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  Evans Bank Reaps Rewards from Communities Served
Evans Bank Reaps Rewards from Communities Served

Following back-to-back record years, and two national awards, Evans Bank is on a roll – and on pace for yet another record.
Not an easy task in the highly competitive western New York banking environment. And unlike some of its larger competitors, which have pursued a merger and acquisition strategy, Evans’ success has been largely home grown.
“It comes back to our people and culture,” said David J. Nasca, president and CEO since December 2006. “Banking is commodity-driven. It comes back to execution and people. We execute well and have the right people in the right places.”
Headquartered in Hamburg, Evans Bank is a federally chartered commercial bank with $816 million in assets and 13 branches in four counties. Its parent company is Evans Bancorp Inc.
For the second quarter of 2013, the most recent earnings statement available, Evans reported its net earnings increased 28.7 percent to $1.9 million.
In 2011, Evans reported a then-record $6.2 million in net income for the year. It topped that record the very next year with $8.3 million in net income. Through the first six months of 2013, Evans was on pace to equal or better its 2012 record.
Evans’ performance has not gone unnoticed. In September 2012, the investment banking firm Sandler O’Neill and Partners named Evans Bank one of 25 top performing banks and thrifts with market capitalization under $2 billion. Evans was selected from a pool of 461 financial institutions nationwide.
In July 2013, Evans was recognized among the top 10 percent of U.S. community banks in the first annual Raymond James Community Bankers Cup. The Raymond James Community Bankers Cup identified the top 10 percent of community banks with total assets between $500 million and $10 billion, a pool of more than 300 community banks nationwide.
Evans’ strong performance is due in part to a diversified revenue strategy. In 2000, it began purchasing several insurance related businesses, which form the Evans Agency, Inc. The Evans Agency includes a financial services division that offers access to investments and securities. Non-interest income now accounts for 31.5 percent of total revenue.
“That’s a pretty attractive level compared to the rest of the industry,” said Damon DelMonte, an analyst at Keefe, Bruyette & Woods Inc. “It makes them less dependant on spread income, which has come under pressure because of the low interest environment and asset yield.”
Evans also has an attractively low percentage of nonperforming loans – 1.65 percent of total assets as of June 2013.
“We are appropriately conservative,” Nasca said. “That being said, what we’re about is really knowing our customers and their needs so we can provide business solutions and be that trusted advisor.”
In the second quarter of 2013, loans increased 2.2 percent over the prior year period, and 3.5 percent from the trailing first quarter to $607.4 million. The bank’s annualized loan growth rate was 13.8 percent.

Market Penetration
The bank’s lending is in three main areas: commercial real estate, commercial industrial and consumer lending.
“We do a bunch of things for businesses – employee benefits, cash management,” Nasca said. “We have a nice set of complimentary products and work holistically with customers to meet a significant amount of their needs. It’s resulted in strong market penetration.”
Over the last five years, Nasca said Evans’ loan growth has averaged about 12 to 15 percent annually, and its deposit growth about 5 to 8 percent.
“That’s still only about two percent in deposit penetration,” he said. “There’s a lot of opportunity to continue our growth.”
Nasca noted that “a lot of the low hanging acquisition fruit has already been picked in western New York,” meaning growth now must come from in house.
“Most of the acquisition work is behind us,” he said. “Organic is the way we have to grow now.”
DelMonte agreed. “There’s definitely been a lot of shakeup and market disruption in western New York. It’s a good opportunity for smaller banks to take market share.”
Nasca said Evans’ team and products makes the bank well-positioned to be the beneficiary of this market disruption.
“We know how to win business organically. That’s how we’ve gone at it because of the lack of acquisition opportunities.”
But large or small, he noted the current and future environment for banking institutions is filled with challenges and uncertainty. In the government’s efforts to rein in “too big to fail” banks, Nasca said the increased regulation has “hit everybody. “
“In our little community bank, it’s increased our compliance costs 500 percent, and we believe there’s more to come,” he said. “It’s created uncertainty and confusion, number one, and number two, regulatory creep. It’s not a good environment to be aggressive in.”
But so far, Evans seems to have found the right formula.■


Posted on Wednesday, November 27, 2013 (Archive on Tuesday, February 25, 2014)
Posted by Scott  Contributed by Scott
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