Evans Bancorp Inc. (EVBN, Financial) filed Quarterly Report for the period ended 2010-09-30.
Evans Bancorp Inc. has a market cap of $58.7 million; its shares were traded at around $14 with a P/E ratio of 6.3 and P/S ratio of 1.3. The dividend yield of Evans Bancorp Inc. stocks is 2.8%. Evans Bancorp Inc. had an annual average earning growth of 1.6% over the past 10 years.
The rapid deterioration of the portfolio, the lack of strategic fit in the Companys community banking business model, and the sensitivity of direct financing leases to the economic environment led management to make the strategic decision in April 2009 to exit the national direct financing lease business and market the portfolio for sale. This decision resulted in the classification of the leasing portfolio as held-for-sale and the portfolio being marked to its market value at June 30, 2009. The mark-to-market adjustment was $7.2 million. At September 30, 2009, management determined to keep the lease portfolio, terminated its plans to actively market the portfolio for sale, and the portfolio was placed back into held-for-investment at the revised carrying amount as of June 30, 2009. The difference between the principal value and the carrying value, initially created by the mark-to-market adjustment at June 30, 2009, reduces over time as individual leases deteriorate, become uncollectible, and are written off. The allowance for lease losses was zero at June 30, 2009 when the portfolio was classified as held-for-sale and reported at its fair market value. With the portfolio classified as held-for-investment at September 30, 2010, the portfolio has been evaluated in accordance with the Companys normal credit review policies in determining the appropriate allowance for lease losses. During the third quarter of 2010, $0.3 million in leases were deemed uncollectible and the difference between the principal value and carrying value of the leases declined from $2.4 million to $2.1 million. This is a decline in the quarterly write-offs from $0.6 million in the second quarter of 2010 and $1.1 million in the first quarter of 2010. Non-performing leases of $2.4 million at September 30, 2010 have declined from $2.9 million at December 31, 2009, but remained flat compared with $2.4 million at June 30, 2010. Leases still accruing but delinquent 31 days or more were $0.4 million at September 30, 2010, an increase from $0.2 million at June 30, 2010 and $0.3 million at December 31, 2009. With charge-offs continuing to reduce the remaining mark
Total non-performing loans and leases, defined as accruing loans and leases greater than 90 days past due and non-accrual loans and leases, totaled $9.9 million, or 1.96% of total loans and leases outstanding, at September 30, 2010, compared with $11.1 million, or 2.20% of total loans and leases outstanding at June 30, 2010 and $12.9 million, or 2.64% at December 31, 2009. In the third quarter, two loans totaling $1.4 million were removed from the 90 days past due and still accruing category. One of the loans, for $0.8 million, was extended under normal terms after administrative delays caused the loan to go past its original maturity date, and is no longer categorized as a non-performing loan. The other loan, for $0.6 million, was a construction loan and was put on nonaccrual status and is still considered a non-performing loan. Most of the rest of the decline in nonperforming loans in the quarter ($0.2 million) is attributable to charge-offs of previously non-performing loans.
For the three and nine month periods ended September 30, 2010, gross interest income that would have been reported on non-accruing loans and leases had they been current was $186 thousand and $506 thousand, respectively. For the three and nine month periods ended September 30, 2009, gross interest income that would have been reported on non-accruing loans and leases had they been current was $70 thousand and $287 thousand, respectively. The amount has increased year-over-year to the higher level of non-accruing loans and leases. There was $13 thousand and $53 thousand of interest income on non-accruing loans and leases included in net income for the three and nine month periods ended September 30, 2010. There was $71 thousand and $200 thousand of interest income on non-accruing loans and leases included in net income for the three and nine month periods ended September 30, 2009. This amount has decreased as more loans and leases were added to non-accruing status in the prior year than in the current year, resulting in more loans and leases in 2009 that earned income prior to be putting in non-accruing status
The Company had $1.6 million in loans and leases that were restructured in a troubled debt restructuring at September 30, 2010, compared with $1.9 million at June 30, 2010 and $2.2 million at December 31, 2009. $0.5 million, $0.6 million, and $0.9 million of the troubled debt restructurings at September 30, 2010, June 30, 2010, and December 31, 2009, respectively, were in non-accrual. All of the restructurings were undertaken in an effort to
Total securities were $99.3 million at September 30, 2010, reflecting a $2.1 million, or 2.16%, increase from $97.2 million at June 30, 2010 and a $20.3 million, or 25.7%, increase from $79.0 million at December 31, 2009. In the second quarter of 2010, the Company raised net proceeds of $13.4 million through a registered offering of shares of its common stock and experienced deposit growth that outpaced loan growth. With cash and interest-bearing deposits at correspondent banks paying close to zero in this historically low interest rate environment, management purchased investment securities of various types and maturities to better utilize the excess capital. Compared with December 31, 2009, as of September 30, 2010, the Company added $7.7 million in U.S. government-sponsored agency bonds, $0.1 million in tax-advantaged municipal bonds, and $14.6 million in U.S. government-sponsored mortgage-backed securities. Securities and interest-bearing deposits at correspondent banks made up 16.9% of the Banks total average interest earning assets in the third quarter of 2010, compared with 15.1% in the second quarter of 2010 and 15.6% in the third quarter of 2009.
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Evans Bancorp Inc. has a market cap of $58.7 million; its shares were traded at around $14 with a P/E ratio of 6.3 and P/S ratio of 1.3. The dividend yield of Evans Bancorp Inc. stocks is 2.8%. Evans Bancorp Inc. had an annual average earning growth of 1.6% over the past 10 years.
Highlight of Business Operations:
The Bank sells these fixed rate residential mortgages to FNMA, while maintaining the servicing rights for those mortgages. During the three month period ended September 30, 2010, the Bank sold mortgages to FNMA totaling $2.8 million, as compared with $4.0 million sold during the three month period ended September 30, 2009. During the nine month period ended September 30, 2010, the Bank sold mortgages to FNMA totaling $7.6 million, as compared with $12.6 million during the nine month period ended September 30, 2009. Sales to FNMA decreased due to a decline in originations. At September 30, 2010, the Bank had a loan servicing portfolio principal balance of $41.3 million upon which it earns servicing fees, as compared with $40.3 million at June 30, 2010 and $37.4 million at December 31, 2009. The value of the mortgage servicing rights for that portfolio was $0.3 million at September 30, 2010, compared with $0.4 million at June 30, 2010 and $0.3 million at December 31, 2009. The value of the mortgage servicing rights has not increased in perfect correlation to the increase in the size of the servicing portfolio because the historic low interest rate environment portends more prepayments and refinancing of loans in the servicing portfolio with higher coupon rates, reducing the amount of time the Company has to earn servicing fees from FNMA. Residential mortgage loans held-for-sale were $0.7 million at September 30, 2010, compared withThe rapid deterioration of the portfolio, the lack of strategic fit in the Companys community banking business model, and the sensitivity of direct financing leases to the economic environment led management to make the strategic decision in April 2009 to exit the national direct financing lease business and market the portfolio for sale. This decision resulted in the classification of the leasing portfolio as held-for-sale and the portfolio being marked to its market value at June 30, 2009. The mark-to-market adjustment was $7.2 million. At September 30, 2009, management determined to keep the lease portfolio, terminated its plans to actively market the portfolio for sale, and the portfolio was placed back into held-for-investment at the revised carrying amount as of June 30, 2009. The difference between the principal value and the carrying value, initially created by the mark-to-market adjustment at June 30, 2009, reduces over time as individual leases deteriorate, become uncollectible, and are written off. The allowance for lease losses was zero at June 30, 2009 when the portfolio was classified as held-for-sale and reported at its fair market value. With the portfolio classified as held-for-investment at September 30, 2010, the portfolio has been evaluated in accordance with the Companys normal credit review policies in determining the appropriate allowance for lease losses. During the third quarter of 2010, $0.3 million in leases were deemed uncollectible and the difference between the principal value and carrying value of the leases declined from $2.4 million to $2.1 million. This is a decline in the quarterly write-offs from $0.6 million in the second quarter of 2010 and $1.1 million in the first quarter of 2010. Non-performing leases of $2.4 million at September 30, 2010 have declined from $2.9 million at December 31, 2009, but remained flat compared with $2.4 million at June 30, 2010. Leases still accruing but delinquent 31 days or more were $0.4 million at September 30, 2010, an increase from $0.2 million at June 30, 2010 and $0.3 million at December 31, 2009. With charge-offs continuing to reduce the remaining mark
Total non-performing loans and leases, defined as accruing loans and leases greater than 90 days past due and non-accrual loans and leases, totaled $9.9 million, or 1.96% of total loans and leases outstanding, at September 30, 2010, compared with $11.1 million, or 2.20% of total loans and leases outstanding at June 30, 2010 and $12.9 million, or 2.64% at December 31, 2009. In the third quarter, two loans totaling $1.4 million were removed from the 90 days past due and still accruing category. One of the loans, for $0.8 million, was extended under normal terms after administrative delays caused the loan to go past its original maturity date, and is no longer categorized as a non-performing loan. The other loan, for $0.6 million, was a construction loan and was put on nonaccrual status and is still considered a non-performing loan. Most of the rest of the decline in nonperforming loans in the quarter ($0.2 million) is attributable to charge-offs of previously non-performing loans.
For the three and nine month periods ended September 30, 2010, gross interest income that would have been reported on non-accruing loans and leases had they been current was $186 thousand and $506 thousand, respectively. For the three and nine month periods ended September 30, 2009, gross interest income that would have been reported on non-accruing loans and leases had they been current was $70 thousand and $287 thousand, respectively. The amount has increased year-over-year to the higher level of non-accruing loans and leases. There was $13 thousand and $53 thousand of interest income on non-accruing loans and leases included in net income for the three and nine month periods ended September 30, 2010. There was $71 thousand and $200 thousand of interest income on non-accruing loans and leases included in net income for the three and nine month periods ended September 30, 2009. This amount has decreased as more loans and leases were added to non-accruing status in the prior year than in the current year, resulting in more loans and leases in 2009 that earned income prior to be putting in non-accruing status
The Company had $1.6 million in loans and leases that were restructured in a troubled debt restructuring at September 30, 2010, compared with $1.9 million at June 30, 2010 and $2.2 million at December 31, 2009. $0.5 million, $0.6 million, and $0.9 million of the troubled debt restructurings at September 30, 2010, June 30, 2010, and December 31, 2009, respectively, were in non-accrual. All of the restructurings were undertaken in an effort to
Total securities were $99.3 million at September 30, 2010, reflecting a $2.1 million, or 2.16%, increase from $97.2 million at June 30, 2010 and a $20.3 million, or 25.7%, increase from $79.0 million at December 31, 2009. In the second quarter of 2010, the Company raised net proceeds of $13.4 million through a registered offering of shares of its common stock and experienced deposit growth that outpaced loan growth. With cash and interest-bearing deposits at correspondent banks paying close to zero in this historically low interest rate environment, management purchased investment securities of various types and maturities to better utilize the excess capital. Compared with December 31, 2009, as of September 30, 2010, the Company added $7.7 million in U.S. government-sponsored agency bonds, $0.1 million in tax-advantaged municipal bonds, and $14.6 million in U.S. government-sponsored mortgage-backed securities. Securities and interest-bearing deposits at correspondent banks made up 16.9% of the Banks total average interest earning assets in the third quarter of 2010, compared with 15.1% in the second quarter of 2010 and 15.6% in the third quarter of 2009.
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