e ans bancorp inc evans bancorp, inc.renshaw2010.pdfe ans bancorp inc rodman & renshaw...

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E ans Bancorp IncE ans Bancorp IncRodman & Renshaw Conference

Community & Regional Bank Track Community & Regional Bank Track

Evans Bancorp, Inc.Evans Bancorp, Inc.

September 15, 2010

David J. Nasca Gary A. Kajtoch

© 2009 by Evans Bancorp

David J. NascaPresident & CEO

Gary A. KajtochExecutive Vice President & CFO

NASDAQ: EVBN

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Safe Harbor StatementSafe Harbor Statement

This presentation includes "forward looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements concerning future business, revenue and earnings. These statements are not historical facts or guarantees of future performance, events or results. There are risks, uncertainties and other factors that could cause the actual results of the Company toother factors that could cause the actual results of the Company to differ materially from the results expressed or implied by such forward-looking statements. Information on factors that could affect the Company's business and results is discussed in the Company's periodic reports filed with the Securities and Exchange Commission. Forward looking statements speak only as of the date they are made. The Company undertakes no obligation to publicly update or revise forward looking information whether as a

© 2010 by Evans Bancorp2

publicly update or revise forward looking information, whether as a result of new, updated information, future events or otherwise.

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C it b d fi i l i

Evans Bancorp, Inc. Evans Bancorp, Inc. (NASDAQ: EVBN)(NASDAQ: EVBN)

Community-based financial services company

Provides banking, insurance and investment services in Western New York

Relationship-focused organization, serves as a trusted advisor

Easy to interact with and an excellent work environment for top talent

Recent Price $12.76Market Capitalization $52.3 millionTotal Shares Outstanding 4.1 millionO hi I id 4 8%

Dividend Yield 3.13%Total Assets $658.0 millionTotal Loans (excluding Leases) $480.3 millionT l D i $535 6 illi

Evans Established: 1920 Bank Branches: 13 Insurance Agency Locations: 14


Ownership – Insider 4.8%Institutional 30.3%

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Total Deposits $535.6 millionTotal Common Equity $62.9 million

Note: Market data as of 9/01/10; financial data as of June 30, 2010; ownership as of June 30, 2010 filings

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Opportunity for GrowthOpportunity for Growth

2009 Market Share by Deposits

Buffalo, NY

Evans Bank Branch

The Evans Agency Office

y p$32.7B Total Deposits

HSBC38 1%

Evans1.4%

Citizens

Bank of America3.4%

All Others2.7%

38.1%

M&T29.4%Key Bank

9.1%

First Niagara11.2%

4.7%

© 2010 by Evans BancorpSource: FDIC, as of June 30, 2009

4Source: FDIC, as of June 30, 2009

• Over 16,000 households• Core business growth

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Comprehensive Financial ServicesComprehensive Financial Services

17%

Diversified Revenue Sources

$37.7 million

• Q2 2010 net interest income expanded 14% over prior year period due to core loan performance and reduced interest expense

– $24.2 mm in Q2 2010 TTM revenueQ2 2010 t i t t i t 4 21%

64%

19%

Net Interest Income

Insurance & Investment Services Fee Income

• Significant insurance agency presence in WNY

– $1.6 mm in Q2 2010 revenue– 14 locations; 7 agency acquisitions since

2004

– Q2 2010 net interest margin at 4.21%

Insurance & Investment Services Fee Income

Other Non-interest Income2004


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Experienced Management TeamExperienced Management TeamDavid NascaPresident and

Over 26 years experience with 11 at First Niagara Financial Group in several leadership roles such as bank president, treasurer and executive vice

id t f t t i l i Si ifi t i i M&A d t ilChief Executive Officer

Gary KajtochExecutive Vice President andChief Financial Officer

Cynthia Rich Executive Vice President,Operational Excellence and Credit

president of strategic planning. Significant experience in M&A and retail banking.

Over 20 years financial experience in the banking industry, with 17 years in the finance and treasury divisions of M&T Bank.

Over 20 years at M&T Bank in the retail, operations, marketing and finance areas.

Robert Miller CLU, CPCU Executive Vice President, Sales and Customer Experience /President, The Evans Agency

John EagletonVice President, Commercial Loan Officer

Michael Bonito

Over 29 years of insurance agency experience, 7 at TEA. Experience includes agency ownership and production, sales management, marketing, M&A and planning.

Over 20 years in credit underwriting and loan originations with small, middle market and large corporate clients and developers at Chase Manhattan, Key Bank, Evans Bank, GE Capital and GMAC.

Over 25 years experience in mortgage lending. 14 years experience as


Michael BonitoVice President,Manager of Consumer Lending

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Over 25 years experience in mortgage lending. 14 years experience as President, CEO and owner of Multisource Funding, Inc. Worked with Empire of America Realty Credit Corp and Goldome Credit Corp. Past president of the NYS Mortgage Brokers Association.

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Evans’ Strategy for GrowthEvans’ Strategy for Growth

• +50% over 4 years in a shrinking marketI ti lO i G th • Incentive plans

• Focus on customer experienceOrganic Growth

• Management restructure• Advancing automation and use of technologyScalable

Organization• Raised $13.4 million in net proceeds

S t th d id fl ibilitC it l R i • Supports growth and provides flexibilityCapital Raise

• Strong CRE business• Strengthening focus on C&I lending• Developing complementary products (e.g., Cash &Treasury Mgt)

Commercial Portfolio

• Continue to drive name awarenessI l d l d i d ($24 illi iB di


• Implemented several new deposit products ($24 million in new deposits)Branding

• Training & leadership development• Identify top-tier candidates• Metrics oriented accountability

Talent Management

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Distribution StrategyDistribution Strategy

NY

De novo expansionReviewing potential sites –

3 to 5 branches

Strategic Acquisitions FDIC i t d i iti f

OH

PA

FDIC-assisted acquisition of Waterford Village Bank


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Financial Highlights g gand Results


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Expanding Asset BaseExpanding Asset Base

Expanded asset base through organic loan growth and acquisition

$619.4$658.0

($ in millions)

p g g g qIncreased future earnings power potentialRestructured balance sheet in 2007; 17.2% CAGR (2007 – Q2 10)

9.8% CAGR (2006 –Q2 10)9.8% CAGR (2006 –Q2 10)

$473.9$442.7

$529.0($,in millions)

2006 2007 2008 2009 Q2 10

10 © 2010 by Evans Bancorp

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Core Banking: Loan Growth*Core Banking: Loan Growth*

Commercial loans and acquisition drove 31% growth in 2009

$458.1$480.3

q gHigh quality in-market commercial real estate loansCapturing strong credits from larger banksSupports core business strategy

19.5% CAGR (2006 –Q2 10)19.5% CAGR (2006 –Q2 10)

$257.4 $279.0

$349.1($, in millions)


* Excludes National Lease Portfolio

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2006 2007 2008 2009 Q2 10

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Total Loan and Lease

Diverse Loan and Lease PortfolioDiverse Loan and Lease Portfolio

9.0%

0.3%1.2%

ota oa a d easePortfolio

$503.0 million

22%13% 4%

Commercial Loans

$335.7 million

66.7%

4.5%

18.2%

22%

42%

18%

Owner occupied CRE


Per June 30, 2010

Commerical Direct Finance Leases1-4 Family Mortgage Consumer Home EquityConsumer Other Other

Non-owner occupied CREC&IMulti-familyConstruction / Land Development

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Asset QualityAsset Quality

NPAs to Total Loan + OREO

2.65% 2.20%2 00%2.50%3.00%3.50%4.00%

1.79% 1 55%

0.24% 0.22%0.89%

0.00%0.50%1.00%1.50%2.00%

2006 2007 2008 2009 Q2 10EVBN (GAAP)Banks < $1 Billion in Assets*

1.55%

EVBN without ENL EVBN without ENL & WVB


* Peer data per SNLENL- Evans National Leasing WVB- Waterford Village Bank (FDIC assisted acquisition)

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National Leasing PortfolioNational Leasing PortfolioNon-performing leases Leases

$40.92 $36.22 $31.49 $26.70$22.67

Portfolio StatusHigh water mark (12/31/08) : $58.6 millionNet lease charge-offs (Q2 09): $7.7 million*

$2.15 $2.82 $2.91 $2.89 $2.45

Q2 09 Q3 09 Q4 09 Q1 10 Q2 10

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Net lease charge offs (Q2 09): $7.7 millionBook value (6/30/10): $22.7 million (4.5% of total loan and lease portfolio)Cushion**: $3.2 millionCurrent run down rate: $1.4 million per month (approximate)

*Lease portfolio was classified as held-for-sale at June 30, 2009, resulting in a mark-to-market adjustment and actual charge-offs of $7.7 million** Remaining mark plus allowance for lease losses


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Asset QualityAsset QualityAllowance for Loan Loss / Non-Accruals

Q2 2010Q2 2010

91.7%

113.8% 118.3%

66 7%

Current Loan Allowance Ratio :

1.65%

Current Loan Allowance Ratio :

1.65%

66.7%


EVBN (GAAP) EVBN without ENL EVBN without ENL & WVB Banks<$1B

* Peer data per SNLENL- Evans National Leasing WVB- Waterford Village Bank (FDIC assisted acquisition)

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Q2 10 Non-Performing Loans by Portfolio*

Asset QualityAsset Quality

$2.61 $2.78

$1.93

($, in millions) Core Non-Performing Loans: $5.45WVB Non-Performing Loans: $3.16Total Non-Performing Loans: $8.63Total Loan Portfolio: $503.0 million

Core Non-Performing Loans: $5.45WVB Non-Performing Loans: $3.16Total Non-Performing Loans: $8.63Total Loan Portfolio: $503.0 million

$0.83

$0.24 $0.23

Residential 1-4 family real estate

Commercial real estate

Construction Home equity Commercial loans

Consumer installment loans


* Excludes National Lease Portfolio

NPL Ratios by Portfolio

1.03% 1.01% 10.48% 0.53% 3.11% 2.89%

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Low Cost Core DepositsLow Cost Core Deposits23.6% increase in 2009 on strong growth in regular savings, demand deposits and acquisition

$499.5$535.612.4% CAGR

(2006 –Q2 10)12.4% CAGR (2006 –Q2 10)

and acquisition2009 Peer Comparison: EVBN up 23.6% vs. Banks < $1 billion up 11.2%*Q2 10 deposit composition: Savings & Money Market: 44.7%; Time Deposits: 27.4%; Demand & NOW: 22.7%; Municipal Money Market: 5.2%

$355.7$325.8


2006 2007 2008 2009 Q2 10


* Peer data per SNL

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Strong Margins and Revenue GrowthStrong Margins and Revenue Growth

Net Interest Margin Comparison Revenue

$2.4 $3.5$4.6

$3.5 $2.211.1% CAGR (2006 –Q210 TTM)

3.61%

4.21%

Net Interest Margin Comparison Revenue

$36.0$30.9

$27.8$25.6

4.14%**


$23.2 $24.3 $26.3$32.5 $34.8

2006 2007* 2008 2009** Q210 TTM**

Leasing Revenue EVBN without Leases

Banks<$1B EVBN

Q2 2010


* Excludes $2.3 million loss on sale of securities associated with balance sheet restructuring in June 2007.

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** EVBN without Leases** Excludes $0.7 million gain on bargain purchase.

* Peer data per SNL

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Fee income less rate sensitive

NonNon--Interest Interest IncomeIncome

$13.4 $13.5

Capitalize on relationship managementInsurance 53% of Q2 10 TTM non-interest incomeFocusing on growing commercial lines

6.6% CAGR (2006 – Q210 TTM)6.6% CAGR (2006 – Q210 TTM)

(in millions)

$10.8 $11.1$11.7

(in millions)


2006 2007* 2008 2009** Q210 TTM

* Excludes $2.3 million loss on sale of securities associated with balance sheet restructuring in June 2007. ** Excludes $0.7 million gain on bargain purchase.

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BottomBottom--line Resultsline Results

(in millions)Net Income

$0.44 $0.44(in millions)

$2.73 $4.47 $4.49 $6.45$0.64

-$3.78

2007 2008 2009 Q210 TTM

As Reported: $3.37 $4.91 $0.71 $6.89

$1.00 $1.62 $1.60 $2.20$0.23 $0.16

-$1.35

$0.14

2007 2008 2009 Q210 TTM

Earnings Per Share (diluted)

$0.01 $0.01 $0.01 $0.01

EVBN without Leases Leasing 20

$1.23 $1.78 $0.25 $2.34As Reported:

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* Excludes national lease portfolio

Second Second Quarter 2010 Quarter 2010 –– Core Business StrengthCore Business Strength($ in millions, except per share data)

Net Interest Income* Non-Interest Income* Non-Interest Expense*

$4.55$5.75

$3.02 $2.93

$5.80 $6.34

$0 47

Q2 2009 Q2 2010 Q2 2009 Q2 2010 Q2 2009 Q2 2010

Net Income

$1 63

Earnings Per Share (diluted)

-$0.67

$0.47

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-$1.85

$1.63

Q2 2009 Q2 2010 Q2 2009 Q2 2010

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Capital StructureCapital Structure

Risk-Based Capital Ratios Evans BancorpJune 30, 2010

Prior to Offering March 31, 2010

RegulatoryGuidelines for

Well CapitalizedTier 1 leverage ratio 10.18% 7.88% 5.00%Tier 1 risk-based capital 13.10% 10.08% 6.00%Total risk based capital 14.36% 11.34% 10.00%

• Solid capital base• Capital raise to support growth

TCE/TA 8.28% 5.92%Tangible Book Value $13.05 $13.08


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Driving Growth

M i Ri kManaging Risk


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ThreeThree--toto--Five Year Growth GoalsFive Year Growth Goals

Gain Operating Leverage with ScaleGain Operating Leverage with Scale

^The calculation of the efficiency ratio excludes goodwill impairment, amortization of intangibles and gains and losses on sale of securities, for comparative purposes

Total Assets: $900-1.2BROA: 0.95-1.0%ROE: 11.0-13.0%

($, in millions, Q2 2010)

Total Assets: $658.0

Investments in systems, process

Increase diversity in

loan portfolio

Acquisition opportunities

Efficiency Ratio^: Low 60%

3-5 Year Goals


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Total Assets: $658.0ROA: 1.02%ROE: 11.79%Efficiency Ratio^: Low 69.72%

process, branches and

people

Today

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Investment HighlightsInvestment Highlights

Diverse revenue mix strong operating fundamentalsDiverse revenue mix, strong operating fundamentals

Strong and growing franchise in WNY

Sophisticated / experienced management team

Solid capital baseSolid capital base

Quality core deposit growth

Lower-risk balance sheet

Sh h ld t i t ti


Shareholder return orientation

Historically reasonable valuation

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E ans Bancorp IncE ans Bancorp IncEvans Bancorp, Inc.Evans Bancorp, Inc.Rodman & Renshaw Conference

Community & Regional Bank Track Community & Regional Bank Track

September 15, 2010


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