.0 million, and $11.1 million of unearned income on direct financing leases as of June 30, 2009, March 31, 2009 and December 31, 2008, respectively. Commercial loans and leases totaled $324.1 million at June 30, 2009, reflecting a $3.7 million or 1.2% increase from March 31, 2009 and a $15.3 million or 4.9% increase from December 31, 2008. Growth in commercial real estate loans of $18.6 million for the second fiscal quarter and $29.8 million for the year to date was largely responsible for the increase in commercial loans and leases from March 31, 2009 and December 31, 2008, respectively, to June 30, 2009.Direct finance lease balances decreased $14.5 million or 26.2% from March 31, 2009 and $17.7 million or 30.2% from December 31, 2008. Starting in the third quarter of 2008, the leasing portfolios asset quality began to deteriorate. This deterioration accelerated in the first quarter of 2009. Non-performing leases increased to $2.1 million at June 30, 2009, from $0.8 million at December 31, 2008 and $1.6 million at March 31, 2009. Net leasing charge-offs in the second quarter of 2009 were $7.7 million (including $6.9 million for the mark-to-market adjustment), compared with $1.6 million in the first quarter of 2009 and $0.4 million in the second quarter of 2008. This rapid deterioration in the portfolio prompted management to take preventive measures such as credit tightening for new applicants and consolidation of ENLs broker network during the fourth quarter of 2008. However, in the first quarter of 2009 management decided that these measures were not enough and materially slowed new originations. Given the high risk of the portfolio in the current economic recession, in April 2009 management decided that the business model of ENL was no longer a good strategic fit, and decided to exit the national leasing business. As it was the Companys intent to sell the leasing portfolio as of June 30, 2009, the portfolio was marked to its market value and classified as held for sale on the Companys balance sheet.
The Bank sells these fixed rate residential mortgages to the Federal National Mortgage Association (FNMA), while maintaining the servicing rights for those mortgages. During the three month period ended June 30, 2009, the Bank sold mortgages to FNMA totaling $4.6 million, as compared with $0.9 million sold during the three month period ended June 30, 2008. During the six month period ended June 30, 2009, the Bank sold mortgages to FNMA totaling $8.8 million, as compared to $1.4 million sold during the six month period ended June 30, 2008. At June 30, 2009, the Bank had a loan servicing portfolio principal balance of $33.2 million upon which it earns servicing fees, as compared with $31.0 million at March 31, 2009 and $26.9 million at December 31, 2008.
26For the three and six month period ended June 30, 2009, gross interest income that would have been reported on non-accruing loans and leases had they been current was $127 thousand and $217 thousand. For the three and six month periods ended June 30, 2008, gross interest income that would have been reported on non-accruing loans and leases had they been current, was $14 thousand and $30 thousand, respectively. There was $6 thousand and $61 thousand of interest income on non-accruing loans and leases included in net income for the three and six month periods ended June 30, 2009. There was $12 thousand and $22 thousand of interest income on non-accruing loans and leases included in net income for the three and six month periods ended June 30, 2008.
Total deposits at June 30, 2009 were $451.3 million, reflecting an $8.8 million or 1.9% decrease from March 31, 2009 and a $47.3 million or 11.7% increase from December 31, 2008. Demand deposits at June 30, 2009 were $87.8 million, reflecting a $7.5 million or 9.4% increase from March 31, 2009 and an $11.9 million or 15.6% increase from December 31, 2008. Demand deposit balances fluctuate day-to-day based on the high volume of transactions normally associated with the demand product, and therefore average demand deposit growth is a better measure of sustained growth. Average demand deposits in the three month period ended June 30, 2009 were 7.7% higher than the first quarter of 2009, and 17.0% higher than the prior years second quarter. Much of the overall deposit growth in the quarter ended June 30, 2009 when compared with the prior year-end is attributable to an increase in regular savings deposits of $37.4 million, or 24.2%, to $191.6 million. The Company introduced a new money market savings product in 2008 and much of the continued growth in regular savings is due to this product. NOW deposits increased during the quarter ended June 30, 2009 by $2.5 million, or 26.1%, while muni-vest balances decreased during the same quarter by $14.2 million, or 31.0%. The decrease in muni-vest balances reflects the seasonal nature of municipal deposit balances. Municipal deposits trend higher in the first quarter when municipalities collect taxes. These deposits tend to diminish throughout the fiscal year as municipalities use the
Short-term borrowings from other correspondent banks and the FHLBNY was $6.2 million at June 30, 2009, a slight increase from $4.5 million at March 31, 2009, but a significant decrease from $30.7 million at December 31, 2008. Long-term borrowings were $27.0 million at June 30, 2009, reflecting an $8.8 million increase from March 31, 2009 and December 31, 2008. The Companys strong savings deposit growth has resulted in a decrease in its need for wholesale short-term borrowings. However, in an effort to mitigate interest rate risk with the growing variable rate savings balances and declining fixed rate time deposits, the Company increased its long-term fixed rate borrowings.
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