Evans Bancorp, Inc.

Greetings. Welcome to the Evans Bancorp fourth quarter fiscal year 2021 financial results. At this time, all participants are in a listen-only mode. A 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. Please note this conference is being recorded. I'll now turn the conference over to your host, Deborah Pawlowski of Investor Relations for Evans Bancorp. You may begin.

Thank you, Shamali, and good afternoon, everyone. We certainly appreciate your taking the time today to join us and for your interest in Evans Bank Corp. On the call today, we have David Naska, our President and Chief Executive Officer, and John Connerton, our Chief Financial Officer. David and John will review our results for the fourth quarter and full year of 2021 and provide an update on the company's strategic progress and outlook, after which we will then open it up for Q&A. You should have a copy of the financial results that were released today after the markets closed, and if not, you can access them on our website at www.evansbank.com. On the website, you'll also find slides that accompany today's discussion. So if you are reviewing those slides, if you would please turn to slide two for the safe harbor statement. As you are aware, we may make some forward-looking statements during the formal discussion 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 call. These risks and uncertainties and other factors are provided in the earnings release, as well as with other documents filed by the company with Securities and Exchange Commission. You can find those documents 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 your joining us for the call today. I will start with a review of the past year and hand off to John to discuss the quarterly results in detail and then come back for closing comments around our refined strategy and expectations. The past year, while very much like 2020 in challenges, delivered a very different result. Business was still being largely conducted in a remote environment and there was significant uncertainty as to when some sense of normalcy might return. I'm incredibly proud of the resilience and selfless work of the entire Evans team as we fought through compressed margins and challenging asset returns, abnormal levels of liquidity, historic prepayment and repayment activity, credit challenges for some businesses, and a difficult environment for our core strength of relationship building. Against this backdrop, we delivered exceptional results in 2021, culminating in record net income of $24 million, more than double the prior year. There were a number of highlights, some of which I will touch on now. In the commercial banking segment, significant experience and talent were added to the commercial real estate and commercial and industrial teams in both Buffalo and Rochester, which helped deepen our penetration in those markets and introduce new contacts and clients to Evans. This helped enable record commercial loan production exceeding $312 million, which was critical to offsetting commercial loan payoffs, which ran at double average rates. Payoffs were the result of historically low interest rates, intensified commercial real estate demand due to strong valuations, and increased sales of commercial businesses. Though detrimental to balances, these payoffs provided 1.2 million in fees to the bank. In addition to record commercial loan production, we participated in the second round of the Paycheck Protection Program and generated $94 million of loans, largely at the beginning of 2021, with approximately three-quarters of those loans forgiven by year-end. These loans, together with approximately $200 million from the first round of PPP, which were forgiven during the year, resulted in a significant contribution to income. John will provide more details on current PPP balances fees received and fees remaining, and we have this scheduled out in our deck, which Deb mentioned earlier. Credit quality improved during 2021, especially related to our efforts and assistance around the hotel portfolio. Of those loans, approximately a third were upgraded during the year, and the remainder of the portfolio is positioned for upgrades as we move through 2022. While Evans' primary focus is meeting the needs of businesses and commercial clients, The addition of Fairport Savings Bank's residential mortgage operation combined with Evan's recent modernization and growth of our consumer lending products and platform allowed us to drive profits in a scalable and efficient manner with a superior client experience while meeting the surging demand for home financing. The combined organization produced a record $119 million in mortgages in 2021. In addition to other key initiatives on the digital front, Evans has adapted as client preferences have evolved. While associates continue to serve customers as they always have, clients are finding self-service tools available through mobile and online banking to be convenient and efficient as digital channel usage to open accounts, deposit checks, pay bills, manage commercial balances, and other functions continue to increase. During the year, upgrades were made to our account opening platform to support digital client acquisition, as well as our consumer loan platform, which improved our ability to sell, process, underwrite, and close consumer mortgages in a scalable and compliant way. With that, I'll turn it over to John to run through our quarterly results, and then we'll be happy to take questions. John?