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Evans Bank stands firm in legal fight with the state

Evans Bancorp isn’t backing down in its legal battle with State Attorney General Eric T. Schneiderman.

President and CEO David J. Nasca defended the bank’s lending record at its annual meeting Thursday in Hamburg. It was Evans’ first annual meeting since Schneiderman filed a lawsuit in September in U.S. District Court accusing the bank of redlining certain Buffalo neighborhoods. Nasca, in comments during and after the meeting, rejected the allegations, saying Evans has invested more than $25 million in the East Side since 2010.

Evans and Schneiderman’s office met for a mediation session in January at the court’s direction. They haven’t met since but have continued to talk and share documents, Nasca said.

“I’ve always believed we were a target of opportunity. I don’t think they feel hugely strong about their case; they would argue that,” he said. “Their whole feeling on this, I believe, was an opportunity to make a statement. We continue to work with them. I think we’re having productive dialogue.”

Nasca told shareholders that the bank is “very strongly vested in the strength of our community. We therefore reject the premise that we have avoided serving any area of our market.” He said the bank expects to “vigorously challenge” the accusations in court. “It is not in our culture or DNA as a community bank to exclude anyone,” he said.

The bank has set aside $1 million to deal with the case. Nicholas Benson, a spokesman for Schneiderman, said Thursday he had no update to provide on the case.

Evans had record-high net income of $8.2 million in 2014, marking the third time in the last five years that it posted a record. In the first quarter of this year, the bank’s assets reached the $900 million mark for the first time in its history.

Nasca highlighted Evans’ financing role in projects such as the Curtis Hotel and 550 Seneca St. in Buffalo, and companies such as Crescent Manufacturing in North Collins and Schwabel Manufacturing in the Town of Tonawanda. Nasca said that those examples “reflect our participation in the revitalization taking place in the region.”

Evans’ deposits in Erie County grew by 111 percent from 2006 to 2014, but the bank still had market share of only 1.9 percent, compared with market leader M&T’s 53 percent. “Deposit growth is one key to our current customer-acquisition strategy, and our rate of growth has accelerated during the past quarter,” Nasca said. The bank is also taking steps to bolster its revenues while keeping its expenses in check, he said.

Meanwhile, Evans is on track to reopen its Lancaster branch at 4979 Transit Road in late summer, Nasca said. That location was destroyed by a fire last December. The bank is operating a temporary branch in a trailer on the property while it rebuilds the permanent branch.

The rebuilt location will be a “hybrid,” with features of a typical branch along with technology upgrades, said Valerie A. Muka, vice president and alternative delivery channels manager. “We are bringing on technology, but we recognize that we have customers that are used to working with us in the traditional fashion.”

The branch will remove the traditional teller line while installing two interactive ATMs, allowing a customer to talk to an Evans employee who is based at another site, even past regular branch hours. The location will also have “universal bankers” who can handle multiple tasks, Nasca said. “They will be able to be salespeople as well as tellers.”

The rebuilt branch will also replace teller cash drawers with cash recycling machines, Nasca said. With that technology, employees “just have to punch in the amount that is being deposited or withdrawn, there’s no balancing, it spits out the cash like an ATM, and they hand it over, and it’s with a receipt.”

Evans will also move its Lockport insurance office from 135 Main St. to 5688 Transit Road within a few months, into a former KeyBank branch, Nasca said. Evans does not own either of the properties.

The building will be a “better location on Transit Road,” Nasca said, “with more-efficient space to meet our needs, expand our business and potentially deliver additional financial services in the future.”