Evans Bancorp’s second-quarter net income rose 29 percent from a year ago, as the Hamburg-based bank capped a robust first half of the year.
Evans, which has 13 branches in Western New York, posted net income of $1.9 million, or 46 cents per diluted share, in the quarter. That compared to net income of $1.5 million or 36 cents per share a year ago, and topping the analyst estimate of 38 cents per share.
Evans executives said profits rose due to a combination of factors, including growing interest-earning assets, higher non-interest income, and lower non-interest expenses.
“I think what we’re seeing is a sustainability of earnings in all areas of our business,” said David J. Nasca, Evans Bank’s president and chief executive officer.
Through the first six months of this year, Evans has recorded net income of $3.7 million. That was down 3.5 percent from the $3.9 million in the first half of 2012, which ended up as a full-year, all-time record for the bank.
In the second quarter, Evans’ net interest income from taking deposits and making loans was $7 million, up 1.8 percent from a year ago. Non-interest income, from sources including fees, increased 5.8 percent from a year ago, to $3.2 million.
Evans has generated higher fee income from areas such as deposit growth, insurance, cash management and employee benefits, Nasca said.
The bank reduced its non-interest expenses by about 1 percent from a year ago, including a 30 percent reduction in advertising expenses. Last year, Evans ramped up its ad spending as upstate HSBC Bank USA branches changed ownership, aiming to attract customers affected by the transition.
Evans’ total loans in the second quarter increased 2.2 percent from a year ago, to $607 million. “We were really successful in growing our pipeline in the first half of the year and we saw the closings happen,” Nasca said.
Evans’ credit quality has continued to improve, and as a result, the bank was able to reduce its provision for loan and lease losses, Nasca said.
“Because of our strong earnings, our capital position continues to improve in a tough regulatory environment,” said Gary A. Kajtoch, executive vice president and chief financial officer.