Evans Bancorp Inc. (EVBN, Financial) filed Quarterly Report for the period ended 2010-03-31.
Evans Bancorp Inc. has a market cap of $39.62 million; its shares were traded at around $14.01 with a P/E ratio of 7.3 and P/S ratio of 0.89. The dividend yield of Evans Bancorp Inc. stocks is 2.86%. Evans Bancorp Inc. had an annual average earning growth of 1.6% over the past 10 years.
The Bank sells these fixed rate residential mortgages to FNMA, while maintaining the servicing rights for those mortgages. During the three month period ended March 31, 2010, the Bank sold mortgages to FNMA totaling $2.0 million, as compared with $4.1 million sold during the three month period ended March 31, 2009. At March 31, 2010, the Bank had a loan servicing portfolio principal balance of $38.5 million upon which it earns servicing fees, as compared with $37.4 million at December 31, 2009. The value of the mortgage servicing rights for that portfolio was $0.4 million and $0.3 million at March 31, 2010 and December 31, 2009, respectively. Residential mortgage loans held-for-sale were $1.1 million and $0.3 million at March 31, 2010 and December 31, 2009, respectively.
The rapid deterioration of the portfolio, the lack of strategic fit in the Companys community banking business model, and the sensitivity of direct financing leases to the economic environment led management to make the strategic decision in April 2009 to exit the national direct financing lease business and market the portfolio for sale. This decision resulted in the classification of the leasing portfolio as held-for-sale and the portfolio being marked to its market value at June 30, 2009. The mark-to-market adjustment was $7.2 million. At September 30, 2009, management determined to keep the lease portfolio, terminated its plans to actively market the portfolio, and the portfolio was placed back into held-for-investment using the same discount used at June 30, 2009. The difference between the principal value and the carrying value, initially created by the mark-to-market adjustment at June 30, 2009, will reduce over time as individual leases deteriorate and become uncollectible. The allowance for lease losses was zero at June 30, 2009 when the portfolio was classified as held-for-sale and reported at its fair market value. With the portfolio classified as held-for-investment at March 31, 2010, the portfolio has been evaluated in accordance with the Companys normal credit review policies in determining the appropriate allowance for lease losses. During the first quarter of 2010, $1.1 million in leases were deemed uncollectible and the difference between the principal value and carrying value of the leases declined from $4.2 million to $3.1 million. Non-performing
The allowance for loan and lease losses totaled $8.2 million or 1.64% of total loans and leases outstanding at March 31, 2010 as compared with $7.0 million or 1.42% of total loans and leases outstanding as of December 31, 2009. As noted above $0.8 million of the increase is attributable to provision for the Companys leasing portfolio. In addition to the $0.8 million allowance for lease losses, the Company has $3.1 million remaining of its mark on the leasing portfolio from the 2009 second quarter. The $3.9 million total of those two items equals 13.1% of the remaining leasing principal balance of $29.8 million.
For the three month period ended March 31, 2010, gross interest income that would have been reported on non-accruing loans and leases had they been current was $195 thousand, as compared to $101 thousand for the same period in 2009. There was $20 thousand and $24 thousand of interest income from non-accruing loans and leases included in net income for the three month periods ended March 31, 2010 and 2009, respectfully.
There was little change in the Companys wholesale borrowings position in the first quarter. Short-term borrowings from other correspondent banks and the FHLBNY increased from $19.1 million at December 31, 2009 to $22.0 million at March 31, 2010, while long-term borrowings declined by $0.2 million to $27.0 million at March 31, 2010.
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Evans Bancorp Inc. has a market cap of $39.62 million; its shares were traded at around $14.01 with a P/E ratio of 7.3 and P/S ratio of 0.89. The dividend yield of Evans Bancorp Inc. stocks is 2.86%. Evans Bancorp Inc. had an annual average earning growth of 1.6% over the past 10 years.
Highlight of Business Operations:
Loan and Lease Activity Total loans and leases grew to $499.6 million at March 31, 2010, reflecting a $10.1 million or 2.1% increase from December 31, 2009. Commercial loans and leases totaled $376.7 million at March 31, 2010, reflecting a $10.5 million or 2.9% increase from December 31, 2009. Growth in commercial real estate loans of $15.4 million for the first fiscal quarter was largely responsible for the increase in commercial loans and leases from December 31, 2009.The Bank sells these fixed rate residential mortgages to FNMA, while maintaining the servicing rights for those mortgages. During the three month period ended March 31, 2010, the Bank sold mortgages to FNMA totaling $2.0 million, as compared with $4.1 million sold during the three month period ended March 31, 2009. At March 31, 2010, the Bank had a loan servicing portfolio principal balance of $38.5 million upon which it earns servicing fees, as compared with $37.4 million at December 31, 2009. The value of the mortgage servicing rights for that portfolio was $0.4 million and $0.3 million at March 31, 2010 and December 31, 2009, respectively. Residential mortgage loans held-for-sale were $1.1 million and $0.3 million at March 31, 2010 and December 31, 2009, respectively.
The rapid deterioration of the portfolio, the lack of strategic fit in the Companys community banking business model, and the sensitivity of direct financing leases to the economic environment led management to make the strategic decision in April 2009 to exit the national direct financing lease business and market the portfolio for sale. This decision resulted in the classification of the leasing portfolio as held-for-sale and the portfolio being marked to its market value at June 30, 2009. The mark-to-market adjustment was $7.2 million. At September 30, 2009, management determined to keep the lease portfolio, terminated its plans to actively market the portfolio, and the portfolio was placed back into held-for-investment using the same discount used at June 30, 2009. The difference between the principal value and the carrying value, initially created by the mark-to-market adjustment at June 30, 2009, will reduce over time as individual leases deteriorate and become uncollectible. The allowance for lease losses was zero at June 30, 2009 when the portfolio was classified as held-for-sale and reported at its fair market value. With the portfolio classified as held-for-investment at March 31, 2010, the portfolio has been evaluated in accordance with the Companys normal credit review policies in determining the appropriate allowance for lease losses. During the first quarter of 2010, $1.1 million in leases were deemed uncollectible and the difference between the principal value and carrying value of the leases declined from $4.2 million to $3.1 million. Non-performing
The allowance for loan and lease losses totaled $8.2 million or 1.64% of total loans and leases outstanding at March 31, 2010 as compared with $7.0 million or 1.42% of total loans and leases outstanding as of December 31, 2009. As noted above $0.8 million of the increase is attributable to provision for the Companys leasing portfolio. In addition to the $0.8 million allowance for lease losses, the Company has $3.1 million remaining of its mark on the leasing portfolio from the 2009 second quarter. The $3.9 million total of those two items equals 13.1% of the remaining leasing principal balance of $29.8 million.
For the three month period ended March 31, 2010, gross interest income that would have been reported on non-accruing loans and leases had they been current was $195 thousand, as compared to $101 thousand for the same period in 2009. There was $20 thousand and $24 thousand of interest income from non-accruing loans and leases included in net income for the three month periods ended March 31, 2010 and 2009, respectfully.
There was little change in the Companys wholesale borrowings position in the first quarter. Short-term borrowings from other correspondent banks and the FHLBNY increased from $19.1 million at December 31, 2009 to $22.0 million at March 31, 2010, while long-term borrowings declined by $0.2 million to $27.0 million at March 31, 2010.
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