Evans Bancorp Inc. (NYSE MKT:EVBN) Q3 2018 Earnings Conference Call Transcript

Oct 25, 2018 • 04:45 pm ET


Evans Bancorp Inc. (NYSE MKT:EVBN) Q3 2018 Earnings Conference Call Transcript


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Greetings, and welcome to the Evans Bancorp Third Quarter 2018 Conference Call. At this time all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. (Operator Instructions) As a reminder, this conference is being recorded.

It is now my pleasure to introduce Craig Mychajluk, IR for Evans Bancorp. Please go ahead, Craig.

Craig Mychajluk

Thank you, and good afternoon, everyone. We certainly appreciate you taking the time to join us and your interest in Evans Bancorp. On the call today, we have David Nasca, President and CEO; and John Connerton, CFO. David and John will review our results for the third quarter, and then we'll open it up for questions. You should have a copy of the financial results that were released today after the market close. If not, you can access it on our website at evansbank.com.

(Forward-Looking Cautionary Statements)

So with that, let me turn it over to David to begin.

David Nasca

Thank you, Craig, and good afternoon, everyone. As you've seen today, we reported third quarter 2018 results with net income of $4.8 million, a 29% increase; and $0.97 per diluted common share, which was up from $0.77 in last year's third quarter. These results were driven by higher net interest income, which increased 9% and higher fee income, particularly in our insurance business.

We're pleased to continue to deliver positive results to our shareholders, while providing sophisticated and responsive solutions for clients and living our values as a long-tenured corporate citizen in the Western Europe market. In this role as a community financial institution, we're making a more significant financial commitment to the betterment of the markets we serve.

Our loan portfolio continued to expand this quarter with an 11% annualized growth rate, in line with our recent history of consistent double-digit loan growth. This commercial loan growth continues to be the catalyst for our overall strong performance. As noted in last quarter's call, we closed on the acquisition of the Richardson & Stout Insurance Agency on July 1st. This strategic acquisition significantly deepens The Evans Agency's leadership bench, broadens its geographic footprint, leverages the two agencies' complementary products and services and provides a bigger platform through which to further scale our insurance business. Integration of our newest operation has been seamless to both clients and employees.

The addition of R&S led to the biggest revenue quarter in the agency's history at $3.2 million, about $800,000 of which is attributable to R&S. In other corporate developments, we celebrated the opening of our first business and relationship center in downtown Baltimore (ph) yesterday with employees, valued clients and dignitaries. This location with its new format will be a key building block in the evolution of our delivery strategy. As funding becomes more important due to the current interest rate environment and our strong asset growth, we believe we are positioning the bank to succeed in attracting commercial deposits and additional clients.

In discussing funding, our results this quarter were impacted by the industry-wide trend of rising