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Section 1: 8-K/A (8-K/A)

8-K/A

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K/A

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 6, 2020 (May 1, 2020)

 

 

EVANS BANCORP, INC.

(Exact name of registrant as specified in its charter)

 

 

 

New York   001-35021   161332767

(State or other jurisdiction

of incorporation)

 

(SEC Commission

File Number)

 

(IRS Employer

Identification Number)

One Grimsby Drive

Hamburg, New York

  14075
(Address of principal executive offices)   (Zip Code)

Registrant’s telephone number, including area code: 716-926-2000

Not Applicable

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

Common Stock, $0.50 par value   EVBN   NYSE American

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

 


On May 1, 2020, Evans Bancorp, Inc. (“Evans”), the parent holding company of Evans Bank, N.A., filed a Current Report on Form 8-K (the “Original 8-K”) reporting the completion of the acquisition of FSB Bancorp, Inc. (“FSB”), the parent holding company of Fairport Savings Bank by Evans pursuant to the Agreement and Plan of Merger, dated December 19, 2019, as amended on March 5, 2020, by and among Evans, MMS Merger Sub, Inc., a wholly-owned subsidiary of Evans, and FSB. In that filing, Evans indicated that it would amend the Form 8-K at a later date to include the unaudited pro forma financial information required by Item 9.01 of Form 8-K. This amendment to the Original 8-K is being filed to provide such financial information, which is attached to this report as Exhibit 99.1. No other changes have been made to the Original 8-K.

 

Item 9.01

Exhibits.

(b) Pro forma financial information.

The unaudited pro forma combined condensed balance sheet of Evans and FSB as of December 31, 2019, and the unaudited pro forma combined condensed statement of income of Evans and FSB for the year ended December 31, 2019, and the related notes to the unaudited pro forma combined condensed financial information, are attached hereto as Exhibit 99.1 and incorporated by reference herein.

(d) Exhibits.

Exhibit 99.1 – Unaudited pro forma combined condensed balance sheet of Evans Bancorp, Inc. and FSB Bancorp, Inc. as of December 31, 2019, and the unaudited pro forma combined condensed statement of income of Evans Bancorp, Inc. and FSB Bancorp, Inc. for the year ended December 31, 2019, and the related notes to the unaudited pro forma combined condensed financial information.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, hereunto duly authorized.

 

    EVANS BANCORP, INC.
Date: July 6, 2020     By:   /s/ David J. Nasca
   

Name:

  David J. Nasca
   

Title:

  President and Chief Executive Officer
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Section 2: EX-99.1 (EX-99.1)

EX-99.1

Exhibit 99.1

UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL INFORMATION

The following unaudited pro forma combined condensed financial statements are based on the separate historical financial statements of Evans Bancorp, Inc., or Evans, and FSB Bancorp, Inc., or FSB, and give effect to the mergers of (i) Merger Sub, Inc., a Maryland corporation and wholly-owned subsidiary of Evans, or Merger Sub, with and into FSB, which we refer to as the merger, with FSB continuing as the surviving corporation, (ii) FSB with and into Evans, which we refer to as the second merger and, together with the merger, the holdco mergers, with Evans continuing as the surviving corporation, and (iii) Fairport Savings Bank, a New York-chartered savings bank and wholly owned subsidiary of FSB, which we refer to as FSB Bank, with and into Evans Bank, N.A., a national banking association and a wholly owned subsidiary of Evans, which we refer to as Evans Bank, with Evans Bank being the surviving bank, which we refer to as the bank merger and, together with the holdco mergers, the mergers, including pro forma assumptions and adjustments related to the mergers, as described in the accompanying notes to the unaudited pro forma combined condensed financial statements. The unaudited pro forma combined condensed balance sheet as of December 31, 2019 is presented as if the mergers occurred on December 31, 2019. The unaudited pro forma combined condensed statement of income for the year ended December 31, 2019 is presented as if the mergers occurred on January 1, 2019. The historical consolidated financial information has been adjusted on a pro forma basis to reflect factually supportable items that are directly attributable to the mergers and, with respect to the statements of earnings only, expected to have a continuing impact on consolidated results of operations.

The unaudited pro forma combined condensed financial statements have been prepared using the acquisition method of accounting for business combinations under U.S. Generally Accepted Accounting Principles. Evans is the acquirer for accounting purposes. Certain reclassifications have been made to the historical financial statements of FSB to conform to the presentation in Evans’ financial statements.

The unaudited pro forma combined condensed financial statements are presented for illustrative purposes only. The unaudited pro forma combined condensed financial statements are not necessarily, and should not be assumed to be, an indication of the results that would have been achieved had the mergers been completed as of the dates indicated or that may be achieved in the future. The preparation of the unaudited pro forma combined condensed financial statements and related adjustments required management to make certain assumptions and estimates. The unaudited pro forma combined condensed financial statements should be read together with:

 

   

the accompanying notes to the unaudited pro forma combined condensed financial statements;

 

   

Evans separate audited historical consolidated financial statements and accompanying notes as of and for the year ended December 31, 2019, included in Evans’ Annual Report on Form 10-K for the year ended December 31, 2019;

 

   

FSB’s consolidated financial statements and related notes as of and for the years ended December 31, 2019 included in Exhibit 13 in FSB’s Annual Report on Form 10-K for the year ended December 31, 2019; and

 

   

other information pertaining to Evans and FSB contained in or incorporated by reference into this document.

 

II-1


EVANS BANCORP, INC./FSB BANCORP, INC.

UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET

AS OF DECEMBER 31, 2019

(Dollars in thousands, except per share amounts)

 

     EVBN
12/31/2019
(as reported)
    FSB
12/31/2019
(as reported)
    Pro Forma
Adj
    Notes      Pro Forma
12/31/2019
Combined
 

ASSETS

           

Cash and cash equivalents

   $  38,857     $  7,933     ($ 22,367     (a)      $  24,423  

Investment securities

     133,852       23,292       (89     (b)        157,055  

Loans, net of allowance for loan losses

     1,211,356       276,702       1,014       (c)        1,489,072  

Premises and equipment

     13,754       2,439       —            16,193  

Goodwill

     10,746       —         1,996       (d)        12,724  

Intangible assets

     1,799       —         1,494       (e)        3,293  

Other assets

     49,866       12,944       —            62,810  
  

 

 

   

 

 

   

 

 

      

 

 

 

Total Assets

   $ 1,460,230     $  323,310     ($ 17,952      $ 1,765,588  
  

 

 

   

 

 

   

 

 

      

 

 

 

LIABILITIES

           

Deposits

           

Noninterest-bearing

     263,717       12,886       —            276,603  

Interest-bearing

     1,003,723       222,674       1,047       (f)        1,227,444  
  

 

 

   

 

 

   

 

 

      

 

 

 

Total deposits

     1,267,440       235,560       1,047          1,504,047  
  

 

 

   

 

 

   

 

 

      

 

 

 

Other Liabilities

           

Borrowed funds

     12,425       51,735       549       (g)        64,709  

Other liabilities

     31,912       4,471       —            36,383  
  

 

 

   

 

 

   

 

 

      

 

 

 

Total other liabilities

     44,337       56,206       549          101,092  
  

 

 

   

 

 

   

 

 

      

 

 

 

Total liabilities

     1,311,777       291,766       1,596          1,605,139  
  

 

 

   

 

 

   

 

 

      

 

 

 

STOCKHOLDERS EQUITY

           

Preferred stock

     —         —         —            —    

Common Stock

     2,467       19       (19     (h)        2,467  

Capital surplus

     63,302       16,081       1,215       (i)        80,598  

Accumulated other comprehensive income

     (2,583     (9     9       (j)        (2,583

Retained earnings

     85,267       15,699       (20,999     (k)        79,967  

Treasury stock

     —         —         —            —    

Unearned ESOP shares, at cost

     —         (246     246       (l)        —    
  

 

 

   

 

 

   

 

 

      

 

 

 

Total stockholders’ equity

     148,453       31,544       (19,548        160,449  
  

 

 

   

 

 

   

 

 

      

 

 

 

Total liabilities and equity

     1,460,230       323,310       (17,952        1,765,588  
  

 

 

   

 

 

   

 

 

      

 

 

 

 

Balance Sheet Pro Forma Accounting Adjustments Notes as of December 31, 2019

 

(a)

  

Adjustments to cash and cash equivalents:

  
  

To reflect the total anticipated after tax merger related costs borne by both Evans and FSB

   $ (5,300
  

To reflect estimated cash consideration

     (17,067
     

 

 

 
      $ (22,367

(b)

  

Adjustment to investment securities:

  
  

To reflect estimated fair value of FSB’s held to maturity investment securities

   $ (89

(c)

  

Adjustments to loans, net:

  
  

To eliminate FSB’s allowance for loan and lease losses

   $ 1,641  
  

To reflect estimated fair value of loan portfolio comprised of a credit mark of $3.6 million and an interest rate mark of $2.4 million

     (1,219
  

To eliminate FSB’s deferred loan and lease fees

     592  
     

 

 

 
      $ 1,014  

(d)

  

Adjustment to goodwill:

  


  

To reflect goodwill for amount of consideration paid in excess of fair value of assets received and

liabilities assumed

   $ 1,996  

(e)

  

Adjustment to intangible assets, net:

  
  

To record fair value estimate of intangible assets specifically identified Core Deposit Intangibles

   $ 1,494  

(f)

  

Adjustment to interest-bearing deposits:

  
  

To reflect estimated fair value of FSB’s deposits

   $ 1,047  

(g)

  

Adjustment to borrowed funds:

  
  

To reflect estimated fair value of FSB’s borrowed funds

   $ 549  

(h)

  

Adjustment to common stock:

  
  

To eliminate FSB common stock

   $ (19

(i)

  

Adjustments to additional paid in capital:

  
  

To eliminate FSB’s additional paid in capital

   $ (16,081
  

To reflect issuance of shares of Evans common stock in the merger

     17,122  
  

To reflect payment of the stock option awards that fully vest upon closing of the merger

     174  
     

 

 

 
      $ 1,215  

(j)

  

Adjustment to accumulated other comprehensive income:

  
  

To eliminate FSB’s accumulated other comprehensive income

   $ 9  

(k)

  

Adjustments to retained earnings:

  
  

To eliminate FSB’s retained earnings

   $ (15,699
  

To reflect the total anticipated after tax merger related costs borne by both Evans and FSB

     (5,300
     

 

 

 
      $ (20,999

(l)

  

Adjustments to unearned ESOP shares:

  
  

To reflect the liquidation of the remaining unallocated shares in the ESOP

   $ 246  

 

Preliminary purchase price allocation (in thousands, except per share data)  

Pro forma stock consideration:

  

Shares of FSB common stock outstanding of 1,940,661 as of December 31, 2019 at exchange ratio of 0.4394

     421  

Price per share, based upon Evans’ closing price as of December 18, 2019

   $ 40.64  
  

 

 

 

Total pro forma stock consideration

     17,122  

Cash consideration:

     17,067  
  

 

 

 

Total consideration to holders of FSB common stock

     34,190  

Economic value of FSB options (172,080 at weighted average exercise price of $16.79)

     174  
  

 

 

 

Total pro forma purchase price

   $ 34,363  

 

     12/31/2019
(as reported)
     Pro Forma
Adj
    12/31/2019
(as adjusted)
 

ASSETS OF ACQUIRED BANK (FSB)

       

Cash and cash equivalents

   $  7,933        —       $  7,933  

Investment securities

     23,292        (89     23,203  

Loans, net of allowance for loan losses

     276,702        1,014       277,716  

Premises and equipment

     2,439        —         2,439  

Goodwill

     —          —         —    

Intangible assets

     —          1,494       1,494  

Other assets

     12,944        —         12,944  
  

 

 

    

 

 

   

 

 

 

Total Assets

   $ 323,310      $ 2,419     $ 325,729  
  

 

 

    

 

 

   

 

 

 

LIABILITIES OF ACQUIRED BANK (FSB)

       

Deposits

     235,560        1,047       236,607  

Other borrowed funds

     51,735        549       52,284  

Other liabilities

     4,471        —         4,471  
  

 

 

    

 

 

   

 

 

 

Total liabilities assumed

     291,766        1,596       293,362  
  

 

 

    

 

 

   

 

 

 

Net assets acquired

          32,367  

Preliminary pro forma goodwill

          1,996  


EVANS BANCORP, INC./FSB BANCORP, INC.

UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME

FOR THE YEAR ENDED DECEMBER 31, 2019

(Dollars in thousands, except per share amounts)

 

     EVBN
12/31/2019
(as reported)
     FSB
12/31/2019
(as reported)
    Pro Forma
Adj
    Notes     Pro Forma
12/31/2019
Combined
 

INTEREST INCOME

           

Interest and fees on loans

   $ 60,193      $ 12,248       813       (a   $ 73,254  

Interest on investment securities

     3,850        693       (13     (b     4,530  

Other interest income

     697        106       —           803  
  

 

 

    

 

 

   

 

 

     

 

 

 

Total interest income

   $ 64,760      $ 13,047     $ 800       $ 78,587  
  

 

 

    

 

 

   

 

 

     

 

 

 

INTEREST EXPENSE

           

Interest on deposits

     11,939        3,469       209       (c     15,617  

Interest on borrowed funds

     746        1,468       275       (d     2,489  
  

 

 

    

 

 

   

 

 

     

 

 

 

Total interest expense

     12,685        4,937       484         18,106  
  

 

 

    

 

 

   

 

 

     

 

 

 

Net interest income

     52,055        8,110       316         60,481  

Provision for loan losses

     75        295       —           370  
  

 

 

    

 

 

   

 

 

     

 

 

 

Net interest income after provision for loan losses

     51,980        7,815       316         60,111  

NONINTEREST INCOME

           

Service fees

     2,569        141       —           2,710  

Fee income

     10,688        19       —           10,707  

Bank owned life insurance

     656        58       —           714  

Realized gain on sale of loans

     154        931       —           1,085  

Mortgage fee income

     —          612       —           612  

Other

     4,015        176       —           4,191  
  

 

 

    

 

 

   

 

 

     

 

 

 

Total noninterest income

     18,082        1,937       —           20,019  
  

 

 

    

 

 

   

 

 

     

 

 

 

NONINTEREST EXPENSE

           

Salaries, benefits and other compensation

     29,628        6,137       —           35,765  

Occupancy expense

     3,429        1,056       —           4,485  

Other operating expense

     14,763        3,173       149       (e     18,085  
  

 

 

    

 

 

   

 

 

     

 

 

 

Total noninterest expense

     47,820        10,366       149         58,335  
  

 

 

    

 

 

   

 

 

     

 

 

 

Income before taxes

     22,242        (614     167         21,795  

Income tax provision

     5,228        (101     43       (f     5,170  
  

 

 

    

 

 

   

 

 

     

 

 

 

Net income

     17,014        (513     123         16,624  

Basic earnings per share

     3.47              3.13  
  

 

 

          

 

 

 

Diluted earnings per share

     3.42              3.08  
  

 

 

          

 

 

 

Weighted average shares outstanding for basic EPS

     4,897,803          421,303       (g     5,319,106  

Adjusted weighted average shares outstanding for diluted EPS

     4,968,172          421,303       (g     5,389,475  

 

Income Statement Pro Forma Accounting Adjustments Notes for the Twelve Months Ended December 31, 2019

 

(a)

  

Adjustments to interest and fees on loans:

  
  

To reflect the interest income for accretion on purchased performing acquired loans based on estimated

fair market value adjustment

   $ 813  

(b)

  

Adjustment to interest on investment securities:

  
  

To reflect the interest income for accretion on purchased performing acquired investments based on

estimated fair market value adjustment

   $ (13

(c)

  

Adjustment to interest on deposit accounts:

  
  

To reflect amortization of the discount based on estimated fair market value adjustment

   $ 209  

(d)

  

Adjustment to interest on borrowed funds:

  
  

To reflect amortization of the discount based on estimated fair market value adjustment

   $ 275  

(e)

  

Adjustment to amortization of intangible assets:

  
  

To reflect estimated amortization of core deposit intangibles based on 10 year useful life

   $ 149  

(f)

  

Adjustment to income taxes:

  
  

To reflect the tax adjustment related to pro forma adjustments calculated at a 26% rate

   $ 43  

(g)

  

Adjustment to weighted average shares:

  
  

To reflect the increase in the weighted average shares in connection with the issuance of shares of Evans

common stock in the merger (comprised of 1.94 million shares of FSB at a conversion rate of 0.4394)

           421,303  
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