e ans bancorp inc evans bancorp, inc.renshaw2010.pdfe ans bancorp inc rodman & renshaw...
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E ans Bancorp IncE ans Bancorp IncRodman & Renshaw Conference
Community & Regional Bank Track Community & Regional Bank Track
Evans Bancorp, Inc.Evans Bancorp, Inc.
September 15, 2010
David J. Nasca Gary A. Kajtoch
© 2009 by Evans Bancorp
David J. NascaPresident & CEO
Gary A. KajtochExecutive Vice President & CFO
NASDAQ: EVBN
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Safe Harbor StatementSafe Harbor Statement
This presentation includes "forward looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements concerning future business, revenue and earnings. These statements are not historical facts or guarantees of future performance, events or results. There are risks, uncertainties and other factors that could cause the actual results of the Company toother factors that could cause the actual results of the Company to differ materially from the results expressed or implied by such forward-looking statements. Information on factors that could affect the Company's business and results is discussed in the Company's periodic reports filed with the Securities and Exchange Commission. Forward looking statements speak only as of the date they are made. The Company undertakes no obligation to publicly update or revise forward looking information whether as a
© 2010 by Evans Bancorp2
publicly update or revise forward looking information, whether as a result of new, updated information, future events or otherwise.
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C it b d fi i l i
Evans Bancorp, Inc. Evans Bancorp, Inc. (NASDAQ: EVBN)(NASDAQ: EVBN)
Community-based financial services company
Provides banking, insurance and investment services in Western New York
Relationship-focused organization, serves as a trusted advisor
Easy to interact with and an excellent work environment for top talent
Recent Price $12.76Market Capitalization $52.3 millionTotal Shares Outstanding 4.1 millionO hi I id 4 8%
Dividend Yield 3.13%Total Assets $658.0 millionTotal Loans (excluding Leases) $480.3 millionT l D i $535 6 illi
Evans Established: 1920 Bank Branches: 13 Insurance Agency Locations: 14
© 2010 by Evans Bancorp
Ownership – Insider 4.8%Institutional 30.3%
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Total Deposits $535.6 millionTotal Common Equity $62.9 million
Note: Market data as of 9/01/10; financial data as of June 30, 2010; ownership as of June 30, 2010 filings
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Opportunity for GrowthOpportunity for Growth
2009 Market Share by Deposits
Buffalo, NY
Evans Bank Branch
The Evans Agency Office
y p$32.7B Total Deposits
HSBC38 1%
Evans1.4%
Citizens
Bank of America3.4%
All Others2.7%
38.1%
M&T29.4%Key Bank
9.1%
First Niagara11.2%
4.7%
© 2010 by Evans BancorpSource: FDIC, as of June 30, 2009
4Source: FDIC, as of June 30, 2009
• Over 16,000 households• Core business growth
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Comprehensive Financial ServicesComprehensive Financial Services
17%
Diversified Revenue Sources
$37.7 million
• Q2 2010 net interest income expanded 14% over prior year period due to core loan performance and reduced interest expense
– $24.2 mm in Q2 2010 TTM revenueQ2 2010 t i t t i t 4 21%
64%
19%
Net Interest Income
Insurance & Investment Services Fee Income
• Significant insurance agency presence in WNY
– $1.6 mm in Q2 2010 revenue– 14 locations; 7 agency acquisitions since
2004
– Q2 2010 net interest margin at 4.21%
Insurance & Investment Services Fee Income
Other Non-interest Income2004
© 2010 by Evans Bancorp5
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Experienced Management TeamExperienced Management TeamDavid NascaPresident and
Over 26 years experience with 11 at First Niagara Financial Group in several leadership roles such as bank president, treasurer and executive vice
id t f t t i l i Si ifi t i i M&A d t ilChief Executive Officer
Gary KajtochExecutive Vice President andChief Financial Officer
Cynthia Rich Executive Vice President,Operational Excellence and Credit
president of strategic planning. Significant experience in M&A and retail banking.
Over 20 years financial experience in the banking industry, with 17 years in the finance and treasury divisions of M&T Bank.
Over 20 years at M&T Bank in the retail, operations, marketing and finance areas.
Robert Miller CLU, CPCU Executive Vice President, Sales and Customer Experience /President, The Evans Agency
John EagletonVice President, Commercial Loan Officer
Michael Bonito
Over 29 years of insurance agency experience, 7 at TEA. Experience includes agency ownership and production, sales management, marketing, M&A and planning.
Over 20 years in credit underwriting and loan originations with small, middle market and large corporate clients and developers at Chase Manhattan, Key Bank, Evans Bank, GE Capital and GMAC.
Over 25 years experience in mortgage lending. 14 years experience as
© 2010 by Evans Bancorp
Michael BonitoVice President,Manager of Consumer Lending
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Over 25 years experience in mortgage lending. 14 years experience as President, CEO and owner of Multisource Funding, Inc. Worked with Empire of America Realty Credit Corp and Goldome Credit Corp. Past president of the NYS Mortgage Brokers Association.
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Evans’ Strategy for GrowthEvans’ Strategy for Growth
• +50% over 4 years in a shrinking marketI ti lO i G th • Incentive plans
• Focus on customer experienceOrganic Growth
• Management restructure• Advancing automation and use of technologyScalable
Organization• Raised $13.4 million in net proceeds
S t th d id fl ibilitC it l R i • Supports growth and provides flexibilityCapital Raise
• Strong CRE business• Strengthening focus on C&I lending• Developing complementary products (e.g., Cash &Treasury Mgt)
Commercial Portfolio
• Continue to drive name awarenessI l d l d i d ($24 illi iB di
© 2010 by Evans Bancorp7
• Implemented several new deposit products ($24 million in new deposits)Branding
• Training & leadership development• Identify top-tier candidates• Metrics oriented accountability
Talent Management
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Distribution StrategyDistribution Strategy
NY
De novo expansionReviewing potential sites –
3 to 5 branches
Strategic Acquisitions FDIC i t d i iti f
OH
PA
FDIC-assisted acquisition of Waterford Village Bank
© 2010 by Evans Bancorp8
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Financial Highlights g gand Results
© 2009 by Evans Bancorp9
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Expanding Asset BaseExpanding Asset Base
Expanded asset base through organic loan growth and acquisition
$619.4$658.0
($ in millions)
p g g g qIncreased future earnings power potentialRestructured balance sheet in 2007; 17.2% CAGR (2007 – Q2 10)
9.8% CAGR (2006 –Q2 10)9.8% CAGR (2006 –Q2 10)
$473.9$442.7
$529.0($,in millions)
2006 2007 2008 2009 Q2 10
10 © 2010 by Evans Bancorp
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Core Banking: Loan Growth*Core Banking: Loan Growth*
Commercial loans and acquisition drove 31% growth in 2009
$458.1$480.3
q gHigh quality in-market commercial real estate loansCapturing strong credits from larger banksSupports core business strategy
19.5% CAGR (2006 –Q2 10)19.5% CAGR (2006 –Q2 10)
$257.4 $279.0
$349.1($, in millions)
© 2010 by Evans Bancorp
* Excludes National Lease Portfolio
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2006 2007 2008 2009 Q2 10
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Total Loan and Lease
Diverse Loan and Lease PortfolioDiverse Loan and Lease Portfolio
9.0%
0.3%1.2%
ota oa a d easePortfolio
$503.0 million
22%13% 4%
Commercial Loans
$335.7 million
66.7%
4.5%
18.2%
22%
42%
18%
Owner occupied CRE
© 2010 by Evans Bancorp12
Per June 30, 2010
Commerical Direct Finance Leases1-4 Family Mortgage Consumer Home EquityConsumer Other Other
Non-owner occupied CREC&IMulti-familyConstruction / Land Development
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Asset QualityAsset Quality
NPAs to Total Loan + OREO
2.65% 2.20%2 00%2.50%3.00%3.50%4.00%
1.79% 1 55%
0.24% 0.22%0.89%
0.00%0.50%1.00%1.50%2.00%
2006 2007 2008 2009 Q2 10EVBN (GAAP)Banks < $1 Billion in Assets*
1.55%
EVBN without ENL EVBN without ENL & WVB
© 2010 by Evans Bancorp13
* Peer data per SNLENL- Evans National Leasing WVB- Waterford Village Bank (FDIC assisted acquisition)
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National Leasing PortfolioNational Leasing PortfolioNon-performing leases Leases
$40.92 $36.22 $31.49 $26.70$22.67
Portfolio StatusHigh water mark (12/31/08) : $58.6 millionNet lease charge-offs (Q2 09): $7.7 million*
$2.15 $2.82 $2.91 $2.89 $2.45
Q2 09 Q3 09 Q4 09 Q1 10 Q2 10
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Net lease charge offs (Q2 09): $7.7 millionBook value (6/30/10): $22.7 million (4.5% of total loan and lease portfolio)Cushion**: $3.2 millionCurrent run down rate: $1.4 million per month (approximate)
*Lease portfolio was classified as held-for-sale at June 30, 2009, resulting in a mark-to-market adjustment and actual charge-offs of $7.7 million** Remaining mark plus allowance for lease losses
© 2010 by Evans Bancorp
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Asset QualityAsset QualityAllowance for Loan Loss / Non-Accruals
Q2 2010Q2 2010
91.7%
113.8% 118.3%
66 7%
Current Loan Allowance Ratio :
1.65%
Current Loan Allowance Ratio :
1.65%
66.7%
© 2010 by Evans Bancorp15
EVBN (GAAP) EVBN without ENL EVBN without ENL & WVB Banks<$1B
* Peer data per SNLENL- Evans National Leasing WVB- Waterford Village Bank (FDIC assisted acquisition)
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Q2 10 Non-Performing Loans by Portfolio*
Asset QualityAsset Quality
$2.61 $2.78
$1.93
($, in millions) Core Non-Performing Loans: $5.45WVB Non-Performing Loans: $3.16Total Non-Performing Loans: $8.63Total Loan Portfolio: $503.0 million
Core Non-Performing Loans: $5.45WVB Non-Performing Loans: $3.16Total Non-Performing Loans: $8.63Total Loan Portfolio: $503.0 million
$0.83
$0.24 $0.23
Residential 1-4 family real estate
Commercial real estate
Construction Home equity Commercial loans
Consumer installment loans
© 2010 by Evans Bancorp16
* Excludes National Lease Portfolio
NPL Ratios by Portfolio
1.03% 1.01% 10.48% 0.53% 3.11% 2.89%
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Low Cost Core DepositsLow Cost Core Deposits23.6% increase in 2009 on strong growth in regular savings, demand deposits and acquisition
$499.5$535.612.4% CAGR
(2006 –Q2 10)12.4% CAGR (2006 –Q2 10)
and acquisition2009 Peer Comparison: EVBN up 23.6% vs. Banks < $1 billion up 11.2%*Q2 10 deposit composition: Savings & Money Market: 44.7%; Time Deposits: 27.4%; Demand & NOW: 22.7%; Municipal Money Market: 5.2%
$355.7$325.8
$404.0($, in millions)
2006 2007 2008 2009 Q2 10
© 2010 by Evans Bancorp17
* Peer data per SNL
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Strong Margins and Revenue GrowthStrong Margins and Revenue Growth
Net Interest Margin Comparison Revenue
$2.4 $3.5$4.6
$3.5 $2.211.1% CAGR (2006 –Q210 TTM)
3.61%
4.21%
Net Interest Margin Comparison Revenue
$36.0$30.9
$27.8$25.6
4.14%**
$37.0($, in millions)
$23.2 $24.3 $26.3$32.5 $34.8
2006 2007* 2008 2009** Q210 TTM**
Leasing Revenue EVBN without Leases
Banks<$1B EVBN
Q2 2010
© 2010 by Evans Bancorp
* Excludes $2.3 million loss on sale of securities associated with balance sheet restructuring in June 2007.
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** EVBN without Leases** Excludes $0.7 million gain on bargain purchase.
* Peer data per SNL
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Fee income less rate sensitive
NonNon--Interest Interest IncomeIncome
$13.4 $13.5
Capitalize on relationship managementInsurance 53% of Q2 10 TTM non-interest incomeFocusing on growing commercial lines
6.6% CAGR (2006 – Q210 TTM)6.6% CAGR (2006 – Q210 TTM)
(in millions)
$10.8 $11.1$11.7
(in millions)
© 2010 by Evans Bancorp19
2006 2007* 2008 2009** Q210 TTM
* Excludes $2.3 million loss on sale of securities associated with balance sheet restructuring in June 2007. ** Excludes $0.7 million gain on bargain purchase.
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BottomBottom--line Resultsline Results
(in millions)Net Income
$0.44 $0.44(in millions)
$2.73 $4.47 $4.49 $6.45$0.64
-$3.78
2007 2008 2009 Q210 TTM
As Reported: $3.37 $4.91 $0.71 $6.89
$1.00 $1.62 $1.60 $2.20$0.23 $0.16
-$1.35
$0.14
2007 2008 2009 Q210 TTM
Earnings Per Share (diluted)
$0.01 $0.01 $0.01 $0.01
EVBN without Leases Leasing 20
$1.23 $1.78 $0.25 $2.34As Reported:
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* Excludes national lease portfolio
Second Second Quarter 2010 Quarter 2010 –– Core Business StrengthCore Business Strength($ in millions, except per share data)
Net Interest Income* Non-Interest Income* Non-Interest Expense*
$4.55$5.75
$3.02 $2.93
$5.80 $6.34
$0 47
Q2 2009 Q2 2010 Q2 2009 Q2 2010 Q2 2009 Q2 2010
Net Income
$1 63
Earnings Per Share (diluted)
-$0.67
$0.47
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-$1.85
$1.63
Q2 2009 Q2 2010 Q2 2009 Q2 2010
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Capital StructureCapital Structure
Risk-Based Capital Ratios Evans BancorpJune 30, 2010
Prior to Offering March 31, 2010
RegulatoryGuidelines for
Well CapitalizedTier 1 leverage ratio 10.18% 7.88% 5.00%Tier 1 risk-based capital 13.10% 10.08% 6.00%Total risk based capital 14.36% 11.34% 10.00%
• Solid capital base• Capital raise to support growth
TCE/TA 8.28% 5.92%Tangible Book Value $13.05 $13.08
© 2010 by Evans Bancorp22
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Driving Growth
M i Ri kManaging Risk
© 2009 by Evans Bancorp23
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ThreeThree--toto--Five Year Growth GoalsFive Year Growth Goals
Gain Operating Leverage with ScaleGain Operating Leverage with Scale
^The calculation of the efficiency ratio excludes goodwill impairment, amortization of intangibles and gains and losses on sale of securities, for comparative purposes
Total Assets: $900-1.2BROA: 0.95-1.0%ROE: 11.0-13.0%
($, in millions, Q2 2010)
Total Assets: $658.0
Investments in systems, process
Increase diversity in
loan portfolio
Acquisition opportunities
Efficiency Ratio^: Low 60%
3-5 Year Goals
© 2010 by Evans Bancorp
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Total Assets: $658.0ROA: 1.02%ROE: 11.79%Efficiency Ratio^: Low 69.72%
process, branches and
people
Today
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Investment HighlightsInvestment Highlights
Diverse revenue mix strong operating fundamentalsDiverse revenue mix, strong operating fundamentals
Strong and growing franchise in WNY
Sophisticated / experienced management team
Solid capital baseSolid capital base
Quality core deposit growth
Lower-risk balance sheet
Sh h ld t i t ti
© 2010 by Evans Bancorp
Shareholder return orientation
Historically reasonable valuation
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E ans Bancorp IncE ans Bancorp IncEvans Bancorp, Inc.Evans Bancorp, Inc.Rodman & Renshaw Conference
Community & Regional Bank Track Community & Regional Bank Track
September 15, 2010
© 2009 by Evans Bancorp
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© 2010 by Evans Bancorp
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