Evans Bancorp, Inc.

Greetings and welcome to Evans Bancorp fourth quarter and full year 2020 financial results conference call. At this time, all participants are in a listen-only mode. The question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host and investor relations for Evans Bancorp, Deborah Kulowski.

Thank you, Omar, and good afternoon, everyone. We certainly appreciate your taking the time today to join us and your interest in Evans Bank Corp. On the call, we have David Nazca, our President and Chief Executive Officer, and John Connerton, our Chief Financial Officer. David and John will review the results of the fourth quarter and full year 2020, and then we will open up the call for questions. You should have a copy of the financial results that were released today after the markets closed. If not, you can access them on our website at www.evansbank.com. As you are aware, we may make some forward-looking statements during a formal presentation as well as during the Q&A. These statements apply to future events that are subject to risks and uncertainties as well as other factors that could cause actual results to differ from what is stated on today's calls. These risks and uncertainties and other factors are provided in the earnings relief as well as with other documents filed by the company with securities and exchange commissions. You can find those documents as well on our website or at sec.gov. So with that, let me turn it over to David to begin. David?

Thank you, Debbie. Good afternoon, everyone. We appreciate you joining us for the call today. This goes without saying, 2020 was a singular year unlike any other. with monumental upheaval that tested the fortitude and resiliency of our organization. I'm most proud of what our entire Evans team achieved. We responded rapidly to support the people and businesses in our region to help them navigate the many challenges presented by the pandemic. At the outset of this disruption, we quickly adjusted to a new remote work posture to protect our associates, clients, and the community. In fact, by the end of last March, we had over 96% of our non-branch staff working remotely. While we have had some reintroduction to the office environment, we are predominantly operating in a remote stance and will through at least this spring. Given the multiple changes to guidelines for operating safely, the retail delivery channel has also seen significant impact, alternating between branches being drive-through, mobile, and ATM only, to being open with appointments only, to being fully open with safety protocols and equipment. To facilitate business and continue to serve clients, a number of new processes and technologies were employed throughout the bank, as well as new customer-facing tools such as online document signing, end-to-end commercial lending platform tools, secure communication platforms, and paycheck protection program bulk application submission software, to name a few. From an industry perspective, intense pressure was put on net interest margins as the Fed lowered rates to near 0% to address business challenges and shutdowns occurring as a result of the pandemic. Liquidity flooded the system due to PPP, and there were few opportunities to redeploy profitably. In addition, industry-wide income was negatively impacted in a material way by the holding of significant reserves in response to macroeconomic trends, and concerns including unemployment, reduced spending, and business slowing to levels never before seen. During the year, while COVID significantly impacted the financial industry and operations, we were able to pursue execution of our strategy through the flexible and committed efforts of our team to position the company for long-term growth. This included a number of significant achievements. We extended and bolstered our market presence in the Rochester market by successfully closing and integrating the acquisition of $322 million asset Fairport Savings Bank. The acquisition helped scale our mortgage operation by quadrupling production volumes and strengthening operating platforms during one of the hottest markets for home financing in history. The integration of employee benefits brokers of Western New York occurred very early in the year. after closing on December 31, 2019. This will provide complimentary fee income and business to our insurance agency. During the year, we closed 1,933 PPP loans totaling $203 million, which were originated and closed during this year. Evans was the only bank in our market that accepted applications from all clients and non-clients without a pause. This resulted in the bank transacting with approximately 900 new-to-bank prospects, effectively doubling the size of the commercial borrowing portfolio in approximately 45 days. Supported needed debt was opportunistically raised mid-year as a lower cost source to add capital after the FSB acquisition and provide additional strength against business uncertainties. Additionally, construction was completed on our new administrative headquarters in Technology enhancements were incorporated. The move was accomplished combining occupants of three facilities into one, and our former administrative facility was sold at a gain. Equally important were our actions in support of our core values. Payment deferrals were provided to commercial and consumer borrowing clients to assist their cash flow and address possible rent or mortgage holidays. We suspended fee income for services and served as a conduit to government stimulus as originators of SBA guaranteed PPP loans while trying to address ever-changing governmental regulation. Several community grants were given, including to two Buffalo area charter schools that Evans supports. These funds assisted in changes needed to respond to COVID-19, including the addition of a part-time school nurse and virtual curriculum support. Additional donations were made to charities fighting food insecurity exacerbated by the pandemic and economic fallout in our communities. A new financial fitness initiative was launched and partnerships established to enhance financial proficiency in the communities we serve. A new bank branch office in Westminster Commons, a low-income senior housing project financed by the bank, located in an underserved market within our footprint, was approved and is expected to open in the first half of 2021. And amidst political division and racial unrest, we refocused and enhanced our diversity, equity, and inclusion efforts. A national consultant was brought in to facilitate discussions with associates and the board of directors on concerns related to racial inequity and unrest in our communities, as well as help solidify Evan's position as a community participant in the dialogue around these issues. A review and needs assessment were completed along with insights and recommendations for a path forward that our DEI steering committee is leading. To wrap up, 2020 was an incredibly challenging year, but it also showcased the bank's agility and resilience. Tremendous credit goes to all our associates in management who soldiered through and showed outstanding grit in an impossibly difficult and chaotic environment. As we look to the new year, We are optimistic that the pockets of recovery within our markets will continue to strengthen and the building developments with vaccinations can return the country to a more normal state. Even as our world continues to operate in a drastically changed environment, we are positioned to assist and take advantage of the opportunities ahead. With that, I'll hand it over to John to run through our results, and then we'll be happy to take any questions. John?