EVANS BANCORP INC (EVBN)·Q3 2024 Earnings Summary

Executive Summary

• Q3 2024 EPS was $0.53 with net income of $2.9 million; sequentially flat vs Q2, down year over year due to the absence of insurance agency contributions after the TEA sale, while core banking fundamentals improved (NIM, loans, deposits) .
• Net interest margin expanded to 2.80%, up 9 bps q/q, versus company expectations for ~2.68% given rising funding costs—an implicit beat on internal margin guidance, aided by deposit pricing discipline and asset mix optimization .
• Non-interest income rose sequentially, driven by a gain on the sale of OREO, partially offsetting $0.6 million in merger-related expenses; asset quality saw NPLs increase largely due to one 90+ day past due accruing loan expected to renew early Q4 .
• Strategic catalyst: definitive agreement to merge with NBT Bancorp at a fixed 0.91 NBT shares per EVBN share (aggregate value ≈ $236 million based on NBT’s 9/6 price); expected close in Q2 2025, subject to approvals .

What Went Well and What Went Wrong

What Went Well

• Net interest margin expanded to 2.80% (+9 bps q/q; +1 bp y/y) on balance sheet positioning and strategic deposit pricing; loan yields rose 17 bps q/q and 55 bps y/y .
• Loans and deposits grew meaningfully: loans +$67 million YTD (+4%) and +$84 million y/y (+5%); deposits +$182 million YTD (+11%) and +$95 million y/y (+5%) .
• CEO emphasized “solid third quarter performance” and highlighted OREO sale gain offsetting initial merger costs: “growth in our lending portfolio, and deposits, an expanded net interest margin, and continued expense management discipline” .

What Went Wrong

• Non-performing loans increased by $7.5 million q/q to $32.6 million (1.82% of loans) mainly due to one 90+ DPD accruing loan; provision for credit losses rose to $0.57 million .
• Non-interest expenses increased $1.03 million q/q to $13.59 million, including $0.6 million of merger-related costs; GAAP efficiency ratio ticked up to 75.32% from 75.11% in Q2 .
• Year-over-year non-interest income fell $2.56 million largely due to the prior-period TEA insurance revenue, highlighting the structural reduction in non-bank fee income following the sale .

Financial Results

Core Results vs Prior Periods and Estimates

Note on estimates: S&P Global consensus data for EVBN was unavailable through our system. Therefore, comparisons to Wall Street consensus cannot be provided and should be treated as unavailable.

Segment/Component Breakdown

Non-Interest Income Detail

Non-Interest Expenses Detail

KPIs and Balance Sheet

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• CEO: “Evans delivered solid third quarter performance… driven by growth in our lending portfolio, and deposits, an expanded net interest margin, and continued expense management discipline. We additionally benefited from the sale of an OREO property… which helped offset the initial $0.6 million in merger-related costs.”
• CEO on merger: “This partnership provides a tremendous opportunity to scale our service… leveraging NBT’s strong regional presence and shared community banking values.”
• CFO highlights (from PR): net interest income up 5% q/q; NIM +9 bps q/q; cost of interest-bearing liabilities 3.28% vs 3.27% in Q2; effective tax rate 24.2% .

Q&A Highlights

• The Q3 2024 earnings call transcript was not available in the document catalog; Q&A highlights cannot be provided. We will update this section if/when the transcript becomes accessible.

Estimates Context

• S&P Global (Capital IQ) consensus estimates were unavailable for EVBN due to mapping limitations in our system; therefore, formal comparisons to Wall Street consensus could not be performed. Use reported results and internal guidance as the benchmark [S&P Global consensus unavailable].

Where estimates may need to adjust:

• Internal expectation for Q3 NIM (~2.68%) was outperformed by actual 2.80%, suggesting the street’s forward NIM/Net Interest Income trajectories may be revised modestly upward, contingent on funding cost trends and loan yield progression .

Key Takeaways for Investors

• Margin upside: Q3 NIM beat internal expectations despite near-flat funding costs—evidence that asset mix and pricing discipline are gaining traction; watch for continued NIM stabilization or modest expansion into Q4 as indicated earlier .
• Core growth: Balanced loan and deposit growth (+5% and +5% y/y, respectively) supports net interest income improvement into 2025, pending broader rate dynamics .
• Credit watchlist: NPL uptick was primarily idiosyncratic (one 90+ DPD accruing loan expected to renew); provisioning rose modestly—monitor resolution and criticized loans trend .
• Expense control vs merger costs: Non-interest expenses rose q/q due to merger-related items; absent merger costs, expense discipline remains intact; efficiency ratio near mid-70s .
• Structural non-interest income lower post-TEA sale: Gains (OREO sale) helped in Q3, but recurring fee income remains structurally reduced year over year—focus turns to growing core fees (deposit, interchange, wealth) .
• Strategic catalyst: NBT merger provides scale and potential deposit/fee synergies; exchange ratio is fixed (0.91), close expected Q2 2025—track regulatory/shareholder approvals .
• Near-term trading: Positive narrative on NIM and core growth vs expectations may support the stock; headline risk around NPLs and merger timeline could create volatility; medium-term thesis hinges on integration benefits and sustained margin normalization .

Sources: EVBN Q3 2024 8-K earnings release and exhibits ; EVBN Q2 2024 8-K earnings release ; EVBN Q2 2024 earnings call transcript ; EVBN Q1 2024 8-K earnings release .