Evans Bank(US:EVBN)2024-11-08 19:46Loan and Credit Losses - As of September 30, 2024, the allowance for credit losses (ACL) on loans totaled $23.1 million, an increase from $21.8 million at September 30, 2023, representing a growth of 6%[136] - The company recorded a provision for credit losses of $0.6 million during the three months ended September 30, 2024, primarily due to loan growth and slower prepayment rates[152] - The provision for credit losses in Q3 2024 was $0.6 million, primarily due to loan growth and slower prepayment speeds[168] Loan Portfolio and Performance - Total gross loans reached $1.8 billion at September 30, 2024, compared to $1.7 billion at both December 31, 2023, and September 30, 2023, indicating a year-over-year growth of approximately 6%[146] - The commercial and industrial (C&I) loan portfolio increased by $33 million, or 15%, from December 31, 2023, to $256 million at September 30, 2024[148] - Non-performing loans amounted to $33 million, or 1.82% of total loans outstanding, as of September 30, 2024, up from $27 million, or 1.59%, at December 31, 2023[149] Investment Securities - Total investment securities were $276 million at September 30, 2024, down from $337 million at September 30, 2023, primarily due to strategic repositioning of the balance sheet[154] - The company's highest concentration in its securities portfolio was in U.S. government-sponsored mortgage-backed securities, comprising 62% of total investment securities as of September 30, 2024[155] - The Bank's investment portfolio included mortgage-backed securities, which comprised 62% of the portfolio as of September 30, 2024[185] Deposits and Liquidity - Total deposits increased to $1.9 billion at September 30, 2024, representing an increase of $182 million, or 11%, from December 31, 2023, and $95 million, or 5%, from September 30, 2023[158] - Interest-bearing deposits at banks increased significantly to $107 million at September 30, 2024, compared to $4 million at December 31, 2023, reflecting strategic balance sheet strengthening[154] - The Bank could draw advances of up to $373 million on the FHLB via an Overnight Line of Credit Agreement as of September 30, 2024[183] Income and Expenses - Net income for Q3 2024 was $2.9 million, or $0.53 per diluted share, down from $3.6 million, or $0.66 per diluted share, in Q3 2023[165] - Net interest income for the three months ended September 30, 2024, was $15,044 thousand, compared to $14,256 thousand for the same period in 2023[162] - Non-interest income was $3.0 million in Q3 2024, up from $2.4 million in Q2 2024, but down from $5.6 million in Q3 2023[169] Efficiency and Ratios - The GAAP efficiency ratio was 75.32% in Q3 2024, compared to 72.72% in Q3 2023[172] - The Tier 1 leverage ratio was 10.01% as of September 30, 2024, compared to 9.40% at September 30, 2023[179] - The net interest margin for the three months ended September 30, 2024, was 2.80%, slightly up from 2.79% in the prior year[162] Strategic Initiatives - The proposed merger with NBT Bancorp Inc. has an aggregate transaction value of approximately $236 million, with each outstanding share of Evans common stock converting into 0.91 shares of NBT common stock[144] - Non-interest expense rose to $13.6 million in Q3 2024, an increase of $1.0 million from Q2 2024, including $0.6 million in merger-related costs[170] Risk and Sensitivity - The sensitivity analysis indicated that a +200 basis points change in interest rates could decrease net interest income by $3,542 thousand as of September 30, 2024[194] - The Company relies on cash on hand and dividends from its subsidiary bank to service its debt, which could be impacted by the subsidiary bank's capital deterioration[182]