Edgar Filing: EVANS BANCORP INC

FWP

Common Equity Offering

January 17, 2017

David J. Nasca

President & CEO

John B. Connerton

Executive Vice President & CFO

NYSE MKT:

EVBN

www.evansbank.com

Issuer Free Writing Prospectus

Dated January 17, 2017

Filed Pursuant to Rule 433

Registration Statement No. 333-210443

This presentation has been prepared by Evans Bancorp, Inc. (“Evans Bancorp” or the “Company”) solely for informational purposes based on its own

information, as well as information from public sources. This presentation has been prepared to assist interested parties in making their own evaluation of

Evans Bancorp and does not purport to contain all of the information that may be relevant. In all cases, interested parties should conduct their own

investigation and analysis of Evans Bancorp and the data set forth in this presentation and other information provided by or on behalf of Evans Bancorp.

This presentation does not constitute an offer to sell, nor a solicitation of an offer to buy, any securities of Evans Bancorp by any person in any jurisdiction in

which it is unlawful for such person to make such an offering or solicitation.

Neither the Securities and Exchange Commission (“SEC”) nor any other regulatory body has approved or disapproved of the securities of Evans Bancorp or

passed upon the accuracy or adequacy of this presentation. Any representation to the contrary is a criminal offense.

Except as otherwise indicated, this presentation speaks as of the date hereof. The delivery of this presentation shall not, under any circumstances, create any

implication that there has been no change in the affairs of the Company after the date hereof.

Certain of the information contained herein may be derived from information provided by industry sources. Evans Bancorp believes that such information is

accurate and that the sources from which it has been obtained are reliable. Evans Bancorp cannot guarantee the accuracy of such information, however, and

has not independently verified such information.

From time to time, Evans Bancorp may make forward-looking statements that reflect the Company’s views with respect to, among other things, future events

and financial performance. Words such as “believes,” “anticipates,” “expects,” “intends,” “plans,” “estimates,” “targeted” or

the negative version of those words

or other comparable words are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements. These forward-

looking statements are not historical facts, and are based on current expectations, estimates and projections about the Company’s industry, management’s

beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond the Company’s control.

Accordingly, you are cautioned that any such forward-looking statements are not guarantees of future performance and are subject

to certain risks,

uncertainties and assumptions that are difficult to predict. Although the Company believes that the expectations reflected in

such forward-looking statements

are reasonable as of the date made, actual results may prove to be materially different from the expected results expressed or implied by such forward-looking

statements. Unless otherwise required by law, the Company also disclaims any obligation to update its view of any such risks or uncertainties or to announce

publicly the result of any revisions to the forward-looking statements made in this presentation. A detailed discussion of the factors that could cause actual

results to differ from the anticipated results or other expectations is included in our SEC filings, including our Annual Report

on Form 10-K for the year ended

December 31, 2015.

Evans Bancorp has filed a registration statement (including a prospectus) and a prospectus supplement which is preliminary and subject

to completion, with the

SEC for the offering to which this communication relates. Before you invest, you should read the prospectus in that registration

statement, the preliminary

prospectus supplement and the other documents that Evans Bancorp has filed with the SEC for more complete information about Evans Bancorp and the

offering. You may get these documents for free by visiting the SEC website at www.sec.gov. Alternatively, the Company, any underwriter or any dealer

participating in the offering will arrange to send you the prospectus if you request it by contacting: Sandler O’Neill & Partners, L.P. at toll-free 1-866-805-4128

or Hovde

Group, LLC at toll-free 1-866-971-0961.

Offering Disclosure

Offering Summary

Issuer:

Evans Bancorp, Inc.

Offering:

Follow-on

common stock

Gross Amount Offered:

$14 million

Over-Allotment Option:

15%

Exchange

/ Symbol:

NYSE MKT / EVBN

Market Capitalization¹:

$152 million

Current Semi-Annual

Dividend:

$0.38

Dividend

Yield¹:

2.1%

Use of Proceeds:

To support our organic growth and for other

general corporate purposes, including

contributing capital to the Bank

Book-Running Manager:

Sandler O’Neill + Partners, L.P

Co-Manager:

Hovde

Group, LLC

(1)

Based on January 13, 2017 stock price of $35.43/share and 4,300,634 common shares outstanding

Source: SNL Financial, Company documents

Corporate Profile

Evans Established: 1920

Headquarters: Hamburg, NY

Bank Branches: 14

Insurance Agency Locations: 7

Community-based diversified financial services company

Provides banking, insurance and investment services in Western New York

Achieved $1 billion in assets on record loan growth

Strategy focused on driving greater earnings power and returns

Financial Summary –

Q3 2016

Total Assets:

$1.1 billion

Net Loans:

$899 million

Total Deposits:

$898 million

Loans / Deposits:

102%

Nonperforming Assets / Total Assets¹:

1.41%

Total Stockholders’ Equity²:

$95.2 million

Stockholders’ Equity

/ Total Assets:

8.8%

Note: List of companies included in Peer Group can be found in the Appendix

(1)

Nonperforming assets defined as nonaccrual loans and loans 90 days or more past due and still accruing

(2)

Stockholders’ equity includes $8.1 million of goodwill, or $1.89 per share

Source: SNL Financial and Company documents

Tier 1 Leverage:

9.55%

Common Equity Tier 1 Risk-Based Capital:

10.82%

Tier 1 Risk-Based Capital:

10.82%

Total Risk-Based Capital:

12.07%

Stock Price:

$35.43

52 week

range:

$22.87 –

$37.67

Market Capitalization:

$152 million

Total Shares

Outstanding:

4.3 million

Ownership:

Insider:

Institutional:

43%

Dividend

Yield:

2.1%

Current Balance Sheet Position

Consolidated Regulatory Capital Ratios

Market Data as of January 13, 2017

Valuation as of January 13, 2017

EVBN

Peers

Price / BV:

160%

151%

Price / TBV:

174%

162%

Price

/ LTM EPS:

19.9x

19.5x

Price / Est. 2016 EPS:

18.7x

19.8x

Price / Est. 2017 EPS:

15.9x

17.5x

Management Profile

Executive

Position

Experience

David Nasca

President

and Chief Executive Officer

34 Years

John Connerton

Chief Financial Officer

15 Years

John Eagleton

Chief Lending Officer

32 Years

Robert

Miller Jr.

President of The

Evans Agency, LLC

40 Years

Paul Ulrich

Chief Credit Officer

43 Years

Average of Over 32 Years of Financial Services Experience

Refocus Community

Banking Model

Executed Strategic Plan (Fiscal Years 2013-2015)

Effective Risk

Management

Effective Lending

Strategy

Fee Based Income

Growth

Strengthen

Operating Model

Optimize Technology:

Execute core

conversion

33% Loans

2013 -

2015

18% Deposits

2013 -

2015

2015 Non-Interest Income

= 30% of Total

Revenue in 2015

Returned

Capital to

Shareholders

Strategic

Plan

Stock Performance

3-Year Total Return

(1/13/2014 thru

1/13/2017)

5-Year Total Return

(1/13/2012 thru 1/13/2017)

+62%

+67%

+241%

+129%

Note: Market data as of January 13, 2017; list of companies included in Peer Group can be found in the Appendix

Source: SNL Financial

70%

80%

60%

50%

40%

30%

20%

10%

(10%)

1/13/2014

5/13/2014

9/13/2014

1/13/2015

5/13/2015

9/13/2015

1/13/2016

5/13/2016

9/13/2016

1/13/2017

EVBN

Peer Group

EVBN

300%

250%

200%

150%

100%

50%

1/13/2012

1/13/2013

1/13/2014

1/13/2015

1/13/2016

1/13/2017

Results –

Q3 2016

Net Income of $2.2 million or $0.51 Per Diluted Share

ROAA: 0.84%

ROAE: 9.23%

Net Interest Income of $9.1 million

Net Interest Margin: 3.67%

Total Loans of $913 million¹

Growth of $60 million in Q3 2016 or 28% annualized

Deposits of $898 million with Average Cost of 0.45%

Growth of $28 million in Q3 2016 or 13% annualized

(1)

Includes Loans Held For Sale

Q3 2016 Performance vs. Peers

Note: List of companies included in Peer Group can be found in the Appendix

Source: SNL Financial, Company documents

Return on Average Assets

Return on Average Equity

Efficiency Ratio

Net Interest Margin

0.84%

EVBN

Peer Group

9.23%

8.59%

EVBN

Peer Group

70.23%

64.51%

EVBN

Peer Group

3.67%

3.47%

EVBN

Peer Group

$809.7

$833.5

$846.8

$939.1

1,084.7

2012

2013

2014

2015

Q3 2016

8% CAGR

(2012 –

Q3 2016)

8% CAGR

(2012 –

Q3 2016)

Over $1 Billion in Assets

(in millions)

18% YOY

Q3 16 vs Q3 15

Driven by

organic loan

and deposit

growth

Platforms

increased

future earnings

power

$581.3

$647.0

$695.7

$774.0

$912.9

2012

2013

2014

2015

Q3 2016

Record Loan Growth

High quality

in-market

commercial loans

Capturing strong

credits from

competition

Supports core

business strategy

Strong loan

pipeline

(in millions)

86%

92%

98%

96%

102%

Loan to Deposit Ratio

13% CAGR

(2012 –

Q3 2016)

(1)

Excludes $1.6 million in direct financing leases

Loan Portfolio Diversification

27%

16%

23%

22%

12%

Q3 2016 Commercial Loan

Portfolio

Non-owner occupied CRE

Owner occupied CRE

C & I

Multi-family

Construction / Development

$546

$187

$64

$113

Q3 2016

Total Loan Portfolio: $913 million¹

Average Yield: 4.39%

Commercial & Multi-Family²

Commercial & Industrial

Consumer & Other

Home Equities

Residential Mortgage²

Note: Dollars in millions

(1)

Total composition does not sum to $913 million due to rounding

(2)

Includes construction loans

Solid Credit Fundamentals

Booking high

quality assets

Solid

underwriting

discipline

Strong customer

relationships

Note: List of companies included in Peer Group can be found in the Appendix

(1)

Nonperforming loans defined as nonaccrual loans and loans 90 days past due and still accruing

Source: SNL Financial, Company Documents

ALLL/

NPLs¹/

NCOs/

ALLL/

Total Loans

Avg. Loans

NPLs¹

9/30/2015

1.84%

1.12%

0.03%

164.7%

12/31/2015

1.66%

2.07%

0.42%

80.3%

3/31/2016

1.65%

2.25%

(0.02%)

73.1%

6/30/2016

1.50%

1.88%

(0.01%)

79.5%

9/30/2016

1.50%

1.67%

0.03%

89.7%

Peer Group

(9/30/2016)

1.03%

0.69%

0.05%

142.9%

Conservative Securities Portfolio

10% of Total Assets

94% of Obligations of

States and Political

Subdivisions Rated A

or Higher

Effective Portfolio

Duration is 3.9 Years

$105 million Total Securities

$679.0

$706.6

$707.6

$803.0

$898.0

2012

2013

2014

2015

Q3 2016

8% CAGR

(2012 –

Q3 2016)

8% CAGR

(2012 –

Q3 2016)

55%

13%

32%

Strong Core Deposit Growth

15% YOY

Q3 16 vs Q3 15

15% Demand

9% NOW

14% Savings

(in millions)

Q3 2016 Deposit Composition

Savings & Money Market

Time Deposits

Demand & NOW

Average Cost of Deposits: 0.45%

New money

market account

Driving new deposits and

cross-sell opportunities

YOY Q3 16 vs Q3 15

15%

Q3 2016 TTM Non-Interest Income:

$11.5 million

Non-Interest Income Opportunity

25% of total

Q3 2016 TTM

revenue

Emphasis on

expanding:

Financial services

Employee benefits

Insurance

Cash management

21%

Other Income

59%

Insurance

Service &

Fees

Bank-owned

Life Insurance

Bank

Charges

Capital Overview

Both the Company and the Bank have consistently maintained regulatory capital

ratios significantly above the federal “well capitalized” standards

indicates minimum level to be considered “well capitalized”

5.00%

8.00%

10.00%

5.00%

8.00%

10.00%

Bank

Consolidated

16.00%

14.00%

12.00%

10.00%

8.00%

6.00%

4.00%

2.00%

0.00%

16.00%

14.00%

12.00%

10.00%

8.00%

6.00%

4.00%

2.00%

0.00%

Tier 1 Leverage

Tier 1 RBC

Total RBC

Tier 1 Leverage

Tier 1 RBC

Total RBC

12/31/2014

12/31/2015

9/30/2016

12/31/2014

12/31/2015

9/30/2016

10.78%

10.18%

9.33%

13.65%

11.53%

10.57%

14.91%

12.78%

11.83%

10.84%

10.45%

9.55%

13.60%

11.82%

10.82%

14.85%

13.07%

12.07%

2.1%

1.8%

EVBN

Peer Group

Current Dividend Yield

Returning Capital to Shareholders

$0.26

$0.65

$0.72

$0.76

$0.24

2013¹

2014

2015

2016

Dividend Payment History

$0.50

Note: Market data as of January 13, 2017; list of companies included in Peer Group can be found in the Appendix

(1)

One semi-annual dividend of $0.24 was accelerated into 2012 due to tax policy considerations for shareholders

Source: SNL Financial, Company documents

Market Opportunity / Future Vision

NYSE MKT:

EVBN

www.evansbank.com

Public/Private Project

Evans committed

$1 million

Housing Opportunity Fund

(Joint with City of Buffalo)

$475 thousand

over 2 years

The Bank for a Resurgent WNY

Seneca Street Lofts

Tim Hortons Café

& Bake Shop

Stanton Building

Community Reinvestment

Buffalo Information Technologies Innovation and

Commercialization Hub

High Tech Manufacturing Innovation Hub at River Bend

43 North Startup and Innovation Competition

Buffalo Medical Innovation and Commercialization Hub

Buffalo Manufacturing Works

Opportunity from Market Disruption

Note: Market share data for Buffalo-Cheektowaga-Niagara Falls, NY Metropolitan Statistical Area as of June 30, 2016; market share does not sum to 100% due to rounding

(1)

Reflects Northwest Bank’s purchase of 18 FN branches, consisting of $1.6B in Deposits, in September 2016

(2)

Reflects KeyBank’s acquisition of First Niagara in August 2016

Source: FDIC

Buffalo MSA

1.9%

2.5%

3.9%

4.8%

5.1%

27.7%

54.0%

Total Deposits in Market: $42.6 billion

All Others (9)

Citizens

Northwest Bank¹

Bank of America

Key Bank²

M&T Bank

Transformative Growth Phase of Strategy

New Four-Year Plan (2016 –

2020)

Organic Market

Growth:

Lead with Business

Market

Disruption

Fee-Based

Income Growth

Retail

Transformation

Talent

Acquisition &

Retention

Capital

Management

IT Optimization

Investment Highlights

Strong and growing franchise in resurgent WNY

Diverse revenue mix, strong operating fundamentals

Core deposit and loan growth

Lower-risk balance sheet

with solid capital base

Sophisticated / experienced management team

Shareholder return orientation

Historically reasonable valuation

Appendix

NYSE MKT:

EVBN

www.evansbank.com

Peer Group

Note:

Includes

banks

that

trade

major

exchange

(NYSE,

NYSE

MKT,

NASDAQ)

with

Total

Assets

between

billion

and

billion

that

are

headquartered

the

Northeast or Mid-Atlantic Regions; exclude targets of announced merger transactions; financial data for the quarter ended September 30, 2016

Source: SNL Financial

Company Name

Ticker

Location

Total Assets

(000s)

Arrow Financial Corporation

AROW

Glens Falls, NY

$2,580,485

CNB Financial Corporation

CCNE

Clearfield, PA

$2,539,944

Enterprise Bancorp, Inc.

EBTC

Lowell, MA

$2,470,849

Sun Bancorp, Inc.

SNBC

Mount Laurel, NJ

$2,189,346

Peoples Financial Services Corp.

PFIS

Scranton, PA

$1,971,239

Republic First Bancorp, Inc.

FRBK

Philadelphia, PA

$1,734,462

Chemung Financial Corporation

CHMG

Elmira, NY

$1,728,865

BCB Bancorp, Inc.

BCBP

Bayonne, NJ

$1,678,936

Old Line Bancshares, Inc.

OLBK

Bowie, MD

$1,650,105

First Bancorp, Inc.

FNLC

Damariscotta, ME

$1,635,088

Bankwell Financial Group, Inc.

BWFG

New Canaan, CT

$1,565,586

Codorus Valley Bancorp, Inc.

CVLY

York, PA

$1,522,981

Orrstown Financial Services, Inc.

ORRF

Shippensburg, PA

$1,354,154

Penns Woods Bancorp, Inc.

PWOD

Williamsport, PA

$1,347,412

First United Corporation

FUNC

Oakland, MD

$1,338,189

Community Financial Corporation

TCFC

Waldorf, MD

$1,281,874

Citizens & Northern Corporation

CZNC

Wellsboro, PA

$1,245,333

ACNB Corporation

ACNB

Gettysburg, PA

$1,208,869

Shore Bancshares, Inc.

SHBI

Easton, MD

$1,157,866

Unity Bancorp, Inc.

UNTY

Clinton, NJ

$1,152,896

AmeriServ Financial, Inc.

ASRV

Johnstown, PA

$1,145,655

Norwood Financial Corp.

NWFL

Honesdale, PA

$1,125,057

1st Constitution Bancorp

FCCY

Cranbury, NJ

$1,055,308

Mid Penn Bancorp, Inc.

MPB

Millersburg, PA

$1,042,687

Howard Bancorp, Inc.

HBMD

Ellicott City, MD

$1,014,787

First Bank

FRBA

Hamilton, NJ

$1,007,685

Bar Harbor Bankshares

BHB

Bar Harbor, ME

$1,717,875

Common Equity Offering

January 17, 2017

NYSE MKT:

EVBN