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Evans Bancorp said Tuesday that profits for the third quarter rose 6.4 percent, as the bank sold more savings accounts, insurance policies and consumer loans, but also used investments to overcome higher salaries and costs from moving to a new administrative office.

The Angola-based parent ofEvans National Bank, with nine branches, reported earnings of $1.1 million, or 43 cents per share, compared with $1 million, or 41 cents per share, a year ago.

"The company's performance during the first three quarters of 2004 has been very solid," said president and chief executive James Tilley. "We believe we are making significant progress at executing our growth strategy."

Total revenues increased 19 percent to $5.3 million, driven by a 29 percent rise in net interest income to $3.2 million because of a jump in investment securities and a smaller increase in loans. Total net loans were $203.8 million, up 9.9 percent from a year ago. During the quarter, commercial loans increased by $1.3 million, while consumer loans rose $4.3 million. Asset quality remained strong.

Deposits rose 25 percent to $333 million, led by a 59 percent jump in savings accounts to $168 million as the bank introduced a retail savings account during the quarter with a rate like a money-market product. That alone brought in $20 million. The bank also borrowed $30 million from the Federal Home Loan Bank of New York and used the added deposits and borrowings to grow its investment portfolio by 49 percent. That made up for the slack lending activity.

Fee income was flat at $2 million, as a 27.4 percent increase in insurance fees resulting from two acquisitions in January was offset by a $100,000 drop in loan fees. Operating expenses rose 18.6 percent to $3.7 million because of $200,000 in salaries related to growth and bonuses and another $200,000 from moving offices to Hamburg.

Total assets increased 9.8 percent to $429.4 million. The company said on Oct. 1 that it had purchased Ulrich & Co., the largest independent insurance agency in Niagara County, as it seeks to grow that fee business. It also raised $11 million by selling securities that regulators count toward the bank's capital requirements.

Evans shares closed at $25.55 Tuesday, up $1.53.