Evans Bancorp, Inc. reported its financial results for the nine-month period ending September 30, 2024, highlighting significant developments in its operations and financial performance. The company, which operates through its subsidiaries including Evans Bank and Evans National Financial Services, has entered into a merger agreement with NBT Bancorp Inc. on September 9, 2024. Under this agreement, each share of Evans common stock will convert to 0.91 shares of NBT common stock, with the merger expected to close in the second quarter of 2025, pending regulatory and shareholder approvals.

For the nine months ended September 30, 2024, Evans Bancorp reported net income of $8.2 million, or $1.49 per diluted share, a decrease from $14.4 million, or $2.62 per diluted share, in the same period of 2023. The decline in profitability is attributed to a reduction in non-interest income, which fell to $7.7 million from $14.4 million year-over-year, primarily due to the sale of The Evans Agency, LLC (TEA) in November 2023, which ceased its insurance business operations.

Net interest income for the nine-month period was $43.3 million, down from $47.3 million in the prior year. The provision for credit losses increased to $42.1 million, reflecting loan growth and slower prepayment rates. The allowance for credit losses stood at $23.1 million, representing 1.29% of total loans, slightly up from 1.28% at the end of 2023.

Total gross loans increased to $1.8 billion as of September 30, 2024, compared to $1.7 billion at the end of 2023. The composition of the loan portfolio showed growth in commercial and industrial loans, which rose to $256.3 million, a 15% increase from December 31, 2023. Non-performing loans also increased to $33 million, or 1.82% of total loans, up from $27 million at the end of 2023.

Deposits grew by 11% to $1.9 billion, driven by increases in demand deposits and brokered time deposits. The company reported a net interest margin of 2.76% for the first nine months of 2024, down from 3.12% in the same period of 2023, reflecting rising costs of interest-bearing liabilities.

In terms of asset management, the total fair value of available-for-sale securities decreased to $271.2 million as of September 30, 2024, from $275.7 million at the end of 2023. The company continues to manage its liquidity effectively, with net short-term liquidity increasing to $351 million.

Overall, Evans Bancorp's financial performance reflects the impact of strategic decisions, including the merger agreement and the sale of its insurance business, alongside challenges in maintaining profitability amid changing market conditions.