Evans Bancorp (EVBN) Q3 2024 earnings summary

Executive summary

• Net income for Q3 2024 was $2.9 million ($0.53 per diluted share), down from $3.6 million ($0.66 per share) in Q3 2023, reflecting higher net interest income offset by increased expenses and the prior-year sale of The Evans Agency.

• Evans Bancorp entered into a merger agreement with NBT Bancorp, valued at approximately $236 million; each Evans share to be exchanged for 0.91 NBT shares, with closing expected in Q2 2025.

• Loan and deposit growth continued, with total loans up 5% and deposits up 11% year-over-year.

• Sale of insurance subsidiary TEA in late 2023 led to a significant reduction in non-interest income and expenses in 2024.

Financial highlights

• Net interest income for Q3 2024 was $15.0 million, up 6% year-over-year and $0.7 million sequentially; nine-month net interest income was $43.3 million, down 8% from 2023.

• Net interest margin was 2.80% in Q3 2024, up 9 bps from Q2 2024 and 1 bp year-over-year; nine-month margin was 2.76%, down 36 bps from 2023.

• Non-interest income for Q3 2024 was $3.0 million, up $0.6 million sequentially due to a gain on sale of OREO property, but down from $5.6 million in Q3 2023 due to the TEA sale.

• Non-interest expenses increased $1.0 million sequentially, including $0.6 million in merger-related costs; salaries and benefits rose 3% sequentially but fell 14% year-over-year.

• Provision for credit losses was $0.6 million in Q3 2024 and $1.1 million for the nine months, compared to a release of $0.3 million in the prior year period.

Outlook and guidance

• The merger with NBT Bancorp is expected to close in Q2 2025, subject to regulatory and shareholder approvals.

• Management anticipates long-term value creation from the merger, leveraging scale and regional presence, and expects continued focus on balance sheet strength, liquidity, and credit quality during the merger process.