About Evans Bancorp

Evans Bancorp, Inc. operates as the bank holding company for Evans Bank, N.A. that provides a full range of banking services to consumer and commercial customers in Western New York (WNY) and the Finger Lakes Region. The company also owns Evans National Financial Services, LLC (ENFS), which owns 100% of the membership interests in The Evans Agency, LLC (TEA), which sells various premium-based insurance policies on a commission basis. Evans Bank, N.A. The bank is a nationally chartered bank that has its headquarters at 6460 Main Street, Williamsville, New York (NY); and a full-service banking offices in Erie County, Niagara County, Monroe County and Chautauqua County, NY. The company offers deposit products, which include checking and negotiable order of withdrawal (NOW) accounts, savings accounts, and certificates of deposit, as its principal source of funding. The Bank’s deposits are insured up to the maximum permitted by the Deposit Insurance Fund of the Federal Deposit Insurance Corporation (FDIC). The company offers a variety of loan products to its customers, including commercial and consumer loans and commercial and residential mortgage loans. TEA TEA, a property and casualty insurance agency, is a wholly-owned subsidiary of ENFS. TEA is headquartered in Williamsville, NY, with offices located throughout WNY. TEA is a full-service insurance agency offering personal, commercial and financial services products. TEA’s primary market area is Erie, Chautauqua, Cattaraugus and Niagara counties, NY. Most lines of personal insurance are provided, including automobile, homeowners, boat, recreational vehicle, landlord, and umbrella coverage. Commercial insurance products are also provided, consisting of property, liability, automobile, inland marine, workers compensation, bonds, crop and umbrella insurance. TEA also provides the following financial services products: employee benefits, life and disability insurance, Medicare supplements, long term care, annuities, mutual funds, retirement programs and New York State Disability. Other Subsidiaries In addition to the bank and TEA, the company has the following direct and indirect wholly-owned subsidiaries: Evans National Holding Corp. (ENHC): ENHC, a wholly-owned subsidiary of the bank, operates as a real estate investment trust that holds commercial real estate loans and residential mortgages, providing additional flexibility and planning opportunities for the business of the bank. Evans National Financial Services, LLC (ENFS): ENFS is a wholly-owned subsidiary of the company. ENFS's primary business is to own the business and assets of the company’s non-banking financial services subsidiaries. The company also has two special purpose entities: Evans Capital Trust I, a statutory trust formed under the Delaware Statutory Trust Act, solely for the purpose of issuing and selling certain securities representing undivided beneficial interests in the assets of the trust, investing the proceeds thereof in certain debentures of the Company and engaging in those activities necessary, advisable or incidental thereto; and ENB Employers Insurance Trust, a Delaware trust company formed for the sole purpose of holding life insurance policies under the bank’s bank-owned life insurance (BOLI) program. Market Area The company’s footprint is in Western New York and the Finger Lakes Region, primarily Erie County, Monroe County, Niagara County, northern Chautauqua County and northwestern Cattaraugus County, New York (NY). This primary market area is the area where the bank principally receives deposits and makes loans and TEA sells insurance. Segments The company operates through two segments, Banking and Insurance Agency. Banking The banking business segment includes both commercial and consumer banking services, including a wide array of lending and depository services, as well as offering non-deposit investment products, such as annuities and mutual funds. Insurance Agency The insurance agency segment includes the activities of selling various premium-based insurance policies on a commission basis, including business and personal insurance, employee benefits, surety bonds, risk management, life, disability and long-term care coverage, as well as providing claims adjusting services to various insurance companies. Lending Activities The company offers a variety of loan products to its customers, including residential and commercial real estate mortgage loans, commercial loans, and installment loans. The company primarily extends loans to customers located within its footprint. Real Estate Loans The company offers fixed rate residential mortgage loans with terms of 10 to 30 years with, typically, up to an 80% loan-to-value (LTV) ratio. The company has a contractual arrangement with FNMA, pursuant to which it sells certain mortgage loans to FNMA and it retains the servicing rights to those loans. The company determines with each origination of residential real estate loans, which desired maturities, within the context of overall maturities in the loan portfolio, provide the appropriate mix to optimize its ability to absorb the corresponding interest rate risk within its tolerance ranges. The company offers adjustable rate residential mortgage loans with terms of up to 30 years. The company also offers commercial mortgage loans with up to an 80% LTV ratio for up to 20 years on a variable and fixed rate basis. The company also offers other types of loans collateralized by real estate, such as home equity loans. The Bank offers home equity loans at variable and fixed interest rates with terms of up to 15 years and up to an 85% combined LTV ratio. The company also offers both residential and commercial real estate construction loans at up to an 80% LTV ratio at fixed interest or adjustable interest rates and multiple maturities. Commercial and Industrial Loans The company offers C&I loans on a secured and unsecured basis, including lines of credit and term loans at fixed and variable interest rates and multiple maturities. Consumer Loans The company offers consumer installment and other loans. Traditional installment loans are offered at fixed interest rates with various maturities of up to 60 months, on a secured and unsecured basis. This segment of the portfolio is done on an accommodation basis for customers. Other loans consisted primarily of cash reserves, overdrafts, and loan clearing accounts. Deposits The company offers a variety of deposit products, including checking, savings, NOW accounts, certificates of deposit and jumbo certificates of deposit. The company’s deposits are insured up to the limits provided by the FDIC. Securities As of December 31, 2022, the company’s investment securities included U.S. treasuries and government agencies; states and political subdivisions; and Mortgage-backed securities (FNMA, FHLMC (the Federal Home Loan Mortgage Corporation), GNMA, SBA (the U.S. Small Business Administration), and CMO. Supervision and Regulation As a bank holding company registered under the Bank Holding Company Act of 1956, as amended (BHCA), the company and its non-banking subsidiaries are subject to regulation and supervision under the BHCA by the FRB. The FRB requires periodic reports from the company, and is authorized by the BHCA to make regular examinations of the company and its subsidiaries. The company is subject to the rules, regulations, and reporting requirements of various regulatory bodies, including the FRB, the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC), the New York State Department of Financial Services (NYSDFS), and the Securities and Exchange Commission (SEC). The bank is a nationally chartered banking corporation, primarily subject to supervision, examination, and regulation by the OCC. The FDIC has certain backup regulatory authority as the deposit insurer. The bank is subject to Sections 23A and 23B of the Federal Reserve Act and Regulation W thereunder, which govern certain ‘covered transactions’, by a bank with its affiliates, including its parent holding company. The bank is also subject to certain restrictions imposed by the Federal Reserve Act on extensions of credit to executive officers, directors, principal stockholders, and/or any related interest of such persons (Insiders). Under the Community Reinvestment Act, or ‘CRA’, as implemented by OCC, a national bank has a continuing and affirmative obligation, consistent with its safe and sound operation, to help meet the credit needs of the communities served by the bank, including low- and moderate-income neighborhoods. The bank’s OCC CRA rating was ‘Outstanding’. The bank is also subject to the supervision, regulation and examination of the Office of the Comptroller of the Currency of the United States of America (the OCC). In addition to the laws and regulations, the bank is subject to certain fair lending and consumer laws that are designed to protect consumers in transactions with banks. Many of these laws are implemented through regulations issued by the Consumer Financial Protection Bureau (the “CFPB”) though, for institutions of the bank’s asset size, compliance is subject to examination by the federal banking regulator, i.e., the OCC in the Bank’s case. These laws include, but are not limited to, the Truth in Lending Act, the Truth in Savings Act, the Electronic Funds Transfer Act, the Expedited Funds Availability Act, the Equal Credit Opportunity Act, the Fair Housing Act, the Home Mortgage Disclosure Act, the Real Estate Settlement Procedures Act, Federal Financial Privacy Laws, the Right to Financial Privacy Act, and the Fair and Accurate Credit Transactions Reporting Act. These laws, and their implementing regulations, generally regulate the manner in which financial institutions must deal with customers when taking deposits or making loans to such customers. The USA PATRIOT Act of 2001 gave the federal government new additional powers to address terrorist threats through enhanced domestic security measures, expanded surveillance powers, increased information sharing and broadened anti-money laundering requirements. The USA Patriot Act placed additional responsibilities upon financial institutions in terms of broadened anti-money laundering compliance programs and due diligence policies and controls to facilitate detection and reporting of money laundering. The bank has established policies, procedures and systems designed to comply with these laws. Such compliance programs supplement previously existing anti-money laundering compliance requirements, also applicable to financial institutions, under the Bank Secrecy Act and the Office of Foreign Assets Control regulations. TEA is regulated by the New York State Department of Financial Services. As is the case with banking institutions generally, the bank’s operations are significantly influenced by general economic conditions and by related monetary and fiscal policies of banking regulatory agencies, including the Federal Reserve Board (FRB) and FDIC. History Evans Bancorp, Inc. was founded in 1920. The company was incorporated in 1988 under the laws of the state of New York.