Evans Bancorp said Thursday that third-quarter earnings rose 10.9 percent, as the Southtowns banking company recorded higher income from lending and set aside less money for loan losses.
The Hamburg-based parent of Evans Bank reported net income of $2.1 million, or 51 cents per share, up from $1.9 million, or 47 cents per share, in the same quarter a year ago.
Net interest income from taking deposits and making loans rose 6.6 percent to $6.9 million, as the bank benefited from growth in interest-earning assets, such as loans and investments, and lower interest expense on deposits. The profit margin narrowed because of low interest rates that cut the yield on loans, although Evans tried to make up for it by lowering the rate it pays on deposits.
Core loans, not including the equipment leases, rose 6.3 percent to $596.2 million, with most of the growth in commercial mortgages. Total deposits rose 9.7 percent to $672.7 million, as core consumer and commercial deposits both rose, particularly in the bank’s Better Checking and Better Savings accounts. Core deposits rose an annualized 13.8 percent in the last three months, with checking, NOW accounts and savings accounts rising by $18 million in the third quarter alone.
Fee and other income rose 1 percent to $3.2 million, representing 31.7 percent of total revenues in the quarter. Insurance agency revenues fell 4 percent to $1.8 million as heavy competition cut into personal lines revenues, and deposit service fees fell 2.2 percent to $487,000. But other income rose by $117,000 because the bank sold mortgages to Fannie Mae.
Operating expenses rose 8.1 percent to $7.4 million, driven by salaries and employee benefits, which rose 17.3 percent, primarily because of $500,000 in one-time severance costs because a senior executive’s job was cut. Bonuses, higher health insurance costs and increased staff also contributed.