Evans Bancorp, Inc.

Greetings and welcome to EVAN's Bancorp Second Quarter Fiscal Year 2023 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A brief 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. It is now my pleasure to introduce your host, Craig Maholick. Investor Relations, Avans Bank Corp. Thank you. Mr. Mahalik, you may begin.

Yeah, good afternoon, everyone. We certainly appreciate you taking the time today to join us, as well as your interest in Evans Bank Corp. On the call, I have with me here David Naska, our president and CEO, and John Connerton, our chief financial officer. David and John are going to review the results for the second quarter of 2023 and provide an update on the company's strategic progress and outlook. After that, we'll open up the call for questions. Should have a copy of the financial results that were released today after markets closed. If not, you can access them on our website at evansbank.com. 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 the Securities and Exchange Commission. Please find those documents on our website or at sbc.gov. So with that, let me turn it over to David to begin. David.

Thank you, Craig. Good afternoon, everyone. We appreciate your joining us today. I'll start with a review of the key themes that played out during the quarter, and we'll then hand it off to John to discuss our results in detail. Things have somewhat settled in the banking sector this quarter as the focus has returned from fears of bank failures to execution. However, external market forces, in particular the interest rate environment, continue to have an effect on our results. While loan yields have improved both sequentially and year-over-year, the increases are being outpaced by deposit costs, as reflected in net interest margin contraction. We expect these market conditions and pricing pressures to persist and negatively impact our margin at a decreasing rate in the third quarter, as John will discuss in more detail. Addressing these headwinds, we are focusing our efforts on areas that are important for short-term stability and to deliver us in a position of strength when the cycle turns and these conditions change. This includes maintaining and growing deposits, prudent asset growth, expense management, maintaining our credit standards, and strengthening capital. The shared tool for all these objectives remains a laser focus on client engagement and providing broad solutions through continued collaborative communication by our associates. Our deposit base is solid and stable and remains backed by a diversified product portfolio, which is a focus of our efforts to grow. Along with deposits, we have a robust availability of alternative funding sources. Second quarter and year-to-date performance has reflected balance fluctuations that are mostly seasonal, which predominantly includes normal municipal flows. Overall, we believe we are executing well against stiff competition as our team has continued to retain key deposits while accumulating net new customers and accounts. Staying close to our clients and cultivating prospective relationships remains paramount as we look for opportunities to drive growth and loan production. While growth has been somewhat muted this quarter and for the year, we continue to focus on building a diverse portfolio of high-quality loans and have a robust pipeline which stood at $87 million at quarter end. Credit trends in the second quarter continue to be favorable and while we have historically experienced higher non-performing assets than our peers due to relative size and commercial focus, we have and expect to successfully manage these credits and as a result continue to see low actual charge-offs. Investing in technology and talent is also critical as we look to scale the organization, enhance client experience, and more effectively manage risk while creating opportunities for efficiencies. We have completed phase one of the multi-year commercial efficiency and customer experience initiative embarked upon late last year with integrated loan applications, streamlined, more efficient loan origination workflows, and consistent product handling. Other highlights from the quarter included changes to our board In May, as part of our annual meeting of shareholders' activities, longtime director James E. Biddle Jr. retired, and we added two new, highly experienced and accomplished leaders, Don DePerrier, who brings vast knowledge and experience in information technology, cybersecurity, finance, strategy, and digitization, and Robert James, a corporate attorney who has expertise in corporate governance, diversity, equity, and inclusion. Additionally, during the quarter, the company was re-added to the Russell 2000 Index as part of its annual reconstitution. We believe this can provide additional demand and liquidity to our stock trading. Lastly, on the community front, the bank made a $1 million investment with Launch New York, a nonprofit venture development organization, and CDFI, providing high-growth potential startups with mentorship and access to seed funding with a goal to fuel the startup ecosystem in Western New York. This is the second round of investing the bank has participated in with this organization. As we look to the second half of the year, we expect to continue to confront headwinds, but we'll maintain focus on those areas that support short-term progress and sustainability of our business model and position us strongly coming through this unusual business climate. for the successful execution of our long-term strategic goals. With that, I'll turn it over to John to run through our results in detail, and then we'll be happy to take any questions. John?