<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(mark one)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For quarterly period ended September 30, 2000
------------------
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ----------------- to -----------------
Commission file number 0-18539
-------
EVANS BANCORP, INC.
-------------------
(Exact name of registrant as specified in its charter)
NEW YORK 16-1332767
-------- -----------
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
14-16 NORTH MAIN STREET, ANGOLA, NEW YORK 14006
------------------------------------------------
(Address of principal executive offices)
(Zip Code)
(716) 549-1000
--------------
(Issuer's telephone number)
Not Applicable
--------------
(Former name, former address and former fiscal year, if
changed since last report.)
Indicate by check (x) whether the issuer (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date:
Common Stock, $.50 Par Value--1,756,698 shares as of September 30, 2000
<PAGE> 2
INDEX
EVANS BANCORP, INC. AND SUBSIDIARY
PAGE
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated balance sheets--September 30, 2000 and
December 31, 1999 1
Consolidated statements of income--Three months
ended September 30, 2000 and 1999 2
Consolidated statements of income--Nine months 3
ended September 30, 2000 and 1999
Consolidated statements of cash flows--Nine months 4
ended September 30, 2000 and 1999
Notes to consolidated financial statements--
September 30, 2000 and 1999 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
Item 3. Quantative and Qualitative Disclosures About
Market Risks 10
PART II. OTHER INFORMATION 11
---------------------------
Item 1. Legal Proceedings
Item 2. Changes In Securities
Item 3. Defaults upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES 12
<PAGE> 3
PART I - FINANCIAL INFORMATION PAGE 1
ITEM I - FINANCIAL STATEMENTS
EVANS BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
September 30, 2000 and December 31, 1999
(Unaudited)
<TABLE>
<CAPTION>
September 30, December 31,
ASSETS 2000 1999
------------- ------------
<S> <C> <C>
Cash and due from banks $5,960,370 $8,528,778
Federal funds sold 0 3,450,000
Securities:
Classified as available-for-sale, at fair value 69,404,611 59,550,786
Classified as held-to-maturity, at amortized cost 3,649,792 3,448,892
Loans, net 124,968,279 116,433,438
Properties and equipment, net 3,857,246 3,834,496
Other assets 7,551,903 3,541,993
------------- ------------
TOTAL ASSETS $215,392,201 $198,788,383
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits:
Demand $35,695,754 $29,683,357
NOW and money market accounts 8,991,609 8,048,455
Regular savings 62,147,122 58,819,156
Time deposits, $100,000 and over 26,119,114 28,856,320
Other time accounts 49,760,924 44,541,611
------------- ------------
182,714,523 169,948,899
Other borrowed funds 6,705,295 5,000,000
Dividend payable 474,308 0
Other liabilities 2,892,687 5,554,546
------------- ------------
TOTAL LIABILITIES 192,786,813 180,503,445
=========== ===========
STOCKHOLDERS' EQUITY
Common stock, $.50 par value; 10,000,000 shares authorized;
1,759,602 shares issued and 1,698,950 shares issued respectively 879,801 849,475
Capital surplus 13,810,991 10,990,720
Retained earnings 8,603,972 7,629,839
Accumulated other comprehensive (loss) income (net of tax) (552,935) (1,185,096)
------------- ------------
22,741,829 18,284,938
Less: Treasury stock, at cost (2,903 shares) (136,441) 0
Total stockholders' equity 22,605,388 18,284,938
------------- ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $215,392,201 $198,788,383
============ ============
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE> 4
PART I - FINANCIAL INFORMATION PAGE 2
ITEM 1 - FINANCIAL STATEMENTS
EVANS BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
For the Three Months ended September 30, 2000 and 1999
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
September 30,
2000 1999
---------- ----------
<S> <C> <C>
INTEREST INCOME
Loans $2,740,769 $2,341,696
Federal funds sold 45,202 59,640
Securities:
Taxable 711,384 458,348
Non-taxable 388,632 339,710
---------- ----------
Total Interest Income 3,885,987 3,199,394
INTEREST EXPENSE
Interest on deposits 1,521,458 1,165,647
Short term borrowing 105,511 78,931
---------- ----------
NET INTEREST INCOME 2,259,018 1,954,816
PROVISION FOR LOAN LOSSES 60,000 45,000
---------- ----------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 2,199,018 1,909,816
---------- ----------
NON-INTEREST INCOME:
Service charges 236,347 196,298
Other 349,415 200,222
Securities loss (16,136) 0
---------- ----------
Total Non-interest Income 569,626 396,520
---------- ----------
NON-INTEREST EXPENSE:
Salaries and employee benefits 929,271 810,438
Occupancy 251,545 230,676
Supplies 46,662 48,628
Repairs and maintenance 63,264 57,424
Advertising and public relations 39,475 30,622
Professional services 65,035 69,287
FDIC assessments 8,860 4,286
Other 405,805 298,823
---------- ----------
Total Non-interest Expense 1,809,917 1,550,184
---------- ----------
Income before income taxes 958,727 756,152
---------- ----------
INCOME TAXES 264,000 203,450
---------- ----------
NET INCOME $694,727 $552,702
========== ==========
NET INCOME PER COMMON SHARE-BASIC $0.41 $0.33
========== ==========
WEIGHTED AVERAGE NUMBER OF COMMON SHARES 1,715,342 1,698,950
========== ==========
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE> 5
PART I - FINANCIAL INFORMATION PAGE 3
ITEM I - FINANCIAL STATEMENTS
EVANS BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
For the Nine Months ended September 30, 2000 and 1999
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
2000 1999
---------- ----------
<S> <C> <C>
INTEREST INCOME
Loans $7,922,258 $7,003,251
Federal funds sold 125,551 152,958
Securities:
Taxable 2,029,762 1,235,883
Non-taxable 1,161,352 947,049
---------- ----------
Total Interest Income 11,238,923 9,339,141
INTEREST EXPENSE
Interest on deposits 4,389,064 3,437,441
Short term borrowing 313,327 237,167
---------- ----------
NET INTEREST INCOME 6,536,532 5,664,533
PROVISION FOR LOAN LOSSES 220,000 125,000
---------- ----------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 6,316,532 5,539,533
---------- ----------
NON-INTEREST INCOME:
Service charges 625,133 543,330
Other 775,213 439,910
Securities (loss) gain (31,616) 1,064
---------- ----------
Total Non-interest Income 1,368,730 984,304
---------- ----------
NON-INTEREST EXPENSE:
Salaries and employee benefits 2,670,906 2,323,560
Occupancy 734,442 665,578
Supplies 141,218 116,533
Repairs and maintenance 174,947 170,455
Advertising and public relations 101,791 126,460
Professional services 193,855 195,397
FDIC assessments 25,611 12,585
Other 1,095,513 852,032
---------- ----------
Total Non-interest Expense 5,138,283 4,462,600
---------- ----------
Income before income taxes 2,546,979 2,061,237
---------- ----------
INCOME TAXES 673,800 555,900
---------- ----------
NET INCOME $1,873,179 $1,505,337
========== ==========
NET INCOME PER COMMON SHARE-BASIC $1.09 $0.89
========== ==========
WEIGHTED AVERAGE NUMBER OF COMMON SHARES 1,715,342 1,698,950
========== ==========
</TABLE>
See Notes to Consolidated Financial Statements
<PAGE> 6
PAGE 4
ITEM I - FINANCIAL STATEMENTS
EVANS BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 2000 and 1999
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
2000 1999
----------- ----------
<S> <C> <C>
OPERATING ACTIVITIES
Interest received $10,961,442 $9,094,173
Fees and commissions received 1,525,784 942,294
Interest paid (4,629,424) (3,710,598)
Cash paid to suppliers and employees (5,681,455) (4,086,341)
Income taxes paid (807,235) (621,482)
----------- ----------
Net cash provided by operating
activities 1,369,112 1,618,046
----------- ----------
INVESTING ACTIVITIES
Available for sale securities
Purchases (20,403,274) (24,484,803)
Proceeds from sales 7,411,556 2,842,567
Proceeds from maturities 4,029,164 6,105,430
Held to maturity securities
Purchases (2,391,654) (2,263,557)
Proceeds from maturities 2,190,755 3,999,664
Additions to bank properties and equipment (284,933) (234,494)
Investment unconsolidated subsidiary (10,500) 0
Increase in loans, net of repayments (9,841,020) (5,370,918)
Proceeds from sales of loans 1,029,497 4,178,464
Proceeds from sales of other real estate owned 294,452 0
----------- ----------
Net cash used in investing activities (17,975,957) (15,227,647)
----------- ----------
FINANCING ACTIVITIES
Increase in deposits 13,144,149 16,985,152
Repayment short term borrowing (1,994,534) (3,001,663)
(Purchase)Sale treasury stock (136,441) 60,840
Dividends paid (424,737) (390,448)
----------- ----------
Net cash provided by financing
activities 10,588,437 13,653,881
----------- ----------
Net (decrease)increase in cash and cash
equivalents (6,018,408) 44,280
Cash and cash equivalents, January 1 11,978,778 7,300,780
----------- ----------
Cash and cash equivalents, September 30 $5,960,370 $7,345,060
========== ===========
</TABLE>
See Notes to Consolidated Financial Statements
<PAGE> 7
PART I - FINANCIAL INFORMATION PAGE 5
ITEM I - FINANCIAL STATEMENTS
EVANS BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 2000 and 1999
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
2000 1999
---------- ----------
<S> <C> <C>
RECONCILIATION OF NET INCOME TO NET CASH
PROVIDED BY OPERATING ACTIVITIES:
Net income $1,873,179 $1,505,337
---------- ----------
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 454,521 459,166
Provision for credit losses 220,000 125,000
(Loss)Gain on sale of assets 25,007 (16,178)
Increase(Decrease) in accrued interest payable 72,967 (35,990)
Increase in accrued interest receivable (252,075) (306,942)
(Decrease)Increase in other liabilities (692,790) 66,549
Increase in other assets (331,697) (178,896)
---------- ----------
Total adjustments (504,067) 112,709
---------- ----------
NET CASH PROVIDED BY
OPERATING ACTIVITIES $1,369,112 $1,618,046
========== ==========
SUPPLEMENTAL DISCLOSURE
OF CASH FLOW INFORMATION:
Net unrealized loss on available for sale securities ($813,139) ($639,291)
---------- ----------
</TABLE>
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
The Bank acquired all of the capital stock of M&W Group, Inc. through the
issuance of common stock at an aggregate offering price of $2,850,597. In
conjunction with the acquisition, assets acquired and liabilities assumed were
as follows:
Fair value of assets acquired $858,857
Liabilities assumed $1,198,104
See Notes to Consolidated Financial Statements.
<PAGE> 8
PART I - FINANCIAL INFORMATION PAGE 6
ITEM 1 - FINANCIAL STATEMENTS
EVANS BANCORP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2000 AND 1999
(UNAUDITED)
1. GENERAL
The accounting and reporting policies followed by Evans Bancorp, Inc.,
(the "Company") a bank holding company, and its subsidiary, Evans
National Bank (the "Bank") and subsidiaries in the preparation of the
accompanying interim financial statements conform with generally
accepted accounting principles and with general practice within the
banking industry.
The accompanying financial statements are unaudited. In the opinion of
management, all adjustments necessary for a fair presentation of
financial position and results of operations for the interim periods
have been made. Such adjustments are of a normal recurring nature.
The results of operations for the nine month period ended September 30,
2000 are not necessarily indicative of the results to be expected for
the full year.
2. SECURITIES
Securities which the Bank has the ability and intent to hold to maturity
are stated at cost, plus discounts accrued and less premiums amortized.
Securities which the Bank has identified as available for sale are
stated at fair value.
3. ALLOWANCE FOR CREDIT LOSSES
The provision for credit losses is based on management's evaluation of
the relative risks inherent in the loan portfolio of the Bank and, on an
annual basis, generally exceeds the amount of net loan losses charged
against the allowance.
4. REVENUE RECOGNITION
The Bank's primary sources of revenue are interest income from loans and
investments and service charge income. The revenue is recognized in the
period in which it is earned. The Insurance Agency's revenue is derived
mainly from insurance commissions. The revenue is recognized on the
accrual basis of accounting in accordance with generally accepted
accounting principles.
5. INCOME TAXES
Provision for deferred income taxes are made as a result of timing
differences between financial and taxable income. These differences
relate principally to directors deferred compensation, pension premiums
payable, allowance for loan losses and deferred loan origination
expenses.
6. PER SHARE DATA
The per share of common stock information is based upon the weighted
average number of shares outstanding during each period, retroactively
adjusted for stock dividends and stock splits. The Company adopted
Statement of Financial Accounting Standards (SFAS) No. 128, "Earnings
per Share," during the fourth quarter of 1997. Only basic earnings per
share is disclosed because the Company does not have any dilutive
securities or other contracts to issue common stock or convert to common
stock.
7. ACQUISITION
Effective September 1, 2000, the Company completed its previously
announced acquisition of the assets, business and certain liabilities of
M&W Group, Inc., a retail property and casualty insurance agency
headquartered at Silver Creek, New York, with offices located in Angola,
North Collins, South Dayton, Cattaraugus and Randolph, New York. Subject
to post closing adjustments, the Company issued 60,651 shares of its
common stock as the purchase price for the assets acquired.
<PAGE> 9
Page 7
The purchase price (including liabilities assumed) exceeded the fair
value of the assets acquired by approximately $3.2 million which has
been recorded by the Company as goodwill and will be amortized on a
straight line basis over the next 10 years. The insurance agency
acquired will be operated through M&W Agency, Inc., a newly formed
operating subsidiary of the Bank.
Due to the insignificant effect on the financial position and results of
operation, no pro-forma data of this acquisition is required or
presented, and no 8K has been filed.
8. SEGMENT INFORMATION
SFAS No. 131, Disclosures about Segments of an Enterprise and Related
Information was issued in 1997 by the Financial Accounting Standards
Board. This Statement establishes standards for the way that public
business enterprises report information about operating segments in
annual financial statements. The Company is comprised of two primary
business segments, Evans National Bank and M & W Agency, Inc., its
insurance subsidiary. The following table sets forth information
regarding these segments for the three month and nine month periods
ended September 30, 2000.
Three Months Ended
September 30, 2000
<TABLE>
<CAPTION>
Banking Activities Insurance Activities Total
<S> <C> <C> <C>
Net Interest Income 2,262,626 (3,608) 2,259,018
Provision for credit losses 60,000 0 60,000
------------------- ------------------- ----------------
Net interest income after
provision for credit losses 2,202,626 (3,608) 2,199,018
Non-interest income 453,693 132,069 585,762
Net securities losses (16,136) 0 (16,136)
Non-interest expense 1,683,970 125,947 1,809,917
Income before income taxes 956,213 2,514 958,727
Income tax expense 262,900 1,100 264,000
------------------- ------------------- ----------------
Net income 693,313 1,414 694,727
------------------- ------------------- ----------------
</TABLE>
Nine Months Ended
September 30, 2000
<TABLE>
<CAPTION>
Banking Activities Insurance Activities Total
<S> <C> <C> <C>
Net Interest Income 6,540,140 (3,608) 6,536,532
Provision for credit losses 220,000 0 220,000
------------------- ------------------- ----------------
Net interest income after
provision for credit losses 6,320,140 (3,608) 6,316,532
Non-interest income 1,268,277 132,069 1,400,346
Net securities losses (31,616) 0 (31,616)
Non-interest expense 5,012,336 125,947 5,138,283
Income before income taxes 2,544,465 2,514 2,546,979
Income tax expense 672,700 1,100 673,800
------------------- ------------------- ----------------
Net income 1,871,765 1,414 1,873,179
------------------- ------------------- ----------------
</TABLE>
Prior to September 1, 2000, the Company was comprised of one operating
segment, the Bank. SFAS No. 131 was not applicable to the Company's
financial statements prior to the September 30, 2000 reporting period.
As such, the abbreviated represents one month of insurance activity.
<PAGE> 10
PAGE 8
9. NEW ACCOUNTING STANDARDS PRONOUNCEMENTS
SFAS No. 133, Accounting for Derivative Instruments and Hedging
Activities, was issued in June 1998. The Company adopted the provisions
of SFAS No. 133 effective October 1, 1998. Because the Company does not
use derivatives, the adoption of SFAS No. 133 did not impact the
Company's earnings or financial position. As allowed by SFAS No. 133 the
Company transferred approximately $2,900,000 of certain securities from
held to maturity to the available for sale classification. The realized
and unrealized gains on the securities transferred were not material to
the Company.
<PAGE> 11
PAGE 9
PART I - FINANCIAL INFORMATION
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS
INTRODUCTION
The Bank is in the commercial banking business, attaching deposits from
and making loans to the general public in its immediate geographical area.
M&W ACQUISITION
Effective September 1, 2000, the Company completed its previously
announced acquisition of the assets, business and certain liabilities of M&W
Group, Inc., a retail property and casualty insurance agency headquartered at
Silver Creek, New York, with offices located in Angola, North Collins, South
Dayton, Cattaraugus and Randolph, New York. Subject to post closing adjustments,
the Company issued 60,651 shares of its common stock as the purchase price for
the assets acquired. The purchase price (including liabilities assumed) exceeded
the fair value of the assets acquired by approximately $3.2 million which has
been recorded by the Company as goodwill and will be amortized on a straight
line basis over the next 10 years. The insurance agency acquired will be
operated through M&W Agency, Inc., a newly formed operating subsidiary of the
Bank.
MATERIAL CHANGES IN FINANCIAL CONDITION
Total deposits increased 7.5% over the first nine months of 2000. This
compares to an increase of 11.8% over the first nine months of 1999. Demand
deposits increased 20.3%, NOW accounts increased 11.7%, Regular Savings
increased 5.7% and Other time accounts increased 11.7% over the first nine
months of 2000. Deposit increases primarily are attributable to the expansion of
the Bank's trade area to include West Seneca, NY since opening a new branch in
February 1999. All the branches continue to exhibit growth in deposits. Time
deposits greater than $100,000 decreased 9.5% in the first nine months of 2000
versus a decrease of 4.8% in the first nine months of 1999, as volatile funds
were replaced with core deposits. Excess cash was kept for the Y2K contingency
for year-end, since then the excess cash has been reinvested in the securities
portfolio resulting in the decrease in total cash and due from banks and federal
funds sold of $6.0 million over the first nine months of 2000.
Total net loans outstanding of $124.9 million have increased 7.3% since
December 31, 1999, which compares to an increase of .6% from December 1998 to
September 1999. Growth was concentrated primarily in commercial mortgages
(approximately $6.4 million) and home equity loans (approximately $930
thousand). Residential mortgage sales to the Federal National Mortgage
Association ("FNMA") for the first nine months of 1999 totaled $3.3 million
compared to $519 thousand for the first nine months of 2000. The Bank typically
sells residential mortgages to FNMA for the purpose of reducing exposure to the
rate risk inherent in long-term loans, while keeping the customer relationships
through servicing. In January 2000, the Bank introduced a residential mortgage
product which provides for bi-weekly payments. This substantially reduces the
life of the loans and these mortgages have been retained in the portfolio.
Total commercial loans outstanding at September 30, 2000 increased
approximately $10.9 million over the amount outstanding at September 30, 1999
and consumer loans increased approximately $3.1 million during that period. This
growth was concentrated primarily in commercial mortgages (approximately $8.0
million), new and increased usage on commercial lines of credit (approximately
$1.4 million) and home equity loans (approximately $2.1 million).
The securities portfolio increased 16.0% between December 31, 1999 and
September 30, 2000 versus an increase of 24.2% over the same time period last
year. Available funds continue to be invested in US government and agency
securities and tax-advantaged bonds issued by New York State municipalities and
school districts.
The annualized return on average assets ("ROAA") at September 30, 2000
was 1.21%. The ROAA at December 31, 1999 was 1.10%. The return on average equity
at September 30, 2000 was 12.46% versus 10.72% at December 31, 1999. The capital
to assets ratio of 11.20% at September 30, 2000 compares to 10.17% at December
31, 1999. Total assets have increased approximately $16.6 million or 8.4% since
December 31, 1999. Approximately $4.0 million of the increase in assets is
attributable to the acquisition of the M&W Group, Inc.
<PAGE> 12
PAGE 10
MATERIAL CHANGES IN THE RESULTS OF OPERATIONS
Net interest income for the nine month period ending September 30, 2000
increased 15.4% over the same nine month period in 1999. Interest paid on
deposits increased 27.7%. The increase reflects the impact of Federal Reserve
raising short term interest rates 175 basis points since June of last year. The
cost of short term borrowing was substantially higher, 32.1%, due to the fact
that the Repo Sweep accounts, which are considered borrowing, are now based on a
tiered rate structure with the primary users of this account qualifying for the
highest rate offered. Despite the increases in short- term rates by the Federal
Reserve, the Bank's net interest margin has been highly consistent. The Bank's
year-to-date net interest margin at September 30, 2000 was 4.57% as compared to
4.54% at September 30, 1999.
The year-to-date yield on average earning assets has increased to 8.03%
at September 30, 2000 from 7.69% at September 30, 1999. The yield on loans has
increased to 8.59% from 8.48% over that time period and the tax-equivalent yield
on federal funds and investments has increased from 6.25% to 6.98%.
Comparatively, the year-to-date cost of funds on interest bearing balances
increased from 3.72% at September 30, 1999 to 4.11% at September 30, 2000. This
reflects increases in short term rates on Time Deposits over $100,000 which are
immediately impacted by Federal Reserve actions. There have also been higher
balances maintained in the Repo Sweep accounts.
The year-to-date provision for loan losses was $220,000 through
September 30, 2000 versus $125,000 through the third quarter of 1999. Management
has increased the amount set aside for potential loan losses due to the
substantial increase in the size of the loan portfolio experienced over the past
two years. Management believes that the credit quality of the portfolio remains
high as supported by the fact that the charge-offs for the nine month period
ending September 2000 were $1,000 and $16,000 for the same period in September
1999.
Total non-interest expenses increased 14.8% in the first nine months of
2000. This compares to an increase of 17.8% in the first nine months of 1999.
All expense categories continue to be impacted by the branch expansion in West
Seneca. Salary and employee benefits increased 14.9% due to annual salary
adjustments and additional staffing. Two loan officer positions were filled and
an additional commercial loan officer was hired. A full-time officer was also
hired for ENB Associates Inc. Supplies are up 21.2% over the same time period in
1999 due in part to the new debit card program, supplies for the mass Y2K
mailing in January and the purchase of stationary with the Bank's new logo.
Advertising and public relations have decreased 19.5% compared to an increase of
43.8% over the same time period in 1999. Last year additional costs were
experienced as a result of the West Seneca branch expansion. FDIC assessments
have increased 103.5% due to new assessment rates which went into effect on
January 1, 2000. Miscellaneous other expenses increased 27.0% for the third
quarter of 2000 compared to the third quarter of 1999.
Net income through September 30, 2000 of $1,873,179 reflects an increase
of 24.4% over the first nine months of 1999. The effective combined tax rate for
the first nine months of 2000 was 26% compared to 27% for the first nine months
of 1999. The relatively low tax rates experienced in 2000 and 1999 demonstrate
the impact of increasing the Bank's investment in tax-advantaged municipal bonds
and the benefit realized from a favorable deferred tax position.
On March 11, 2000 ENB Associates Inc. a wholly-owned subsidiary of
Evans National Bank, began doing business. Through an agreement with O'Keefe
Shaw & Co. Inc., ENB Associates, Inc. provides customers with access to
non-deposit products, such as annuities and mutual funds.
ITEM 3 - QUANTATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS
The Company does not hold investments in instruments (i.e. such as
derivative financial or commodity instruments) that are considered to be subject
of any significant market risk.
The Company realizes income principally from the interest earned on
loans and investments. Loan volumes and yields, as well as the volume of and
rates on investments, deposits and borrowings, are affected by market interest
rate volatility.
<PAGE> 13
PART II - OTHER INFORMATION PAGE 11
---------------------------
ITEM 1. Legal Proceedings - None to report.
ITEM 2. Changes in Securities
Effective September 1, 2000, and subject to post closing
adjustments, the Company issued 60,651 shares of its common
stock, $.50 par value, to M&W Group, Inc. in consideration for
the acquisition of the assets, business and certain liabilities
of that insurance agency. The aggregate offering price of the
shares issued was $2,850,597. The issuance of stock was exempt
from registration pursuant to Section 4 (2) of the Securities
Act of 1933 and Rules 505 and 506 of Regulation D promulgated
thereunder. No underwriter was involved in the stock issuance.
ITEM 3. Defaults upon Senior Securities - None to report.
ITEM 4. Submission of Matters To a Vote of Security Holders--None
to report.
ITEM 5. Other Information
On September 19, 2000, the Board of directors declared a cash
dividend of $.27 per share payable on October 5, 2000 to
shareholders of record on September 21, 2000.
Effective September 1, 2000, the Bank completed its previously
announced acquisition of the assets, business and certain
liabilities of the M&W Group, Inc., a property and casualty
insurance agency.
ITEM 6. Exhibits and Reports on Form 8-K - None to Report.
The following Exhibits are filed as part of this Report:
EXHIBIT NO. DESCRIPTION PAGE
27 Financial Data Schedule 13
99 Press Release 14
<PAGE> 14
PAGE 12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed by the undersigned thereunto
duly authorized.
Evans Bancorp, Inc.
DATE
November 9, 2000 /s/ Richard M. Craig
------------------------------------------
Richard M. Craig
President and Chief Executive Officer
DATE
November 9, 2000 /s/ James Tilley
------------------------------------------
James Tilley
Senior Vice President
