Bucking industry trends, Evans Bancorp said Thursday that third-quarter profits rose 10.4 percent, as the Southtowns bank added loans and checking accounts, and grew fees.
The Angola-based parent of Evans National Bank reported net income of $1.42 million, or 52 cents per share, up from $1.28 million or 47 cents, a year ago.
That includes gains and losses from selling investment securities as part of a restructuring of the balance sheet to improve revenues. Not counting those one-time costs, net operating income rose 16.7 percent to $1.41 million, or 52 cents, from $1.21 million, or 44 cents.
Total revenues increased 12 percent to $7.1 million, as income from both lending and other sources rose. In particular, executives cited the bank's success at growing its direct leasing business and its low-cost demand deposits, while cutting higher-cost municipal deposits to reduce its cost of funds.
"We're pretty proud and happy to be able to report this," said President and CEO David Nasca. "We're capturing some business and growing in light of a flat market, which has us very enthused. We're excited about the opportunities that we have."
Net interest income from taking deposits and making loans rose 13.7 percent to $4.24 million, as interest earned rose 3.9 percent while interest paid fell 7.9 percent. Evans' profit margin widened sharply, as it shifts to higher-yielding assets and lower-cost funds. It set aside just $283,000 for loan losses, down 7.2 percent from a year ago.
Total loans grew 10.4 percent to $303.8 million, led by an 11.3 percent gain in commercial loans and leases. Consumer loans rose 7.9 percent, led by real estate. Deposits fell 3.3 percent to $347.2 million.
Fee income rose 8.9 percent to $2.88 million, representing 40 percent of revenues. Insurance revenues rose 15.3 percent because of new accounts and renewals, as well as the acquisition in the summer of the L.R. Frank Agency in Williamsville. Deposit fees rose 11.8 percent.
Expenses rose 12.7 percent to $4.86 million, mostly because of staff and occupancy costs from a new branch in Tonawanda. In addition, Evans outsources investor relations, and has been working with site-selection consultants to evaluate its branch network and potential new locations in the North Towns. The bank received regulatory approval for a new office on Elmwood Avenue at Delavan Avenue, in Elmwood Village.